D.A.B.E., Inc. v. Toledo ( 2005 )


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  •                                RECOMMENDED FOR FULL-TEXT PUBLICATION
    Pursuant to Sixth Circuit Rule 206
    File Name: 05a0004p.06
    UNITED STATES COURT OF APPEALS
    FOR THE SIXTH CIRCUIT
    _________________
    X
    Plaintiffs-Appellants, -
    D.A.B.E., INC., d/b/a ARNIE’S SALOON, et al.,
    -
    -
    -
    No. 03-4662
    v.
    ,
    >
    CITY OF TOLEDO,                                              -
    Defendant-Appellee. -
    N
    Appeal from the United States District Court
    for the Northern District of Ohio at Cleveland.
    No. 03-07637—James G. Carr, District Judge.
    Argued: September 22, 2004
    Decided and Filed: January 6, 2005
    Before: MARTIN, COLE, and GIBBONS, Circuit Judges.
    _________________
    COUNSEL
    ARGUED: Richard M. Kerger, KERGER & KERGER, Toledo, Ohio, for Appellants. Keith A.
    Wilkowski, VASSAR, DILLS & DAWSON, Toledo, Ohio, for Appellee. ON BRIEF: Richard M. Kerger,
    Kimberly A. Donovan, KERGER & KERGER, Toledo, Ohio, for Appellants. Keith A. Wilkowski,
    VASSAR, DILLS & DAWSON, Toledo, Ohio, for Appellee.
    _________________
    OPINION
    _________________
    BOYCE F. MARTIN, JR., Circuit Judge. Appellants are a group of proprietors of bars, restaurants
    and bowling alleys, as well as an association of restaurant owners, all of whom operate within the City of
    Toledo, Ohio. Collectively, they comprise an organization called “D.A.B.E., Inc.,” which filed suit against
    the City seeking a declaration that the City’s amended “Clean Indoor Air Ordinance” is void and
    unenforceable, as well as a preliminary and permanent injunction prohibiting the City from enforcing the
    ordinance. Appellants appeal the district court’s denial of their claims for relief. For the reasons that
    follow, we AFFIRM.
    I.
    The City of Toledo has regulated smoking in public places since 1987, when it enacted the original
    Clean Indoor Air Ordinance. In early 2003, the City Council formed a task force to consider strengthening
    the ordinance in order to protect employees and non-smoking patrons from the harmful effects of
    1
    No. 03-4662             D.A.B.E., et al. v. City of Toledo                                              Page 2
    secondhand smoke. After holding numerous meetings and public hearings, the City Council unanimously
    repealed the 1987 Clean Indoor Air Ordinance and enacted a new Clean Indoor Air Ordinance, No. 509-03.
    Ordinance No. 509-03 regulates the ability to smoke in public places, such as retail stores, theaters,
    courtrooms, libraries, museums, health care facilities, and—most relevant to the instant case—restaurants
    and bars. In enclosed public places, smoking is generally prohibited except in a “separate smoking lounge”
    that is designated for the exclusive purpose of smoking and that satisfies the following criteria:
    (1)     it cannot constitute more than thirty percent of the total square footage of space to
    which the public is invited;
    (2)     it must be completely enclosed on all sides by floor-to-ceiling walls;
    (3)     it must have a separate ventilation system not used by the non-smoking portion of
    the establishment;
    (4)     it must not incorporate the sole path to or from the restrooms, to or from the non-
    smoking portion of the establishment, or into or out of the building or waiting areas;
    and
    (5)     it cannot be located in an area where employees are required to work.
    The ordinance provides for a 120-day exemption within which an establishment may construct a smoking
    lounge meeting these requirements.
    Various interested parties attempted to seek repeal of the amended ordinance by referendum, but the
    referendum failed for lack of the requisite number of valid signatures. Appellants then filed suit against the
    City of Toledo seeking declaratory and injunctive relief. They challenged the ordinance on two grounds:
    first, that it constitutes a regulatory taking of their property in violation of the Fifth and Fourteenth
    Amendments; and second, that it is preempted by section 3791.031 of the Ohio Revised Code, a state law
    that regulates smoking in places of public assembly but that does not apply to restaurants, bowling alleys
    and bars.
    On November 13, 2003, the district court held a hearing on appellants’ requests for relief. During
    the following weeks, the district court entered a series of orders denying relief on all claims and, ultimately,
    dismissing appellants’ complaint. In so doing, the district court held that the ordinance did not effect a
    regulatory taking and that it did not conflict with—and, therefore, was not preempted by—section 3791.031
    of the Ohio Revised Code. This timely appeal followed.
