Case Title: State ex rel. Fisher v. Cleveland

Citation: 2006-Ohio-1827

Docket Number: 20041726

State: ohio

Court: Ohio Supreme Court

Date: 2006-04-26T00:00:00Z

Document:
[Cite as State ex rel. Fisher v. Cleveland, 109 Ohio St.3d 33, 2006-Ohio-1827.] 
 
 
THE STATE EX REL. FISHER ET AL., APPELLEES, v. 
CITY OF CLEVELAND ET AL., APPELLANTS. 
[Cite as State ex rel. Fisher  v. Cleveland, 109 Ohio St.3d 33, 2006-Ohio-1827.] 
Constitutional law — Right to privacy — Informal document request of employee 
undergoing initial stages of residency investigation cannot include request 
for income tax returns. — R.C. 733.59 — Statutory taxpayer actions. 
(No. 2004-1726 — Submitted September 21, 2005 — Decided April 26, 2006.) 
APPEAL from the Court of Appeals for Cuyahoga County, 
No. 83945, 2004-Ohio-4345. 
__________________ 
SYLLABUS OF THE COURT 
1.  
A taxpayer action may exist when the ability to obtain or continue public 
employment is implicated by the alleged abuse of the corporate power. 
2. 
A municipal employee’s right to privacy outweighs any benefit to be 
obtained from the disclosure of individual tax returns required to be 
produced as part of an informal document request in a residency 
investigation. 
3. 
A policy requiring the disclosure of a municipal employee’s individual tax 
returns as part of an informal document request in a residency 
investigation constitutes a breach of the employees’ right to privacy, 
which is an abuse of the municipality’s corporate powers, and injunction is 
the proper remedy pursuant to R.C. 733.56. 
__________________ 
 
O’CONNOR, J. 
{¶ 1} We are asked to consider whether a municipality, in enforcing its 
residency requirement for municipal employees, may require that an employee 
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undergoing a residency investigation submit a copy of the employee’s income tax 
returns. We hold that such a request, as part of an informal document request, 
constitutes an invasion of privacy and is therefore barred. 
 
 
I. Facts and Procedural History 
{¶ 2} Plaintiffs-appellees Robert Fisher and the Association of Cleveland 
Fire Fighters, Local 93 of the International Association of Fire Fighters 
(“relators”) initiated this action by filing a statutory taxpayer complaint, pursuant 
to R.C. 733.59, against the city of Cleveland and the Cleveland Civil Service 
Commission (collectively, “city appellants”). Relators alleged that the city 
appellants were violating the right of privacy, as protected by Ohio and federal 
law, of all full-time firefighter employees of Cleveland by requiring the 
employees to submit income tax returns as an initial part of residency 
investigations.1  
{¶ 3} The pertinent facts follow: The Cleveland Charter requires that a 
municipal employee be a “bona fide” resident of Cleveland and remain so while 
employed. Cleveland City Charter Section 74(a).  The charter and R.C. Chapter 
119 authorize the Cleveland Civil Service Commission to establish rules 
enforcing the residency requirements and other employment-related conditions.  
See Cleveland City Charter Section 127 and R.C. 119.02 and 119.03. 
{¶ 4} Ever since the residency requirement has been in effect, Cleveland 
has directed municipal employees to prove their “bona fide” residency in 
Cleveland.  In addition, certain employees are selected for investigation as the 
result of anonymous tips and other information.  As an initial part of a residency 
investigation, employees receive a document request, which requires employees 
to submit completed 1040 tax returns as “actually filed with Federal, State and 
Local Income Tax agencies.”  (Emphasis sic.)   
                                          
