Emanuel's, L.L.C. v. Restore Marietta, Inc. , 2023 Ohio 147 ( 2023 )

[Cite as Emanuel's, L.L.C. v. Restore Marietta, Inc., 2023-Ohio-147.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
WASHINGTON COUNTY
Emanuel’s LLC, : Case No. 22CA6
Plaintiff-Appellant, :
v. : DECISION AND
JUDGMENT ENTRY
Restore Marietta, Inc., et al., :
Defendants-Appellees. : RELEASED 1/17/2023
______________________________________________________________________
APPEARANCES:
Anne C. Labes, Esq., Parkersburg, West Virginia, for appellant.
Jared A. Wagner and Jane M. Lynch, Green & Green, Lawyers, Dayton, Ohio, and Paul
Betram, III, City of Marietta Law Director, Marietta, Ohio, for appellee City of Marietta.
Patrick Kasson and Kent Hushion, Columbus, Ohio, for appellees Restore Marietta, Inc.
and Christie Lynn Thomas.1
______________________________________________________________________
Hess, J.
{¶1} Emanuel’s LLC appeals from a judgment of the Washington County
Common Pleas Court granting judgment on the pleadings in favor of the city of Marietta
(the “City”), Restore Marietta, Inc., d/b/a Marietta Main Street (“MMS”), and Christie Lynn
Thomas, defendants below. Emanuel’s presents three assignments of error asserting
that the trial court erred by extending statutory immunity to the defendants and by
dismissing tortious interference with business relations and monopoly claims contrary to
1 We have used the spelling of Thomas’s first name in the complaint. However, we observe that in her
answer, Thomas asserted that her first name was spelled “Cristie,” and Emanuel’s has used that spelling
in its appellate brief.
Washington App. No. 22CA6 2
facts asserted in the complaint. For the reasons which follow, we overrule the
assignments of error and affirm the trial court’s judgment.
I. FACTS AND PROCEDURAL HISTORY
{¶2} In June 2021, Emanuel’s filed a complaint against the City, MMS, and
Thomas which alleged the following. Emanuel’s owns real estate in Marietta, Ohio, where
it operates an Israeli restaurant, TLV Restaurant. In March 2021, the mayor of Marietta
submitted to the Marietta City Council the final version of an application to establish a
Designated Outdoor Refreshment Area, or “DORA,” in an area of downtown Marietta
where TLV is located. A DORA is an area “where the State’s open container laws are
lifted during designated times, allowing customers to purchase alcoholic beverages from
permitted establishments and carry the containers within the confined DORA area.”
Emanuel’s holds a D5L liquor license from the Ohio Division of Liquor Control for TLV,
and the application identified TLV as a qualified permit holder. The application mentioned
DORA cups, included a “mock-up design of the cups,” and stated that the cups would be
“ ‘made available’ to qualified permit holders.” On April 29, 2021, the Marietta City Council
passed a resolution to establish the DORA. The City announced that its DORA program
would begin on June 4, 2021.
{¶3} On or about May 18, 2021, Thomas, the Executive Director of MMS, a
private not-for-profit corporation, “initiated a private e-mail chain to certain designated
permit holders within the DORA zone, informing them of additional regulations [MMS] was
requiring permit holders to comply with, including the purchase of designated cups” from
MMS. Emanuel’s was not included in the chain. The information in the chain, “including
the link to purchase the cups, was not made publicly available at any time,” and “[t]he
Washington App. No. 22CA6 3
only way to receive this information and purchase the cups was through the private email
chain generated by [MMS].” The cups are sold for $0.90 each, “with part of the profit
allegedly inuring to [MMS], part of the profit inuring to the print shop that designed the
cups and orders the cups, part of the profit inuring to the benefit of the company that
actually prints the cups, and part of the profit allegedly inuring to the benefit of a fund
maintained by [MMS].” It costs approximately $50.00 to ship 250 cups, “the minimum
order permitted.” And the link to purchase the cups “indicates that businesses are
required to charge their customers $1.00 per cup.”
{¶4} On May 24, 2021, Emanuel’s “received its DORA license from the Ohio
Division of Liquor [C]ontrol.” On June 3, 2021, Emanuel’s contacted the City “to obtain
the DORA cups mentioned in” the application and was directed to contact Thomas of
MMS. Thomas informed representatives of Emanuel’s that “they may not participate in
DORA on June 4, 2021, as they had not ordered the cups sold by [MMS], which take
approximately 2 weeks to produce.” Thomas also came to TLV and “expressed to
restaurant employees and the manager, in front of customers,” that Ari Gold, the CEO of
Emanuel’s, had accused her “of vandalizing his property with spray-painted swastikas”
even though he “never accused anyone, let alone Ms. Thomas, of this hate crime,” which
had occurred in 2017. Gold and Emanuel’s representative went to a city council meeting
and expressed concerns about MMS’s “apparent enforcement of the DORA legislation
without any authority.” The mayor said a city official or the city law director would call
them the next day, but this did not occur.
