[Cite as Wymsylo v. Bartec, Inc., 132 Ohio St.3d 167, 2012-Ohio-2187.]

W YMSYLO , D IR ., A PPELLEE , v . B ARTEC , I NC ., D . B . A . Z ENO ’ S V ICTORIAN V ILLAGE , ET AL ., A PPELLANTS ; D E W INE , A TTY . G EN ., A PPELLEE . [Cite as Wymsylo v. Bartec, Inc., 132 Ohio St.3d 167, 2012-Ohio-2187.] R.C. Chapter 3734—Smoke Free Work place Act—Legislation requiring proprietors of public places of employment to prevent smoking on premises is valid exercise of state’s police power—State’s enforcement of legislation against property owners doe s not constitute regulatory taking without just compensation. (No. 2011-0019—Submitted October 19, 2011—Decided May 23, 2012.)
A PPEAL from the Court of Appeals for Franklin County, No. 10AP-173, 2010-Ohio-5558.

__________________ S YLLABUS OF THE C OURT R.C. Chapter 3794, the Smoke Free Workpla ce Act, is a valid exercise of the state’s police power by Ohio voters and does not amount to a regulatory taking.

__________________ L ANZINGER , J. {¶ 1} In this case, we are asked to address several constitutional challenges to the Smoke Free Workplace Act, R.C. Chapter 3794. I. Factual Background {¶ 2} On November 7, 2006, Ohio voter s passed a ballot initiative to enact the Smoke Free Workplace Act (“the Smoke Free Act”). Codified in R.C. Chapter 3794, the act became effective on December 7, 2006. The Ohio Department of Health (“ODH”) and its designees are charged with the enforcement of the Smoke Free Act. R.C. 3794.07. Subject to certainS UPREME C OURT OF O HIO

2 exemptions, proprietors of public places of employment are not to permit smoking in their establishments. R.C. 3794.02(A). Zeno’s Victorian Village is a privately owned bar in Columbus that has been cited for violations of the act on multiple
occasions. {¶ 3} ODH’s director filed a complaint seeking preliminary and permanent injunctive relief ordering Bart ec, Inc., d.b.a. Zeno’s Victorian Village, and Richard Allen, the CEO and sole share holder of Bartec, Inc. (collectively, “appellants”) to comply with the Smoke Free Act and to pay all outstanding fines. Appellants answered the complaint and admitted receiving nine notices of violations after investigations had been completed and that a tenth investigation was pending. They raised the affirma tive defenses that R.C. Chapter 3794 is unconstitutional both on its face and as applied to them and that R.C. Chapter
3794 has been enforced in an unconstituti onal manner and in a manner that is inconsistent with its plain language. Appellants also file d a counterclaim for declaratory and injunctive relief against ODH and a cross-claim against the Ohio Attorney General, alleging that the Smoke Free Act operates in violation of appellants’ constituti onal rights under the Ohio Cons titution, Article I, Sections 1, 16, 19, and 20, that the act is invalid as a pplied to them, and that ODH engaged in rulemaking that exceeds its authority. 1

1. The actual relief sought by appellants with respect to their declaratory judgment is somewhat unclear because the answer/counterclaim/cross-claim filed in the record is missing two pages. The only part of the request for relief that appears in full is a request for a preliminary and permanent injunction prohibiting
1. Any further unconstitutional or otherwise unlawful enforcement of R.C. 3794 and OAC 3701. 2. Any further Ohio Attorney General collection efforts against Zeno’s and similarly situated proprietors that have been, are, and continue to be issued under an unconstitutional and unlawful framework. 3. Current Ohio Attorney General collection efforts which, if successful, will effectuate the permanent cessation of Zeno’s as a going business

concern.January Term, 2012

3 {¶ 4} The trial court consolidated the parties’ requests for preliminary injunction with the trial on the merits. At trial, evidence was presented that appellants had been cited ten times for violating the Smoke Free Act between July 2007 and September 2009. Eight of the ten violations were not appealed. The two violations that were appealed were upheld by the Franklin County Court of Common Pleas. The trial court, howev er, found that ODH has implemented a policy of strict liability for violations of the Smoke Free Act by issuing fines regardless of whether the appellants were actually “permitting” smoking to occur at Zeno’s. The court observed, “Propert y owners, however, have no control over whether someone rips out a cigarette a nd lights up. Again, the Department of Health’s interpretation of the Smoke Fr ee Act makes property owners liable for the actions of third parties upon which the property owner has little to no control.” The trial court held that this ODH polic y of imposing liability without fault was
stricter than R.C. 3794.02 allowed and that ODH had exceeded its authority in implementing it. The trial court denied ODH’s request for a permanent injunction
and vacated the ten citations. {¶ 5} ODH appealed to the Tenth District Court of Appeals, raising three assignments of error. The first alleged that the trial court failed to apply the plain language of the Smoke Free Act. The second alleged that th e trial court erred