 
1.  Appellee Cleveland Police Patrolmen's Association was permitted to intervene and has since 
adopted each of the relators’ positions as its own. 
January Term, 2006 
3 
{¶ 5} If the employees do not submit their tax returns, their cases may be 
referred to a civil-service-commission referee before whom the employees must 
prove city residency by a preponderance of the evidence. If the commission is 
satisfied with the documentation provided, no further proceedings are instigated. 
{¶ 6} The city appellants seek the tax returns, arguing that the returns are 
verified under penalty of law and are thus of great probative weight. The returns 
also may contain information about rental income, secondary residences, 
secondary employment, mortgage deductions, and property taxes. 
{¶ 7} The trial court entered summary judgment in favor of relators and 
enjoined the city appellants from requesting the tax returns.  Pursuant to R.C. 
733.61, it also awarded relators attorney fees because they were successful in their 
action. 
{¶ 8} The city appellants appealed on four primary bases. First, they 
argued that relators did not have standing to pursue the action, as the matter did 
not concern a public right or benefit. Second, they asserted that they were entitled 
to the tax returns, as no abuse of the municipal corporate power occurred. Third, 
they argued that the administrative-subpoena standard should apply, under which 
relators are required to prove that the requirement for submitting tax returns was 
unreasonable. Finally, they claimed that the award of attorney fees pursuant to 
R.C. 733.61 was improper because relators did not post “security for costs,” 
pursuant to R.C. 733.59, at the time of filing the action. 
{¶ 9} The Eighth District Court of Appeals affirmed the trial court on 
every issue. This cause is now before us pursuant to our acceptance of the city 
appellants’ discretionary appeal. 
II. Analysis 
A. Is This Properly a Taxpayer Action? 
{¶ 10} As a threshold matter, the city appellants contend that they are 
entitled to judgment because relators have not properly brought a taxpayer action 
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and therefore have no standing on which to bring their claims.  A taxpayer action 
is properly brought only when the right under review in the action is one 
benefiting the public. See State ex rel. White v. Cleveland (1973), 34 Ohio St.2d 
37, 63 O.O.2d 79, 295 N.E.2d 665, paragraph one of the syllabus; State ex rel. 
Caspar v. Dayton (1990), 53 Ohio St.3d 16, 20, 558 N.E.2d 49. 
{¶ 11} A jurisdictional analysis of a statutory taxpayer action begins with 
R.C. 733.56, which requires a city law director to apply in the city’s name “to a 
court of competent jurisdiction for an order of injunction to restrain * * * the 
abuse of its corporate powers.” R.C. 733.59 allows a taxpayer to institute suit in 
his own name on behalf of the municipal corporation if the law director fails to 
comply with R.C. 733.56 but prohibits a taxpayer action “until the taxpayer gives 
security for the cost of the proceeding.” 
{¶ 12} As established in White and discussed in Caspar, for a taxpayer to 
maintain an action under R.C. 733.59, the “aim must be to enforce a public right, 
regardless of any personal or private motive or advantage.” Caspar, 53 Ohio St.3d 
at 20, 558 N.E.2d 49. 
{¶ 13} The city appellants argue that the facts of the instant case are 
closely allied with those of Caspar, in which several Dayton police officers 
sought redress under a taxpayer action for the denial of certain fringe benefits. 
This court held that an action seeking to compel fringe benefits for the relators’ 
personal benefit does not represent a public aim, nor is it seeking to enforce a 
public right. Id. 
{¶ 14} Here, however, we reach a different result from that in Caspar and 
conclude that although the tax records are sought within the employment 
relationship, the rights to the records and implications thereof do affect a public 
right. 
{¶ 15} First and foremost, the records are being sought for the 
