J&C Marketing, L.L.C. v. McGinty , 2013 Ohio 4805 ( 2013 )

[Cite as J&C Marketing, L.L.C., v. McGinty, 2013-Ohio-4805.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 99676
J&C MARKETING, L.L.C.
PLAINTIFF-APPELLEE
vs.
TIMOTHY J. McGINTY,
CUYAHOGA COUNTY PROSECUTOR
DEFENDANT-APPELLANT
JUDGMENT:
AFFIRMED IN PART, REVERSED IN PART
AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case Nos. CV-784234 and CV-785188
BEFORE: E.A. Gallagher, P.J., Kilbane, J., and McCormack, J.
RELEASED AND JOURNALIZED: October 31, 2013
ATTORNEYS FOR APPELLANT
Timothy J. McGinty
Cuyahoga County Prosecutor
By: Charles E. Hannan, Jr.
David Lambert
Assistant County Prosecutors
Justice Center, 8th Floor
1200 Ontario Street
Cleveland, OH 44113
ATTORNEYS FOR APPELLEE
J&C Marketing, L.L.C.
Daniel F. Gourash
Eric D. Baker
Seeley, Savidge, Ebert & Gourash, Co., L.P.A.
26600 Detroit Road, Third Floor
Cleveland, OH 44145-2397
ALSO LISTED
AMA Ventures D.B.A. Internet Galaxy
Kent R. Minshall, Jr.
2189 Professor Avenue
Suite 100
Cleveland, OH 44113
CTD Entertainment, L.L.C.
Robert G. Mansour
23611 Chagrin Blvd.
Suite 270
Beachwood, OH 44122
Cyber Time Café Maple Hts., L.L.C.
Kenneth A. Bossin
1392 SOM Center Road
Mayfield Heights, OH 44124
Martin S. Delahunty, III
Slater & Zurz, L.L.P.
One Cascade Plaza
Suite 2210
Akron, OH 44308
Cyber World Entertainment, et al.
Charles H. Cooper, Jr.
Barton Keyes
2175 Riverside Drive
Columbus, OH 43221
Angelo F. Lonardo
Mitchell J. Yelsky
Yelsky & Lonardo
75 Public Square
Suite 800
Cleveland, OH 44113
Cyberspace Westlake, L.L.C., etc.
Erin R. Flanagan
1370 Ontario Street
2000 Standard Building
Cleveland, OH 44113
Feelin’ Lucky, L.L.C.
Lawrence J. Kramer, Jr.
Jacqueline Kim Roberts
J.K. Roberts Law Group, Ltd.
17601 W. 130th Street
Suite 4B
North Royalton, OH 44133
Jimkat, L.L.C. d.b.a. Cyberspace Café
Jeffry F. Kelleher
1540 Leader Building
526 Superior Avenue
Cleveland, OH 44114
Land Of Loot And Piggy Bank
Robert Wakut
3122 West 14th Street
Cleveland, OH 44109
LV & Ibnee, L.L.C., et al.
Nate N. Malek
Law Office of Nate N. Malek, L.L.C.
29025 Bolingbrook Road
Cleveland, OH 44124
Nova’s Internet Sweepstakes Café
Michael L. Nelson
55 Public Square
Suite 1500
Cleveland, OH 44103
SOR, L.L.C. d.b.a. Lucky Palms
Karen P. Desanto-Kellogg
Robert P. Desanto
Desanto & Kellogg, L.L.C.
432 Center Street
Ashland, OH 44805
Surf City, L.L.C.
George J. Argie
Dominic J. Vitantonio
Argie, D’Amico & Vitantonio
6449 Wilson Mills Road
Mayfield Village, OH 44143
Surf Shop, L.L.C.
Michael J. O’Shea
Ronald A. Annotico
Lipson O’Shea Legal Group
Beachcliff Market Square
19300 Detroit Road, Suite 202
Rocky River, OH 44116
Winner’s Circle Café, L.L.C.
Antonio Franceschini
2000 Auburn Drive
Suite 200
Beachwood, OH 44122
EILEEN A. GALLAGHER, P.J.:
{¶1} Appellant Timothy J. McGinty, Cuyahoga County Prosecutor, appeals from
the decision of the Cuyahoga County Court of Common Pleas that ordered the
prosecutor’s office to turn over certain materials and answer interrogatories in a
declaratory judgment action. For the following reasons, we affirm, in part, and reverse, in
part, and remand.
