Convey IT, Inc. v. Chatfield et al

Filing 54

SUPPLEMENTAL REPORT AND RECOMMENDATIONS re 32 Motion for Judgment on the Pleadings. It is again respectfully recommended that Defendants' Motion for Partial Judgment on the Pleadings be granted. Objections to R&R due by 7/13/2012. Signed by Magistrate Judge Michael R Merz on 6/26/2012. (mdf1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON

CONVEY IT, INC.,

:
Case No. 3:10-cv-457
Plaintiff,
District Judge Walter Herbert Rice
Magistrate Judge Michael R. Merz

-vsDANIEL CHATFIELD, et al.,
Defendants.

:

SUPPLEMENTAL REPORT AND RECOMMENDATIONS

This case is before the Court on Defendants’ Motion for Judgment on the Pleadings (Doc.
No. 32). Additional motion papers are at Doc. Nos. 34, 35, 40, and 44. After the Magistrate Judge
filed a Report and Recommendations (Doc. No. 45), Plaintiff filed Objections (Doc. No. 46),
Defendants filed a Response (Doc. No. 49), the Motion was recommitted (Doc. No. 50), and oral
argument was held at Plaintiff’s request. The oral argument has now been transcribed (Doc. No. 52)
and the Motion is ripe on recommittal.
In his decision on Defendants’ Motion to Dismiss, Judge Rice described this litigation as
follows:
In this litigation, Plaintiff Convey It, Inc. (“Plaintiff” or “Convey It”),
alleges that for a number of years it has safely operated the
Springfield Salt Terminal (“SST”) in Clark County, Ohio. [Footnote
omitted]. According to Plaintiff, Defendants Daniel Chatfield
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(“Chatfield”), Charles Patterson (“Patterson”) and the Board of
Health of the Clark County Combined Health District (the “Board”)
have engaged in a false media campaign to impugn its reputation and
put it out of business. [FN2].
FN2 Chatfield and Patterson, alleged to be employees of the Board
(see Doc. #24 at ¶¶ 4-5), have been sued in their individual and
official capacities.
***
The basic facts giving rise to this litigation are not greatly in dispute.
In [sic] September 24, 2003, the Plaintiff leased real property,
located in Clark County, Ohio, for the purpose [of] operating the
Springfield Salt Terminal (“SST”). Doc. #24 at ¶ 7. Plaintiff filed
with the Ohio Environmental Protection Agency (“Ohio EPA”), in
2004, a Notice of Intent for Coverage under Ohio EPA General
Permit (“Notice of Intent”) and a Storm Water Pollution Prevention
Plan (“SWPPP”). Id. at ¶ 8. [FN4]. The Ohio EPA accepted Plaintiff
under its General Permit No. OHR000004 and issued Plaintiff
Individual Permit 1GR00664*DG (“Permit”). Id. at ¶ 9. The Plaintiff
alleges that the Defendants violated § 6111.04(A) of the Ohio
Revised Code. See Doc. # 24 at ¶ 10. According to Plaintiff, that
statutory provision “expressly and unambiguously exempted permits
such as Plaintiff’s from “(a) being considered a public nuisance (b)
being considered in violation of Ohio law prohibiting pollution of the
waters of this state.” Id. The Court agrees with Plaintiff’s
interpretation of the statute.
Throughout the remainder of its Second Amended Complaint (Doc. #
24), the Plaintiff sets forth allegations concerning its operation of the
SST, including that it operated in compliance with its permit and
stored only road salt at its facility; that it did not discharge any salt
into the surface water of Ohio during its operation of the SST; that it
did not alter the content of the road salt delivered to it; that sodium
chloride is a commonly used material found in most households and
is useful to state and local governments to de-ice roads; that no
binding health-based standard governing sodium chloride in drinking
water exists; that the location of the SST was beneficial from its
business point of vies [sic]; that the location of the SST was good
from an environmental prospective, given that it was located outside
the City of Springfield’s well protective area; and that throughout the
operation of the SST, neither the Springfield water department nor
residents of that municipality complained of the location of the SST.
Id. at ¶¶ 11-24. These allegations are not separately actionable.
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More importantly, they do not set forth independent claims for relief
from one or more or all of the Defendants. [FN5]. Plaintiff also
explains how it received and stored the shipments of road salt it was
using at the SST. Id. at ¶ 14.
FN 4 These documents are attached to Plaintiff’s Second Amended
Complaint (Doc. #24) as Exhibit 3.
FN5 The remaining factual allegations constitute a detailed
restatement of the horrible things that Defendant has done to it. This
Court does not interpret those allegations as setting forth claims,
different from Plaintiff’s claims for relief which are expressly set
forth in that pleading immediately thereafter.
(Decision and Entry, Doc. No. 27, PageID 918-19, 923-25.) In this Decision, Judge Rice dismissed
all claims in the Second Amended Complaint except claims for violation of the Contract Clause,
tortious interference with contractual and business relationships, false light invasion of privacy, and
civil conspiracy. The instant Motion addresses only the Contract Clause claim, Count II of the
Second Amended Complaint, as it is directed at Defendant Board of Health and Messrs. Chatfield
and Patterson in their official capacities.
Defendants argue that Count II does not state a claim for relief under the Contracts Clause
because: (1) Plaintiff did not plead any change in state law which interfered with its contracts; (2)
Defendants Board of Health did not act legislatively when it declared the SST to be a public
nuisance; and (3) Defendants Chatfield and Patterson are not alleged to be voting members of the
Board of Health (Motion, Doc. No. 32, PageID 953).
The Report and Recommendations recommended granting the Motion in its entirety upon the
conclusion that the complained-of board of Health Resolution did not change state law and was
administrative rather than legislative in character. It also noted Convey It offered no authority for