enforcement of a rule that requires certain Cleveland employees to be residents of 
January Term, 2006 
5 
the city. This rule was the result of a 1982 referendum passed by the residents of 
Cleveland.  Therefore, the interests of the people of Cleveland are implicated in 
this case in two ways. 
{¶ 16} First, the interests of the people of Cleveland are implicated 
because they are voters.  Relators’ action has the potential (if the city appellants 
are believed) to eviscerate the ability of the commission to effectively investigate 
employee-residency issues. Second, residency is a threshold issue for municipal 
employment by Cleveland. As potential employees, the public is directly affected 
by the rule itself. 
{¶ 17} Additionally, the records sought are being used as part of a civil-
service-residency-examination process for which mandatory compliance is 
required to continue employment. A failure to successfully complete the process 
(for which the tax returns at issue are sought) can result in a termination of public 
employment.  The public has an interest in seeing the continued employment of 
firefighters and police officers it has trained with taxpayer dollars and who have 
gained invaluable experience in their community. 
{¶ 18} These facts are distinguishable from those in Caspar. We hold that 
a taxpayer action may exist when the ability to obtain or continue public 
employment is implicated by the alleged abuse of the corporate power. 
B. Does the Request for Income Tax Returns Constitute 
an Abuse of the Municipal Corporate Power? 
{¶ 19} The issued injunction prohibits the commission from requesting 
the income tax returns in question.  For the injunction to stand, it must be 
determined that the commission’s requests for the tax returns constitute an “abuse 
of corporate powers” as described in R.C. 733.56. “ ‘The abuse of corporate 
powers, within the purview’ of Section 733.56 ‘includes the unlawful exercise of 
powers possessed by the corporation, as well as the assumption of power not 
conferred.’ ”  (Emphasis deleted.)  Porter v. Oberlin (1965), 1 Ohio St.2d 143, 
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146, 30 O.O.2d 491, 205 N.E.2d 363, quoting Elyria Gas & Water Co. v. Elyria 
(1898), 57 Ohio St. 374, 49 N.E. 335, syllabus. 
{¶ 20} The city appellants argue that, under Cleveland’s corporate 
powers, they are entitled to request copies of tax returns as part of an initial 
blanket request for documents from employees undergoing a residency 
investigation. We disagree. 
{¶ 21} Cleveland requires its employees to live within city limits. 
Cleveland City Charter Section 74(a). Further, the municipality can require the 
employee to carry the burden of proving compliance with the residency 
requirement. Jones v. Cleveland, 152 Ohio App.3d 278, 2003-Ohio-1534, 787 
N.E.2d 666, ¶ 13. 
{¶ 22} Under the Cleveland charter, the commission is vested with the 
investigatory authority concerning residency and has the power to request 
documents relevant to its investigations.  See R.C. 124.40 et seq. Therefore, there 
is no abuse of the municipal corporate power; the commission here is not 
attempting to assume a power not conferred. The question remains, however, 
whether the power being exercised is being exercised in a lawful fashion. 
{¶ 23} Relators contend that requesting the tax returns constitutes a 
breach of both the state and the federal constitutional rights to privacy. Although 
the right to privacy can be amorphous and esoteric, we focus on the more defined 
body of law that discusses the right in the context of public-records disclosure.  In 
the context of personal information, “[c]onstitutional privacy rights are ‘state or 
federal law’ ” that prohibit disclosure. State ex rel. WBNS TV, Inc. v. Dues, 101 
Ohio St.3d 406, 2004-Ohio-1497, 805 N.E.2d 1116, ¶ 41. 
{¶ 24} In State ex rel. Beacon Journal Publishing Co. v. Akron (1994), 70 
Ohio St.3d 605, 640 N.E.2d 164, this court discussed the federal constitutional 
right to privacy as it applied to the “ ‘individual interest in avoiding disclosure of 
