Case Title: Cleveland Clinic Found. v. Levin

Citation: 2008-Ohio-6197

Docket Number: 20080411

State: ohio

Court: Ohio Supreme Court

Date: 2008-12-04T00:00:00Z

Document:
[Cite as Cleveland Clinic Found. v. Levin, 120 Ohio St.3d 1210, 2008-Ohio-6197.] 
 
 
CLEVELAND CLINIC FOUNDATION ET AL., APPELLANTS, v. LEVIN,  
TAX COMMR., ET AL., APPELLEES. 
[Cite as Cleveland Clinic Found. v. Levin, 
 120 Ohio St.3d 1210, 2008-Ohio-6197.] 
Board of Tax Appeals — Interim order — Appealability — R.C. 2505.02(B)(2) — 
Order by BTA refusing to seal documents alleged to contain trade secrets 
is final, appealable order. 
(No. 2008-0411 — Submitted September 30, 2008 — Decided  
December 4, 2008.) 
APPEAL from the Board of Tax Appeals,  
Nos. 2005-V-1726, 2006-V-99, and 2006-H-117. 
ON MOTION TO DISMISS 
__________________ 
{¶ 1} This cause is pending before the court as an interlocutory appeal 
from the Board of Tax Appeals (“BTA”).  Appellants Cleveland Clinic 
Foundation and Fairview Hospital (together, “CCF”) have filed a notice of appeal 
from an interim order of the BTA dated January 25, 2008.  That order denied a 
portion of CCF’s motion for protective order.  Specifically, although the BTA 
adopted a stipulated confidentiality order between the parties, the BTA declined 
to rule on the trade-secret status of particular documents.  CCF asserts that unless 
the BTA issues a prehearing ruling that confers trade-secret protection on 
particular documents, its confidentiality rights may suffer irretrievable loss.  The 
Tax Commissioner has moved to dismiss the appeal for lack of jurisdiction, 
claiming that the interlocutory order is not final and appealable. 
{¶ 2} This case involves a claim of tax exemption for real property based 
on alleged charitable use of the property.  R.C. 5709.12(B) and 5709.121.  CCF 
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applied to exempt three healthcare facilities.  For its Taussig Cancer Center and 
Fairview Hospital, CCF sought exemption for the 2002 tax year along with 
remission of taxes for 2001, 1999, and 1998.  For the Beachwood Family Health 
and Surgery Center, CCF sought exemption for the 2004 tax year along with 
remission of taxes for 2003, 2002, and 2001.  The Tax Commissioner granted 
exemption to the Taussig Center and Fairview Hospital, but denied exemption to 
the Beachwood facility.  The Cleveland Municipal School District Board of 
Education (“Cleveland BOE”) appealed the exemptions that the commissioner 
had granted, and CCF appealed the denied application.  The Cleveland BOE and 
the Beachwood City School District Board of Education (together, the “school 
boards”) pursued extensive written discovery at the BTA. 
{¶ 3} At issue are interrogatories and document requests served by the 
school boards that, as the BTA stated, “relat[e] to, inter alia, CCF’s physician and 
executive compensation, joint ventures, spin-offs, conflicts of interest, pricing and 
debt collection, and marketing” during the period for which exemption is claimed.  
Cleveland Clinic Found. v. Levin (Jan. 25, 2008), BTA Nos. 2005-V-1726, 2006-
V-99, and 2006-H-117 at 3-4.  CCF has claimed that a number of such documents 
contain or constitute trade secrets protected from disclosure by R.C. 1333.61 et 
seq. 
{¶ 4} In the January 25, 2008 interim order, the BTA ruled on a motion 
to compel and a motion for protective order.  Having previously held a hearing 
that concerned the confidential status of categories of documents, the BTA 
ordered CCF to produce a large number of the requested documents.  To protect 
confidentiality during discovery, the BTA adopted and reinforced a stipulated 
confidentiality order to which the school boards and CCF had agreed.  The BTA 
also limited the Tax Commissioner’s access to the documents to the extent that he 
would decline to sign the stipulated confidentiality order.  CCF contests the 
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BTA’s refusal to make a definitive determination that certain documents are 
confidential and to order that such documents should be produced under seal. 
{¶ 5} Although the parties analyze the order’s finality and appealability 
under R.C. 2505.02(B)(4), we have held that the appealability of an interim order 
of the BTA should be analyzed under R.C. 2505.02(B)(2).  Southside Community 
Dev. Corp. v. Levin, 116 Ohio St.3d 1209, 2007-Ohio-6665, 878 N.E.2d 1048, ¶ 
5.  As we stated in Southside, quoting R.C. 2505.02(B)(2), an interim order of the 
BTA is final and appealable if it is an “ ‘order that affects a substantial right.’ ” 1  
Id. 
{¶ 6} Furthermore, an order qualifies as one that “affects a substantial 
right” if it satisfies a two-pronged test.  First, the order must implicate “a right” 
that “a statute [or other law] * * * entitles a person to enforce or protect.”  R.C. 
2505.02(A)(1).  Because the Revised Code at Sections 1333.61 et seq. defines and 
provides remedies for protecting trade secrets, the BTA order satisfies the first 
prong of the test. 
{¶ 7} More difficult is the analysis under the second prong.  An interim 
order of the BTA qualifies as one that affects a substantial right only when it is an 
order that “ ‘if not immediately appealable, would foreclose appropriate relief in 
the future.’ ”  Southside,  116 Ohio St.3d 1209, 2007-Ohio-6665, 878 N.E.2d 
1048, ¶ 7, quoting Bell v. Mt. Sinai Med. Ctr. (1993), 67 Ohio St.3d 60, 63, 616 
N.E.2d 181. 
{¶ 8} CCF asserts two reasons that the January 25, 2008 order in this 
case might expose its trade secrets to irretrievable loss.  We reject the first but 
accept the second. 
                                                 
