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Rowitz v. McClain

Court of Appeals of Ohio, Tenth District

December 31, 2019

Stephanie Rowitz, Appellant-Appellant,
[Jeff McClain], Tax Commissioner of Ohio, Appellee-Appellee. Jamie Weisbarth, Appellant-Appellant,
[Jeff McClain], Tax Commissioner of Ohio, Appellee-Appellee. Madison Weisbarth, Appellant-Appellant,
[Jeff McClain], Tax Commissioner of Ohio, Appellee-Appellee. McKenna Weisbarth, Appellant-Appellant,
[Jeff McClain], Tax Commissioner of Ohio, Appellee-Appellee.

          APPEALS from the Ohio Board of Tax Appeals

         On brief:

          Murray & Murray Co., L.PA., John T. Murray, and Leslie O. Murray; Ray Robinson Law Co., L.PA., Sandra M. Kelly, and Christopher D. Kuebler.

          Dave Yost, Attorney General, Daniel W. Fausey, and Raina Nahra Boulos, for appellee.


          John T. Murray and Sandra M. Kelly for appellants.

          Raina Nahra Boulos.


          BEATTY BLUNT, J.

         {¶ 1} Appellants in this consolidated action appeal a decision from the Ohio Board of Tax Appeals ("BTA") affirming the Tax Commissioner's decision denying their applications for a refund of sales taxes they paid for purchasing feminine hygiene products.


         {¶ 2} Appellants Stephanie Rowitz, McKenna Weisbarth, Madison Weisbarth, and Jamie Weisbarth filed applications for refunds of sales tax they paid for feminine hygiene products, such as tampons and menstrual pads, to appellee Ohio Tax Commissioner Jeff McClain ("Commissioner") on May 20, 2016. They included receipts for each of their purchases with their applications.

         {¶ 3} Their claims for refunds were denied. In the denial letter, the Ohio Department of Taxation found that "[a] thorough review of R.C. 5739.02 reveals that there is not an applicable exemption." (July 22, 2016 Letter.)

         {¶ 4} Appellants filed an appeal with the Commissioner on August 9, 2016. Appellants submitted a letter from Dr. Edwina Simmons, who purported to provide an expert opinion. In that letter, Dr. Simmons stated "[m]enstrual products are not a Luxury for women and [t]herefore do not qualify for a Luxury Tax." (Attachment to Appellants' October 27, 2016 letter.) Dr. Simmons said that feminine hygiene products are necessary to protect furniture, floors, and clothing from blood-borne illnesses.

         {¶ 5} The Commissioner issued his final determination and denied the applications on December 16, 2016. In his decision, the Commissioner found the Department of Taxation is "without power to exercise any jurisdiction beyond that conferred by statute" such that he could not address appellants' constitutional arguments. Addressing the taxability of feminine hygiene products solely under Ohio's statutory scheme, the Commissioner found that feminine hygiene products do not fit within the definition of a drug, prosthetic device, durable medical equipment, or mobility enhancing equipment.[1] The Commissioner determined the products are not "drugs" because they "are not compounds or substances." (Dec. 16, 2016 Final Determination at 4.) They are not "durable medical equipment" because they "are worn in or on the body." (Dec. 16, 2016 Final Determination at 4.) They are not "prosthetic devices" because "they do not artificially replace a missing portion of the body or prevent or correct a physical deformity or malfunction, or support a weak or deformed portion of the body." (Dec. 16, 2016 Final Determination at 4-5.) Rather, the Commissioner found that "menstruation is a normal bodily function, 'necessary for continued reproduction and continuation of the human species.'" (Dec. 16, 2016 Final Determination at 5, quoting unidentified documentation provided by appellants.)

         {¶ 6} The Commissioner went on to find that:

[F]eminine menstrual products are not dispensed pursuant to a prescription as required under the exemptions set forth in R.C. 5739.02(B)(18) and (19). Hence, sales of such products cannot be exempt in any case, regardless of whether they meet the definitions of drugs, prosthetic devices, [or] durable medical equipment * * *.

(Dec. 16, 2016 Final Determination at 5.)

         {¶ 7} Appellants appealed the Commissioner's decision to the BTA.

         {¶ 8} On February 20, 2018, the BTA issued its Decision and Order affirming the Final Determination of the Commissioner. The BTA found that appellants failed to meet their burden to show they are entitled to an exemption. Specifically, "the provisions in R.C. 5739.01(FFF) through (JJJ) relate to an exemption in R.C. 5739.02(B)(18)-(19) for items meeting such definitions that are provided under a prescription." (Feb. 20, 2018 Decision at 2.)

