The opinion
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON
Alana Harrison,
Plaintiff,
v. Case No. 3:19-cv-288
Judge Thomas M. Rose
Montgomery County, Ohio,
Defendant.
ENTRY AND ORDER GRANTING MOTION TO DISMISS
FOR LACK OF JURISDICTION AND FAILURE TO STATE
A CLAIM BY DEFENDANT MONTGOMERY COUNTY
OHIO, (ECF 17), GRANTING UNOPPOSED MOTION FOR
LEAVE TO FILE REPLY TO PLAINTIFF'S 22-PAGE
RESPONSE TO DEFENDANT'S NOTICE OF
SUPPLEMENTAL AUTHORITY AND PLAINTIFF'S
SUBMISSION OF ADDITIONAL SUPPLEMENTAL
AUTHORITY BY DEFENDANT MONTGOMERY COUNTY
OHIO, (ECF 23), AND GRANTING UNOPPOSED MOTION
FOR LEAVE TO FILE RESPONSE TO PLAINTIFF'S
NOTICE OF SUPPLEMENTAL AUTHORITY (ECF 24) BY
DEFENDANT MONTGOMERY COUNTY OHIO, (ECF 25),
AND TERMINATING CASE.
Pending before the Court are Motion to Dismiss for Lack of Jurisdiction and Failure to
State a Claim by Defendant Montgomery County Ohio, (ECF 17), Unopposed Motion for Leave
to File Reply to Plaintiff's 22-Page Response to Defendant's Notice of Supplemental Authority and
Plaintiff's Submission of Additional Supplemental Authority by Defendant Montgomery County
Ohio, (ECF 23), and Unopposed Motion for Leave to File Response to Plaintiff's Notice of
Supplemental Authority (ECF 24) by Defendant Montgomery County Ohio. (ECF 25).
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Plaintiffs are a putative class of individuals who failed to pay property tax in Ohio. The
Montgomery County Treasurer prosecuted a tax foreclosure against the properties and then
transferred the properties to a land reutilization corporation. Plaintiffs allege that the value of
their property exceeded the taxes owed and that Defendant Montgomery County violated the
federal and state Takings Clauses when the County transferred that property without providing
compensation for the value that exceeded the tax liabilities. Defendant moved to dismiss, arguing
that the Court does not have jurisdiction over the controversy and that Plaintiffs do not state valid
claims and that the action is barred by res judicata.
I. Background
Named Plaintiff Alana Harrison asserts a taking arising from Defendant Montgomery
Treasurer’s enforcement of an administrative tax foreclosure proceeding under Ohio Revised Code
§ 323.65 through 323.79. (Compl. ¶ 6-12 and ¶ 27). Ohio Rev. Code § 323.65, et seq., was first
adopted by the General Assembly in 2006 in order to expedite the tax foreclosure process for
“abandoned” lands. (Amd. Compl. ¶ 6). Under this statutory procedure, if a tax delinquent
property involves “abandoned” land, as defined by Ohio Revised Code § 323.65(A), the County
Treasurer may initiate a foreclosure proceeding with the county Board of Revision, which upon
any adjudication of foreclosure, may order disposition of the abandoned land by public auction or
by other conveyance in the manner prescribed by sections 323.65 to 323.79 of the Revised Code.
See Ohio Rev. Code § 323.66(A).
Under Ohio Rev. Code § 323.65(A), the administrative tax foreclosure procedures set forth
in Ohio Rev. Code § 323.65 through Ohio Rev. Code § 323.79 only apply to tax delinquent lands
“that are unoccupied and that first appeared on the [tax delinquent] list compiled under division
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(C) of section 323.67 of the Revised Code, or the delinquent tax list or delinquent vacant land tax
list compiled under section 5721.03 of the Revised Code . . . at any time after the county auditor
makes the certification of the delinquent land list under section 5721.011 of the Revised Code.”
Id. Moreover, the subject property must be “unoccupied,” which is defined by Ohio Rev. Code §
323.65(F) to mean: “(a) [n]o building, structure, land, or other improvement that is subject to
taxation and that is located on the parcel is physically inhabited as a dwelling; (b) no trade or
business is actively being conducted on the parcel by the owner, a tenant, or another party
occupying the parcel pursuant to a lease or other legal authority, or in a building, structure, or other
improvement that is subject to taxation and that is located on the parcel; [or] (c) [t]he parcel is
uninhabited and there are no signs that it is undergoing a change in tenancy and remains legally
habitable, or that it is undergoing improvements, as indicated by an application for a building
permit or other facts indicating that the parcel is experiencing ongoing improvements.” Id.
Traditional tax foreclosures in Ohio follow the same basic procedure as routine mortgage
foreclosures. The county treasurer files a lawsuit in the common pleas court, a judgment of
foreclosure is rendered, and the property is sold at public auction. See Ohio Rev. Code § 323.25.