But a fragment of another request for what app ears to be declaratory relief reads as follows:
3. Relevant policies of the Ohio Department of Health constitute unlawful agency policymaking. 4. The Ohio Department of Health’s interpretations and applications of relevant provisions of R.C. [Chapter] 3794 and OAC [Chapter] 3701 are in contravention of the language of the statute drafted and handed down by Ohio’s legislative branch of government. 5. Ohio Attorney General’s Office collection efforts effectuate a taking of property without just compensation.
From appellants’ trial brief, it appears that they were requesting that R.C. Chapter 3794 be declared unconstitutional as applied to them, that the citations already issued be invalidated, and that future enforcement against them be enjoined.S UPREME C OURT OF O HIO

4 when it held that ODH had engaged in unl awful rulemaking. The third asserted that the trial court abused its discretion in denying ODH’s complaint for injunction. Appellant s filed a cross-appeal, arguing that they were entitled to declaratory and injunctive relief to prohibit further unconstitutional or otherwise unlawful enforcement of R.C. Chapter 3794 and to prohibit the Ohio Attorney General from attempting to collect the outstanding fines. {¶ 6} The Tenth District reversed the trial court’s judgment. Jackson v. Bartec, Inc. , 10th Dist. No. 10AP-173, 2010-Ohio -5558. The court of appeals examined R.C. 3794.02 and determined that the plain language of the statute and
related Administrative Code sections re quired proprietors covered by the Smoke
Free Act to assume some level of re sponsibility for conduct occurring on their premises. Id . at ¶ 19. The court of appeals determined that appellants were challenging ODH’s method of enforcement as applied and that appellants were therefore required to develop a factual record so that their challenge could be fully considered on appeal. By not pursuing an administrative hearing and failing to develop the necessary record, appellants had waived any error. Id . at ¶ 24. Because the ten orders finding violations of the Smoke Free Act had become final orders, the court of appeals held that the trial court should not have heard appellants’ collateral attack on the enforcement issue and thus erred as a matter of law in vacating the violations. Id . at ¶ 25. With respect to appellants’ argument
that the Smoke Free Act is unconstitutional on its face, the appe llate court relied on its previous decision in Deer Park Inn v. Ohio Dept. of Health , 185 Ohio App.3d 524, 2009-Ohio-6836, 924 N.E.2d 898, to hold that the act is
constitutional. {¶ 7} After resolving the constitutional issues, the Tenth District addressed whether ODH was entitled to a pe rmanent injunction. The court stated,January Term, 2012

5 On this record, the evidence is overwhelming that Bartec repeatedly and intentionally violat ed the Smoke Free Act, failed to comply with its provisions as R.C. 3794.09(D) requires, and in so doing exposed patrons and employee s to the very harm the statute is designed to prevent. Due to the hearing the court conducted and the evidence adduced as a result of the hearing, the trial court
could reach no other conclusion than that ODH is entitled to the statutory injunction it requested.

Id . at ¶ 33. {¶ 8} Based on its resolutions of ODH’s assignments of error, the Tenth District overruled appellants’ cross-assignments of error as an impermissible
collateral attack on the fina l orders of violation. {¶ 9} We accepted appellants’ appeal to this court on the following three propositions of law: {¶ 10} 1. “The Health Department’s method of enforcing the smoking ban violates separation of power s, and must be discontinued.” {¶ 11} 2. “Inclusion of bars as proprieto rs subject to R.C. [Chapter] 3794 exceeds the outer limits of the state police power, and unreasonably extinguishes property rights.” {¶ 12} 3. “Ohio’s declaratory judgment statute enables previously-cited Ohioans to challenge the constitutionality of a statute or rule.” {¶ 13} Because appellants failed to exhaust their administrative remedies and cannot use declaratory judgment to vacate final orders, we affirm the judgment of the court of appeals with re spect to the ten earlier violations. We also hold that the Smoke Free Act is a valid exercise of the state’s police power and does not constitute a taking.S UPREME C OURT OF O HIO