         {¶ 9} Appellants appealed this decision.[2] In addition to appealing the BTA's determination that the products are not exempt from taxation under Ohio law, appellants also raise two constitutional arguments. First, they argue that the taxation of feminine hygiene products violates the federal and state Equal Protection Clauses. Second, they argue that Ohio's sales tax law, to the extent it requires taxation of feminine hygiene products, is preempted by federal law.


         {¶ 10} Appellants submit the following assignments of error:

[1.] Pursuant to the Constitutional issue raised before the Board of Tax Appeals, but not addressed by that body on jurisdictional grounds, the taxation of feminine hygiene products violates the equal protection clauses of the United States and Ohio Constitution because it discriminates against women.
[2.] Pursuant to the Constitutional issue raised before the Board of Tax Appeals, but not addressed by that body on jurisdictional grounds, the Tax Commissioner's failure to exempt feminine hygiene products from Ohio sales tax is preempted by the Federal Food and Drug Administration's identification of these products as medical devices.
[3.] Contrary to the Board of Tax Appeals' conclusion, the Tax Commissioner's failure to exempt feminine hygiene products from Ohio sales tax is unlawful because they are "drugs" as defined by R.C. § 5739.01(FFF), "durable medical equipment" as defined by R.C. § 5739.01(HHH) and/or "prosthetic devices" as defined by R.C. § 5739.01(JJJ).


         {¶ 11} In reviewing a decision of the BTA, appellate courts must determine whether the decision is "reasonable and lawful." Accel, Inc. v. Testa, 152 Ohio St.3d 262, 2017-Ohio-8798, ¶ 11, citing Satullo v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, ¶ 14; Witt Co. v. Hamilton Cty. Bd. of Revision, 61 Ohio St.3d 155, 157 (1991); Miracit Dev. Corp. v. Zaino, 10th Dist. No. 04AP-322, 2005-Ohio-1021, ¶ 7. The court may not "substitute its judgment for that of the BTA on factual issues." Miracit Dev. Corp. at ¶ 7, citing Bethesda Healthcare, Inc. v. Wilkins, 101 Ohio St.3d 420, 2004-Ohio-1749, ¶ 18. Rather, the court must affirm the BTAs factual findings" 'if they are supported by reliable and probative evidence, '" and the court" 'afford[s] deference to the BTAs determination of the credibility of witnesses and its weighing of the evidence subject only to an abuse-of-discretion review on appeal.'" Accel, Inc. at ¶ 16, quoting HealthSouth Corp. v. Testa, 132 Ohio St.3d 55, 2012-Ohio-1871, ¶ 10; see also Miracit Dev. Corp. at ¶ 7 ("the BTAs factual determinations must be supported by sufficient probative evidence"), citing Bethesda Healthcare; Hawthorn Mellody, Inc. v. Lindley, 65 Ohio St.2d 47 (1981), syllabus.

         {¶ 12} Nonetheless, an appellate court" 'will not hesitate to reverse a BTA decision that is based on an incorrect legal conclusion.'" Accel, Inc. at ¶ 11, quoting Satullo at ¶ 14; see also Gahanna- Jefferson Local School Dist. Bd. of Edn. v. Zaino, 93 Ohio St.3d 231, 232 (2001). "Thus, legal conclusions are reviewed de novo." Summer Rays, Inc. v. Testa, 10th Dist. No. 17AP-32, 2017-Ohio-7901, ¶ 10, citing Terraza 8, L.L.C v. Franklin Cty. Bd. of Revision, 150 Ohio St.3d 527, 2017-Ohio-4415, ¶ 7.


         A. Taxation of feminine hygiene products does not violate the Equal Protection Clauses of the United States and Ohio Constitutions-Assignment of Error 1.

         {¶ 13} Appellants first argue that taxing feminine hygiene products violates the Equal Protection Clauses of the Ohio and United States Constitution. The BTA correctly determined that it does not have authority to adjudicate constitutional questions. See generally Cleveland Gear Co. v. Limbach, 35 Ohio St.3d 229 (1988), paragraph three of the syllabus ("The question of whether a tax statute is unconstitutional when applied to a particular state of facts must be raised in the notice of appeal to the Board of Tax Appeals, and the Board of Tax Appeals must receive evidence concerning this question if presented, even though the Board of Tax Appeals may not declare the statute unconstitutional."); MCI Telecommunications Corp. v. Limbach, 68 Ohio St.3d 195 (1994); S. S. Kresge Co. v. Bowers, 170 Ohio St. 405 (1960), syllabus ("The Board of Tax Appeals of Ohio is an administrative agency and is without jurisdiction to determine the constitutional validity of a statute."). Under R.C. 5717.04, [3] appellants properly appealed their decision from the BTA to this court. See also Stines v. Limbach, 61 Ohio App.3d 461 (10th Dist.1988); Brown v. Levin, 10th Dist. No. 11AP-349, 2012-Ohio-5768, ¶ 22.