The sales proceeds are then distributed among the various interest holders, starting with the county
treasurer who holds a first lien position for real estate taxes. See Ohio Rev. Code § 5721.10. In
other words, the treasurer commences a traditional tax foreclosure as an effort to collect tax dollars
and, by the end of the process, actually collects delinquent real estate taxes. In the process, the
property is offered for sale at public auction where the property owner may, through the
competitive bidding process, realize on the equity she possesses in the property. Ohio Rev. Code
§ 2329.44.
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The statute’s expedited tax foreclosure process is different. First, tax foreclosure cases
may be prosecuted in the county’s board of revision instead of the court of common pleas.
Second, although an expedited foreclosure starts in the usual way, the process soon comes to a
fork in the road. Before any final action is taken on the complaint, the county treasurer—as
plaintiff—must make a choice whether to collect the delinquent taxes owed through a judicial sale
or to invoke the alternative redemption period of Ohio Rev. Code § 323.78 and waive all taxes and
assessments owed on the parcel. Indeed, Ohio Rev. Code § 323.78(B) provides that “after the
expiration of the alternative redemption period[,] the parcel shall be transferred by deed directly
to the. . . county land reutilization corporation without appraisal and without a sale, free and clear
of all impositions and any other liens on the property, which shall be deemed forever satisfied and
discharged.” Because Ohio Rev. Code § 323.78(A) gives the county treasurer the sole discretion
to ask the board of revision to directly transfer the property to an electing subdivision instead of
ordering a judicial sale and the treasurer’s decision to invoke Ohio Rev. Code § 323.78, the county
treasurer controls whether the statute’s foreclosure process results in the collection of tax dollars
or provides inventory for an electing subdivision’s Land Reutilization Program. Finally, a
property may be directly transferred pursuant to Ohio Rev. Code § 323.78 “regardless of whether
the value of the taxes, assessments, penalties, interest, and other charges due on the parcel, and the
costs of the action, exceed the fair market value of the parcel.”
In creating this expedited foreclosure procedure for abandoned, tax delinquent lands, the
General Assembly implemented a number of procedural safeguards to protect the rights of affected
property owners who want to contest the foreclosure or pay their delinquent taxes. First, with
respect to service of process, Ohio Rev. Code § 323.66(C) provides that “the clerk of court, in the
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same manner as in civil actions, shall provide summons and notice of hearings, maintain an official
case file, docket all proceedings, and tax as costs all necessary actions in connection therewith in
furtherance of the foreclosure of abandoned land” under sections 323.65 to 323.79. Id. Moreover,
under Ohio Rev. Code § 323.69(B)(1), the Summons served by the clerk of courts must provide
notice to “the addressee that delinquent taxes stand charged against the abandoned land,” and that
the subject property may be sold or transferred “in the manner prescribed in sections 323.65 to
323.79 of the Revised Code,” and that the owner or other addressee may redeem the land by paying
the total of the impositions against the land at any time before confirmation of sale or transfer of
the parcel as prescribed in sections 323.65 to 323.79 of the Revised Code or before the expiration
of the alternative redemption period, as may be applicable to the proceeding.” Id.
Second, the relevant statutes provide that an affected property owner who wants to contest
the tax foreclosure action shall have the right to obtain an automatic transfer of the proceeding to
the court of common pleas. See Ohio Rev. Code § 323.691 and Ohio Rev. Code § 323.70. In
particular, Ohio Rev. Code § 323.691 provides that a county board of revision may order that a tax
foreclosure proceeding filed under § 323.69 be transferred to the court of common pleas or to a
municipal court with jurisdiction over the property, upon a motion filed by the record owner of the
parcel or the county prosecuting attorney, or upon its own motion. See Ohio Rev. Code §
323.691(A). Moreover, Ohio Rev. Code § 323.70(B) provides that “[i]f, on or before the
fourteenth day after service of process is perfected under division (B) of section 323.69 of the
Revised Code, a record owner files with the clerk of court a motion requesting that the county
board of revision order the case be transferred to a court pursuant to § 323.691 of the Revised
Code, the board shall, without conducting a hearing on the matter, promptly transfer the case for
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foreclosure of that land to a court pursuant to section 323.691 of the Revised Code to be conducted
in accordance with the applicable laws.” See Ohio Rev. Code § 323.70(B). Thus, the record
owner of the parcel has the automatic right to transfer the case to the common pleas court under
Ohio Rev. Code § 323.70(B).
Third, the relevant statutes provide that the affected property owner or other interested
parties shall have the right to terminate the foreclosure proceedings at any time by paying all
outstanding taxes in full, or by showing that the impositions have been paid in full. Ohio Rev.