6 II. Legal Analysis {¶ 14} R.C. 3794.04 expresses the purpose of the Smoke Free Act passed by Ohio voters.

Because medical studies have conclusively shown that exposure to secondhand smoke from tobacco causes illness and disease, including lung cancer, heart disease, and respiratory illness, smoking in the workplace is a statewide concern and, therefore, it is in the best interests of public health that smoking of tobacco products be prohibited in public places and places of employment and that there be a uniform statewide minimum standard to protect workers and the public from the health hazards associated with exposure to secondhand smoke from tobacco. The provisions of this chapter shall be liberally construed so as to further its purposes of protecting public health and the health of employees and shall prevail over any less restrictive state or local laws or regulations. Nothing in this chapter shall be construed to permit smoking where it is otherwise restricted by other laws or regulations.

{¶ 15} The act also provides that “[n]o proprietor 2 of a public place 3 or place of employment 4 * * * shall permit smoking in the public place or place of employment * * *.” (Footnotes added.) R.C. 3794.02(A). Another section states,

2. “ ‘Proprietor’ means an employer, owner, manager, operator, liquor permit holder, or person in charge or control of a public place or place of employment.” R.C. 3794.01(G). 3. “ ‘Public place’ means an enclosed area to which the public is invited or in which the public is permitted and that is not a private residence.” R.C. 3794.01(B).January Term, 2012

7 No person shall refuse to immediately discontinue smoking in a public place, place of employme nt, or establishment, facility or outdoor area declared nonsmoking [under this chapter] when requested to do so by the proprietor or any employee of an employer of the public place, place of employment or establishment, facility or outdoor area.

R.C. 3794.02(D). Proprietors of public places and places of employment are required to remove all ashtrays and recep tacles used for disposing of smoking materials and to post at every entrance “no smoking” signs, which shall be “clearly legible to a person of normal vision throughout the areas they are intended to mark.” R.C. 3794.06. Only private residences and certain familyowned and -operated places of employme nt, retail tobacco shops, outdoor patios, private clubs, and designated smoking r ooms in hotels and nursing homes are exempt from the reach of the act. R.C. 3794.03. {¶ 16} According to the rules promulgated by ODH pursuant to R.C. 3794.04, once a report of violation is receive d, ODH has two alternatives. It may dismiss the report if, after construing the allegations as true, it determines that the report is frivolous, was not made in good faith, or is too old to be reasonably investigated. Ohio Adm.C ode 3701-52-08(C). If it concludes that the report may have merit, ODH must issue to a proprieto r a written notice and copy of the report of violation and allow for written statements or evidence to contest the report

. Ohio Adm.Code 3701-52-08(D). After th e written notice is issued, ODH must

4. “ ‘Place of employment’ means an enclosed ar ea under the direct or indirect control of an employer that the employer's employees use for work or any other purpose, including but not limited to, offices, meeting rooms, sales, production and storage areas, restrooms, stairways, hallways, warehouses, garages, and vehicles. An enclosed area as described herein is a place of employment without regard to the time of day or the presence of employees.” R.C. 3794.01(C).S UPREME C OURT OF O HIO

8 investigate. Ohio Adm.Code 3701-52-08( D)(2). Upon finding a violation, ODH must provide a proprietor with either a letter of warning if there has been no finding of violation within the previous two years, or a written proposed finding of violation and a proposed civil fine. Ohio Adm.Code 3701-52-08(F). The fine per day for a violation of R.C. 3794.02(A) shall be not less than $100 and not more than $2,500. R.C. 3794.07(B). The fine shall be doubled for intentional
violations. Id. {¶ 17} A proprietor who receives a propos ed finding of violation and proposed civil fine may request an administr ative review to present its case and to
confront and cross-examine adverse witnesses. Ohio Adm.Code 3701-52- 08(F)(2). The hearing officer must prepare a report and recommendation, including findings of fact and conclusions of law, to which objections may be filed. ODH is required to approve, m odify, or disapprove the report. Id. An affected proprietor may appeal a fina l ODH decision to the Franklin County Common Pleas Court pursuant to R.C. 119.12. R.C. 3794.09(C). A. Scope of Appeal {¶ 18} Before addressing the merits of appellants’ appeal, we must determine which issues are properly before this court. The first two propositions
of law assert that ODH’s method of enfo rcing the Smoke Free Act violates the separation-of-powers doctrine, exceeds th e state’s police power, and constitutes a taking of property. The third propos ition of law addresses the denial of appellants’ request for declaratory judgment. {¶ 19} With regard to the first two pr opositions, the Tenth District Court of Appeals concluded that these arguments were as-applied constitutional challenges that should have been raised at the administrative level. 2010-Ohio5558, ¶ 22-25. Because the court of appeal s determined that appellants never argued an as-applied challenge during the administrative process, it held that the issues had been waived, and the trial c ourt erred in vacating the violations.January Term, 2012