         {¶ 14} The Fourteenth Amendment to the United States Constitution provides that "[n]o State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws." Similarly, Article I, Section 2 Ohio Constitution states that "[a]ll political power is inherent in the people. Government is instituted for their equal protection and benefit, and they have the right to alter, reform, or abolish the same, whenever they may deem it necessary; and no special privileges or immunities shall ever be granted, that may not be altered, revoked, or repealed by the General Assembly." "Simply stated, the Equal Protection Clauses require that individuals be treated in a manner similar to others in like circumstances." McCrone v. Bank One Corp., 107 Ohio St.3d 272, 2005-Ohio-6505, ¶ 6. "The limitations placed upon governmental action by the federal and state Equal Protection Clauses are essentially the same." Id. at ¶ 7.

         {¶ 15} In analyzing the constitutionality of a statute, we must first recognize that "[a]ll statutes have a strong presumption of constitutionality." Arbino v. Johnson & Johnson, 116 Ohio St.3d 468, 2007-Ohio-6948, ¶ 25, citing Sorrell v. Thevenir, 69 Ohio St.3d 415, 418-19 (1994); see also State ex rel. Swetland v. Kinney, 69 Ohio St.2d 567, 574 (1982) ("[C]ourts must afford legislation a very strong presumption in favor of constitutionality."). "It is difficult to prove that a statute is unconstitutional." Arbino at ¶ 25. As such, "[b]efore a court may declare unconstitutional an enactment of the legislative branch, 'it must appear beyond a reasonable doubt that the legislation and constitutional provisions are clearly incompatible.'" Id., quoting State ex rel. Dickman v. Defenbacher, 164 Ohio St. 142 (1955), paragraph one of the syllabus.

         {¶ 16} "A party seeking constitutional review of a statute may proceed in one of two ways: present a facial challenge to the statute as a whole or challenge the statute as applied to a specific set of facts." Id. at ¶ 26, citing Harrold v. Collier, 107 Ohio St.3d 44, 2005-Ohio-5334, ¶ 37. A facial challenge requires that the party challenging the statute demonstrate that there is "no set of circumstances" in which the statute would be valid. Id., citing Harrold at ¶ 37; see also United States v. Salerno, 481 U.S. 739, 745 (1987). "The fact that a statute might operate unconstitutionally under some plausible set of circumstances is insufficient to render it wholly invalid." Harrold at ¶ 37.

         {¶ 17} "An as-applied challenge, on the other hand, alleges that application of the statute in a particular factual context is unconstitutional." Simpkins v. Grace Brethren Church of Del, 149 Ohio St.3d 307, 2016-Ohio-8118, ¶ 20, citing Yajnik v. Akron Dept. of Health, Hous. Div., 101 Ohio St.3d 106, 2004-Ohio-357, ¶ 14. If a statute is declared unconstitutional "as applied," future application of the statute in a similar context is prohibited, "but it does not render the statute wholly inoperative." Id., citing Yajnik at ¶ 14. "A party raising an as-applied constitutional challenge must prove by clear and convincing evidence that the statute is unconstitutional when applied to an existing set of facts." Id. at ¶ 22, citing Groch v. Gen. Motors Corp., 117 Ohio St.3d 192, 2008-Ohio-546.

         {¶ 18} Courts apply different levels of scrutiny in determining whether a statute violates the Equal Protection Clause: rational basis, heightened or intermediate scrutiny, or strict scrutiny. State v. Thompson, 95 Ohio St.3d 264, 2002-Ohio-2124, ¶ 13; Clark v. Jeter, 486 U.S. 456, 461 (1988). The "first step" is determining what standard of review is proper. Arbino at ¶ 64.

