Supreme Court of Ohio Clerk of Court - Filed January 23, 2018 - Case No. 2018-0114 IN THE SUPREME COURT OF OHIO HDV CLEVELAND, LLC, dba Larry ) CASE NO. Flynt’s Hustler Club, ) ) On Appeal from the Franklin County Court Appellant, ) of Appeals, Tenth Appellate District ) vs. ) ) Court of Appeals Case No. 17AP-362 OHIO LIQUOR CONTROL ) COMMISSION ) ) Appellee. ) ______________________________________________________________________ MEMORANDUM IN SUPPORT OF JURISDICTION ______________________________________________________________________ J. MICHAEL MURRAY* (0019626) MIKE DEWINE *Counsel of Record Attorney General STEVEN D. SHAFRON (0039042) CHARLES E. FEBUS 0063213 BERKMAN, GORDON, MURRAY & DeVAN Assistant Attorney General 55 Public Square, Suite 2200 Charitable Law Section Cleveland, Ohio 44113 150 E. Gay St. 23rd FL (216)781-5245 Columbus, OH 43215-3400 (216) 781-8207 (facsimile) (614) 466-4513 [email protected] (614) 728-4548 (facsimile) [email protected] [email protected] Attorneys for Appellant HDV Cleveland, Attorneys for Appellee Ohio Liquor Control LLC dba Larry Flynt’s Hustler Club Commission TABLE OF CONTENTS Page No. EXPLANATION OF WHY THIS CASE PRESENTS A SUBSTANTIAL CONSTITUTIONAL QUESTION AND IS OF GREAT PUBLIC INTEREST.. 1 STATEMENT OF THE CASE. 4 ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW. 6 Proposition of Law No. 1 A court reviewing an administrative decision has the authority to reverse, modify, or vacate that decision when the penalty imposed violates the Due Process or Equal Protection Clauses of the United States or Ohio Constitutions. Henry’s Café, Inc. v. OLCC, 170 Ohio St. 233, 163 N.E.2d 678 (1959), distinguished.. 6 Proposition of Law No. 2 Rule 52, which prohibits entertainment that contains nudity in every venue that hold a liquor license, including theaters, nightclubs, restaurants and concert halls, is a content-based restriction of expression subject to strict scrutiny under Art. I, §11 of the Ohio Constitution. 10 APPENDICES Franklin County Court of Appeals Opinion (Dec. 14, 2017) Franklin County Court of Appeals Judgment Entry (Dec. 18, 2017) i EXPLANATION OF WHY THIS CASE PRESENTS A SUBSTANTIAL CONSTITUTIONAL QUESTION AND IS OF GREAT PUBLIC INTEREST This case presents an important question of administrative law concerning the ability of a reviewing court to examine an administrative order and sanction under R.C. 119.12. In this case, the court of appeals affirmed the imposition of a penalty comprised of a revocation of Appellant’s liquor license or, in lieu thereof, a $100,000 forfeiture for a single violation of OAC 4301-1-1-52 (“Rule 52"), which, HDV asserted, violated its rights to due process and equal protection. But the court below refused to consider the merits of HDV’s constitutional claim, relying on this Court’s decision in Henry’s Café, Inc. v. Liquor Control Comm’n, 170 Ohio St. 233, 163 N.E.2d 678 (1959), which states that in an administrative appeal, “the Court of Common Pleas has no authority to modify a penalty that the agency was authorized to and did impose, on the ground that the agency abused its discretion.” It held that HDV’s due process and equal protection arguments in this case are a thinly veiled attempt to circumvent the holding of the Supreme Court in Henry's Cafe. As an intermediate appellate court, this court is required to follow the syllabus of Henry's Cafe unless or until such reconsideration occurs. Lindner. Accordingly, we find that appellant's due process and equal protection challenges to the amount of the forfeiture are without merit. Id. ¶ 48 (citation omitted). The court’s determination that an unconstitutional penalty can entirely escape judicial scrutiny warrants review by this Court. Further, the reach of Henry’s Café is not limited to appeals from the Liquor Commission; it applies to virtually all appeals taken pursuant to Chapter 119 of the Revised Code. Courts of Appeals throughout the state have recognized that adherence to Henry’s Café can result in 1 draconian consequences, including professional license suspensions and revocations, that deprive citizens of their livelihoods and have repeatedly called on this Court to revisit its decision. The Franklin County Court of Appeals succinctly observed: [W]e have little or no ability to review a penalty even if it seems on the surface to be unreasonable or unduly harsh. Though she had no prior violations, appellant had her liquor license revoked, not suspended for a period of time. Perhaps the time to reconsider Henry's Cafe has arrived, but the Supreme Court of Ohio must be the court to do that reconsideration. We, as an intermediate appellate court, are required to follow the syllabus of Henry's Cafe unless or until such reconsideration