{¶2} This interlocutory appeal is taken from a declaratory judgment action
brought by numerous businesses operating internet sweepstakes cafés within Cuyahoga
County. Appellee J&C Marketing, L.L.C. is one such party who owns internet
sweepstakes cafés within the county. Appellee, among others, received a cease and
desist letter from the Cuyahoga County prosecutor on May 30, 2012, asserting that such
cafés were operating in violation of several Ohio gambling laws, including R.C. 2915.02,
2915.03 and 2915.04. The letter directed the businesses to cease operation and
threatened criminal prosecution for failing to comply.
{¶3} On June 4, 2012, appellee filed a declaratory judgment action against the
prosecutor seeking a declaration that internet sweepstakes cafés are not subject to
prosecution under R.C. Chapter 2915 et seq., and further seeking temporary, preliminary
and permanent injunctive relief.1
{¶4} The question presently before this court is not the legality of internet
sweepstakes cafés in Cuyahoga County. Recently in Cleveland v. Thorne, 8th Dist.
Numerous other internet sweepstakes café businesses operating within
1
Cuyahoga County intervened as plaintiffs in appellee’s declaratory judgment action.
Cuyahoga Nos. 98365, 98474, 98503, 98695, 98696, and 98697, 2013-Ohio-1029, 987
N.E.2d 731, this court upheld the convictions of certain proprietors of “cyber cafés” or
“internet cafés” for sweepstakes ventures that this court found to constitute gambling in
violation of Cleveland Codified Ordinances (“CCO”) 611.02(a)(2), 611.05 (operating a
gambling house) and 625.08 (possession of criminal tools).
{¶5} Our role in the present appeal is not to judge the outcome of this case.
Instead we are faced with a unique discovery dispute. The principal question posed by
this appeal is the extent to which information and records compiled by law enforcement
and a county prosecutor’s office are subject to discovery in a civil action. We are
mindful of the sweeping implications of this case. The prosecutor asserts that appellee
and other targets of the internet sweepstakes cafés possess a mischievous purpose in
bringing the present declaratory judgment action. From the prosecutor’s point of view,
this action is merely a thinly veiled attempt by targets of an ongoing criminal
investigation to preemptively obtain, through civil discovery, investigatory materials
compiled by law enforcement and internal discussions of the prosecutor’s office towards
the purpose of stymying such investigation and hampering any criminal prosecution.
Appellee asserts that pursuant to Peltz v. S. Euclid, 11 Ohio St.2d 128, 228 N.E.2d 320(1967), a declaratory judgment action is the appropriate vehicle for testing the application
of Ohio’s gambling laws to its business and that the requested discovery of appellant’s
investigatory results is necessary to proceed with this civil action.
{¶6} Appellee and other sweepstakes cafés who have joined in this action have
sought, through discovery, materials relating to the ongoing law enforcement
investigation against the internet sweepstakes cafés in Cuyahoga County including
investigative reports compiled by undercover police officers, email exchanges between
the prosecutor’s office and lead investigators and the identities of parties involved in the
investigation, including experts.
{¶7} Appellant objected to such discovery and, in his three assignments of error,
asserts that the trial court erred in ordering him to produce certain materials and answer
certain interrogatories. Appellant argues that the trial court’s discovery order violates
the law enforcement investigatory privilege, the attorney work-product doctrine and the
deliberative-process privilege. Because appellant’s three assignments of error each
apply in varying and overlapping parts to the discovery sought, we address them together
for ease of discussion.
{¶8} Civ.R. 26(B) provides that parties may obtain discovery on any
unprivileged matter that is relevant to the subject matter involved in the pending action.
Although the information sought need not itself be admissible at trial, it should appear
“reasonably calculated to lead to the discovery of admissible evidence.”
{¶9} Prior to delving into the specific discovery materials sought, we must
appropriately define the law enforcement investigatory privilege, the attorney
work-product doctrine and the deliberative-process privilege within the context of this
unique case. We note that when a discovery issue involves an alleged privilege, it is a
question of law that we review de novo. Ward v. Summa Health Sys., 128 Ohio St.3d
212, 2010-Ohio-6275, 943 N.E.2d 514, ¶ 13.
I. The Law Enforcement Investigatory Privilege
{¶10} The prosecutor contends that discovery of nearly all of the contested
material is protected by the law enforcement investigatory privilege. The prosecutor
primarily relies upon cases establishing the law enforcement investigatory privilege under
federal law and laws of other states. We find reliance on these cases unnecessary. To
understand this privilege under Ohio law, we must first consider R.C. 149.43 that,
although not applicable in the present instance, provides important context to our
understanding of the claimed privilege.
{¶11} R.C. 149.43 excludes confidential law enforcement investigatory records
from the definition of “public records” that must be made available for inspection. R.C.