{¶5} The complaint further alleged that the DORA application and resolution did
not “delegate any authority to operate or enforce DORA to [MMS], or any other private
Washington App. No. 22CA6 4
entity,” or indicate that participating businesses had to buy cups from MMS, that the cups
could only be manufactured and sold by a single entity, that the cups had to be
compostable, or that businesses had to charge customers $1.00 per cup. The resolution
only required the use of plastic cups that were “distinctly marked.” MMS did not “have
the authority to enforce legislation” in the City or “create additional restrictions regarding
duly-passed city legislation,” “wrongfully precluded some businesses, including Plaintiff,
from participating in a city-authorized program designed to benefit downtown
businesses,” did not have “authority to usurp contract opportunities and create a
monopoly under the guise of operating a city program,” and “created a situation where
certain businesses were able to benefit from the DORA program, while others were
wrongfully excluded.” And the City “failed to prevent [MMS] from assuming government
functions and assuming governmental authority.”
{¶6} The complaint set forth three counts. Counts One and Two incorporated
“by reference all other material allegations” in the complaint and made additional
allegations. Count One was titled “tortious interference with business relations” and
alleged that MMS did not have “authority to impose additional restrictions on businesses
willing to participate in DORA,” “to enforce DORA legislation,” or “to exclude businesses
from the DORA program” and that MMS “wrongfully prevented [Emanuel’s] from
participating in the DORA program,” causing Emanuel’s to suffer damages. Count Two
was titled “violation of O.R.C. 1331: rules against monopolies” and alleged that MMS
“created a monopoly by requiring business owners to purchase cups through [MMS] only
or be excluded from the DORA program, despite no legislative authority.” Count Two
further alleged that MMS caused “the cups to be sold at an inflated price well-above
Washington App. No. 22CA6 5
market value, for the purported benefit of [MMS] and a fund [MMS] maintains,” that this
“monopoly also inured to the benefit of private manufacturers, a deal which was struck
outside the confines of the government contract procurement process,” and that the
pricing scheme was not in the DORA application or resolution. Count Two also alleged
that the City “allowed [MMS] to cause this monopoly” and that the monopoly caused
Emanuel’s to suffer damages. Count Three was titled “defamation and slander” and
alleged that Thomas’s false statement about Gold accusing her of vandalism caused
Emanuel’s damages.
{¶7} The complaint requested “preliminary injunctive relief preventing Marietta
Main Street from continuing to enforce DORA legislation, impose additional restrictions
not included in the legislation, and engage in a monopoly as detailed herein.” The prayer
for relief demanded “judgment against Defendants which will fairly and reasonably
compensate Plaintiff for damages, plus interest, costs, and other such relief as this Court
deems appropriate, and injunctive relief as stated herein.”
{¶8} In July 2021, Emanuel’s filed a “renewed motion for preliminary injunction”
asking that MMS and the City be enjoined from certain conduct.2 The defendants
opposed this motion. The defendants also filed answers to the complaint and motions for
judgment on the pleadings.
{¶9} The trial court granted the motions for judgment on the pleadings, denied
the “Application for Preliminary Injunction” as moot, and dismissed the case. The court
observed that it was “not entirely clear” whether Emanuel’s asserted “all three causes of
2 The City asserts that this motion only requested a preliminary injunction against MMS. However, the
motion itself requests a preliminary injunction against both MMS and the City even though the “introduction”
to Emanuel’s memorandum in support of the motion, which the City quotes in its appellate brief, refers only
to MMS.
Washington App. No. 22CA6 6
action” in the complaint against the City. However, even if Emanuel’s did, the City was
“entitled to immunity from plaintiff’s claims as a matter of law” under R.C. 2744.02(A)(1)
“unless one of the exceptions in R.C. 2744.02(B)” applied. The court found that the facts
in the complaint were “insufficient to establish any of the exceptions to immunity.” The
court also found the City immune from the Valentine Act claim under the state action
doctrine. The court found that the claim for tortious interference with business relations
against MMS and Thomas failed because the complaint did not allege (1) any prospective
business relations with which they interfered, (2) that they actually interfered with any
prospective business relations, (3) that they prevented Emanuel’s from entering into any
prospective business relations, (4) that any alleged interference was intentional, or that
(5) Emanuel’s suffered any damages. The court found the Valentine Act claim against
MMS and Thomas failed because (1) the alleged antitrust violations were “not an
unreasonable restraint of trade,” (2) the complaint did not “allege an antitrust injury,” and
(3) MMS and Thomas were “immune under the state action doctrine.” The court found
that the defamation claim against Thomas failed because a corporation could not bring a
claim for defamation based on “the alleged slander of its owners and officers,” and the
complaint failed to allege “special damages required for its per quod slander claim.”