1.  R.C. 2505.02(B)(4) refers on its face to a “provisional remedy” in an “action,” rather than 
orders issued in a “special proceeding.”  Because of our disposition of the question of 
appealability under R.C. 2505.02(B)(2), we need not reach the issue of whether R.C. 
2505.02(B)(4) applies.   
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{¶ 9} First, CCF fears a loss of confidentiality during the discovery 
process.  To be sure, the BTA adopted and reinforced the stipulated 
confidentiality order of the parties, and that order furnishes various protections 
that even CCF might regard as sufficient in a case involving only private litigants.  
The source of CCF’s concern lies in the nature of the school boards as “public 
offices.”  Because the school boards are subject to the Public Records Act, R.C. 
149.43, CCF fears that they might disclose – or be compelled to disclose – the 
documents obtained through discovery in response to a public-records request. 
{¶ 10} 
We hold that with respect to the protection of documents during 
the discovery process, the January 25, 2008 interim order is not final and 
appealable pursuant to R.C. 2505.02(B)(2).  That is so because, as all parties have 
opined, documents that a public office obtains through civil discovery as a litigant 
do not constitute “public records,” at least not during the discovery process.  In 
making this determination, we assume without deciding that such documents 
would constitute “records” as defined at R.C. 149.011(G).  Given that assumption, 
documents that a public office obtains as a litigant through discovery will 
ordinarily qualify as “trial preparation records” pursuant to R.C. 149.43(A)(1)(g) 
throughout the discovery phase of the litigation.  Accord State ex rel. Steckman v. 
Jackson (1994), 70 Ohio St.3d 420, 431-432, 639 N.E.2d 83 (prosecutor’s file that 
contained “material compiled in anticipation of a specific criminal proceeding or 
the personal trial preparation of the prosecutor” constituted “trial preparation 
records”). 
{¶ 11} 
It follows that because those documents are exempt from public-
records disclosure during discovery, the public-office litigant is no less bound by 
the terms of the stipulated confidentiality order than a private litigant would be.  
Because the BTA adopted the stipulated order that the parties drafted and agreed 
to, it has afforded a great measure of protection to CCF’s alleged confidentiality 
rights during the discovery process.  As a result, the discovery process presents no 
January Term, 2008 
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threat of a loss of confidentiality that is grave enough to justify an immediate 
appeal from the January 25, 2008 order under R.C. 2505.02(B)(2). 
{¶ 12} 
As a second ground for immediate appeal, CCF states that if 
discovered documents are introduced as evidence at the BTA hearing, it would 
have “no remedy,” because CCF “cannot adjourn the hearing to appeal the BTA’s 
ruling or otherwise shield the documents until an appeal can be taken.”  Under 
this scenario, CCF could ask that documents be sealed if they are offered into 
evidence, but if the BTA refuses, those documents would become public records 
in the hands of the BTA. 
{¶ 13} 
We agree that this scenario creates the possibility that 
confidentiality may be irretrievably lost at the BTA hearing.  As a result, the 
January 25, 2008 interim order, to the extent that it raises such a possibility, 
constitutes a final and appealable order pursuant to R.C. 2505.02(B)(2).2  We 
therefore accept jurisdiction over this appeal and deny the motion to dismiss. 
{¶ 14} 
We also find it appropriate to decide CCF’s appeal on its merits 
without further briefing and argument.  Our review of the record and the case law 
persuades us that under the particular circumstances presented, the BTA has erred 
by not proceeding with a determination of the trade-secret status of particular 
documents.  CCF has strenuously and consistently sought this remedy, and the 
BTA held a hearing at which CCF presented evidence on the trade-secret status of 
particular categories of documents.  In the January 25, 2008 order, the BTA 
acknowledged that “CCF has demonstrated that portions of the requested material 
may qualify as confidential commercial information * * *.”  Cleveland Clinic 
Found. v. Levin, BTA Nos. 2005-V-1726, 2006-V-99, and 2006-H-117, at 8.  Yet 
                                                 