Code § 323.72(A)(2). In this regard, Ohio Rev. Code § 323.72(B) provides: “If the record owner,
lienholder, or other person shows by a preponderance of the evidence that all impositions against
the parcel have been paid, the board shall dismiss the complaint and remove the parcel of
abandoned land from the abandoned land list, and that land shall not be offered for sale or
otherwise conveyed under sections 323.65 to 323.79 of the Revised Code.” Id. Moreover, Ohio
Rev. Code § 323.72(B) provides that “if the board determines that the impositions have been paid,
then the board, on its own motion, may dismiss the case without a hearing.” Id.
Fourth, under the relevant statutes, a property owner has been granted a statutory right of
redemption, which terminates upon the filing of the confirmation of sale for abandoned land sold
at public auction pursuant to § 323.73 of the Revised Code, or upon the filing of the county board
of revision's order to the sheriff to transfer the abandoned land to an electing subdivision, such as
a county land reutilization corporation, under §§ 323.73(G) or 323.74 of the Revised Code. See
Ohio Rev. Code § 323.76. If the County Treasurer invokes the alternative redemption period
under section 323.78, however, then Ohio Rev. Code § 323.65(J) provides that the property owner
shall have an additional twenty (28) days after the Order of Foreclosure to exercise the statutory
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right of redemption. See Ohio Rev. Code § 323.65(J). Thus, for “abandoned” lands ordered
transferred under Ohio Rev. Code § 323.78, the statute provides the property owner or other
interested party with an additional 28- day period to redeem their interest in the property by paying
their taxes before any direct transfer of land to an electing subdivision can occur. See Ohio Rev.
Code § 323.78. If the property owner does not exercise the statutory right of redemption,
however, then Ohio Rev. Code § 323.76(C)(2) provides that any common law or statutory right of
redemption shall terminate “upon the expiration of such alternative redemption period.” Id.
In this regard, this statutory right to transfer tax delinquent land to an “electing subdivision”
under Ohio Rev. Code § 323.78 is only applicable to “abandoned” lands, as defined by Ohio Rev.
Code § 323.65(A). A property owner can prevent the direct transfer of land under Ohio Rev.
Code § 323.78 by showing that the land is not abandoned, by paying the outstanding taxes and
impositions (or entering into a payment plan), or by exercising their statutory right of redemption
before the expiration of the 28-day alternative redemption period. But, if the property is
“abandoned land” and the property owner fails to pay the outstanding taxes owed before the
expiration of the 28-day alternative redemption period, then Ohio Rev. Code § 323.78 provides
that “* * * any statutory or common law right of redemption in the parcel by its owner shall be
forever terminated after the expiration of the alternative redemption period and that the parcel shall
be transferred by deed directly to the requesting municipal corporation, township, county, school
district, community development corporation, or county land reutilization corporation without
appraisal and without a sale, free and clear of all impositions and any other liens on the property,
which shall be deemed forever satisfied and discharged.” Id. (emphasis added). Moreover, Ohio
Rev. Code § 323.78 provides that “[t]he court or board of revision shall order such a transfer
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regardless of whether the value of the taxes, assessments, penalties, interest, and other charges due
on the parcel, and the costs of the action, exceed the fair market value of the parcel,” and that “[n]o
further act of confirmation or other order shall be required for such a transfer, or for the
extinguishment of any statutory or common law right of redemption.” Id. Thus, once a
foreclosure order has been issued and the 28-day alternative redemption period has expired, then
the property owner loses all right, title or interest in the abandoned, tax delinquent property. See
Ohio Rev. Code § 323.76(C)(2) and Ohio Rev. Code § 323.78.
Finally, the statutory scheme provides an aggrieved party with the right to file an
administrative appeal of a final order of foreclosure under Chapters 2505 and 2506 of the Revised
Code. See Ohio Rev. Code § 323.79 (“Any party to any proceeding instituted pursuant to sections
323.65 to 323.79 of the Revised Code who is aggrieved in any of the proceedings of the county
board of revision under those sections may file an appeal in the court of common pleas pursuant
to Chapters 2505 and 2506 of the Revised Code upon a final order of foreclosure and forfeiture by
the board”). An administrative appeal under Ohio Rev. Code § 323.79 differs from a traditional
Ohio Rev. Code 2506 appeal, however, because the appeal under Ohio Rev. Code § 323.79 “shall
proceed as an appeal de novo and may include issues raised or adjudicated in the proceedings
before the county board of revision, as well as other issues that are raised for the first time on
appeal and that are pertinent to the abandoned land that is the subject of those proceedings.” Id.
Thus, Ohio Rev. Code § 323.79 appears to allow an aggrieved party to file new, constitutional
claims arising from the tax foreclosure proceedings.