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holding Chatfield and Patterson liable in their official capacities under 42 U.S.C. § 1983 (Report and
Recommendations, Doc. No. 45, PageID 1044.)
In its Objections, Convey It asserts:
The complexity of the issues below appears to have caused the Chief
Magistrate Judge to become lost on the road to justice1. Defendants
effectively changed and repealed section 6111.04(A)’s exception from
public nuisance for permitted facilities and thereby took legislative
action, although Defendants did not follow the usual form for taking
legislative action.

(Objections, Doc. No. 46, PageID 1046, emphasis sic.) The Magistrate Judge had reasoned that
because the Defendant Board of Health had no authority under Ohio law to declare the SST to be a
public nuisance (per Judge Rice’s interpretation of Ohio Revised Code § 6111.04(A)), the adoption
of the offending Resolution did not work a change in the law. Convey It argues § 6111.04 was
“effectively changed and repealed” by the Resolution. It offers the analogy of a speed limit set on a
certain state route by the General Assembly at 35 mph, but the local sheriff takes down the 35 mph
sign and puts up a 25 mph sign (Objections, Doc. No. 46, PageID 1047) . Convey It says this means
the sheriff has effectively changed the law just as the Board of Health did here. Not so. The sheriff
has acted unlawfully and without authority. It may be, as Convey It asserts, that a motorist given a
ticket for driving 30 mph on that route “will have to take action and incur expense to have the traffic
court effectively change the law back to Ohio’s original 35 MPH “legislative policy” or incur
damage resulting from the ticket (a monetary fine) and lose the right to drive 35 MPH on the state
route.” Id. There is nothing unusual in that situation. Anytime a law applier acts unlawfully, a
person subject to that unlawful action may incur transaction costs in preventing the unlawful action

1 Perhaps the “road to justice” has not been properly de-iced.

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from having an improper effect. For example, it is not costless to file a motion to suppress in a
criminal case even if the search is plainly unconstitutional. But that does not make the search a
“legislative” act of the searching police officers.
Convey It’s first numbered Objection is that the Report misconstrues Ohio Revised Code §
6111.04 by somehow concluding it can be overruled by the Resolution because the Board of Health
has the power to declare a public nuisance under Ohio Revised Code § 3707.01. (Objections, Doc.
No. 46, PageID 1048-1053.) Again, not so. The law of this case is that § 6111.04 is controlling
over Ohio Revised Code § 3707.01 and nothing in the Report suggests the contrary.
In its second numbered Objection, Convey It argues the Magistrate Judge violated the Erie
doctrine by “incorrectly construing the Ohio Supreme Court’s holding in Weber v. Board of Health,
Butler County, 148 Ohio St. 389, ¶ 3 of Syllabus (1947).” (Objections, Doc. No. 48, PageID 1053.)
The holding in Weber, as the Magistrate Judge continues to read it despite the Objections, is that the
Butler County Board of Health violated the Ohio Constitution when it acted beyond the power
delegated to it by the General Assembly by declaring unlawful the practice of feeding hogs on
transported garbage. Assuming the Clark County Board of Health violated the Ohio Constitution in
this case by adopting the Resolution, that would not give rise to a cause of action under 42 U.S.C. §
1983 for violating the Contracts Clause or any other protection of the United States Constitution.
An action under § 1983 is available only for violations of the federal Constitution, not state
constitutions.
In its third numbered Objection, Convey It asserts the Magistrate Judge violated the Fed. R.
Civ. P. 12(c) standard by finding as a matter of fact that Convey It had taken out of context the
statement by an Ohio EPA employee that Clark County needed a “legislative fix” to solve its

