City of Cleveland v. State

138 Ohio St.3d 232

5 N.E.3d 644

The CITY OF CLEVELAND, Appellee,

v.The STATE of Ohio, Appellant.

No. 2012–1616.

Supreme Court of Ohio.

Submitted Aug. 21, 2013.

Decided Jan. 21, 2014.

Held Unconstitutional

R.C. § 4921.25

Syllabus of the Court

1. The General Assembly may not by statute prohibit the municipal home-rule authority granted by Article XVIII, Section 3 of the Ohio Constitution.

2. R.C. 4921.25 is a general law that will prevail over conflicting municipal ordinances, but the second sentence of the statute purporting to limit municipal home-rule authority violates Article XVIII, Section 3 of the Ohio Constitution.

3. The second sentence of R.C. 4921.25, which reads, “Such an entity is not subject to any ordinance, rule, or resolution of a municipal corporation, county, or township that provides for the licensing, registering, or regulation of entities that tow motor vehicles,” is severed from the statute.

Barbara A. Langhenry, Cleveland Director of Law, and Gary S. Singletary, Assistant Director of Law, for appellee.

Michael DeWine, Attorney General, Michael J. Hendershot, Chief Deputy Solicitor, Megan Dillhoff, Deputy Solicitor, and Pearl M. Chin, Associate Assistant Attorney General, for appellant.

The Ferris Law Group, L.L.C., and David A. Ferris, Columbus, urging reversal for amicus curiae Towing & Recovery Association of Ohio, Inc.

John P. Curp, Cincinnati City Solicitor, and Katherine A. Miefert, Assistant City Solicitor, urging affirmance for amicus curiae city of Cincinnati.

LANZINGER, J.

{¶ 1} This case arises from a complaint for declaratory judgment brought by appellee, the city of Cleveland, challenging the constitutionality of R.C. 4921.25,¹ a law that grants the Public Utilities Commission of Ohio (“PUCO”) authority to regulate towing companies as “for-hire motor carriers.” Because we agree with the city that the second sentence of R.C. 4921.25 violates the Ohio Constitution's Home Rule Amendment, Article XVIII, Section 3, by prohibiting the “licensing, registering, or regulation” of entities that tow motor vehicles, we sever that portion of the statute. We furtherhold that the first sentence of R.C. 4921.25 is a general law. Therefore, we affirm in part and reverse in part the judgment of the Eighth District Court of Appeals, which held that the entire statute was unconstitutional.

I. Case Background

{¶ 2} Towing companies were not regulated by the PUCO as motor carriers under R.C. Chapter 4921 until 2003, when the General Assembly enacted Am.Sub.H.B. No. 87, 150 Ohio Laws, Part I, 59, 157–158 (enacting R.C. 4921.30 [now R.C. 4921.25], which provides that entities engaged in towing motor vehicles are subject to regulation by the PUCO as for-hire motor carriers). In 2009, the city of Cleveland filed a declaratory-judgment action seeking a declaration that R.C. 4921.25 violates the Home Rule Amendment of the Ohio Constitution, which authorizes municipalities to adopt and enforce ordinances that do not conflict with general state laws. The trial court granted summary judgment to the state on the grounds that the statute was a general law that does not unconstitutionally infringe on the city's home-rule authority. The Eighth District Court of Appeals, however, reversed the trial court's judgment in a two-to-one decision, concluding that R.C. 4921.25 failed the general-law test outlined in Canton v. State, 95 Ohio St.3d 149, 2002-Ohio-2005, 766 N.E.2d 963. Specifically, the Eighth District determined that the statute is “not part of a statewide and comprehensive legislative enactment,” “does not have uniform operation throughout the state,” fails to set forth police regulations for the operation of tow-truck entities and instead simply curtails the city's police powers in this area, and does not prescribe a rule of conduct upon citizens generally. 2012-Ohio-3572, 974 N.E.2d 123, ¶ 34–41 (8th Dist.). The court of appeals accordingly held that because R.C. 4921.25 is not a general law, it unconstitutionally attempts to limit municipal home-rule authority.

{¶ 3} We accepted the state's discretionary appeal on the following proposition of law: “Because R.C. 4921.25 is part of a comprehensive, statewide legislative framework that regulates tow truck operations, it is a general law that displaces municipal tow truck ordinances.”