Plaintiff’s takings claims arise from an administrative tax foreclosure proceeding that was
filed by the Montgomery County Treasurer with the Montgomery County Board of Revision on
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August 30, 2017, Case No. 2017-BR-0653 (the “Tax Foreclosure Action”). (Amd. Compl. ¶ 27-
34). Attached to the complaint filed in Plaintiff’s Foreclose in state court were two affidavits
signed by the City of Dayton’s Director of Planning and Community Development, Aaron Sorrell,
averring that the Land Bank determined that its acquisition of Plaintiff’s property was “necessary
for the implementation of an effective land reutilization program.” (See, Motion, Ex. 2 (Ex.1-A
and 1-B).)
The owners of the Property failed to pay their real estate taxes at the time when the Tax
Foreclosure Action was filed, and that the total amount due and owing, as reflected in the Findings
of Fact issued by the Montgomery County Board of Revision, was $19,664.44. (Amd. Compl. ¶
31); (Def. Ex. 6, Findings of Fact). Thus, in accordance with the tax foreclosure procedures set
forth in the Ohio Revised Code, the Montgomery County Board of Revision issued an
Adjudication of Foreclosure, and Order to the Sheriff to transfer the Property to the Montgomery
County Land Reutilization Corporation. (Amd. Compl. ¶ 31) (Def. Ex. 5 and 7).
Plaintiff Alana Harrison previously owned a one-half interest in the Property, and filed an
Answer in the Tax Foreclosure Action that “expressed a desire to save the Property from
foreclosure.” (Amd. Compl. ¶ 28-29). In this regard, Harrison admits in her Complaint that she
received the “summons and complaint” in the Tax Foreclosure Action, and that she filed an Answer
with the Montgomery County Board of Revision. (Id. at ¶ 29). Harrison did not exercise her
statutory right to transfer the case to the Court of Common Pleas under Ohio Rev. Code § 323.70
and did not file an administrative appeal from the tax foreclosure order under Ohio Rev. Code §
323.79. (See Def. Ex. 1, Certified Copy of Docket). Moreover, she did not pay her taxes (or enter
into a payment plan), and never exercised her statutory right of redemption under Ohio Rev. Code
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§ 323.78. (Id.) Thus, upon the issuance of foreclosure order and the expiration of the alternative
redemption period, all of Harrison’s rights, title, and interest in the Property were released and
forever terminated under Ohio Rev. Code § 323.78.
The summons served on Harrison provided notice that, if a foreclosure is ordered, “the
parcel(s) will either be sold at public auction or transferred or conveyed to a political subdivision,
land reutilization corporation, school district or eligible community development organization per
Ohio Revised Code §§ 323.65 – 323.79, unless redeemed by the owner of record or any interested
party.” (See Def. Ex. 3, pg. 5). Moreover, the Summons provided notice that the record owner or
other interested party may redeem the parcels by paying all outstanding taxes “at any time prior to
the expiration of the alternative redemption period under Ohio Revised Code § § 323.65(J) and
323.78(A)-(C), or otherwise prior to confirmation of sale, transfer or conveyance of the parcel(s).”
(Id.) Further, the Summons provided notice that Harrison “may raise issues regarding service of
process and whether the parcel(s) are abandoned, or petition for transfer of the attached Complaint
to a court of competent jurisdiction, per Ohio Revised Code § 323.72 et seq.” (Id.)
Other than filing an Answer, Harrison never contested that the land was “abandoned” and
that outstanding taxes were owed, and never exercised her statutory right of redemption before the
expiration of the alternative redemption period.1 Neither did Harrison request a transfer of the
Tax Foreclosure Action to the Montgomery Court of Common Pleas under Ohio Rev. Code §
323.691 or Ohio Rev. Code § 323.70 nor file a timely appeal under Ohio Rev. Code § 323.79 with
1 Plaintiff was unable to pay the taxes and on August 20, 2018, the Board issued three separate orders: (1) an
Adjudication of Foreclosure, which found that Plaintiff’s property was subject to foreclosure under the statute; (2) a
Finding of Fact as to Value, in which the Board found that the value of the properties exceeded the total impositions;
and (3) an order directing the Sheriff to issue a deed transferring Plaintiff’s property to the Land Bank. (Motion to
Dismiss, Exs. 5-7.)
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the Montgomery County Court of Common Pleas. Plaintiff alleges that none of the orders issued
by the Board of Revision were served on Harrison. (Motion to Dismiss, Ex. 1.3) The
Montgomery County Sheriff transferred the properties to the Land Bank by deed dated August 31,
2018. (Am. Compl., ¶ 32.)
On June 21, 2019, the Supreme Court decided Knick v. Tp. of Scott, 139 S. Ct. 2162, 2171
(2019), holding that property owner has an actionable Fifth Amendment takings claim when the
government takes his property without paying for it, and therefore may bring his claim in federal
court under § 1983 at that time; overruling Williamson County Regional Planning Comm’n v.
Hamilton Bank of Johnson City, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985).