personal matters.’ ” Id. at 607, 640 N.E.2d 164, quoting Whalen v. Roe (1977), 
January Term, 2006 
7 
429 U.S. 589, 598-600, 97 S.Ct. 869, 51 L.Ed.2d 64. We reiterate today that the 
interest in avoiding disclosure of “personal matters,” such as those found on 
income tax returns and as described in Whalen, encompasses public employees in 
the civil-service-investigatory process. 
{¶ 25} The holding in Beacon Journal sets forth a two-step process for 
determining whether a right to privacy applies to certain disclosures of personal 
matters. First must be determined whether a legitimate expectation of privacy 
exists in the information sought to be disclosed. Second, if the expectation of 
privacy exists, the benefits to the individual of withholding the information must 
be weighed against the benefits to the government of disclosure. State ex rel. 
Beacon Journal Publishing Co., 70 Ohio St.3d at 608, 640 N.E.2d 164. 
1. An Expectation of Privacy 
{¶ 26} As noted by relators, Section 6103, Title 26, U.S.Code and R.C. 
5747.18 place strict limits on the ability of federal and state employees who have 
access to tax returns and tax-return information on disclosing that information. 
Section 6103(a), Title 26, U.S.Code actually describes the tax-return information 
as “confidential.” 
{¶ 27} In Beacon Journal, we held that the treatment by the Privacy Act 
of 1974, Section 552(a), Title 5, U.S.Code, of Social Security numbers was 
sufficient to create an expectation of privacy in the income tax returns.  The 
recognition in the U.S. Code and the Ohio Revised Code that tax returns are to be 
treated in extreme confidence creates an expectation of privacy in them.  Beacon 
Journal, 70 Ohio St.3d at 609, 640 N.E.2d 164. 
{¶ 28} Cleveland makes much of the fact that no violation of either 
Section 6103, Title 26, U.S.Code or R.C. 5747.18 is actually occurring, as those 
statutes penalize only governmental releases of tax-return data, not disclosures by 
the individual taxpayer. Regardless, the mere existence of the statutory scheme is 
sufficient to support recognizing an individual’s expectation of privacy in the 
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documents. See State ex rel. WBNS TV, Inc., 101 Ohio St.3d 406, 2004-Ohio-
1497, 805 N.E.2d 1116, ¶ 43 (discussing the absence of a protective statutory 
scheme as being the primary indicator of a lack of a legitimate expectation of 
privacy). 
2. Weighing the Privacy Interests Against the Benefits of Disclosure 
{¶ 29} Having found that a legitimate expectation of privacy exists in the 
income tax returns, we next weigh the benefits of disclosure against the privacy 
interests implicated by disclosure. The investigation requires employee 
submission of seven required documents.  Two of the items are mandatory: the 
1040 tax returns at issue and a document evidencing home ownership or house 
rental in Cleveland (i.e., a deed, mortgage, or lease). The other five items may be 
selected at the employee’s discretion from a list and include a voter-registration 
card, a homeowner’s or renter’s insurance policy, utility records, property tax 
records, children’s school records, Ohio identification cards, motor-vehicle 
records, financial records, and mail sent to an employee’s Cleveland address. 
{¶ 30} Cleveland argues that it learns much from the tax returns that it 
would otherwise be unable to learn. The city ascribes particular weight to the 
returns because they contain information about other employment, rental income, 
secondary residences, mortgage deductions, and property taxes, all of which 
pertain to the residency of the employee. Further, the tax returns must be signed 
and verified. 
{¶ 31} Relators contend that the mandatory production of tax returns 
compels disclosure of private and irrelevant information, such as alimony 
payments, handicaps of family members, and financial losses.2  
{¶ 32} Both parties acknowledge that the tax returns represent significant 
insight into the properties, assets, family history, employment history, and 
                                          