II. ASSIGNMENTS OF ERROR
{¶10} Emanuel’s presents three assignments of error:
Assignment of [E]rror 1: The trial court erred in granting Defendants’
Motions for Judgment on the Pleadings, extending statutory immunity to
nongovernmental Defendants ReSTORE Marietta, Inc. and Cristie Thomas,
and extending immunity to the City of Marietta.
Assignment of Error 2: The trial court erred by dismissing the claim for
tortious interference with business relations contrary to facts asserted in
[the] complaint.
Washington App. No. 22CA6 7
Assignment of Error 3: The trial court erred by dismissing the monopoly
claim contrary to facts asserted in [the] complaint.
III. STANDARD OF REVIEW
{¶11} “Appellate review of a judgment on the pleadings involves only questions of
law and is therefore de novo.” New Riegel Local School Dist. Bd. of Edn. v. Buehrer
Group Architecture & Eng., Inc., 157 Ohio St.3d 164, 2019-Ohio-2851, 133 N.E.3d 482,
¶ 8. Civ.R. 12(C) states: “After the pleadings are closed but within such time as not to
delay the trial, any party may move for judgment on the pleadings.” “ ‘Dismissal is
appropriate under Civ.R. 12(C) when (1) the court construes as true, and in favor of the
nonmoving party, the material allegations in the complaint and all reasonable inferences
to be drawn from those allegations and (2) it appears beyond doubt that the plaintiff can
prove no set of facts that would entitle him or her to relief.” Maternal Grandmother v.
Hamilton Cty. Dept. of Job & Family Servs., 167 Ohio St.3d 390, 2021-Ohio-4096, 193
N.E.3d 536, ¶ 13, quoting Reister v. Gardner, 164 Ohio St.3d 546, 2020-Ohio-5484, 174
N.E.3d 713, ¶ 17.
IV. R.C. CHAPTER 2744
{¶12} In its first assignment of error, Emanuel’s contends the trial court erred by
extending statutory immunity to the defendants.
A. The City
{¶13} Emanuel’s maintains that the trial court erred when it “categorically”
dismissed the City “from the action based on its argument of governmental immunity
protections as codified in Ohio Revised Code Chapter 2744.” Emanuel’s asserts that it
requested two forms of relief in its complaint—"damages in tort” and injunctive relief,
Washington App. No. 22CA6 8
which is a form of equitable relief. Emanuel’s suggests that the City is liable for damages
for tortious interference with business relations and violation of the Valentine Act because
the immunity exception in R.C. 2744.02(B)(2) for the negligent performance of acts with
respect to proprietary functions applies.3 Emanuel’s claims that “purchasing materials
and setting prices for goods” are proprietary functions, so “neither the City, nor its alleged
‘agents,’ [MMS] and Ms. Thomas, are immune from the consequences of their actions in
attempting to force business owners to purchase supplies from one and only one
enumerated supplier, and require the customer to charge an extra dollar for DORA drinks,
or for negligently allowing a private organization to attempt to enforce these restrictions
on the public, especially when these restrictions are not supported by the underlying
legislation.” Emanuel’s also asserts that the trial court failed to consider that R.C. Chapter
2744 only provides political subdivisions immunity from tort claims for damages, not
claims for equitable relief. Emanuel’s contends that “[e]ven if the trial court was
persuaded to grant the City immunity from tort damages, it erred by extending this
immunity to Plaintiff’s claims in equity, contrary to established Ohio law.”
{¶14} “R.C. Chapter 2744, the Political Subdivision Tort Liability Act, sets forth a
comprehensive statutory scheme for the tort liability of political subdivisions and their
employees.” McConnell v. Dudley, 158 Ohio St.3d 388, 2019-Ohio-4740, 144 N.E.3d
369, ¶ 20. “ ‘Determining whether a political subdivision is immune from tort liability
pursuant to R.C. Chapter 2744 involves a familiar, three-tiered analysis.’ ” Id., quoting
Pelletier v. Campbell, 153 Ohio St.3d 611, 2018-Ohio-2121, 109 N.E.3d 1210, ¶ 15. The
3Emanuel’s divided its first assignment of error into subsections related to the City and to MMS and
Thomas. Emanuel’s only made its proprietary function arguments under the subsection related to MMS
and Thomas even though these arguments also mention the City.