2.  We reject the Tax Commissioner’s contention that CCF should have appealed the April 6, 2007 
interim order and that, therefore, this appeal is untimely.  Such an appeal would have been 
premature, because the earlier order preserved the possibility that the BTA might require trade 
secrets to be produced under seal.  See Civ.R. 26(C)(7) (protective order may require that trade-
secret information “be disclosed only in a designated way”).    
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the BTA persisted in declaring itself “unwilling to go so far as to seal those 
documents as trade secrets.”   Id. at 11. 
{¶ 15} 
Under similar circumstances, two appellate courts have ordered 
trial courts that they must proceed to rule on the confidential status of documents.  
See Mulkerin v. Cho, Medina App. No. 07CA007-M, 2007-Ohio-6550, ¶ 3, 5, 7; 
GZK, Inc. v. Schumaker Ltd. Partnership, 168 Ohio App.3d 106, 2006-Ohio-
3744, 858 N.E.2d 867, ¶ 34.  Applying the reasoning of these appellate courts, we 
hold that the BTA has a legal obligation to determine the confidential status of 
particular documents and to provide appropriate relief, such as sealing the 
documents, if it finds that the documents qualify as confidential trade secrets.  In 
making that determination, the BTA should consider all the arguments raised, 
including the question whether CCF, by pursuing its exemption applications, has 
waived trade-secret protection as to the documents that must be produced in these 
proceedings.  See R.C. 5715.27(G); State ex rel. Allright Parking, Inc. v. 
Cleveland (1992), 63 Ohio St.3d 772, 776, 591 N.E.2d 708. 
{¶ 16} 
The motion to dismiss is denied.  The January 25, 2008 interim 
order of the BTA is vacated to the extent that the BTA declined to determine the 
trade-secret status of particular documents, but it otherwise remains in force.  We 
remand to the BTA for further proceedings, with instructions to (1) determine the 
trade-secret status of particular documents, (2) determine whether CCF’s pursuit 
of the exemption applications constitutes a waiver of its trade-secret rights in 
these proceedings, and (3) afford adequate protection such as the sealing of 
particular documents, to the extent that trade-secret status has been properly 
established and has not been waived. 
Motion to dismiss denied,  
order vacated in part,  
and cause remanded. 
January Term, 2008 
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MOYER, 
C.J., 
and 
PFEIFER, 
LUNDBERG 
STRATTON, 
O’CONNOR, 
O'DONNELL, LANZINGER, and CUPP, JJ., concur. 
__________________ 
 
Jones Day, Stephen G. Sozio, Tracy K. Stratford, Robert J. Colacarro, and 
Chad A. Readler, for appellants. 
 
Nancy Hardin Rogers, Attorney General, and Lawrence D. Pratt and Alan 
P. Schwepe, Assistant Attorneys General, for appellee Tax Commissioner. 
 
Brindza, McIntyre & Seed, L.L.P., David H. Seed, and Daniel McIntyre, 
for appellees Cleveland Municipal School District Board of Education and 
Beachwood City School District Board of Education. 
______________________