         1. Strict scrutiny does not apply.

         {¶ 19} When legislation infringes upon a fundamental constitutional right or the rights of a suspect class, courts review the law under a strict scrutiny test. Thompson at ¶ 13; Arbino at ¶ 64. "This latter level of scrutiny demands that a discriminatory classification be narrowly tailored to serve a compelling state interest." Thompson at ¶ 13, citing United States v. Playboy Ent. Group, Inc., 529 U.S. 803, 813 (2000); Painesville Bldg. Dept. v. Dworken & Bernstein Co., L.PA., 89 Ohio St.3d 564, 567 (2000). "[A] suspect class is one 'saddled with such disabilities, or subjected to such a history of purposeful unequal treatment, or relegated to such a position of political powerlessness as to command extraordinary protection from the majoritarian political process.'" Massachusetts Bd. of Retirement v. Murgia, 427 U.S. 307, 313 (1976), quoting San Antonio Indep. School Dist. v. Rodriguez, 411 U.S. 1, 28 (1973). To this end, courts have recognized suspect classes of race and national origin. Thompson at ¶ 13; Grutter v. Bollinger, 539 U.S. 306 (2003). They have rejected gender and age as suspect classes. United States v. Virginia, 518 U.S. 515, 533-34 (1996) (sex is not a proscribed classification like race and national origin); Murgia (age classification is not a suspect class or a fundamental right).

         {¶ 20} We reject appellants' arguments that a strict scrutiny analysis applies to the Ohio's sales tax statutes and the taxation of feminine hygiene products.

         {¶ 21} Appellants' argument that the statutes burden the exercise of their fundamental rights also fails. Whether a right is fundamental stems first from the constitution. Rodriguez at 33 ("It is not the province of this Court to create substantive constitutional rights in the name of guaranteeing equal protection of the laws."). The court's job is to assess whether the right at issue is "explicitly or implicitly guaranteed by the Constitution." Id. To this end, courts have recognized a fundamental right to vote, to marry, to procreate, parental rights, and of privacy. See M.L.B. v. S.L.J., 519 U.S. 102 (1996) (parental rights); Obergefell v. Hodges, ___ U.S. ___, 135 S.Ct. 2584 (2015) (marry); Sullivan v. Benningfield, 920 F.3d 401 (6th Cir.2019) (procreate); Troxel v. Granville, 530 U.S. 57 (2000) (parental rights). Courts have rejected classifying things such as education, safe housing, and public welfare assistance as fundamental rights. See Rodriguez (education); Lindsey v. Normet, 405 U.S. 56 (1972) (housing); Dandridge v. Williams, 397 U.S. 471 (1970) (public assistance). Likewise, wealth discrimination and the social importance of the discrimination are also not adequate for invoking strict scrutiny. See Rodriguez at ¶ 29; Lindsey.

         {¶ 22} Appellants argue that Ohio's sales tax law infringes upon a "fundamental right or discriminates against a protected class" and is therefore subject to strict scrutiny. (Appellants' Brief at 15.) Appellants did not identify a specific fundamental right in their appellate brief, though. At the oral argument in this matter, appellants identified two fundamental rights that they believe are implicated here: the right to travel and the right to work. Appellants did not provide legal support, either by reference to a constitutional provision or by citation to any legal authority, for the argument that these rights are fundamental, and they did not develop any argument explaining how Ohio's retail sales tax statutes burden the right to work or travel. Nonetheless, appellants suggest that menstruation affects a woman's ability to work and travel, and a taxation on feminine hygiene products imposes a burden on the exercise of these two fundamental rights.

         {¶ 23} Appellants' failure to develop their argument that the Ohio sales tax statutes violate one or more of their fundamental rights would generally result in the waiver of such arguments. See Gen. Start Natl Ins. Co. v. Administratia Asigurarilor De Stat, 289 F.3d 434, 441 (6th Cir.2002); Lycourt-Donovan v. Columbia Gas of Ohio, 152 Ohio St.3d 73, 2017-Ohio-7566; United States v. Hook, 471 F.3d 766, 775 (7th Cir.2006) ("perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent authority, are waived"); see generally Roby v. Commr. of Social Sec, 48 Fed.Appx. 532, 536 (6th Cir.2002) (considering equal protection claim and noting that the failure to develop an argument generally results in its waiver). As the Sixth Circuit has recognized:

"Issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived. It is not sufficient for a party to mention a possible argument in the most skeletal way, leaving the court to put flesh on its bones."

United States v. Stewart, 628 F.3d 246, 256 (6th Cir.2010), quoting McPherson v. Kelsey, 125 F.3d 989, 995-96 (6th Cir.1997). Nonetheless, in the interest of fully analyzing the standard to apply to appellants' constitutional challenge, we address appellants' fundamental right argument.