    II.
    We review for abuse of discretion the district court’s denial of appellants’ request for injunctive
    relief; within this standard, the district court’s legal conclusions are reviewed de novo and its factual
    findings are upheld unless clearly erroneous. Sec’y of Labor, U.S. Dep’t of Labor v. 3re.com, Inc., 
    317 F.3d 534
    , 537 (6th Cir. 2003); S.W. Williamson County Cmty. Ass’n v. Slater, 
    243 F.3d 270
    , 277 (6th Cir. 2001).
    With regard to appellants’ request for a declaration that the Clean Indoor Air Ordinance is “void and
    unenforceable,” the district court’s legal conclusions are subject to de novo review. United Nat’l Ins. Co.
    v. SST Fitness Corp., 
    309 F.3d 914
    , 916 (6th Cir. 2002).
    A. Regulatory Taking Claim
    The Takings Clause of the Fifth Amendment, made applicable to the States through the Fourteenth
    Amendment, provides that private property shall not “be taken for public use, without just compensation.”
    U.S. Const. amend. V. “The Supreme Court has recognized two categories of takings: regulatory and
    No. 03-4662                 D.A.B.E., et al. v. City of Toledo                                                            Page 3
    physical.” Waste Mgmt., Inc. v. Metro. Gov’t of Nashville, 
    130 F.3d 731
    , 737 (6th Cir. 1997) (citations
    omitted). Appellants allege the former. Furthermore, their attack on the ordinance is limited to a facial
    challenge, which requires them to prove that the “mere enactment” of the ordinance constitutes a taking of
    their property. Hodel v. Va. Surface Mining & Reclamation Ass’n, 
    452 U.S. 264
    , 295 (1981) (citing Agins
    v. Tiburon, 
    447 U.S. 255
    , 260 (1980)). According to the Supreme Court, the test to be applied in
    considering facial challenges such as this one is “fairly straightforward.” Hodel, 
    452 U.S. at 295
    . Under
    that test, “[a] statute regulating the uses that can be made of property effects a taking if it denies an owner
    economically viable use of his land[].” 
    Id. at 295-96
     (citations and internal quotation marks omitted);
    accord Agins, 
    447 U.S. at 260-63
    ; Keystone Bituminous Coal Ass’n v. DeBenedictis, 
    480 U.S. 470
    , 501-02,
    502 n.29 (1987). Sustaining such a facial challenge is a “heavy burden.” Keystone Bituminous Coal Ass’n,
    
    480 U.S. at 501
    .
    The evidence presented in this case fails to establish that, on its face, the Clean Indoor Air Ordinance
    denies appellants “economically viable use” of their respective properties. Appellants have submitted
    affidavits alleging that they have lost—or fear they will lose—customers as a result of the ordinance,
    because smoking is an activity in which many customers wish to engage while patronizing their
    establishments. Even if true, however, those allegations are simply not enough to satisfy appellants’ burden
    of proof.
    In Hodel, the Supreme Court held that the Surface Mining Control and Reclamation Act did not, on
    its face, effect a regulatory taking because of three features of the Act: first, it did not, “on its face, prevent
    beneficial use of coal-bearing lands;” second, it did not “categorically prohibit surface coal mining” but
    “merely regulate[d] the conditions under which such operations may be conducted;” and third, it did not
    “purport to regulate alternative uses to which coal-bearing lands may be put.” Hodel, 
    452 U.S. at 296
    . The
    same factors that compelled the Court’s conclusion in Hodel apply in this case. First, there is nothing on
    the face of the Clean Indoor Air Ordinance that prevents the “beneficial use” of appellants’ property. To
    the contrary, the ordinance has absolutely no effect on any     aspect of appellants’ businesses other than to
    restrict the areas in which appellants’ patrons may smoke.1 Second, the ordinance does not “categorically
    prohibit” smoking inside appellants’ establishments; it “merely regulates the conditions under which”
    smoking is permitted. We recognize that the construction of separate smoking lounges in most cases will
    require some financial investment, but an ordinance does not effect a taking merely because compliance
    with it “requires the expenditure of money.” Third & Catalina Assocs. v. City of Phoenix, 
    895 P.2d 115
    ,
    120 (Ariz. Ct. App. 1994). Finally, for obvious reasons, the ordinance does not “purport to regulate
    alternative uses” of appellants’ respective properties. Therefore, pursuant to Hodel, it is clear that appellants
    have failed to establish that the Clean Indoor Air Ordinance, on its face, effects a regulatory taking of their
    property.