149.43(A)(2) provides:
(2) “Confidential law enforcement investigatory record” means any record
that pertains to a law enforcement matter of a criminal, quasi-criminal,
civil, or administrative nature, but only to the extent that the release of the
record would create a high probability of disclosure of any of the
following:
(a) The identity of a suspect who has not been charged with the offense to
which the record pertains, or of an information source or witness to whom
confidentiality has been reasonably promised;
(b) Information provided by an information source or witness to whom
confidentiality has been reasonably promised, which information would
reasonably tend to disclose the source’s or witness’s identity;
(c) Specific confidential investigatory techniques or procedures or specific
investigatory work product;
(d) Information that would endanger the life or physical safety of law
enforcement personnel, a crime victim, a witness, or a confidential
information source.
{¶12} Although records that qualify as confidential law enforcement investigatory
records under R.C. 149.43(A)(2) are not subject to public disclosure pursuant to the
statute, the Ohio Supreme Court, in Henneman v. Toledo, 35 Ohio St.3d 241, 520 N.E.2d
207 (1988), held that R.C. 149.43 operates only to exempt confidential law enforcement
investigatory records from the requirement of availability to the general public and does
not protect such records from a proper discovery request in the course of civil litigation,
provided that such records are otherwise discoverable.
{¶13} In Henneman, the Ohio Supreme Court recognized that a qualified
privilege exists for information that was compiled in the course of a police internal affairs
investigation in the context of civil discovery. The court stated:
[W]e recognize that the public has an important interest in the
confidentiality of information compiled in the course of police internal
investigations. In many instances, disclosure of such information may work
to undermine investigatory processes by discouraging persons with
knowledge from coming forward or by revealing the identities of
confidential sources. There may very well be an overriding need in
particular cases for protecting the identities of members of the police force
or of the general public who come forward with information about alleged
police abuses. * * * Another equally important interest may exist in some
cases: the need for concealing the identities of informants or citizens who
participate in internal investigations.
Id. at 245-246.
{¶14} The Henneman court concluded that:
[R]ecords and information compiled by an internal affairs division of a
police department are subject to discovery in civil litigation arising out of
alleged police misconduct if, upon an in camera inspection, the trial court
determines that the requesting party’s need for the material outweighs the
public interest in the confidentiality of such information. Of course, the
request for such information is still subject to the normal standards of
discovery. For example, if the files contain privileged medical records or if
the request is vague or burdensome, a properly delineated protective order
may be issued upon motion. But we reject the notion that an absolute
privilege automatically protects internal investigation reports from a
legitimate request for discovery.
Id. at 246.
{¶15} Since the Henneman decision, the rule established in that case has been
extended to apply the Henneman balancing test to a school board’s claim that its
discussions held in executive session were privileged from discovery. Springfield Local
School Dist. Bd. of Edn. v. Ohio Assn. Pub. School Emp., Local 530, 106 Ohio App.3d
855, 869-870, 667 N.E.2d 458 (9th Dist.1995), and the confidentiality of information
about applicants and recipients of Medicaid. Wessell Generations, Inc. v. Bonnifield,
193 Ohio App.3d 1, 2011-Ohio-1294, 950 N.E.2d 989 (9th Dist.).
{¶16} Furthermore, in State ex rel. Multimedia, Inc. v. Whalen, 48 Ohio St.3d
41, 549 N.E.2d 167 (1990), the Ohio Supreme Court held that Henneman extended
beyond protecting internal affairs documents but was applicable to “determine whether a
litigant’s right to discovery outweighs the public interest in nondisclosure of an ongoing
investigation.” Id. at 41. The court stated that the factors recognized in the leading
federal case on the investigatory privilege, Frankenhauser v. Rizzo, 59 F.R.D. 339(E.D.Pa.1973), had been adopted as part of the Henneman test. Id. at 41. The
Frankenhauser factors include:
(1) the extent to which disclosure will thwart governmental processes by
discouraging citizens from giving the government information; (2) the
impact upon persons who have given information of having their identities
disclosed; (3) the degree to which governmental self-evaluation and
consequent program improvement will be chilled by disclosure; (4) whether
the information sought is factual data or evaluative summary; (5) whether
the party seeking the discovery is an actual or potential defendant in any
criminal proceeding either pending or reasonably likely to follow from the
incident in question; (6) whether the police investigation has been
completed; (7) whether any intradepartmental disciplinary proceedings
have arisen or may arise from the investigation; (8) whether the plaintiff’s
suit is non-frivolous and brought in good faith; (9) whether the information
sought is available through other discovery or from other sources; and (10)
the importance of the information sought to the plaintiff’s case.