occurs. Lindner v. Ohio Liquor Control Comm'n, No. 00AP-1430,2001 WL 579808, at *5 (Ohio Ct. App. May 31, 2001). See also Aida Enterprises, Inc. v. Ohio State Liquor Control Comm'n, 2002-Ohio-2764, ¶¶ 13-14; Goldfinger Enterprises, Inc. v. Ohio Liquor Control Comm., Franklin App. No. 01AP–1172, 2002–Ohio–2770 at ¶ 22; id. at ¶ 28 (Deshler, J., concurring)(“ I write separately to emphasize that either Ohio Adm.Code Section 4301:1-1-52 (Rule 52) should be amended or the Supreme Court of Ohio should revisit the case of Henry's Café . .”); Shotz Bar & Grill, Inc. v. Ohio Liquor Control Comm'n, 2003-Ohio-2659, ¶ 16; F & F, Inc. of Cincinnati v. Ohio Liquor Control Comm., 2004-Ohio-5259, ¶¶ 25-26; Gehad & Mandi, Inc.v. Ohio Liquor Control Comm’n, 2006-Ohio-3081, ¶ ¶6-7; O'Wesney v. State Bd. of Registration For Prof'l Engineers & Surveyors, 2009-Ohio-6444, ¶¶ 72-74; Kellough v. Ohio State Bd. of Edn., 2011-Ohio-431, ¶¶ 57-58); O'Wesney v. State Bd. of Registration For Prof'l Engineers & Surveyors, 2009-Ohio-6444, ¶ 73. This case presents the ideal vehicle to re-visit Henry’s Café, for the effect of the lower court’s decision is to leave administrative discretion wholly unchecked and penalties completely insulated from judicial review, irrespective of their constitutionality, harshness, or severity. 2 Second, the case presents a substantial constitutional question under under Art. I, §11 of the Ohio Constitution, namely, whether Rule 52, which prohibits any entertainment that contains “nudity”– broadly defined to include even costumes depicting body parts– in all theaters, comedy clubs, and other premises that have a liquor license, is constitutional. This Court has never addressed Rule 52's constitutionality under Art. I, §11, and all of the opinions addressing the constitutionality of the former and current iterations of Rule 52 under the First Amendment to the United States Constitution, both in state court and in federal court, predated the Supreme Court’s decision in Reed v. Town of Gilbert, 135 S.Ct. 2218 (2015), which represented a sea change in determining whether or not a speech regulation is content-based.1 Under Reed, if a law regulating expression is content-based, it must be subjected to strict scrutiny, even if it has a content-neutral purpose. Reed, 135 S.Ct. at 2227. See also State ex rel. 1This Court upheld a former version of Rule 52 under the First Amendment in Salem v. Liquor Control Comm., 34 Ohio St.2d 244, 298 N.E.2d 138 (1973), which version was later was declared unconstitutional by the federal court in J.L. Spoons v. City of Brunswick, 181 F.R.D. 354 (N.D. Ohio 1998). After the federal court’s decision, the Commission promulgated a new version of Rule 52, which was preliminarily, and later permanently, enjoined as unconstitutional under the First Amendment. J.L Spoons, Inc. v. O’Connor, 194 F.R.D. 589 (N.D. Ohio 2000). Four years later, the Commission adopted the current version of Rule 52. Its constitutionality under the First and Fourteenth Amendments was litigated in the federal courts for a decade. See J.L. Spoons v. Morkel, 2007 WL 14581 (N.D. Ohio 2007), rev’d sub nom., J.L. Spoons, Inc. v. Dragani, 538 F.3d 379 (6th Cir. 2008), cert. denied, 558 U.S. 815 (2009), on remand, J.L. Spoons v. Collins-Taylor, 2012 WL 3370184 (N.D. Ohio 2012), rev’d sub nom., J.L. Spoons, Inc. v. Ohio Dept. of Public Safety, 509 Fed. Apx. 464 (6th Cir .2012), on remand, J.L. Spoons, Inc. v. Ohio Dept. of Public Safety, 31 F.Supp.3d 933 (N.D. Ohio 2014). The ultimate conclusion of that litigation was that Rule 52 passed muster as a content-neutral restriction. An appeal from the district court’s last decision was taken and later dismissed. See also 161 Dublin, Inc. v. Ohio State Liq. Cont. Comm’n, 2001-Ohio-8863( holding former version of Rule 52 unconstitutional under First Amendment); WCI, Inc. v. Ohio Liquor Control Comm’n, 2016-Ohio-4778, appeal not allowed, 148 Ohio St.3d 1410, 69 N.E.3d 750, 2017-Ohio-573(relying on J.L. Spoons and sustaining Rule 52 under First and Fourteenth Amendments). 3 Ethics First-You Decide Ohio Political Action Comm. v. DeWine, 2016-Ohio-3144, ¶ 23, 147 Ohio St. 3d 373, 378, 66 N.E.3d 689, 694–95;In re Judicial Campaign Complaint Against O'Toole, 2014-Ohio-4046, ¶ 19, 141 Ohio St. 3d 355, 361, 24 N.E.3d 1114, 1121; Disciplinary Counsel v. Tamburrino, 2016-Ohio-8014, ¶ 18, 151 Ohio St. 3d 148, 152, 87 N.E.3d 158, 164, reconsideration denied, 2016-Ohio-8492, 147 Ohio St. 3d 1480, 66 N.E.3d 766, cert. denied 137 S. Ct. 2170 (2017). The determination by the court of appeals that Rule 52 passed muster under Art. I, §11 was wrong because first, it ignored the broader and independent protection granted to expression under Ohio’s Constitution.