 
2.  At least as of December 13, 2002, employees may redact some information from the tax 
returns. 
January Term, 2006 
9 
unrelated business relationships of all individuals covered by the returns.  The 
comprehensiveness of the information is precisely the point:  tax returns reflect 
intimate, private details of an individual’s life.  Cleveland’s stated reasons for 
seeking the tax returns do not outweigh the negative implications for an individual 
forced to disclose significant personal information unrelated to the residency 
investigation at issue, particularly when there is no showing that the city is unable 
to obtain elsewhere information of the same value as that revealed on an income 
tax return — e.g., sworn statements. 
{¶ 33} The document request made by Cleveland at the beginning of a 
residency investigation is just that: a document request.  The city receives seven 
documents from which it determines whether further investigation is necessary. If 
the employee fails to submit the tax returns, the matter may be referred for a 
hearing at which the employee must submit evidence and call witnesses to prove, 
by a preponderance of the evidence, residency within the city. 
{¶ 34} Cleveland fails to sufficiently explain how a residency 
investigation will be hampered without the tax returns. The employee is already 
required to submit significant additional documentation in support of residency. 
Moreover, at that point in the process, the commission has yet to exercise its full 
investigative powers, including the use of subpoenas. After the submission of all 
the documentation, it is at the commission’s discretion whether to schedule a 
hearing as described above. 
{¶ 35} The city appellants place great weight on Sweeney v. Bowen 
(E.D.N.Y.1989), No. 86 CV 0581, 1989 WL 88004, *3, to establish that a 
requirement to submit tax returns under a similar “request mechanism” does not 
violate a constitutional right to privacy. Sweeney is not dispositive in this case 
because of its distinct factual differences. That case involved an investigation of 
an individual who was allegedly receiving federal retirement insurance benefits in 
excess of those to which he was entitled while he was still working.  The court 
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held that it was not a violation of his constitutional right to privacy to be required 
to give up the most relevant documents (the corporate tax returns) in such an 
investigation.  Here, the commission has numerous other methods of redressing 
the issue at hand.  The commission properly may require at least six other pieces 
of documentation, maintain and use its subpoena power, and conduct a full 
hearing.  Therefore, in the context of this case, we hold that a municipal 
employee’s right to privacy outweighs any benefit to be obtained from the 
disclosure of individual tax returns required to be produced as part of an informal 
document request in a residency investigation.  The request policy constitutes a 
breach of the employees’ right to privacy, which is an abuse of the corporate 
powers, and injunction was the proper remedy pursuant to R.C. 733.56.  This 
holding recognizes that the commission has numerous alternatives during this 
initial, informal document-request process that do not so clearly intrude on 
employees’ privacy rights. 
C. What Standard of Review Should Have Been Applied? 
{¶ 36} As a related matter, the city appellants contend that the appellate 
court used the wrong standard of review in deciding the matter.  The city 
appellants argue that the general deference applied to administrative subpoenas 
should apply to the circumstances at hand.  Harris v. Stutzman (1989), 42 Ohio 
St.3d 13, 536 N.E.2d 1154, syllabus. They encourage us to adopt the four-part 
administrative-subpoena-examination standard approved in Doe v. United States 
(C.A.6, 2001), 253 F.3d 256, 265.3 
{¶ 37} We need not reach this issue.  The city appellants issued no 
subpoena. They issued a document “request,” and a failure to submit the tax 
                                          
