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Policy: Labor

Liberal policy group can't sue over jobs agency

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News,Business,Jobs,Labor,Ohio,John Kasich

COLUMBUS, Ohio (AP) — Ohio's high court denied legal standing Tuesday to opponents of the private job-creation agency created by Gov. John Kasich, ending a legal fight that has dogged JobsOhio since its inception in 2011.

In a 5-2 decision, the Ohio Supreme Court said ProgressOhio, two Democratic state lawmakers and their allies failed to prove they had a stake in the case, siding with lower courts.

"If and when an injured party seeks to challenge JobsOhio, we may entertain such a case," Justice Judith French wrote for the majority. "But those parties are not before us today."

The ruling is a significant victory for the Republican governor, JobsOhio and the holders of the $1.5 billion in bonds that the agency put on the market in January 2013. JobsOhio moved forward with selling bonds backed by future state liquor profits despite the pending court case.

The lawsuit alleged that JobsOhio's funding structure violates a prohibition in Ohio's Constitution against turning taxpayer dollars over to a private entity. That question remains unresolved, unless another lawsuit is brought against the nonprofit job-creation board that Kasich envisioned would move "at the speed of business."

The state argued that the parties, ProgressOhio and Democrats Mike Skindell and Dennis Murray, couldn't show harm, so they didn't have standing to sue. Opponents argued the law created an impossibly small window in which they had to both experience harm and meet the deadline for filing their legal challenge.

"To succeed in bringing a public-right case, a litigant must allege 'rare and extraordinary' issues that threaten serious public injury," the court said. "Not all allegedly illegal or unconstitutional government actions rise to this level of importance."

Chief Justice Maureen O'Connor, Justice Judith Lanzinger and Beth Whitmore, sitting for Justice Terrence O'Donnell, concurred with the ruling, with Justice Sharon Kennedy concurring in judgment only. Justices Paul Pfeifer and William O'Neill dissented.

Pfeifer said the decision marked the third time the Republican-dominated court had failed to determine the constitutionality of legislation creating JobsOhio — saying first "not here," then "not now."

"Today, this court ends all doubt about when it will determine the constitutionality of the JobsOhio legislation, essentially responding, 'Not ever,'" he wrote.

ProgressOhio Executive Director Brian Rothenberg said the ruling raises questions about who has the right to protect Ohio's Constitution.

"The reality is we may have a situation where the legislature passed something unconstitutional and no court will ever rule on it," he said. "I can't imagine that leveraging of public dollars, and shutting off into a private entity and blocking public review of how that money is spent, isn't significant public policy."

Kasich spokesman Rob Nichols said the decision allows Ohio's job-creation efforts to move forward.

"Let's be clear. These groups sought to preserve the failed government-centric status quo approach to economic development that contributed to the loss of 400,000 Ohio jobs over a four year period," he said in an email. "Ohioans deserve better."

John Minor, president and chief investment officer of JobsOhio, has said proceeds of the sale of bonds allowed the agency to hire more staff and expand its public outreach efforts to bring jobs to the state. In a statement Tuesday, he said the ruling will allow the office to remain focused on that core mission.

The fight over the issue had drawn attention across the political spectrum.

The libertarian 1851 Center for Constitutional Law sided with ProgressOhio, a sometime political adversary, in its legal effort. The law center's Maurice Thompson argued that laws denying taxpayers the standing to sue government are dangerous and increasingly common. The conservative Ohio Roundtable had also closely watched the case, viewing it as precedent-setting for other groups seeking to challenge the constitutionality of government actions.

During oral arguments in November, JobsOhio opponents said the state's Constitution would be left defenseless if their politically diverse coalition wasn't granted standing in the case. They said the law set up almost insurmountable legal hurdles, including a 90-day window to sue that closed before the office could impact any potential plaintiff.

State attorney Stephen Carney argued that plenty of parties — such as public employees, liquor dealers and bondholders — had a legitimate right to sue JobsOhio but chose not to. He said those with standing must have an individual stake in the case, not be pursuing generalized "public interest."

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