Frankenhauser at 344.
{¶17} Although the Supreme Court has not addressed a case postured precisely
as the present case, we find the privilege established in Henneman to be applicable
because the same concerns leading to the adoption of the privilege in that case exist in
this case. We, therefore, apply the balancing test of Henneman to the materials the
appellant claims are protected from discovery by the law enforcement investigatory
privilege.2
II. The Attorney Work-product Privilege
{¶18} Attorney work product in Ohio is governed by Civ.R. 26(B)(3), which
provides in relevant part: “a party may obtain discovery or documents and tangible
We apply the Henneman balancing test with guidance from the
2
Frankenhauser factors that we find useful to the Henneman analysis.
things prepared in anticipation of litigation or for trial by or for another party or that
party’s representative * * * only upon a showing of good cause therefor * * *.”
{¶19} The Ohio Supreme Court has addressed the standard of disclosure of work
product. “Attorney work product, including but not limited to mental impressions,
theories, and legal conclusions, may be discovered upon a showing of good cause if it is
directly at issue in the case, the need for the information is compelling, and the evidence
cannot be obtained elsewhere.” Squire, Sanders & Dempsey v. Givaudan Flavors
Corp., 127 Ohio St.3d 161, 2010-Ohio-4469, 937 N.E.2d 533, paragraph two of the
syllabus. The protection for intangible work product exists because “[o]therwise,
attorneys’ files would be protected from discovery, but attorneys themselves would have
no work product objection to depositions.” Id. at ¶ 58, quoting In re Seagate
Technology, L.L.C., 497 F.3d 1360 (Fed.Cir. 2007).
{¶20} The Ohio Supreme Court has explained that “the determination of
whether materials are protected by the work-product doctrine and the determination of
‘good cause’ under Civ.R. 26(B)(3), are ‘discretionary determinations to be made by the
trial court.’” Sutton v. Stevens Painton Corp., 192 Ohio App.3d 68, 2011-Ohio-841,
951 N.E.2d 91, ¶ 12 (8th Dist.), quoting State ex rel. Greater Cleveland Regional Transit
Auth. v. Guzzo, 6 Ohio St.3d 270, 271, 452 N.E.2d 1314 (1983). Discretionary
decisions are reviewed under an abuse of discretion standard of review. Id. It is an
abuse of discretion if the court’s ruling is “unreasonable, arbitrary, or unconscionable.”
Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
III. The Deliberative-Process Privilege
{¶21} Finally, the prosecutor asserts that the trial court’s discovery orders intrude
improperly into internal deliberations and prosecutorial discretion and, as such, violate
the deliberative-process privilege.
{¶22} In State ex rel. Dann v. Taft, 109 Ohio St.3d 364, 2006-Ohio-1825, 848
N.E.2d 472, the Ohio Supreme Court described the deliberative-process privilege as
follows:
[I]t allows the government to withhold documents and other materials that
would reveal “advisory opinions, recommendations and deliberations
comprising part of a process by which governmental decisions and policies
are formulated.” Predecisional and deliberative materials are protected, but
documents that merely state or explain a decision that has already been
made or contain purely factual information are not. The privilege extends
beyond the chief executive officer of a governmental unit such as a
president or governor. This category of executive privilege is grounded in
judicial recognition of a “valid need for protection of communications
between high Government officials and those who advise and assist them in
the performance of their manifold duties.”
(Citations omitted.) Id. at ¶ 34
{¶23} The deliberative-process privilege has been rarely recognized under Ohio
law, and we are unaware of any case in Ohio applying the privilege to a county
prosecutor. We note that most, if not all, of the materials the privilege would
conceivably protect in this case would already be protected under the law enforcement
investigatory privilege and the attorney work-product doctrine, rendering reliance on the
deliberative-process somewhat redundant and unnecessary. Nonetheless, appellee
asserts that the materials they seek in discovery are purely factual in nature rendering the
deliberative-process privilege inapplicable.
{¶24} Having established the various privileges and doctrines that appellant has
invoked, we proceed to examine their application to the contested materials sought in
discovery. We begin with the list of documents that the trial court marked “Y,”
standing for “yes, the document is to be produced.”
{¶25} We affirm the trial court’s order to produce the police reports containing
factual information gathered in the undercover investigation of the internet sweepstakes
cafés within Cuyahoga County. These reports are directly relevant to the alleged
conduct of the internet sweepstakes cafés involved in this case because any factual
disputes regarding the nature of their business must necessarily be resolved prior to the
ultimate resolution of the legal question at the heart of this declaratory judgment action.