    B. Preemption Claim
    Appellants’ second argument is that the Clean Indoor Air Ordinance conflicts with—and, therefore,
    is preempted by—section 3791.031(A) of the Ohio Revised Code.
    1
    Even if the ordinance “prevent[ed] the most profitable use of [appellants’] property,” that would not be enough to establish
    a taking. Andrus v. Allard, 
    444 U.S. 51
    , 66 (1979); see also 
    id. at 65-66
     (holding that “the interest in anticipated gains has
    traditionally been viewed as less compelling than other property-related interests” and that lost profits “– unaccompanied by any
    physical property restriction – provides a slender reed upon which to rest a takings claim”) (citation omitted); City of Tucson v.
    Grezaffi, 
    23 P.3d 675
    , 684 (Ariz. Ct. App. 2001) (holding that “[l]egislation designed to promote the public welfare . . . often
    places burdens on some persons more than others[,] [b]ut the deprivation of the most beneficial use of property and diminution
    in value are not sufficient in and of themselves to constitute a taking”) (citations and quotation marks omitted). The Supreme
    Court has consistently “affirmed that ‘where an owner possesses a full ‘bundle’ of property rights, the destruction of one ‘strand’
    of the bundle is not a taking.’” Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 
    535 U.S. 302
    , 327 (2002)
    (quoting Andrus, 
    444 U.S. at 65-66
    ).
    No. 03-4662             D.A.B.E., et al. v. City of Toledo                                                Page 4
    A state statute takes precedence over a local ordinance when (1) the ordinance is in conflict
    with the statute, (2) the ordinance is an exercise of police power, rather than of local self-
    government, and (3) the statute is a general law.
    City of Canton v. State, 
    766 N.E.2d 963
    , 966 (Ohio 2002) (citations omitted). The City concedes that the
    ordinance is an exercise of police power and that section 3791.031 of the Ohio Revised Code is a general
    law. Thus, the only issue is whether the ordinance “is in conflict with the statute.” 
    Id.
    “In determining whether an ordinance is in ‘conflict’ with general laws, the test is whether the
    ordinance permits or licenses that which the statute forbids or prohibits, and vice versa.” Middleburg
    Heights v. Ohio Bd. of Bldg. Stds. 
    605 N.E.2d 66
    , 68 (Ohio 1992). To the extent that the statute does not
    address or apply to an item or issue, however, an ordinance regulating the excluded item or issue does not
    conflict with the statute, even if it deals with the same general subject matter. See Mr. Fireworks, Inc. v.
    City of Dayton, 
    548 N.E.2d 984
    , 986-87 (Ohio Ct. App. 1988). “The law in Ohio on ‘conflict’ is stringent.
    Pre-emption is not easily demonstrated.” City of East Cleveland v. Scales, 
    460 N.E.2d 1126
    , 1128 (Ohio
    Ct. App. 1983).
    In this case, section 3791.031 of the Ohio Revised Code regulates indoor smoking throughout the
    State of Ohio within “places of public assembly.” It explicitly provides, however, that “[r]estaurants, food
    service establishments, dining rooms, cafes, cafeterias, or other rooms used primarily for the service of food,
    as well as bowling alleys and places licensed by the division of liquor control to sell intoxicating beverages
    for consumption on the premises, are not places of public assembly.” O.R.C. § 3791.031(A)(3). As
    discussed, the City of Toledo’s Clean Indoor Air Ordinance prohibits smoking in all public places, including
    restaurants and bars, except in separate smoking lounges.
    Appellants argue that because smoking is allowed in their establishments under state law but not
    under the ordinance, there is a conflict that renders the ordinance preempted by state law. The City argues,
    by contrast, that the statute “simply does not regulate the establishments” that are subject to the ordinance
    and, therefore, municipalities within the State of Ohio are free to regulate smoking within these
    establishments in the exercise of their “home rule” authority. See Ohio Const. art. XVIII, § 3
    (“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.”).
    The opinion of the Ohio Court of Appeals in Mr. Fireworks is particularly instructive. In that case,
    the court held that there was no conflict between a municipal ordinance that prohibited the sale of sparklers
    and novelty noisemakers and a state statute that regulated fireworks but that explicitly provided that “[t]his
    chapter does not prohibit or apply to” sparklers and novelty noisemakers. Mr. Fireworks, 
    548 N.E.2d at 985-86
    . The court reasoned that the legislature’s use of the phrase “does not prohibit or apply to” indicated
    not that sparklers and novelty noisemakers were immune to regulation, but that these particular items simply
    were not addressed in, or covered by, the statute. 