Washington App. No. 22CA6 9
first tier “involves the general grant of immunity to political subdivisions by R.C.
2744.02(A)(1), which provides that ‘a political subdivision is not liable in damages in a
civil action for injury, death, or loss to person or property allegedly caused by any act or
omission of the political subdivision or an employee of the political subdivision in
connection with a governmental or proprietary function.’ ” Id. at ¶ 21. The second tier
“involves determining whether any of the five exceptions to immunity that are listed
in R.C. 2744.02(B) apply to expose the political subdivision to liability.” Id. at ¶ 22. “If
any one of the five exceptions to immunity in R.C. 2744.02(B) applies and if any defenses
that may be asserted by the political subdivision under R.C. 2744.02(B)(1) do not apply,
then the third tier of the sovereign-immunity analysis requires a court to determine
whether any of the defenses in R.C. 2744.03 apply to reinstate the political
subdivision’s immunity.” Id. at ¶ 23.
{¶15} Emanuel’s does not dispute that the City is a political subdivision or that the
claims against the City for damages for tortious interference with business relations and
violation of the Valentine Act fall within the general grant of immunity under R.C.
2744.02(A)(1). Rather, Emanuel’s asserts that the exception to immunity in R.C.
2744.02(B)(2) applies. That provision states that with exceptions not relevant here,
“political subdivisions are liable for injury, death, or loss to person or property caused by
the negligent performance of acts by their employees with respect to proprietary functions
of the political subdivisions.” R.C. 2744.02(B)(2).
{¶16} Even if the conduct alleged in the complaint involved proprietary functions,
which the City disputes, the R.C. 2744.02(B)(2) immunity exception would not apply to
expose the City to liability for damages because that exception applies only to negligent
Washington App. No. 22CA6 10
conduct. Although Emanuel’s appellate brief characterizes the City’s conduct as
negligent, tortious interference with a business relationship requires “ ‘an intentional
interference causing a breach or termination of’ ” a business relationship. (Emphasis
added.) DeepRock Disposal Solutions, LLC v. Forté Prods., LLC, 4th Dist. Washington
No. 20CA15, 2021-Ohio-1436, ¶ 107, quoting Martin v. Jones, 2015-Ohio-3168, 41
N.E.3d 123, ¶ 63 (4th Dist.). Moreover, with respect to the Valentine Act claim, Emanuel’s
suggests its complaint alleged a violation of R.C. 1331.01(C)(1), which defines a “trust,”
which R.C. 1331.01(C)(4) makes “unlawful and void.” However, R.C. 1331.01(C)(1)
defines a “trust” as “a combination of capital, skill, or acts by two or more persons for any
of the [statutorily enumerated] purposes.” (Emphasis added.) Because the R.C.
2744.02(B)(2) immunity exception does not apply to intentional or purposeful conduct, the
exception is not applicable to the claims against the City for damages for tortious
interference with business relations and violation of the Valentine Act. Emanuel’s does
not argue that any other immunity exception applies; therefore, Emanuel’s has not shown
that the trial court erred when it found the City immune from liability for damages under
R.C. Chapter 2744.
{¶17} In addition, the trial court did not improperly extend statutory immunity to
the City for a claim for equitable relief. Although R.C. 2744.02(A)(1) does not state that
political subdivisions are immune from claims for equitable relief, the complaint did not
include any such claims against the City. Emanuel’s did file a motion for a preliminary
injunction against the City and MMS, which Emanuel’s originally requested against only
MMS in the complaint. However, while a preliminary injunction is “an equitable remedy,”
it is “an impermanent one.” Community First Bank & Trust v. Dafoe, 108 Ohio St.3d 472,
Washington App. No. 22CA6 11
2006-Ohio-1503, 844 N.E.2d 825, ¶ 28. “[A] preliminary injunction proceeding is parallel,
expedited, and separate from the main action. A preliminary injunction aids the main
action by ensuring that a judgment in the main action will be meaningful.” Id. “Unlike
permanent injunctions, a preliminary injunction is not intended as a remedy for a litigant
on the merits of a claim.” Hosta v. Chrysler, 172 Ohio App.3d 654, 2007-Ohio-4205, 876
N.E.2d 998, ¶ 31. “The goal of a preliminary injunction is to preserve the status quo
pending final determination of the matter.” State Employment Relations Bd. v.