         {¶ 24} Numerous courts have found that "[t]he right to 'make a living' is not a 'fundamental right,' for either equal protection or substantive due process purposes." Medeiros v. Vincent, 431 F.3d 25, 32 (1st Cir.2005), abrogated in part on other grounds by Bond v. United States, 564 U.S. 211 (2011); see also Murgia (citation omitted.) ("we have expressly stated that a standard less than strict scrutiny 'has consistently been applied to state legislation restricting the availability of employment opportunities.' "); Doe v. Nebraska, 734 F.Supp.2d 882, 926 (N.D.Neb.2010); New York State Trawlers Assn. v. Jorling, 16 F.3d 1303, 1309-12 (2d Cir.1994); Hull v. Rose, Schmidt, Hasley & Disalle, P.C., 700 A.2d 996 (Pa.1997). Appellants have not provided support for their statement that the right to work is a fundamental right, and the court declines to find one on its own. Appellants' argument for a strict scrutiny analysis on this basis, therefore, fails.

         {¶ 25} The right to interstate travel has been recognized as a fundamental right.[4] See Shapiro v. Thompson, 394 U.S. 618, 631 (1969), abrogated on other grounds by Edelman v. Jordan, 415 U.S. 651 (1974); Jones v. Helms, 452 U.S. 412, 417-18 (1981); League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 535 (6th Cir.2007). Although the United States Supreme Court has not recognized a fundamental right to intrastate travel, Ohio has. See State v. Burnett, 93 Ohio St.3d 419, 427-28 (2001). But even when the right to travel is implicated, the application of a strict scrutiny analysis is not automatic.

         {¶ 26} "[N]ot every law which makes a right more difficult to exercise is, ipso facto, an infringement of that right." Planned Parenthood v. Casey, 505 U.S. 833, 873 (1992). A fundamental right will only be implicated by government action that, at a minimum, "significantly interferes with the exercise of a fundamental right." Zablocki v. Redhail, 434 U.S. 374, 388 (1978); see also Beydoun v. Sessions, 871 F.3d 459, 467 (6th Cir.2017), citing Zablocki. "The fact that a law which serves a valid purpose, one not designed to strike at the right itself, has the incidental effect of making it more difficult or more expensive" is not enough to invalidate the legislation. Planned Parenthood at 874 (addressing abortion restrictions under the due process clause). If the regulation "merely has an incidental effect" on the exercise of a fundamental right, strict scrutiny does not apply. Schlittler v. State, 488 S.W.3d 306, 317 (Tex.App.2016) (strict scrutiny not triggered on the basis of disparate treatment where the statute only "incidentally" burdened the parent-child relationship for some incarcerated sex offenders); see also Johnson v. Rodriguez, 110 F.3d 299, 316 (5th Cir.1997) ("Thus, any burden which customary consideration in the parole process of litigation activity generally may impose upon a 'fundamental right' is 'incidental' and does not warrant strict scrutiny under an equal protection analysis."), citing Planned Parenthood, and Younger v. Harris, 401 U.S. 37, 49-52 (1971). In these situations, equal protection requires only a "conceivable rational relationship." Johnson at 306, citing Stern at 1054. It is only when there exists a real and appreciable impact on, or a significant interference with the exercise of the fundamental right that the strict scrutiny doctrine will be applied. Murgia at 388.

         {¶ 27} Applying this concept to the right to travel, courts have explained that a state law "implicates the right to travel when it actually deters travel, when impeding travel is its primary objective, or when it uses a classification that serves to penalize the exercise of the right." Bredesen at 535, citing Atty. Gen. of New York v. Soto-Lopez, 476 U.S. 898, 903 (1986). "Burdens that are incidental or negligible are 'insufficient to implicate [the] denial of the right to travel.'" Beydown at 468, quoting Bredesen at 535; see also Pollack v. Duff, 793 F.3d 34, 45 (D.C. Cir.2015) (if the law's effect on the right to travel is negligible, strict scrutiny does not apply); Matsuo v. United States, 586 F.3d 1180, 1183 (9th Cir.2009); Tobe v. Santa Ana, 9 Cal.4th 1069, 1100-01 (1995) (there must be a "direct restriction of the right to travel").

         {¶ 28} Appellants have not made any arguments explaining how Ohio's sales tax statutes "significantly interfere" with their right to travel. The statutes impose a tax on the purchase of all retail sales, including feminine hygiene products, without regard to travel implications. There is nothing in the record to suggest that the imposition of the tax "actually deters travel," has as its "primary objective" the goal to impede travel, or uses any classification to serve to penalize exercising the right to travel. Without any support for the proposition that the tax burdens travel in any way that is not negligible, we decline to apply strict scrutiny on this basis.

         {¶ 29} Because gender classifications are not subject to strict scrutiny, there is no fundamental right to work, and there is no evidence that a tax on feminine hygiene products significantly burdens the right to travel, there is no basis upon ...

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