    Id. at 986
    . The same rationale applies here; by stating that
    certain types of establishments—such as restaurants, bars, bowling alleys, etc.—“are not places of public
    assembly,” O.R.C. § 3791.031(A)(3), the legislature indicated not that these establishments were immune
    to smoking-related regulation, but that they simply did not fall within the ambit of the statute.
    Our independent research reveals that other courts that have considered whether smoking-related
    ordinances are preempted by state law have reached similar conclusions. For example, in Oregon
    Restaurant Association v. City of Corvallis, 
    999 P.2d 518
    , 519 (Or. App. 2000), the Court of Appeals of
    Oregon held that no conflict existed between a state statute prohibiting smoking in public places except in
    approved smoking areas and a City ordinance prohibiting smoking “in all enclosed public places within the
    City or located on City owned property, including but not limited to” restaurants. According to the court:
    No. 03-4662             D.A.B.E., et al. v. City of Toledo                                               Page 5
    The Act prohibits smoking in certain locations; it does not contain the slightest hint that the
    legislature intended to create a positive right to smoke in all public places where it did not
    expressly forbid smoking. Nothing in the Act is inconsistent with a local jurisdiction’s
    decision to impose greater limits on public smoking.
    
    Id. at 520
    . Although the state statute did not explicitly provide that its restrictions were “basic” or
    “minim[al],” the court held that “we are reluctant to assume that the legislature, in adopting statewide
    standards, intended to prohibit a locality from requiring more stringent limitations within its particular
    jurisdiction.” 
    Id. at 521
    . In the court’s view, it is “reasonable to assume that the legislature did not, by
    adopting a statewide law, mean to displace local regulation of local conditions unless its intention to do so
    was apparent.” 
    Id. at 520
    .
    Similarly, in Amico’s Inc. v. Mattos, 
    789 A.2d 899
    , 907 (R.I. 2002), the Supreme Court of Rhode
    Island held that a state statute requiring that “eating facilities with a seating capacity of fifty (50) or more
    persons . . . have separate seating for nonsmokers and smokers” did not conflict with a local ordinance
    requiring “restaurants of any size either [to] be smoke-free or [to] provide a smoking area enclosed by solid
    walls, doors with automatic closing mechanisms, exhaust fans, and negative air pressure.” The court
    reasoned that no restaurant or bar would violate the statute by complying with the ordinance and that, in
    fact, “the more stringent smoking regulations imposed by the town advance the [statute’s] stated purposes
    . . . .” Id.; see also City of Tucson v. Grezaffi, 
    23 P.3d 675
    , 680-81 (Ariz. Ct. App. 2001) (holding that a
    local ordinance restricting smoking was not preempted by a state statute); Tri-Nel Mgmt., Inc. v. Bd. of
    Health, 
    741 N.E.2d 37
    , 44 (Mass. 2001) (same).
    In an attempt to overcome this persuasive authority supporting the City’s position, appellants point
    to the case of LDM, Inc. v. Princeton Regional Health Commission, 
    764 A.2d 507
    , 517 (N.J. Super. Ct.
    2000), in which a New Jersey trial court held that a local ordinance prohibiting smoking in “restaurants,
    bars, cabarets, and taverns” in an attempt to protect the public from the deleterious effects of smoking was
    preempted by a state law that did not prohibit smoking in restaurants, but merely “encourage[d] restaurants
    to establish non-smoking areas.” That case, however, is significantly distinguishable from the present one.
    The statute at issue in LDM provided that any guidelines suggested by political subdivisions such as
    municipalities would “in no case . . . be mandatory.” 
    Id.
     (quoting N.J. STAT. ANN. 26:3E-10(a)). The court
    also found it significant that the statute explicitly stated that its provisions “shall supersede” any municipal
    ordinance concerning smoking in restaurants except ordinances that are enacted “for purposes of protecting
    life and property from fire.” 
    Id.
     (quoting N.J. STAT. ANN. 26:3E-10(b)). This led the court to conclude that
    the statute “precludes a municipality from banning smoking in restaurants based on the alleged deleterious
    effects of smoking on the public health” because “[t]he authority of the municipality to restrict smoking in
    restaurants is limited to protecting life and property from fire.” 
    Id. at 518
    . Because none of the factors that
    compelled the LDM court’s decision is present here, that case fails to undermine our conclusion that section
    3791.031(A)(3) of the Ohio Revised Code does not preempt the City of Toledo’s Clean Indoor Air
    Ordinance.
    III.
    For these reasons, the district court’s judgment is AFFIRMED.