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Lawsuit: Ohio’s Attempted Medicaid Expansion Unlawful

Governor’s end-run around the Ohio General Assembly violates the separation of powers, Controlling Board’s vote impermissibly contradicts General Assembly intent

Columbus, OH – The 1851 Center for Constitutional Law late yesterday moved in the Ohio Supreme Court, on behalf of six veteran Ohio legislators and two of Ohio’s largest pro-life organizations, to stop Ohio’s executive branch from expanding Affordable Care Act (“Obamacare”) Medicaid spending without legislative approval.

The legal action is filed on behalf of State Representatives Matt Lynch, Ron Young, Andy Thompson, Ron Maag, John Becker, and Ron Hood, and Cleveland Right to Life and Right to Life of Greater Cincinnati. These representatives and groups combine to represent nearly 1 million Ohioans.

The action asserts that in accepting jurisdiction over and passing the Governor’s proposed Medicaid spending, the Controlling Board exceeded its legal authority by acting inconsistently with the intent of the Ohio General Assembly. Specifically:

R.C. 127.17 states: “The Controlling Board shall take no action which does not carry out the legislative intent of the general assembly regarding program goals and levels of support of state agencies as expressed in the prevailing appropriation acts of the general assembly.”

The Ohio General Assembly first removed Governor Kasich’s proposed expansion of Medicaid spending from the state budget bill, and then inserted a prohibition against the expansion and spending.

Article II of the Ohio Constitution requires that the legislature, rather than administrative boards such as the Controlling Board, make major policy decisions.

In a 1980 challenge to the Controlling Board, the Ohio Supreme Court held that the Controlling Board’s authority is only constitutional because it must adhere to the intentions of the General Assembly, and because of “the availability of mandamus relief” through the High Court.

“Many competent individuals make strong arguments against Medicaid Expansion on policy grounds. Success in our lawsuit, however, will not prohibit changes to Medicaid through legitimate means. Our lawsuit stands for the simple proposition that neither this Governor nor any other is a king,” said Maurice Thompson, Executive Director of the 1851 Center.

“For government to be limited, the making of transformational public policy requires the assent of the Ohio General Assembly, and cannot be done through administrative overreach. This occasion requires Ohioans to draw a line in the sand and affirm that we’d rather not bring Washington D.C.- style decision-making to Ohio.”

The Supreme Court of the United States, in its seminal decision last July in National Federation of Independent Business v. Sebelius, explained that the spending expansion transforms a state’s Medicaid program from “a program to care for the neediest among us” to “an element of a comprehensive national plan to provide universal health insurance coverage” that “dramatically increases state obligations under Medicaid,” and is “an attempt to foist an entirely new health care system upon the States.”

Read the Complaint HERE.

October 23, 2013: Dayton Business Journal: Ohio Medicaid expansion gets legal challenge

October 23, 2013: WOSU NPR 89.7: Activists, Lawmakers Bring Promised Lawsuit Over Medicaid

October 22, 2013: Cincinnati.com: SW Ohio conservatives file suit to stop Medicaid expansion

October 22, 2013: Bloomberg: Ohio Medicaid Expansion Plan Challenged in Lawsuit

October 21, 2013: New York Times: Medicaid Expansion Is Set for Ohioans

October 21, 2013: Columbus Dispatch: Medicaid-expansion opponents plan to sue Kasich administration

October 21, 2013: 60 Seconds Ohio: Maurice Thompson answers questions following Ohio expansion of Medicaid [VIDEO]

October 14, 2013: NBC 4: Controlling Board Medicaid Maneuver May Face Legal Challenge [VIDEO]

Sixth Circuit Oral Argument: Is Ohio’s “Precious Metals Dealer Act” Constitutional?

Court considers whether to protect Ohio business owners’ right to advertise and sustain invalidation of burdensome regulation of coin dealers

Cincinnati, OH – The Sixth Circuit Court of Appeals heard oral arguments on the constitutionality of the Ohio Precious Metal Dealer Act, which imposes strict limits on precious metals purchasers and businesses in Ohio.

Through vigorous enforcement of the Act, the Ohio Department of Commerce had threatened to shut down many Ohio small businesses. However, the Act was enjoined in its entirety by a federal court in December of 2012.

The ruling, made by Judge Watson of the Columbus division of the Southern District of Ohio, paved the way for Ohio businesses, most prominently coin dealers, to resume purchases of items containing gold and silver content, and in particular, to resume advertising their interest in purchasing inventory consisting of precious metals, free from concern over confiscatory prosecution, fines and regulations.

The legal action was brought by the 1851 Center for Constitutional Law on behalf of Liberty Coins, a Delaware, Ohio coin dealer ordered by Commerce to cease all advertising indicating that it purchases gold and silver and all actual purchases of gold and silver, and threatened with a $10,000 fine and jail time if it does not comply.

The 1851 Center continues to defend Liberty Coins’ right to do business against Attorney General Mike DeWine’s appeal. And the case has since gained national attention, with the Washington D.C.-based Institute for Justice and Sacramento-based Pacific Legal Foundation weighing in with Amicus Briefs defending Liberty Coins and attacking the Act’s lawfulness.

“This Act and those enforcing it have treated small businesses who make gold and silver available as public utilities at best, and criminals at worst, irrespective of whether they have done harm,” according to Maurice Thompson, Executive Director of the 1851 Center.

Thompson added “the state misguidedly seeks to advance its mission of ‘preventing theft and resale of precious metals’ through gag orders, warrantless searches, and criminalization of innocent small businesses. Fortunately, the First Amendment allows us to protect Ohioans’ rights to engage in truthful promotion of their businesses, and this case demonstrates promise for a powerful new method of enforcing constitutional limits on onerous state and federal regulations.”

The Supreme Court has repeatedly confirmed that First Amendment applies to “commercial speech,” which includes advertising. Nevertheless, Commerce, after vigorous lobbying and political contributions made by the pawnbrokers industry, which is a direct competitor of those who are subject to the Act, had begun vigorous enforcement of regulations prohibiting coin dealers from advertising without a license, and requiring a license and payment of steep fine if they had previously advertised (licenses are conditioned on a state finding of “good character and reputation”). Once licensed, state and local agents were empowered to search and seize any item or business record without a search warrant or finding of probable cause.


Listen to the archived oral argument, HERE.

Read the Appellate Briefs HERE.

Read the Amicus Briefs on behalf of Liberty Coins from the Institute for Justice HERE and Pacific Legal Foundation HERE.


October 12, 2013: Cincinnati.com: Coin shop challenges Ohio law as free speech ban