Harrison filed a federal court action against Montgomery County, alleging “takings” claims
that based entirely upon the County’s lawful enforcement of the tax foreclosure laws. (Amd.
Compl. ¶ 34). Her first claim is for takings in violation of Fifth and Fourteenth Amendment to
the United States Constitution. Her second claim asserts violation of Article I, § 19 of the Ohio
Constitution.2 Defendant has filed a Motion to Dismiss for Lack of Jurisdiction and for Failure
to State a Claim. (ECF 17).
II. Standard
I. Standard of Review
Before the Court may determine whether a plaintiff has failed to state a claim upon which
2 Also pending before the Court are Unopposed Motion for Leave to File Reply to Plaintiff's 22-
Page Response to Defendant's Notice of Supplemental Authority and Plaintiff's Submission of
Additional Supplemental Authority by Defendant Montgomery County Ohio, (ECF 23), and
Unopposed Motion for Leave to File Response to Plaintiff's Notice of Supplemental Authority
(ECF 24) by Defendant Montgomery County Ohio. (ECF 25). These motions will be granted.
11
relief may be granted, under a Rule 12(b)(6) motion, the Court must first resolve whether it may
exercise jurisdiction over the subject matter. City of Heath, Ohio v. Ashland Oil, Inc., 834 F.
Supp. 971, 975 (S.D. Ohio 1993). “Federal courts may exercise jurisdiction only where an
actual ‘case or controversy’ exists.” Parsons v. U.S. Dep’t of Justice, 801 F. 3d 701, 709-10 (6th
Cir. 2015) (citing U.S. Const. art. III, § 2). The case or controversy requirement has been
interpreted as requiring “a litigant have standing to invoke the jurisdiction of the federal courts.”
Parsons, 801 F. 3d at 710 (internal citation and quotation marks omitted). In other words, this
Court must first determine the 12(b)(1) motion before it may determine the 12(b)(6) motion
before it.
A. Subject-Matter Jurisdiction Standard of Review
When subject-matter jurisdiction is challenged, the party claiming the jurisdiction bears
the burden of proving it. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). Rule 12(b)(1)
provides that the defendant may file a motion to dismiss based on a “lack of jurisdiction over the
subject matter.” The standard of review of a 12(b)(1) motion to dismiss for lack of subject
matter jurisdiction depends on whether the defendant makes a facial or factual challenge to
subject matter jurisdiction. Wayside Church v. Van Buren County, 847 F. 3d 812, 816-17 (6th
Cir. 2017) (citing Carrier Corp. v. Outokumpu Oyj, 673 F. 3d 430, 440 (6th Cir. 2012). A facial
attack questions merely the sufficiency of the pleading.” Id. (citing Gentek Bldg Prods., Inc. v.
Sherwin-Williams Co., 491 F. 3d 320, 330 (6th Cir. 2007)). This requires the Court to “take[]
the allegations in the complaint as true.” Id.
B. Failure to State a Claim Standard of Review
“The purpose of a Rule 12(b)(6) motion to dismiss is to allow a defendant to test whether,
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as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the
complaint is true.” Bihn v. Fifth Third Mortg. Co., 980 F. Supp. 2d 892, 897 (S.D. Ohio 2013)
(citing Mayer v. Mylod, 988 F. 2d 635, 638 (6th Cir. 1993)). Moreover, the purpose of the
motion is to test the formal sufficiency of the statement of the claim for relief. Id. “[F]or the
purposes of a motion to dismiss, the complaint must be construed in the light most favorable to
the plaintiff and its allegations taken as true.” Id. (citing Scheuer v. Rhodes, 416 U.S. 232
(1974)).
To survive a 12(b)(6) motion to dismiss, a plaintiff must provide more than labels and
conclusions; a formulaic recitation of the elements of a cause of action is not enough. Bell
Atlantic v. Twombly, 550 U.S. 544 (2007). Further, the factual allegations must be enough to
raise a right to relief above the speculative level and must also do something more than merely
create a suspicion of a legally cognizable right. Id. However, the Court is not bound to accept as
true a legal conclusion couched as factual allegation or unwarranted factual inferences. Id. at
555; Morgan v. Church’s Fried Chicken, 829 F. 2d 10, 12 (6th Cir. 1987); See also Ashcroft v.
Iqbal, 556 U.S. 662 (2009). Moreover, only well-pleaded facts are construed liberally in favor
of the party opposing the motion to dismiss. Lillard v. Shelby County Bd. Of Educ., 76 F. 3d 716,
726 (6th Cir. 1996).
