Saturday, July 18, 2009

Feeling lucky Teddy boy?

This post was originally posted at

Many thanks to my friend Mr. Hurley for allowing this post to make it to a much larger audience.

“Feeling lucky Teddy boy?” is a collaborative effort by two new incredibly intelligent attorneys who are thankfully fans of the blog. I know how busy they are with their work & really appreciate them taking the time to write what I hope are the first of many posts. Their pen names are “Shine the Light” & “It is Eight Belles…by a Nose!”

First, the legal issues will most likely be decided relatively quickly in The Supreme Court of Ohio, for which the legislature “leaned” around the Ohio Constitution to add a provision in the budget bill to give original jurisdiction over any challenge to the slots plan. The budget language further requires that any complaint filed at the common pleas level be dismissed immediately.

Now, besides the fact that the Ohio Constitution alone sets forth the original jurisdiction of the Ohio Supreme Court, there is a valid due process argument to be made that this provision might be, in and of itself, unconstitutional because it denies the litigants all three levels of court review, possibly denies the right to a jury trial and, moreover, presents some practical problems in developing the factual record, injunctive relief etc. If this provision is challenged (big question if it will be) the Supreme Court of Ohio would have to rule on the constitutionality of that language suddenly expanding its original jurisdiction and if this constitutional challenge is successful, the real challenge against slots route would then have to start in common pleas, seriously lengthening the time that litigation will stall any legal certainty on the topic of slots at Ohio racetracks. There is a decent shot that the Supreme Court will find this provision unconstitutional and require that the case be filed at the Common pleas level. If so, the case will be bogged down for years in the courts -- game over for Strickland.

This case will not go to Federal court unless a 14th Amendment Due Process argument somehow is filed there. The principal issues will involve interpretations of the Governor and General Assembly delegation of power to the Ohio Lottery under the Ohio Constitution which do not create Federal jurisdiction. Except for the fact that the Ohio Supreme Court will likely rule fairly timely, giving his investors (aka campaign contributors?) answers one way or the other on the topic, Strickland would probably want this to go to Federal court, since he’d have a shot at a friendlier forum. He knows he's facing 7 Republican Ohio Supreme Court Justices (okay, maybe 6.25 Republicans) who will not be in any mood to do him any favors - another negative for Strickland. This Supreme Court is not hard-core right, but no doubt it is licking its chops at the chance to finally get a say in this state budget crisis. Remember – there are some Justices running in 2010 and others who may have political aspirations beyond the State Supreme Court.

Once the procedural issues are resolved, there is a perfect TRIFECTA (if not more) of potential constitutional problems with the General Assembly’s and Strickland's plan. First is the big picture question whether the Governor and the General Assembly have the power to implement such a plan without a vote of the people. In other words:

Can the General Assembly simply whip up some law on the books and the Governor then issue an Executive Order and/or Directive for the Ohio Lottery Commission to put slots into Ohio racetracks, or, do those actions violate the Ohio Constitution which takes a vote of the people of Ohio to change, thereby requiring a vote of the people to commission the same action by the Governor and General Assembly?

Second, that big picture question will depend on the Courts determination of the following two big areas of contention based in the language of the Ohio Constitution. One is the very key question whether the 1972 Ohio constitutional amendment creating the lottery authorized the later development of video lottery terminals (“VLTs”). The pivotal issue will be the definition of "lottery" at the time in 1972. A strong argument can be made that "lottery" meant a game based on a "ticket" (the typical definition and expectation of the term "lottery" at the time) If the Supreme Court finds that the 1972 amendment did not authorize VLTs (which are slot machines -- no matter what you call them), then Strickland is toast.

The next (and separate) constitutional issue revolves around a 1988 amendment specifying that all lottery proceeds have to go to education funding. In case you want to read what the big fight will be about on this one – here is the actual language which is the second sentence in Article XV, Sect. 6: “The General Assembly may authorize an agency of the state to conduct lotteries, to sell rights to participate therein, and to award prizes by chance to participants, provided that the entire net proceeds of any such lottery are paid into a fund of the state treasury that shall consist solely of such proceeds and shall be used solely for the support of elementary, secondary, vocational, and special education programs as determined in appropriations made by the General Assembly.”

There are a few cases out there that suggest the Supreme Court might interpret this to mean that the State of Ohio can't supplant money from the lottery, VLTs or any fees associated with them into anything else in the state budget other than education funding. If so, Strickland is going to have a problem because he (and House D's) explicitly said that if the VLTs do not go forward, then there would be corresponding cuts to JFS, libraries, etc. Maybe good politics on their part at the time, but it is going to come back and bite them in the arse in court. That was a dumb mistake by Strickland and House D's.

These legal problems are in addition to the practical problems like: Will the Ohio Jobs and Growth casino plan get on the Nov. 2009 ballot and will it pass? Will the Lebanon Raceway issue be resolved by May 2010? Will Raceway Park even purchase a license? Due to Thistledown’s bankruptcy we will not even know who owns the track until September 8th & who knows if losing two months of planning will set them back from getting operational on schedule. Can the "racinos" be 80% operational from the very beginning? That's just the tip of the iceberg. Suffice it to say, the press will be following this for a while, each story reminds Ohioans that Strickland was against gambling, before he was for it. And the state of Ohio will more than likely have a budget correction bill in April 2010 – bad timing for governor Strickland.

Finally, apparently no-one but the “inside statehouse” Gongwer News noticed that Strickland has assembled an ad-hoc group of “Slots Commissioners” – several former Lottery Directors – who are supposed to provide help and advice to the Lottery Commission on the implementation of the plans for slots. I think if I were Director Dolan, I might be a little insulted that my boss just stuck me with the last few people who had my job (think Batchelder wants advice on how to potentially be the leader of the GOP caucus from Husted, Householder or Davidson…get my point?), but bigger than that are issues of whether this is a “public body” for purposes of the Ohio Sunshine Law, and, what if anything are we paying these guys? How much does this cost? Additionally, who do they report to and how does anyone know whether they add value or not? I wonder if they have any ethical conflicts with the gaming industry now?

All of these points will be the stories for the next ten months. The stories will not be that Republicans are being obstructionists or slashing this program or that one, which Strickland desperately wanted to create so he could campaign as the "victim" once again. As Strickland himself said, he now "owns" these issues, i.e. the status quo.

Feeling lucky Teddy boy?