9 Appellants counter that the issues were pr operly raised as facial challenges and that they did not need to exhaust administrative remedies. 1. The As-Applied v. Facial Constitutional Challenge {¶ 20} Like statutes and ordinances , administrative rules may be constitutionally challenged on their face or as applied. Jones v. Chagrin Falls , 77 Ohio St.3d 456, 674 N.E.2d 1388 (1997). The distinction between the two types of constitutional challenges is important. For example, the standard of proof depends upon which type of ch allenge is being made. See State ex rel. Ohio Congress of Parents & Teachers v. State Bd. of Edn. , 111 Ohio St.3d 568, 2006- Ohio-5512, 857 N.E.2d 1148, ¶ 21 (a facial constitutional challenge requires proof beyond a reasonable doubt, whereas an as-applied challenge requires clear and convincing evidence). Mo re relevant to this case, however, is that parties advancing an as-applied challenge must raise that challenge at the first available opportunity, and failure to do so results in waiver. They need not do so if arguing a facial challenge. South-Western City Schools Bd. of Edn. v. Kinney , 24 Ohio St.3d 184, 494 N.E.2d 1109 (1986), syllabus; Reading v. Pub. Util. Comm. , 109 Ohio St.3d 193, 2006-Ohio-2181, 846 N.E.2d 840, ¶ 16 (facial constitutional challenge may be raised for the first time in appeal from administrative agency, but as-applied constitutional challenge must be raised first in the agency to allow the parties to develop an evidentiary record). {¶ 21} A facial challenge alleges that a statute, ordinance, or administrative rule, on its face and unde r all circumstances, has no rational relationship to a legitimate governmental purpose. Jaylin Invests., Inc. v.
Moreland Hills , 107 Ohio St.3d 339, 2006-Ohio-4, 839 N.E.2d 903, ¶ 11. Facial challenges to the constitutionality of a statute are the most difficult to mount successfully, since the challenger must establish that no set of circumstances
exists under which the act would be valid. United States v. Salerno , 481 U.S. 739, 745, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987). If a statute is unconstitutionalS UPREME C OURT OF O HIO

10 on its face, the statute may not be enforced under any circumstances. When determining whether a law is facially i nvalid, a court must be careful not to exceed the statute’s actual language and speculate about hypothetical or imaginary cases. Washington State Grange v. Washington State Republican Party , 552 U.S. 442, 450, 128 S.Ct. 1184, 170 L.Ed.2d 151 (2008). Reference to extrinsic facts is not required to resolve a facial challenge. Reading at ¶ 15. {¶ 22} A party raising an as-applied constitutional challenge, on the other hand, alleges that “the ‘appli cation of the statute in the particular context in which he has acted, or in which he proposes to act, would be unconstitutional. The practical effect of holding a statute unconstitutional “as applied” is to prevent its future application in a similar context, but not to render it utterly inoperative.’ ” Yajnik v. Akron Dept. of Health, Hous. Div. , 101 Ohio St.3d 106, 2004-Ohio-357, 802 N.E.2d 632, ¶ 14, quoting Ada v. Guam Soc. of Obstetricians & Gynecologists , 506 U.S. 1011, 113 S.Ct. 633, 121 L.Ed.2d 564 (1992) (Scalia, J., dissenting). Because an as-applied cha llenge depends upon a particular set of facts, this type of constitutional challenge to a rule must be raised before the administrative agency to develop the necessary factual record. Reading at ¶ 13. 2. Appellants’ Separation-of-Powers Proposition—An As-Applied Constitutional Challenge {¶ 23} In their first proposition of law, appellants allege that ODH’s method of enforcing the smoking ban viol ates the separation of powers and is therefore unconstitutional. They argue that this is a facial challenge. We disagree. {¶ 24} R.C. 3794.02(A) provides that no pr oprietor shall permit smoking in a public place or place of employment. In accordance with that statutory provision, ODH adopted Ohio Adm.Code 3701-52-02(B), requiring a proprietor to take “reasonable steps including, but not limited to, requesting individuals to cease smoking, to ensure that tobacco smoke, in an area directly or indirectlyJanuary Term, 2012