Youngstown, 7th Dist. Mahoning No. 20 MA 0060, 2021-Ohio-4552, ¶ 17. Preliminary
injunctions “ ‘are generally regarded as being superseded by a final judgment that is
rendered on the merits in the underlying controversy’ ” and are therefore “not enforceable
after final judgment has been entered.” Hosta at ¶ 31, quoting Burns v. Daily, 114 Ohio
App.3d 693, 708, 683 N.E.2d 1164 (1996). Therefore, the trial court correctly denied as
moot the motion for preliminary injunction against the City when the court made a final
determination of the claims against the City in the complaint.
{¶18} We observe that in Kline v. Davis, 4th Dist. Lawrence Nos. 00CA32 &
01CA13, 2001 WL 1590658 (Dec. 11, 2001), the plaintiff filed a complaint “seeking money
damages, along with a request for a preliminary injunction and temporary restraining
order.” Kline at *1. The plaintiff alleged violations of the Ohio Sunshine Law, the Public
Records Act, and the Open Meetings Act. Id. The trial court granted the defendants’
motion for summary judgment “based on sovereign immunity.” Id. We held that because
R.C. Chapter 2744 does not apply to actions for equitable relief, the defendants “were not
entitled to ‘judgment as a matter of law’ on [the plaintiff’s] request for an injunction.” Id.
at *2. Therefore, we held that the trial court erred in part in granting the summary judgment
Washington App. No. 22CA6 12
motion and remanded to the trial court with instructions to “proceed with a disposition of
[the plaintiff’s] claims for injunctive relief.” Id. at *1. Kline is distinguishable from this case.
Even though it appears that the plaintiff in Kline explicitly requested only a preliminary
injunction, the trial court had a statutory duty to issue a permanent injunction if a violation
of the Ohio Sunshine Law occurred. Id. at *3, citing R.C. 121.22(I)(1) (“Upon proof of a
violation or threatened violation of this section in an action brought by any person, the
court of common pleas shall issue an injunction to compel the members of the public body
to comply with its provisions”). This case does not involve an alleged violation of the Ohio
Sunshine Law, and we are not aware of any statutory provision which would have required
the trial court to issue a permanent injunction against the City in this case even though
Emanuel’s did not request one.
{¶19} For the foregoing reasons, we overrule the portion of the first assignment
which asserts the trial court erred by extending statutory immunity to the City.
B. MMS and Thomas
{¶20} Emanuel’s also maintains that the trial court erred by extending immunity to
MMS and Thomas under R.C. Chapter 2744. However, Emanuel’s misreads the trial
court’s decision. The court did not find MMS and Thomas immune from liability for any
claims under R.C. Chapter 2744. The only immunity the court found MMS and Thomas
were entitled to was immunity under the state action doctrine for the Valentine Act claim.
Therefore, we also overrule the remaining portion of the first assignment of error which
asserts the trial court erred by extending statutory immunity to MMS and Thomas.
Washington App. No. 22CA6 13
V. TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS
{¶21} In its second assignment of error, Emanuel’s contends that the trial court
erred “by dismissing the claim for tortious interference with business relations contrary to
facts asserted in [the] complaint.” Although the assignment of error is broadly worded,
the arguments under it challenge only the trial court’s reasons for dismissing the tortious
interference claim against MMS and Thomas. Emanuel’s asserts that the complaint
alleged sufficient facts to survive a Civ.R. 12(C) motion. Emanuel’s maintains that “[f]rom
the facts as pled, reasonable minds could deduce intent and impropriety on behalf of
Defendants.” Emanuel’s claims that it “alleges that Defendants wrongfully attempted to
prohibit it from participating in a city program that it was otherwise authorized to participate
in by the State Department of Liquor Control.” MMS and Thomas did not include
Emanuel’s in private emails about the DORA program, and based on the facts alleged in
the complaint, Thomas “appears to have personal animosity toward Plaintiff’s affiliates,
potentially accounting for this omission.” Emanuel’s asserts that it “alleges damages in
the form of lost sales” due to the attempts of MMS and Thomas to “exclude” Emanuel’s
“from the city program” and their omission of Emanuel’s from published lists of “approved”
locations to buy DORA drinks.
{¶22} “ ‘The elements of tortious interference with a business relationship are: (1)
a business relationship; (2) the tortfeasor’s knowledge thereof; (3) an intentional
interference causing a breach or termination of the relationship; and (4) damages
resulting therefrom.’ ” DeepRock Disposal Solutions, 4th Dist. Washington No. 20CA15,
2021-Ohio-1436, at ¶ 107, quoting Martin, 2015-Ohio-3168, 41 N.E.3d 123, at ¶ 63.