Specifically items with the following “bates” numbers are to be produced: #001-003,
#005-252 and #254-307.
{¶26} The trial court’s order to produce items #004 and #253 is reversed.
These materials contain primarily internal communications or investigative decisions and
lack the factual content that the other reports contain. We find these materials lacking
in relevant information to this civil action and, as such, are precluded from discovery
pursuant to the law enforcement investigatory privilege.
{¶27} The trial court shall redact the names of the undercover investigators from
the police reports ordered to be produced. However, to the extent that appellant intends
to rely on facts in any particular report or a factual account of a particular investigator,
the appellant is obligated to disclose such investigator’s name consistent with our holding
on appellee’s interrogatories regarding witnesses appellant intends to call at trial. See,
e.g., State v. Bragg, 8th Dist. Cuyahoga No. 58859, 1991 Ohio App. LEXIS 3162 (June
27, 1991).
{¶28} We next consider a series of emails between the Cuyahoga County
prosecutor involved with the investigation and a lead investigator on the case. These
emails contain investigatory decisions, procedural discussions and exchanges of legal
research and opinion. For the most part, the emails can be described as internal
communications regarding how to proceed with the investigation. We are considerably
reluctant to recognize a legal proposition whereby an individual or business involved in a
criminal investigation could acquire the internal email discussions of a prosecutor by way
of discovery in a preemptive civil action. Appellee argues that it is entitled to the
thought process and legal theories of appellant in regards to the alleged illegality of
internet sweepstakes cafés within Cuyahoga County. We are not aware of any authority
for the proposition that appellant is obligated to conduct appellee’s legal research for it.
To the extent that appellee seeks a legal analysis applying a gambling law to an internet
sweepstakes café, we direct appellee to our decision in Thorne.
{¶29} We find that the vast majority of the emails are protected by the law
enforcement investigatory privilege, and because they are completely lacking in factual
content relevant to the present dispute, we hold that they are not subject to discovery.
Even if such emails were not protected by the law enforcement investigatory privilege,
we note that a significant number of such emails would also qualify as attorney work
product.
{¶30} We reverse the trial court’s order to produce the email items with the
following “bates” numbers: 308, 315, 316, 318-324, 326, 330-332, 335-342, 344, 345,
347-354, 356-359, 361-363, 365-367, 369, 370, 379-382, 392-394, 419, 428, 434, 439,
442, 450, 451, 456-458, 461, 462, 467, 468, 473, 474, 477, 478, 484, 487-491, 493, 496,
498, 499, 504, 506, 507, 511-513, 520-522, 532, 534, 535, 539, 540, 559, 569, and
591-594. We affirm the trial court’s order to produce the emails with the following
“bates” numbers: 373-378, 486, 497, 524, 548, 561, 595.
{¶31} Finally, with regard to the interrogatories that the trial court ordered
appellant to answer, we find that a significant number pose questions that are not relevant
to the underlying declaratory action and unnecessarily intrude upon the investigative
process. Some confusion exists as to the precise interrogatories the trial court’s order
compelled the appellant to answer. The order references both interrogatories and
amended interrogatories. Both of the motions to compel filed by appellee and plaintiffs,
Cyber Oasis, Page-Jaq and New Heights, provide only amended interrogatories as
attachments. To eliminate any confusion, we confine our review to appellee’s amended
set of interrogatories and the interrogatories of Tel-Connect. To the extent that any
other interrogatories remain, the trial court shall order appellant to answer them
consistent with the holding of this opinion.
{¶32} Regarding the amended interrogatories of appellee, the trial court’s order
is affirmed as to interrogatories 1 through 4 and 24 through 28. The trial court’s order is
reversed as to interrogatories 5 through 24 that we find protected pursuant to the law
enforcement investigatory privilege and the attorney work-product doctrine. In regards
to the Tel-Connect interrogatories, the trial court’s order is affirmed as to interrogatories
1 through 4, 10, 11, 13, 14, 20 and 23. The trial court’s order is reversed as to
interrogatories 5 through 8, 12, 15 through 19 and 21.
{¶33} Appellant’s assignments of error are sustained, in part, and overruled, in
part.
{¶34} The judgment of the trial court is affirmed, in part, reversed, in part, and the
case is remanded for further proceedings consistent with this opinion.
It is ordered that appellant and appellee share the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common
pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
EILEEN A. GALLAGHER, PRESIDING JUDGE
MARY EILEEN KILBANE, J., and
TIM McCORMACK, J., CONCUR