 
3.  Tangentially, the city appellants argue that the injunction entered here that prevents the 
commission from “requesting” the tax returns at issue may prevent a trial court from enforcing a 
properly ordered subpoena. That issue is not properly before the court today, as the taxpayer 
action was filed challenging only the document-request practice, which does not implicate any 
subpoena process. 
January Term, 2006 
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returns results in a hearing, during which the employee is required to prove 
residency.  See Cleveland Civil Service Rule 17.00.  No enforceable subpoena 
exists, and we decline to apply the law concerning subpoenas in such a 
circumstance. 
{¶ 38} The city appellants also contend that the Eighth District’s holding 
that Cleveland must have “compelling need” to request employee tax returns was 
inappropriate, asserting that civil-discovery rules do not apply to administrative 
investigations.  See State ex rel. Fisher v. Cleveland, 2004-Ohio-4345, ¶ 28. 
Again, we need not reach this issue, as there is simply is no clear-cut standard by 
which to review the procedure being used here. 
{¶ 39} Employees undergoing a residency investigation are presented 
with a mandatory request for their tax returns. There is no method available for 
challenging the reasonableness or necessity of this request. Although this method 
is clearly authorized under the Cleveland Charter and the Ohio Revised Code, it is 
informal and enforced only with punitive action. 
{¶ 40} Despite the discussion of the Eighth District Court of Appeals 
endorsing the “compelling need” standard, the instant procedure contains none of 
the civil-litigation safeguards that accompany that standard. Unlike in the civil-
litigation context, there is no impartial judge from whom a protective order may 
be sought. Further, there is no opportunity to evaluate the necessity or 
requirement of the tax returns in light of the other information presented to the 
commission.  There is only a hearing before a city referee on the ultimate issue. 
{¶ 41} We need not determine which standard of review is appropriate, as 
this case is controlled by our holding as it applies to privacy rights and the 
disclosure of personal information. 
D. Are Attorney Fees Recoverable? 
{¶ 42} Cleveland contends that in order to recover attorney fees for a 
statutory taxpayer action, relators are required to actually post security for the cost 
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of the proceedings. In the instant matter, the trial court entered a nunc pro tunc 
entry waiving security for these costs.  R.C. 733.59, which creates statutory 
taxpayer complaints, provides, “No such suit or proceeding shall be entertained 
by any court until the taxpayer gives security for the cost of the proceeding.” 
Cleveland argues that a failure to post the security at the initial filing of the 
complaint constitutes a full waiver of the statutory taxpayer action, and any 
consideration thereafter must be of only a common-law taxpayer action pursuant 
to State ex rel. Citizens for a Better Portsmouth v. Sydnor (1991), 61 Ohio St.3d 
49, 54, 572 N.E.2d 649. 
{¶ 43} Cleveland misstates our opinion in Sydnor, which involved an 
original mandamus action relating to an election issue. The relators, who 
prevailed before us, filed it as a statutory taxpayer action and sought attorney fees. 
However, the relators had not properly presented a statutory taxpayer action, as 
R.C. 733.59 “unequivocally withholds jurisdiction to bring a statutory taxpayer 
action unless such security is given.” Id.  Relators had not given any security.  In 
that case, we held that the relators had properly presented a common-law taxpayer 
action for which security is not required, but for which attorney fees are not 
recoverable. Id., citing Trustees of Prairie Twp. v. Garver (1931), 41 Ohio App. 
232, 180 N.E. 747, and Walker v. Dillonvale (1910), 82 Ohio St. 137, 92 N.E. 
220. The holding that cases filed without security for costs are automatically, and 
without further consideration, converted into common-law taxpayer proceedings 
has not been considered beyond Sydnor. 
{¶ 44} In finding no error on Cleveland’s assignment on this issue, the 
Eighth District Court of Appeals noted, pursuant to Sydnor, that the trial court had 
no authority to entertain the action until costs had been waived. State ex rel. 
Fisher v. Cleveland, 2004-Ohio-4345, ¶ 32.  Given that the trial court had already 
entertained a motion to dismiss by Cleveland and the commission, had a 
responsive answer filed by Cleveland and the commission (which did not address 
January Term, 2006 
13 
the lack of the security), and was in the process of reviewing a substantive motion 
for summary judgment, the Eighth District found the waiver entry to be proper, as 
without it, the court lacked jurisdiction.4 
{¶ 45} We find this to be the proper analysis. When on notice that the 
relators had failed to file the required security — after the case had already 
proceeded for several months and through two motions, the court knew the case 
had a jurisdictional defect. The court, with its inherent powers, chose to remedy 
the defect. Despite any irregularities in the exact form of the entry, the city 
appellants have failed to cite any authority precluding the trial court from waiving 
such costs. Absent such preclusion, the nunc pro tunc entry served as an effective 
waiver of costs.  Accordingly, we find that under the facts presented, the trial 
court correctly entertained the suit as a statutory taxpayer action, and attorney fees 
were recoverable. 
III. Conclusion 
{¶ 46} The judgment of the Eighth District Court of Appeals is affirmed. 
Judgment affirmed. 
 
MOYER, C.J., RESNICK, PFEIFER, LUNDBERG STRATTON, O’DONNELL and 
LANZINGER, JJ., concur. 
__________________ 
Patrick A. D’Angelo, L.L.C., and Patrick A. D’Angelo; Joseph W. 
Diemert, Jr. & Associates, Joseph W. Diemert Jr., and Thomas Hanculak, for 
appellees. 
Teresa M. Beasley, Cleveland Law Director, Thomas J. Kaiser, Chief 
Trial Counsel, and Cortney R. Oren, Assistant Law Director, for appellants. 
______________________ 
 
                                          
 
4.  The Eighth District Court of Appeals did not agree that the nunc pro tunc form was proper. 
State ex rel. Fisher v. Cleveland, 2004-Ohio-4345, ¶ 32