III. Analysis
A. Jurisdiction
Defendant argues that the Tax Injunction Act, 28 U.S.C. § 1341, prohibits this Court
from exercising jurisdiction. But Plaintiffs seek only monetary damages, while the Tax
Injunction Act limits jurisdiction over actions seeking injunctive and declaratory relief. See
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Tarrify Properties, LLC v. Cuyahoga Cty., Ohio, 1:19-CV-2293, 2020 WL 4043105, at *2 n.24
(N.D. Ohio July 17, 2020)(Gwin, J.) (citing Wayside Church v. Van Buren County, 847 F.3d 812,
822 (6th Cir. 2017) (citing Nat’l Private Truck Council, Inc. v. Okla. Tax Comm’n, 515 U.S. 582,
586-87 (1995)). “[T]he TIA is not keyed to all activities that may improve a State's ability to
assess and collect taxes. Such a rule would be inconsistent not only with the text of the statute,
but also with our rule favoring clear boundaries in the interpretation of jurisdictional statutes. See
Hertz Corp. v. Friend, 559 U.S. 77, 94 (2010). The TIA is keyed to the acts of assessment,
levy, and collection themselves[.]” Direct Mktg. Ass'n v. Brohl, 575 U.S. 1, 11-12 (2015).
The transfer is not part of the County’s tax administration because the County does not
collect any tax when it transfers a property. It does the opposite. By statute, when the County
transfers properties under property-transfer mechanism, the County forfeits any right to collect
delinquent taxes when it transfers the property, as “all impositions and any other liens on the
property [are] deemed forever satisfied and discharged.” Tarrify Properties, at *3 (quoting Ohio
Rev. Code § 323.78(B)); see also Direct Mktg. Ass’n v. Brohl, 575 U.S. 1, 10 (2015)
(“‘[C]ollection’ is the act of obtaining payment of taxes due.”). The property-transfer
mechanism stops tax collection from both the entity taking the property and from the earlier
owner who owed the taxes. A remedy that waives tax payments is not so imbedded within a
state’s tax system to be isolated from federal courts’ review. Id.
Comity is a federal common-law doctrine that “governs constitutional challenges to state
tax administration.” Chippewa Trading Co. v. Cox, 365 F.3d 538, 541 (6th Cir. 2004). When
applied, comity “prohibits ‘taxpayers...from asserting § 1983 actions against the validity of state
tax systems in [the lower] federal courts.’” Chippewa Trading Co. v. Cox, 365 F.3d 538, 541 (6th
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Cir. 2004). “[O]nly one analysis is required” to review the Tax Injunction Act and comity’s
limit on jurisdiction. Id. As discussed below, the principle of comity does not bar the Court from
reviewing this case, so the Tax Injunction Act would not either. Tarrify Properties, at *2 n.24.
The transfer is a land redevelopment program that gives tax-delinquent properties to non-
governmental entities. The act creating the foreclosure-transfer mechanism described its purpose
as “facilitat[ing] the reclamation, rehabilitation, and reutilization of vacant, abandoned, tax-
foreclosed, or other real property.” 127th General Assembly, SB 353, eff. April 7, 2009. The
Court has jurisdiction to consider the constitutionality of these transfers. See Tarrify Properties,
at *3.
B. Res Judicata
Defendants seek dismissal of Harrison’s takings claims on the basis of res judicata. Under
the doctrine of res judicata, “[a] valid, final judgment rendered upon the merits bars all subsequent
actions based upon any claim arising out of the transaction or occurrence that was the subject
matter of the previous action.” Grava v. Parkman Twp., 73 Ohio St.3d 379, 653 N.E.2d 226 (1995),
syllabus. In determining whether res judicata applies, this Court must apply Ohio law. Hapgood
v. City of Warren, 127 F.3d 490, 493 (6th Cir. 1997). Courts ask whether the following four
elements are satisfied:
(1) a prior, final valid decision on the merits by a court of competent
jurisdiction;
(2) a second action involving the same parties, or their privies, as
the first;
(3) a second action raising claims that were or could have been
litigated in the first action; and
(4) a second action arising out of the transaction or occurrence that
was the subject matter of the previous action.
Hapgood, 127 F.3d at 493 (applying Ohio law).
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With respect to the first element, the doctrine of res judicata not only applies to state court
judgments, it applies to final administrative orders that are subject to judicial review under Ohio
law. See Carroll v. City of Cleveland, 522 Fed. App’x 299, 305-306 (6th Cir. 2013) (holding that
res judicata applied to a final administrative order that was not timely appealed to the court of
common pleas under Ohio Revised Code § 2506). See also Tarrify Properties, LLC v. Cuyahoga
Cty., Ohio, No. 1:19-CV-2293, 2020 WL 4043105, at *4 (N.D. Ohio July 17, 2020)(Gwin, J.)
(citing Carroll v. City of Cleveland, 522 F. App’x 299, 303-04 (6th Cir. 2013); and Wade v. City
of Cleveland, 456 N.E.2d 829, 831-32 (Ohio 1982)). Thus, the first element of res judicata is
met.