II. Legal Analysis

{¶ 4} The state argues that the court of appeals erred as a matter of law in concluding that R.C. 4921.25 is not a general law and that it unconstitutionally attempts to limit municipal home-rule authority. It asserts that the statute is a general law as defined by this court's decisions and that the statute displaces local towing ordinances. On the other hand, the city argues that the preemption language within R.C. 4921.25 does not qualify as a general law, is outside the recognized regulatory scheme for Ohio for-hire motor carriers established in R.C. Chapter 4921, and unconstitutionally attempts to limit the city's municipal home-rule authority. Neither party is entirely accurate, for contrary to the city's view, the entire statute must be examined to determine if the statute is a general law, and contrary to the state's suggestion, a general law may not preempt all local ordinances.

{¶ 5} R.C. 4921.25 provides:

Any person, firm, copartnership, voluntary association, joint-stock association, company, or corporation, wherever organized or incorporated, that is engaged in the towing of motor vehicles is subject to regulation by the public utilities commission as a for-hire motor carrier under this chapter. Such an entity is not subject to any ordinance, rule, or resolution of a municipal corporation,county, or township that provides for the licensing, registering, or regulation of entities that tow motor vehicles.

{¶ 6} While the city does not challenge the state's ability to regulate towing entities as it does other motor carriers, the city does attack the constitutionality of the statute's second sentence that purports to totally preempt local authority to regulate towing entities, even through ordinances that do not conflict. We must examine this legal question using home-rule precedent.

A. R.C. 4921.25 as a General Law

{¶ 7} Article XVIII, Section 3 of the Ohio Constitution states, “Municipalities shall have authority to exercise all powers of local self-government and to adopt and enforce within their limits such local police, sanitary and other similar regulations, as are not in conflict with general laws.”

{¶ 8} “A state statute takes precedence over a local ordinance when ‘(1) the ordinance is an exercise of the police power, rather than of local self-government, (2) the statute is a general law, and (3) the ordinance is in conflict with the statute.’ ” Mendenhall v. Akron, 117 Ohio St.3d 33, 2008-Ohio-270, 881 N.E.2d 255, ¶ 17. No one disputes that any city ordinance regulating towing entities would be a matter of police power or safety rather than an exercise of self-government. Thus, any city ordinance of this type must yield if it conflicts with a general state law.

{¶ 9} We set forth a four-part test for evaluating whether a statute is a general law in Canton v. State, 95 Ohio St.3d 149, 2002-Ohio-2005, 766 N.E.2d 963: “To constitute a general law for purposes of home-rule analysis, a statute must (1) be part of a statewide and comprehensive legislative enactment, (2) apply to all parts of the state alike and operate uniformly throughout the state, (3) set forth police, sanitary, or similar regulations, rather than purport only to grant or limit legislative power of a municipal corporation to set forth police, sanitary, or similar regulations, and (4) prescribe a rule of conduct upon citizens generally.” Id. at syllabus. We agree with the reasoning of the appellate panel's dissenting judge in this case to hold that R.C. 4921.25 meets all four parts of the general-law test.

1. Statewide and Comprehensive Legislative Enactment

{¶ 10} The court of appeals concluded that there is no comprehensive statutory scheme that covered tow-truck companies and that it could not infer an intent to preempt local legislation based upon broad regulatory enactment in this field. With respect to the court's conclusion that the statute violates part one of the test because the General Assembly did not enact a separate statutory scheme for towing entities but merely redefined “for-hire motor carriers” to include towing companies, we do not agree that the General Assembly was required to do more. R.C. 4921.25 is part of the statewide and comprehensive statutory scheme for regulating for-hire motor carriers.

{¶ 11} R.C. 4921.25 specifically classifies towing entities as for-hire motor carriers subject to PUCO regulation. The PUCO is accordingly tasked with a number of duties relating to these entities: supervising and regulating them, regulating their safe operation, adopting reasonable rules for highway transportation of property in interstate and intrastate commerce, and requiring the filing of reports and other data. R.C. 4905.81. Clearly, by subjecting towing enterprises to the PUCO's regulations,the General Assembly has made R.C. 4921.25 a part of statewide and comprehensive legislative enactment. The statute satisfies the first prong of the Canton test.

2. Uniform Operation Throughout the State

{¶ 12} The second prong of the Canton test asks whether the statute applies and operates uniformly throughout the state. There can be no question that R.C. 4921.25 applies and operates uniformly throughout Ohio, and the determination by the court of appeals that an exception exists for “private motor carriers” is inapposite. R.C. 4921.25 applies to “[a]ny person, firm, copartnership, voluntary association, joint-stock association, company, or corporation, wherever organized or incorporated, that is engaged in the towing of motor vehicles.” Thus the statute's scope is statewide, and there are no limitations upon the statute's operation. The statute applies...