11 under the control of the proprietor, does not enter any area in which smoking is prohibited.” Appellants c ontend that ODH, in its efforts to enforce this regulation, has adopted an unwritten policy of st rict liability. In other words, if an investigator sees smoking in a public place or place of employment covered by the Smoke Free Act, the proprietor is automatically charged with violating R.C. 3794.02 regardless of the steps the proprietor has taken to comply with the act. Appellants contend that the adoption of a policy of strict liability exceeds the statutory authority granted to ODH, thereb y usurping the legislative function and violating the separation of powers. {¶ 25} The resolution of this proposition, however, depends upon the particular set of facts and circumstances surrounding each of the ten separate violations. Due to the unwritten nature of the alleged strict-liability policy, extrinsic evidence is required to prove that the policy existed and that ODH investigators implemented it when conducting their investigations into the ten complaints. Thus, appellants are raisin g an as-applied challenge on separation-ofpowers grounds. {¶ 26} Nevertheless, we agree with the court of appeals that the trial court should not have entertained this as-applied challenge to the ten past violations. Appellants had the opportunity to request an administrative hearing in which they could have developed a record to show that ODH’s investigators used a strictliability approach. See Ohio Adm.C ode 3701-52-08(F) and (G); R.C. 3794.09. Because appellants failed to request an administrative hearing for eight of their violations and because they failed to prosecute the two administrative appeals they did request, appellants did not raise any constitutional challenge regarding any of its ten violations. Therefore, appellants failed to exhaust their administrative remedies, and this constitutional issue is not properly before the

court.S UPREME C OURT OF O HIO

123. Appellants’ Police-Power and Takings Proposition—An AsApplied Constitutional Challenge {¶ 27} In their second proposition of la w, appellants assert that their inclusion as proprietors subject to the Smoke Free Act exceeds the outer limits of the state’s police power and unreasonably extinguishes property rights.Additionally, they argue that prohibiting smoking in an adults-only liquorlicensed establishment, such as Zeno’s, is unduly oppressive and amounts to a taking. It is clear that this is an as-applied challenge. Appellants are not contending that there is no set of circ umstances under which the Smoke Free Act would be valid. Again, appellants are c ontending that, as applied to their particular circumstances, R.C. 3794.02 is unfair and unconstitutional. {¶ 28} Appellants acknowledge that this second proposition of law raises an as-applied challenge but nonetheless urge this court to adopt their arguments
and invalidate the ten violations. Ho wever, as discussed above, because appellants did not raise this as-applied constitutional challenge in an administrative review, they failed to exhaust their administrative remedies, and this challenge is not properly before the court. B. Declaratory Judgment—Colla teral Attack or Alternate Remedy {¶ 29} In response to ODH’s complaint, appellants filed a counterclaim and cross-claim requesting declaratory judgment. The Tenth District held that the declaratory judgment was an as-applied challenge to the Smoke Free Act and was an improper means to collaterally attack the ten final orders finding violations. 2010-Ohio-5558, ¶ 36. Appellants argue that the appellate court interpreted their request for relief as addressing only the past ten violations. Appellants contend that this characterization ignored the prospective aspect of their request for declaratory relief, i.e., their request to prevent ODH from continuing to apply its unwritten policy of strict liability.January Term, 2012

13 {¶ 30} Declaratory judgment is available to challenge the constitutionality of an administrative rule or policy. Karches v. Cincinnati, 38 Ohio St.3d 12, 526 N.E.2d 1350 (1988). But it may not be used to review administrative proceedings. Driscoll v. Austintown Assoc. , 42 Ohio St.2d 263, 271, 328 N.E.2d 395 (1975) (“the declaratory judgment action is independent from the administrative proceedings; it is not a review of the final administrative order”). {¶ 31} The three essential elements for declaratory relief are that (1) a real controversy exists between the parties, (2) the controversy is justiciable in character, and (3) speedy relief is necessary to preserve the rights of the parties. Burger Brewing Co. v. Liquor Control Comm., 34 Ohio St.2d 93, 97, 296 N.E.2d 261 (1973), citing Am. Life & Acc. Ins. Co. v. Jones , 152 Ohio St. 287, 296, 89 N.E.2d 301 (1949). {¶ 32} Although the existence of anothe r adequate remedy does not preclude an action for declaratory judgme nt, Civ.R. 57, we have also indicated that a party must exhaust an available administrative remedy before instituting a declaratory judgment action challenging the constitutionality of an administrative regulation as applied. Driscoll at 273-274. We further stated,