Plaintiff also contends that the parties to this action are not the same as those in the Board
of Revision case. With respect to this element, in the foreclosure action, the County Treasurer
enjoys privity with the County. Kirkhart v. Keiper, 805 N.E.2d 1089, 1092 (Ohio 2004). Ohio
applies a broad definition of privity and has stated that “a mutuality of interest, including an
identity of desired result, may create privity.” Id. (internal quotation marks omitted). The County
Treasurer represents the County when prosecuting the foreclosures. The County Treasurer and
the County are in privity. Tarrify Properties, at *4. The alleged takings claim involves the same
parties, and arose from the same transaction or occurrence that was the subject matter of the Tax
Foreclosure Action. (Amd. Compl. ¶ 27-34).
As regards the third element, Harrison could have litigated her takings claim in the prior
proceeding by filing a timely administrative appeal under Ohio Revised Code § 323.79. See
Carroll, 522 Fed. App’x at 303-07 (holding that res judicata applied to an administrative order
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where, as here, the plaintiffs failed to prosecute their takings claims via a timely administrative
appeal filed under Ohio Revised Code § 2506).
Plaintiff asserts that her claim was not ripe until after the Board of Revision proceedings
were concluded and the title to the property was subsequently transferred. Here, the
administrative appeal granted by Ohio Revised Code § 323.79 expressly incorporates the
administrative appeal process set forth in Chapters 2505 and 2506 of the Ohio Revised Code. The
judicial remedy provided by Ohio Revised Code § 323.79, in fact, is significantly broader than
Ohio Revised Code Chapters 2505 and 2506 because it provides for de novo review of the tax
foreclosure order and expressly allows for the prosecution of new claims for the first time in the
court of common pleas. See Ohio Revised Code § 323.79; see also Johnson, 2015 WL 4743815,
*5-6. As in Carroll, Harrison cannot show that she could not have brought her alleged takings
claims in state court through the filing of a timely appeal of the final administrative order. Not
only has Harrison abandoned her property, she has abandoned her claim.
As to the fourth element, Plaintiff asserts the transaction at issue in the foreclosure related
to real estate taxes and that her current claim does not relate to taxes. Ohio defines a “transaction”
as a “common nucleus of operative facts.” Hapgood v. City of Warren, 127 F.3d 490, 493 (6th Cir.
1997) (citing Grava v. Parkman Twp., 653 N.E.2d 226, 229 (Ohio 1995)). Both the foreclosure
and this case rely on the same common set of facts, so this element is satisfied. Tarrify Properties,
at *4.
Thus, the Court concludes that res judicata bars Harrison from presenting her takings
claims in a subsequent federal court proceeding. The Court notes that Tarrify, found “it would be
inappropriate to block any challenge to the transfer of property worth substantially more than the
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taxes assessed based solely on the limited foreclosure proceedings.” Tarrify , at *5. Tarrify relies
for this proposition on State ex rel. Estate of Miles v. Vill. of Piketon, 903 N.E.2d 311, 317 (Ohio
2009) and Jacobs v. Teledyne, Inc., 529 N.E.2d 1255, 1259 (Ohio 1988). Estate of Miles declined
to apply res judicata because privity was found between a former police officer served at his home
residence and his former employer, who was not a party. Jacobs involved a claimant who was
not yet totally disabled when he first applied for disability, but later was.
Neither strained privity nor change of material fact is present in this case. While “[t]he
binding effect of res judicata has been held not to apply when fairness and justice would not
support it,” State ex rel. Estate of Miles v. Vill. of Piketon, 903 N.E.2d 311, 317 (Ohio 2009), there
is always an aspect of fairness and justice implicated by res judicata. The purpose of res judicata
is to promote the finality of judgments and thereby increase certainty, discourage multiple
litigation, and conserve judicial resources. See Federated Department Stores, Inc. v. Moitie, 452
U.S. 394, 398-99 (1981); James v. Gerber Products Co., 587 F.2d 324, 327-28 (6th Cir. 1978).
A consideration of fairness to plaintiff would require a countervailing examination of the
costs on society that Ohio’s expedited tax foreclosure system addresses:
Studies have shown that vacant and abandoned buildings are
magnets for criminal activity and that reducing the number of these
buildings reduces the crime rate. Thousands of fires, causing tens
of millions of dollars in damage, are also reported in vacant
structures each year. Vacant and abandoned properties also remain
off tax rolls and lower the value of surrounding properties, further
eroding the real property tax base. Perhaps most significantly,
vacant properties signal that a neighborhood is on the decline,
undermine a neighborhood's sense of community, and discourage
further investment. Moreover, such disinvestment often spreads
across neighborhoods and worsens the overall health of a city. For
these reasons, neighborhoods, schools, and city governments bear
the greatest costs induced by vacant and abandoned property.
18
Thomas J. Fitzpatrick IV, Ohio's Land Bank Legislation: Modernizing an Aged Model, J.
