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Corrections Corporation of America v. City of Youngstown

Court of Appeals of Ohio, Seventh District

June 17, 2013

CORRECTIONS CORPORATION OF AMERICA, PETITIONER-APPELLANT,
v.
CITY OF YOUNGSTOWN, et al., RESPONDENTS-APPELLEES.

Civil Appeal from Common Pleas Court, Case No. 10CV224.

For Petitioner-Appellant: Attorney Timothy Bojanowski.

For Respondents-Appellees: Attorney Steven Friedman Attorney Bruce Khula.

JUDGES: Hon. Joseph J. Vukovich Hon. Gene Donofrio Hon. Mary DeGenaro

OPINION

VUKOVICH, J.

{¶1} Corrections Corporation of America appeals the trial court's decision entering summary judgment in favor of the City of Youngstown, et al. on CCA's request for declaratory and injunctive relief. Specifically, CCA sought to enjoin the City from collecting a $1 per day per prisoner tax under a new city ordinance.

{¶2} CCA's threshold argument is that the ordinance was enacted in violation of the City's charter, which requires a vote of the electorate before enactment of an occupational tax. The City claims that the tax is not an occupational tax. We conclude that the tax at issue here is an occupational tax.

{¶3} Accordingly, the trial court's judgment is reversed, the prison tax ordinance is nullified, and the City of Youngstown is enjoined from enforcing the ordinance.

STATEMENT OF THE CASE

{¶4} As background, the City was previously involved in a lawsuit as a result of Mahoning County threatening to charge the city for housing prisoners at the county jail. At the time, the county housed some prisoners for the United States Marshal's Service for a daily rate of $65-$70. (Bozanich Depo. at 49). These prisoners were thereafter transferred to the Northeast Ohio Correctional Center, a facility which is owned and operated by CCA and which houses some federal prisoners under a contract with the Bureau of Prisons and some under a contract with the U.S. Marshal's.

{¶5} When the prisoners were transferred to CCA, CCA began receiving the daily rate. However, $3 per day stayed with the county for administrative purposes. Id. at 51. When the city's finance director discovered this, he asked CCA why it was not using the city for the services which resulted in the pass-through fee and voiced that it was not fair that the county got the entire $3 per day per inmate fee when the city provided fire, police, water, sewer, etc. Id. at 56-61. Sometime after this sentiment was expressed to the federal government, the $3 fee to the county was terminated.

{¶6} In June of 2009, the City passed an ordinance imposing a $1 per day fee for each prisoner housed in a private institution in the City as a result of convictions of crimes occurring outside of Mahoning County. The ordinance containing the Prisoner Accommodation Fee was to take effect on December 1, 2009 and was declared to be an emergency measure necessary for the immediate preservation of the public peace, welfare, and safety.

{¶7} In November of 2009, the City amended the ordinance to delete the reference to convictions of crimes occurring outside of the county. The amended tax was thus generally payable based upon every prisoner or inmate serving a jail or prison sentence at any private institution in the City. Once again, the ordinance was declared to be an emergency measure necessary for the immediate preservation of the public peace, safety, and welfare. The City also expressed a desire to maintain the original effective date of the ordinance.

{¶8} In December of 2009, CCA served the City with its objections to the tax and a notice of intent to file suit under R.C. 2723.01 et seq., which provides that the common pleas court can entertain a suit to enjoin the illegal levy of taxes and assessments. On January 22, 2010, CCA filed a complaint for declaratory and injunctive relief against the City and its various officials, asking the court to declare that the tax ...


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