This court has recognized at least two situations in which
exhaustion of administrative remedies is not required prior to filing a declaratory judgment action challenging the constitutionality of zoning. One, of course, is th e situation in which there is no administrative remedy available which could provide the relief sought. Kaufman v. Newburgh Heights , [26 Ohio St.2d 217, 271 N.E.2d 280 (1971)]. The other is the situation in which the administrative remedy is unnecessarily onerous. Burt Realty Corp. v. Columbus, [21 Ohio St.2d 265, 257 N.E.2d 355 (1970)].S UPREME C OURT OF O HIO

14 Driscoll at 275. 1. The Ten Orders Finding Violations Are Final {¶ 33} Appellants argue that an administrative appeal would have been futile and costly, and therefore they were not required to exhaust their administrative remedies before seeking a declaratory judgment on the constitutionality of the Smoke Free Act. But nothing in the record suggests that the administrative process under the Sm oke Free Act is unduly burdensome or costly. The act provides proprietors, like appellants, seve ral opportunities to contest a reported violation. A proprie tor may submit a written statement or evidence after receiving a written notice of an alleged violation. Ohio Adm.Code 3701-52-08(F). During an on-site visit by an investigator, a proprietor may demonstrate compliance with the act. A sanitary and program administrator for
ODH testified that if no violations ar e observed during the investigation, the complaint against the proprietor would be dismissed. If the investigation results in proposed findings of violation and a civ il fine, a proprietor will be afforded the opportunity to submit additional evidence. Ohio Adm.Code 3701-52-08(F)(1). Certain repeat violators w ill be afforded the opportunity to request administrative review of the proposed findings, during which they may present evidence and
cross-examine witnesses. Ohio Adm.C ode 3701-52-08(F)(2) and (F)(2)(a)(iv). If the hearing report goes against the proprie tor, the proprietor may object to ODH. Ohio Adm.Code 3701-52-08(F)(2)(a)(vi). At any of these stages, given a proper challenge to the method of enforcing R.C. 3794.02, ODH could have found that there was insufficient evidence of a violation and dismissed the complaints against appellants. Therefore, an administrative remedy was available. {¶ 34} Appellants also argue that pursuant to Johnson’s Island, Inc. v. Danbury Twp. Bd. of Trustees , 69 Ohio St.2d 241, 431 N.E.2d 672 (1982), exhaustion of administrative remedies is not required when the constitutionality of a statute is raised as a defense in a proceeding brought to enforce the statute.January Term, 2012

15 However, the original enforcement of the Smoke Free Act against appellants occurred when the Columbus City Health Department, ODH’s designee, issued the ten proposed findings of violation and civil fine. These orders became final when they were not challenged on appeal, and the time for appeal has passed. Collateral attacks of final judgments are disfavored and succeed only in limited situations—fraud or lack of jurisdiction. Ohio Pyro, Inc. v. Ohio Dept. of
Commerce , 115 Ohio St.3d 375, 2007-Ohio-5024, 875 N.E.2d 550, ¶ 22-23. Because appellants do not argue either fra ud or lack of jurisdiction, their attempt to invalidate the ten violations through a declaratory judgment action is an improper collateral attack. 2. Future Application of Smoke Free Act to Zeno’s {¶ 35} Although appellants are foreclosed from challenging the violations already issued, we agree with appellants that their declaratory judgment/injunction action also sought to prevent future enforcement of the Smoke Free Act. Appellants raised an as-applied challenge and, therefore, must prove by clear and convincing evidence th at future enforcement of the act would violate their constitutional rights. {¶ 36} As an initial matter, we note that the Smoke Free Act was passed as a ballot initiative by Ohio voters. The Ohio Constitution, Article II, Section 1, provides,

The legislative power of the state shall be vested in a general assembly consisting of a senate and house of representatives but the people reserve to themselves the power to propose to the general assembly laws and amendments to the constitution, and to adopt or reject the same at the polls on a
referendum vote as hereinafte r provided. * * * The limitations expressed in the constitution, on the power of the general assemblyS UPREME C OURT OF O HIO

16 to enact laws, shall be deemed limitations on the power of the people to enact laws.