AFFORDABLE HOUSING & COMMUNITY DEV. L., Winter 2010, at 127, 129–30.
Ohio’s administrative and judicial review scheme provides a delinquent taxpayer with
multiple opportunities to challenge a direct transfer in the tax foreclosure proceeding itself, and to
raise any and all takings claims and defenses in the court of common pleas either by transferring
the case under Ohio Revised Code §§ 323.69 or 323.70, or by filing an administrative appeal under
Ohio Revised Code § 323.79. All delinquent taxpayers have the ability to contest a direct transfer
in the underlying tax foreclosure proceeding by demonstrating that the property is occupied, by
paying their taxes, or by entering into a payment plan. Moreover, they have the right and the
ability under Ohio Revised Code §§ 323.69 and 323.70 to transfer the Board of Revision tax
foreclosure proceeding to the court of common pleas during the tax foreclosure proceeding itself,
where they can raise any and all constitutional defenses and counterclaims in the same manner as
any other judicial proceeding.
Unlike the plaintiff in Tarrify, Harrison’s Amended Complaint does not allege that she was
deprived of the opportunity to contest the direct transfer during the tax foreclosure proceeding
itself. Harrison was served with the Complaint and Summons in this case, and filed an Answer
with the Montgomery County Board of Revision. (ECF 15, Amd. Compl. ¶ 29, PageID 174).
While she was aware of the Tax Foreclosure Action and should have known of the legal
consequences of the Tax Foreclosure Action, Harrison never exercised her statutory right to
transfer the case to the Court of Common Pleas under Ohio Rev. Code § 323.70 and did not file a
timely administrative appeal from the direct transfer order under Ohio Rev. Code § 323.79. (See
ECF 17-1, Def. Ex. 1, Certified Copy of Docket). Moreover, she did not pay her taxes (or enter
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into a payment plan), and never exercised her statutory right of redemption under Ohio Rev. Code
§ 323.78. (Id.). Because Defendant has met the elements of res judicata, Plaintiff’s takings claim
is dismissed.
Plaintiff’s state-law claim for damages for an alleged taking under Article I, Section 19 of
the Ohio Constitution also will be dismissed because the Ohio Supreme Court has held that the
proper remedy for the involuntary taking of private property under the Ohio Constitution is a
petition for writ of mandamus. See State ex rel. Cuyahoga Lakefront Land, L.L.C. v. Cleveland,
2016-Ohio-7640, ¶¶ 12-13, 148 Ohio St.3d 531, 534, 71 N.E.3d 1016, 1018 (“Under Ohio law,
‘[m]andamus is the appropriate action to compel public authorities to institute appropriation
proceedings where an involuntary taking of private property is alleged.’”) (quoting State ex rel.
Doner v. Zody, 130 Ohio St.3d 446, 2011- Ohio-6117, 958 N.E.2d 1235, ¶ 53). In this regard, the
Ohio Supreme Court has never held that the Ohio Constitution provides a private right of action
for damages. See Provens v. Stark County Board of Mental Retardation & Developmental
Disabilities, 64 Ohio St. 19-2883d 252 (1992). Thus, to the extent that Harrison alleges a claim
for the involuntary taking of property under Article I, Section 19 of the Ohio Constitution, then
her remedy for the alleged taking would be the filing of a petition for writ of mandamus in state
court, not a claim for damages. See Cleveland v. Martin, 8th Dist. Cuyahoga No. 85374, 2005-
Ohio-6482, ¶ 22-23 (affirming dismissal of takings claim for damages because the “proper legal
remedy” for an alleged taking under Ohio law is a petition for writ of mandamus, and no “private
right of action for damages exists separate and distinct from a mandamus action”); see also Tarrify
Properties, at *5.
IV. Conclusion
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Unopposed Motion for Leave to File Reply to Plaintiff's 22-Page Response to Defendant's
Notice of Supplemental Authority and Plaintiff's Submission of Additional Supplemental
Authority by Defendant Montgomery County Ohio, (ECF 23), and Unopposed Motion for Leave
to File Response to Plaintiff's Notice of Supplemental Authority (ECF 24) by Defendant
Montgomery County Ohio. (ECF 25) are also GRANTED. Because res judicata bars re-
adjudication of Plaintiff’s claims, and because Plaintiff’s asserted Ohio Constitution claims need
to be pursued via mandamus, Motion to Dismiss for Lack of Jurisdiction and Failure to State a
Claim by Defendant Montgomery County Ohio, (ECF 17), is GRANTED. The instant case is
TERMINATED from the dockets of the United States District Court, Western Division at Dayton.
DONE and ORDERED in Dayton, Ohio, this Friday, August 28, 2020.
s/Thomas M. Rose
________________________________
THOMAS M. ROSE
UNITED STATES DISTRICT JUDGE
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