“Tortious interference with a business relationship is similar to tortious interference with
Washington App. No. 22CA6 14
a contract, but the result of the interference does not require the breach of contract. It is
sufficient to prove that a third party does not enter into or continue a business relationship
with the plaintiff.” Martin at ¶ 63.
{¶23} The trial court gave five grounds for granting MMS and Thomas judgment
on the pleadings with respect to the tortious interference with business relations claim.
One ground was that the complaint failed to allege any prospective business relations
with which they interfered. Emanuel’s suggestion that it is sufficient that one can infer
from its complaint that MMS and Thomas interfered with its business relationships with
members of the public by preventing it from participating in the DORA program is not well-
taken. A vague assertion that a party interfered with certain unspecified business
relationships is insufficient to state a claim for tortious interference with a business
relationship. Wilkey v. Hull, 366 Fed.Appx. 634, 638 (6th Cir.2010). See generally One
Energy Ents., LLC v. Ohio Dept. of Transp., 10th Dist. Franklin No. 17AP-829, 2019-Ohio-
359, ¶ 75-76 (“vague reference to hypothetical future contracts and business
relationships” insufficient to state claim for tortious interference with prospective business
relationships); Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So. 2d 812, 815
(Fla.1994) (“no cause of action exists for tortious interference with a business’s
relationship to the community at large”); McCreight v. AuburnBank, ___ F.Supp.3d ___,
2020 WL 1061675, *4 (M.D.Ala.2020), quoting Glennon v. Rosenblum, 325 F.Supp.3d
1255, 1267 (N.D.Ala.2018) (plaintiff alleging tortious interference with a business
relationship must “allege a specific relationship” the defendant interfered with because
“[n]obody has a ‘legally protectable relationship with every potential participant in their
local market’ ”).
Washington App. No. 22CA6 15
{¶24} “[I]n any appeal, including this appeal, the appellant bears the burden to
demonstrate error on the part of the trial court.” State v. West, 4th Dist. Highland No.
14CA7, 2015-Ohio-2139, ¶ 4. Emanuel’s did not meet its burden with respect to the trial
court’s finding that the complaint failed to allege any prospective business relations with
which MMS and Thomas interfered. Therefore, we conclude that the trial court did not
err when it dismissed the tortious interference claim against MMS and Thomas on that
ground and that it is unnecessary for us to address the alternative grounds for that ruling.
We overrule the second assignment of error.
VI. VALENTINE ACT
{¶25} In its third assignment of error, Emanuel’s contends that the trial court erred
“by dismissing the monopoly claim contrary to facts asserted in [the] complaint.”
Emanuel’s maintains that “[t]he elements of a monopoly as defined by the Valentine Act
are sufficiently pled in the complaint to survive a Rule 12 motion.” Emanuel’s asserts that
MMS and Thomas “argue governmental immunity from” the Valentine Act claim “based
on a claimed contractual relationship with the City of which there is no evidence.
However, by definition in the Act, a ‘person’ includes corporations, partnerships, and
associations.” Emanuel’s also asserts that the United States Supreme Court “has
established that a municipal corporation can also be a ‘person’ for the purpose of statutory
analysis” and that the Supreme Court of Ohio “has stated that when a political subdivision
acts in a proprietary nature, there is less justification for affording it immunity * * *.”
{¶26} In addition, Emanuel’s contends that even though “the DORA expanded * *
* trade,” Emanuel’s “does not argue the DORA itself violates the Valentine Act, rather,
Defendants’ actions in attempting to force business owners to purchase materials from
Washington App. No. 22CA6 16
one supplier without any legal or rational justification is the unreasonable restraint on
trade, and must be quashed.” (Emphasis deleted.) Emanuel’s maintains that the DORA
resolution does not mandate that businesses buy cups from MMS, “require business
owners to charge customers an additional dollar for DORA drinks,” or state that the profit
from cup sales “inures to the benefit” of the City, MMS, and the manufacturer. According
to Emanuel’s, there is “an unreasonable restraint on trade for the businesses as described
in the Plaintiff’s Complaint, as the cost per cup including shipping exceeds $1.00, and
plastic cups are readily available from any number of suppliers for significantly less
money, and may very well be already in the business’s inventory.” Emanuel’s maintains
that decisions about “where to purchase supplies and how much to charge belong to the
business owners,” and that “Defendants have no authority to make these decisions for
local businesses.”
A. Statutory Provisions
{¶27} “Ohio’s antitrust statutes, known as the Valentine Act, are contained in R.C.