{¶ 37} Therefore, the same constitutional challenges that would invalidate legislation enacted by the General Assemb ly would also invalidate laws passed by
ballot initiative.
a. Unlawful Enforcement of the Smoke Free Act {¶ 38} In their counterclaim, appellants requested that ODH be enjoined from unlawful enforcement of R.C. Chapter 3794. Specifically, they contended that ODH’s policy of strict liability—wh ere there’s smoke, there’s a violation— exceeds the authority R.C. Chapter 3794 grants to ODH. {¶ 39} A rule adopted by an administrative agency is “valid and
enforceable unless unreasonable or in conflict with the statutory enactment covering the same subject matter.” Amoco Oil Co. v. Petroleum Underground Storage Tank Release Comp. Bd. , 89 Ohio St.3d 477, 484, 733 N.E.2d 592 (2000). In this respect, “an administrative rule cannot add [to] or subtract from the legislative enactment.” Id

. {¶ 40} In ruling in favor of appellants, the trial court found that the following facts had been brought forward at trial:

(1) The Department of Health has in the past implemented a policy of strict liability for violations of the SmokeFree Act in regards to property owners such as [appellants]; (2) In the case of [appellants,] the Department of Health implemented this policy and cited [appellants] fo r violations of the SmokeFree Act without regard to whether [appellants] were actually permitting smoking to occur on the premises of Zeno’s; (3) If a complaint was filed and the Department of Health f ound someone smoking at Zeno’s,January Term, 2012

17 [appellants] were fined; (4) The Department of Health has never
once fined an individual for smoki ng in a public place; and (5) [appellants] posted “no smoking” signs in Zeno’s, removed all ashtrays from Zeno’s, and would regularly ask patrons who were smoking on the premises to put out their cigarette or take it
outside.

{¶ 41} The trial court’s first finding may have been based in part on the
Tenth District’s decision in Pour House, Inc. v. Ohio Dept. of Health , 185 Ohio App.3d 680, 2009-Ohio-5475, 925 N.E.2d 621 (10th Dist.). In that case, a bar in Toledo had been cited by the Toledo- Lucas County Health Department for violating the Smoke Free Act. The hearing examiner concluded that the proprietor’s evidence of good-faith efforts to comply with the act, though credible, was unavailing, because R.C. 3794.02 imposes strict liability. The court of appeals in Pour House stated,

The question before us is the meaning of the phrase “permit smoking” [in R.C. 3794.02(A)]. Does this phrase mean that the statute is violated if smoking occurs in a prohibited place, regardless of the measures taken by the proprietor to prevent it? Or does this phrase mean that the statute is violated only if the proprietor affirmatively allows smoking in a prohibited place, or implicitly allows smoking by failing to take reasonable measures to prevent it?

Id. at ¶ 15. The appellate c ourt determined that a vi olation of R.C. 3794.02(A) occurs only when the proprietor permits smoking. “A proprietor permits smoking when the proprietor affirmatively allows smoking or implicitly allows smoking byS UPREME C OURT OF O HIO

18 failing to take reasonable measures to prevent patrons from smoking * * *.” Id . at ¶ 18. {¶ 42} In Pour House , ODH had argued that once it proved that smoking had occurred, the burden shifted to th e proprietor to prove that it had not permitted smoking. The Tenth District rejected that argument, stating, “Permitting smoking is an element of the sm oking violation; the opposite is not an
affirmative defense.” Id . at ¶ 20. The appellate c ourt remanded the case to the Franklin County Court of Common Pleas with instructions to remand to the hearing examiner to determine whether th e bar had violated the Smoke Free Act.
Id . at ¶ 22. {¶ 43} The Tenth District’s decision in Pour House , however, does not establish that ODH has engaged in a widespread policy of strict liability in investigating and citing proprietors for violations of the Smoke Free Act. Nor does the evidence in this case, contrary to the trial court’s finding. {¶ 44} A sanitary and program administrator for ODH testified that the determination of whether a proprietor is permitting smoking is conducted on a case-by-case basis. Appellants’ main contention is that investigators never inquired of appellants’ employees whet her they had taken steps to prevent smoking in prohibited areas. The smoking enforcement coordinator for the city of Columbus, however, testified that when he observed a patron smoking at Zeno’s, he would on occasion speak with the employees and that none had told him that they had asked the patron to stop smoking. {¶ 45} Substantial evidence exists that appellants at least implicitly permitted smoking. For instance, on August 6, 2007, a Columbus City Health Department investigator witnessed two people smoking at Zeno’s and observed cigarette butts in plastic cups filled halfway with wa ter. On November 29, 2007, another investigator found multiple Zeno’s patrons who were smoking and who were using partially filled plastic cups as ashtrays . Although appellant RichardJanuary Term, 2012