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perceived problem with the SST. (Objections, Doc. No. 46, PageID 1057.) Convey It asserts that
under Rule 12(c) it is “entitled to the inferences” that the EPA officials were recommending local
legislative action and that the action taken in adopting the Resolution must then have been a
legislative action. Therefore, Convey It says “[i]t is for the jury to decide the context of the Ohio
EPA administrative officials’ statements.” (Objections, Doc. No. 46, PageID 1058.)
The particular communications relied on are in Exhibits 6 and 7 to the Second Amended
Complaint (Doc. No. 24). As they are quoted in Convey It’s Response to the Motion (Doc. No. 34),
they read in full:
Language in the current stormwater permit issued to industrial sites
suggests that covering salt piles is only required if there are
discharges to 'surface waters of the state.' ....
Unfortunately, I don't believe groundwater can be considered a
'surface water of the state' ... 'waters of the state' is one thing, but
adding the word 'surface' means something else which possibly
excludes groundwater all altogether, literally speaking. So the
industrial permit may not be of much help here, though I believe from
initial talks with the salt company it will make some effort to improve
their operations. The problem from my end is if they balk at making
changes, I'm not sure how much leverage I'd have since surface
waters aren't being affected ....
In lieu of stronger language in OEPA 's industrial stormwater permit,
which won't be revised for 2 more years, it seems local efforts to
either implement specific groundwater protection ordinances or zone
for more appropriate land use around the city's wellfield might have
more impact in the short term. Getting these sorts of ordinances
implemented is like pulling teeth, I recognize, especially since the
area in question is Moorfield Twp and not Springfield itself. But
there's no guarantee that Ohio EPA's authority will be enhanced any
time soon that would address this. Local initiatives that can be more
quickly crafted and implemented might be the best way to head off
any more problems.

(Doc. No. 24, Ex. 6, April 15, 2009, email from EPA’s Cotton to Springfield’s Dewell.)
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Assuming a legislative fix isn't going to happen any time soon that
would give OEPA more clout, it might behoove relevant local
authorities to begin discussions between themselves and then with
Convey It (and possibly CSX) to see what other siting options exist.
It's not my intention to pass off a problem to someone else, but the
reality here is that OEPA regs cannot be counted on, at least in their
current form, to guarantee protection of the acquifer.

(Doc. No. 24, Ex. 7, April 28, 2009, email from EPA’s Cotton to Defendant Chatfield.)
As Convey It notes, it is entitled to all reasonable inferences from the pled facts. It would
certainly be a reasonable inferences from these two emails that the Ohio EPA official in question
was recommending, in April, 2009, that local authorities consider a zoning change or an ordinance
protecting the City of Springfield’s wellfields. Those would have been legislative changes enacted
by a local legislature with the power to adopt zoning ordinances or other wellfield protection
ordinances2. But there is neither pleading nor reasonable inference from pled facts that the Board of
Health had any zoning authority or that when it adopted the Resolution fourteen months later it was
attempting to follow this recommendation of the EPA which was made to another governmental
body or its representantive. And certainly the “legislative fix” referred to in the second email is a
legislative fix by the Ohio General Assembly – as a matter of law, no local body could adopt a
“legislative fix” that “would give the Ohio EPA more clout.”
In any event, whatever the Defendant Board of Health did in adopting the resolution was
either legislative or administrative as a matter of law, not as a matter on factual inference from what
was suggested to them by Ohio EPA officials. If the Report is wrong on this point, it is wrong in its
interpretation of Wojcik v. City of Romulus, 257 F.3d 600 (6th Cir. 2001). If the District Court
2