Chapter 1331, which is entitled ‘Monopolies.’ ” Aladdins Lights Inc. v. Eye Lighting
Internatl., 2017-Ohio-7229, 96 N.E.3d 864, ¶ 13 (9th Dist.). R.C. 1331.01(C)(1) states:
(1) “Trust” is a combination of capital, skill, or acts by two or more persons
for any of the following purposes:
(a) To create or carry out restrictions in trade or commerce;
(b) To limit or reduce the production, or increase or reduce the price of
merchandise or a commodity;
(c) To prevent competition in manufacturing, making, transportation, sale,
or purchase of merchandise, produce, or a commodity;
(d) To fix at a standard or figure, whereby its price to the public or consumer
is in any manner controlled or established, an article or commodity of
Washington App. No. 22CA6 17
merchandise, produce, or commerce intended for sale, barter, use, or
consumption in this state;
(e) To make, enter into, execute, or carry out contracts, obligations, or
agreements of any kind by which they bind or have bound themselves
not to sell, dispose of, or transport an article or commodity, or an article
of trade, use, merchandise, commerce, or consumption below a
common standard figure or fixed value, or by which they agree in any
manner to keep the price of such article, commodity, or transportation at
a fixed or graduated figure, or by which they shall in any manner
establish or settle the price of an article, commodity, or transportation
between them or themselves and others, so as directly or indirectly to
preclude a free and unrestricted competition among themselves,
purchasers, or consumers in the sale or transportation of such article or
commodity, or by which they agree to pool, combine, or directly or
indirectly unite any interests which they have connected with the sale or
transportation of such article or commodity, that its price might in any
manner be affected;
(f) To refuse to buy from, sell to, or trade with any person because such
person appears on a blacklist issued by, or is being boycotted by, any
foreign corporate or governmental entity.
“A trust as defined in this division is unlawful and void.” R.C. 1331.01(C)(4). And R.C.
1331.08 authorizes “the person injured in the person’s business or property by another
person by reason of anything forbidden or declared to be unlawful in [R.C. 1331.01 to
1331.14]” to “sue therefor” and “recover treble the damages sustained by the person and
the person’s costs of suit.”
B. The City
{¶28} The trial court found that the City was immune from the Valentine Act claim
under both R.C. 2744.02(A)(1) and the state action doctrine. In its arguments under the
third assignment of error, Emanuel’s asserts that the Supreme Court of Ohio “has stated
that when a political subdivision acts in a proprietary nature, there is less justification for
affording it immunity * * *.” To the extent Emanuel’s is implying that the City is not immune
under R.C. 2744.02(A)(1) because the R.C. 2744.02(B)(2) immunity exception related to
Washington App. No. 22CA6 18
proprietary functions applies, we already rejected that contention in Section IV.A. of this
decision.
{¶29} Emanuel’s also suggests that the City qualifies as a “person” who can
violate the Valentine Act, asserting that the United States Supreme Court “has
established that a municipal corporation can also be a ‘person’ for purpose of statutory
analysis * * *.” Though unclear, Emanuel’s may be implying that the City is not immune
under R.C. 2744.02(A)(1) because the immunity exception in R.C. 2744.02(B)(5) applies.
R.C. 2744.02(B)(5) states that “a political subdivision is liable for injury, death, or loss to
person or property when civil liability is expressly imposed upon the political subdivision
by a section of the Revised Code * * *.” However, “to ‘expressly’ impose liability on a
political subdivision, a statute must state that a political subdivision is liable and not simply
recite that some general category of persons is liable.” Student Doe v. Adkins, 2021-
Ohio-3389, 178 N.E.3d 947, ¶ 61 (4th Dist.) Emanuel’s does not direct our attention to
any such provision in the Valentine Act.
{¶30} Emanuel’s has not shown that the trial court erred when it found the City
immune under R.C. 2744.02(A)(1). Consequently, even if any of Emanuel’s arguments
under the third assignment of error could be construed to challenge the court’s alternative
finding that the City is immune under the state action doctrine, it would be unnecessary
for us to address them. Accordingly, we overrule the third assignment of error insofar as
it challenges the dismissal of the Valentine Act claim against the City.
C. MMS and Thomas
{¶31} The trial court gave three grounds for granting MMS and Thomas judgment
on the pleadings with respect to the Valentine Act claim. First, the court found the alleged
Washington App. No. 22CA6 19
antitrust violations were not an unreasonable restraint of trade. The court explained that
to establish the Valentine Act claim, Emanuel’s had to show a combination of effort by
two or more actors that unreasonably restrained trade in a relevant market but could not
because the City’s DORA program expanded, rather than restrained, trade. And “even if
the DORA somehow restrained trade,” it did “not do so unreasonably” because the City
exercised its authority under R.C. 4301.82 “to regulate the containers used in the DORA
program by deciding that participating businesses must use the official cup chosen by the
City” and chose “to implement its DORA, including the sale of its ‘official cup’ to qualified
businesses, by partnering with nonprofit MMS, a permissible arrangement under Ohio
law.” The court further stated: “Plaintiff cites no legal authority that the regulations
imposed to carry out Marietta’s DORA—by which trade is expanded—are an
unreasonable restraint of trade.”
{¶32} Second, the court found that the complaint failed to allege an antitrust injury,
stating:
To establish standing to assert a claim under the Valentine Act, “a
plaintiff must prove the existence of antitrust injury, which is to say injury of
the type the antitrust laws intended to prevent and that flows from that which
makes defendants’ acts unlawful.” See Acme Wrecking Co. v. O’Rourke
Constr. Co., 1995 Ohio App. LEXIS 745, at *6 (1st Dist. March 2, 1995)
quoting Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334
(1990). This requirement “ensures that a plaintiff can recover only if the
loss stems from a competition-reducing aspect or effect of the defendant’s
behavior.” See id. (emphasis in original). Thus, the Complaint “must allege
an injury to the market, not just a personal injury.” Caudill v. Lancaster
Bingo Co., 2005 U.S. Dist. LEXIS 24621, at *18 (S.D. Ohio Oct. 24, 2005).
Plaintiff fails to allege that the requirement to purchase official cups
for $0.90 reduced competition among establishments in the DORA zone or
caused an injury to the market. By suspending Ohio’s Open Container laws
for certain days and times within the DORA zone, the City granted qualified
businesses permission to conduct otherwise unlawful activity—selling
alcohol to be consumed outdoors—which created a market for such activity.
Washington App. No. 22CA6 20
Qualifying businesses are all subject to the same requirements to
participate in DORA, and thus, are all on equal footing. Thus, Plaintiff failed
to allege an antitrust injury: under no set of facts can Plaintiff establish that
the City’s DORA—implemented to expand business activity for qualifying
businesses—reduced competition among such businesses. See Caudill,
2005 U.S. Dist. LEXIS 24621, at *18-19 (granting motion for judgment on
the pleadings on Plaintiff’s antitrust claim because the complaint “is void of
any allegations as to how the market has changed or been damaged as a
result of their inability to compete,” and “fails to identify any competitors . . .
describe the market . . . [or] discuss any market conditions.”)
(Emphasis and alteration sic.) And third, the court found that even if Emanuel’s “could
make a showing of an antitrust claim,” MMS and Thomas were immune under the state
action doctrine.
{¶33} Although Emanuel’s generally challenges the grant of judgment on the
pleadings to MMS and Thomas with respect to the Valentine Act claim, we are unable to
discern any arguments under the third assignment of error which specifically challenge
the trial court’s determination that the complaint failed to allege an antitrust injury.
Emanuel’s arguments appear to focus on the trial court’s alternative conclusions that the
alleged antitrust violations were not an unreasonable restraint of trade and that MMS and
Thomas have immunity. At no point does Emanuel’s mention the topic of antitrust injury,
address the legal authority the trial court cited on that topic, cite any other legal authority
on that topic, or address the trial court’s point that requiring all qualifying business to
comply with the same requirements to participate in the newly created market for DORA
drinks in downtown Marietta could not reduce competition where none existed before.
{¶34} As previously stated, “in any appeal, including this appeal, the appellant
bears the burden to demonstrate error on the part of the trial court.” West, 4th Dist.
Highland No. 14CA7, 2015-Ohio-2139, ¶ 4. Emanuel’s has not demonstrated error in the
trial court’s finding that the complaint failed to allege an antitrust injury. Accordingly, we
Washington App. No. 22CA6 21
conclude that the trial court did not err in granting MMS and Thomas judgment on the
pleadings on that ground with respect to the Valentine Act claim and that it is unnecessary
for us to address the alternative grounds for that ruling. Therefore, we overrule the
remainder of the third assignment of error, which challenges the dismissal of the Valentine
Act claim against MMS and Thomas.
VII. CONCLUSION
{¶35} Having overruled the assignments of error, we affirm the trial court’s
judgment.
JUDGMENT AFFIRMED.
Washington App. No. 22CA6 22
JUDGMENT ENTRY
It is ordered that the JUDGMENT IS AFFIRMED and that appellant shall pay the
costs.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Washington
County Common Pleas Court to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of
this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
Smith, P.J. & Wilkin, J.: Concur in Judgment and Opinion.
For the Court
BY: ________________________________
Michael D. Hess, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment
entry and the time period for further appeal commences from the date of filing with
the clerk.