Convey It correctly points out that zoning changes are “manifestly a legislative act.” Response, Doc. No. 34,
PageID 967, quoting State, ex rel Edwards Land Co., v. Delaware County Bd. Of Elections, 129 Ohio St. 3d 580,
591 (2011). But the Resolution in no way purports to be or effect a zoning change and the Defendant Board of

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disagrees with that interpretation, it would be an error of law, not a refusal to allow the jury to
consider a reasonable inference.
In its fourth numbered Objection, Convey It asserts the Magistrate Judge “violated binding
Sixth Circuit law by concluding that dismissing Convey It’s Contract Clause claim does not leave
Convey It without a remedy.” (Objections, Doc. No. 46, PageID 1059.) Convey It misconstrues this
portion of the Report as if were holding that Convey It had to exhaust its state court remedies before
filing a § 1983 action. Id.

Not so. It has long been held in virtually all3 areas of § 1983

jurisprudence that there is no obligation to exhaust state remedies before bringing suit. Patsy v.
Board of Regents, 457 U.S. 496 (1982). Nothing in the Report suggests the contrary. It is not that
Convey It must exhaust its Ohio Revised Code § 2506.01 appeal before bringing its Contracts
Clause claim in this Court. The Report recommends dismissing the Contract Clause claim
regardless of what happens in the 2506.01 action because Convey It will never have a viable § 1983
action. It may, however, have a remedy by way of the § 2506.01 action for the adoption of the
Resolution in apparently violation of Ohio Revised Code § 6111.04.
In its last argument, Convey It chastises the Magistrate Judge for suggesting that there is a
public policy conflict in Ohio over storage of de-icing salt (Objections, Doc. No. 45, PageID 1060).
There is no such conflict, Convey It says, because the Ohio General Assembly has definitively
resolved any conflict by adopting Ohio Revised Code § 6111.04. If that is true, it is the province of
the Ohio courts to say so. To put it another way, Defendant Board of Health’s disregard of Ohio
Revised Code § 6111.04 does not create a cause of action under the Contract Clause. Not every

Health is not a zoning authority.
3
An exception would be the need to have convictions based on assertedly unconstitutional conduct reversed before
one may bring a civil suit for damages. Heck v. Humphrey, 512 U.S. 477, 486-487(1994).

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violation of state law by a state entity creates a violation of the United States Constitution. Failure
to abide by state law is not itself a constitutional violation. Roberts v. City of Troy, 773 F.2d 720
(6th Cir. 1985). Violation by a State of its own procedural rules does not necessarily constitute a
violation of due process. Bates v. Sponberg, 547 F.2d 325 (6th Cir. 1976); Ryan v. Aurora City Bd.
of Educ., 540 F.2d 222, 228 (6th Cir. 1976). “A state cannot be said to have a federal due process
obligation to follow all of its procedures; such a system would result on the constitutionalizing of
every state rule, and would not be administrable.” Levine v. Torvik, 986 F.2d 1506, 1515 (6th Cir.),
cert. denied, 509 U.S. 907 (1993).
For the foregoing reasons it is again respectfully recommended that Defendants’ Motion for
Partial Judgment on the Pleadings be granted.
June 26, 2012.
s/ Michael R. Merz
United States Magistrate Judge

NOTICE REGARDING OBJECTIONS
Pursuant to Fed.R.Civ.P. 72(b), any party may serve and file specific, written objections
to the proposed findings and recommendations within fourteen days after being served with this
Report and Recommendations. Pursuant to Fed.R.Civ.P. 6(e), this period is automatically
extended to seventeen days because this Report is being served by one of the methods of service
listed in Fed.R.Civ.P. 5(b)(2)(B), (C), or (D) and may be extended further by the Court on timely
motion for an extension. Such objections shall specify the portions of the Report objected to and
shall be accompanied by a memorandum in support of the objections. If the Report and
Recommendations are based in whole or in part upon matters occurring of record at an oral
hearing, the objecting party shall promptly arrange for the transcription of the record, or such
portions of it as all parties may agree upon or the Magistrate Judge deems sufficient, unless the
assigned District Judge otherwise directs. A party may respond to another party’s objections
within fourteen days after being served with a copy thereof. Failure to make objections in
accordance with this procedure may forfeit rights on appeal. See, United States v. Walters, 638
F.2d 947 (6th Cir. 1981); Thomas v. Arn, 474 U.S. 140 (1985).

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