19 Allen was present at the time, the investigator did not witness him addressing any of the smoking patrons. On November 6, 2008, a third investigator witnessed at least eight patrons smoking and using small plastic cups as ashtrays. {¶ 46} The trial court also ignored the fact that appellants were cited nine times for allowing ashtrays to be present. Although the “ashtrays” used were plastic cups filled with wa ter, R.C. 3794.06(B) requires pr oprietors to remove all ashtrays and “other receptacles used fo r disposing of smoking materials” from any area where smoking is prohibited. {¶ 47} Finally, in eight of the violations, the investigator determined that
the violation was intentional and doubled th e fine. The court of appeals agreed:

On this record, the evidence is overwhelming that Bartec repeatedly and intentionally violat ed the Smoke Free Act, failed to comply with its provisions as R.C. 3794.09(D) requires, and in so doing exposed patrons and employee s to the very harm the statute is designed to prevent. Due to the hearing the court conducted and the evidence adduced as a result of the hearing, the trial court
could reach no other conclusion.

Jackson , 2010-Ohio-5558, at ¶ 33. {¶ 48} We therefore conclude that appellants have failed to establish that appellants will be subject to an unlawful policy of strict liability.
b. The Smoke Free Act Does Not Unreasonably Interfere with Property Rights or Amount to a Taking {¶ 49} The Ohio Constitution, Article I, Section 19, provides, “Private property shall ever be held inviolate, but subservient to the public welfare.” Appellants present a two-fold argument that the inclusion of Zeno’s within the Smoke Free Act is unconstitutional. First, they contend that the act exceeds theS UPREME C OURT OF O HIO

20 limits of the state’s police powers. Sec ond, appellants argue that the act amounts to a taking without compensation. We disagree with both arguments. 1. Valid Exercise of Police Power {¶ 50} The fundamental nature of property rights in Ohio was recently
reaffirmed. Norwood v. Horney , 110 Ohio St.3d 353, 2006-Ohio-3799, 853 N.E.2d 1115, ¶ 38. But it has also long been established that the guarantees of the Ohio Constitution are subject to a reasonable, nonarbitrary exercise of the police power of the state or municipality, when exercised in the interest of public health, safety, morals, or welfare. Yajnik , 101 Ohio St.3d 106, 2004-Ohio-357, 802 N.E.2d 632, ¶ 16. In Olds v. Klotz , 131 Ohio St. 447, 3 N.E.2d 371 (1936), we noted,

The exercise of the police power is inherent in government and essential to its existence and inevitably comes into conflict with the constitutional guaranties of the right of property and liberty of contract. In each case presented the court must draw the line of
demarcation. Courts do not attempt to define police power with exactness, and inevitably the i ndividual case must stand upon its own footing.

Id . at 451. Whether a statute is “truly in the public welfare within the meaning of Section 19, and thus superior to private pr operty rights, [the] legislation must be reasonable, not arbitrary, and must co nfer upon the public a benefit commensurate with its burdens upon private property.” Direct Plumbing Supply Co. v. Dayton
, 138 Ohio St. 540, 546, 38 N.E.2d 70 (1941). A court will not invalidate the judgment of the General Assembly as to whether an exercise of the police power bears a real and substantial relation to the public health, safety, morals, or general welfare of the public unless that judgme nt appears to be clearly erroneous.January Term, 2012

21 Benjamin v. Columbus , 167 Ohio St. 103, 146 N.E.2d 854 (1957), paragraph six of the syllabus. We believe that the same holds true for legislation passed by Ohio voters pursuant to a ballot initiative. {¶ 51} We have previously stated that the General Assembly has the authority to enact a public-smoking ban. D.A.B.E., Inc. v. Toledo-Lucas Cty. Bd. of Health , 96 Ohio St.3d 250, 2002-Ohio-4172, 773 N.E.2d 536, ¶ 54 (“Within its constitutional grant of powers, the General Assembly possesses both the authority to enact smoking legislation such as the regulation at issue and the prerogative to delegate that authority to local boards of health”). Although the Smoke Free Act was ultimately passed pursuant to a ballot initiative, the voters of Ohio also have a legitimate purpose in protecting the general welfare and health of Ohio citizens and the workforce from the dangers of secondhand smoke in enclosed public places. By requiring that proprietors of public places and places of employment take reasonable steps to prevent smoki ng on their premises by posting “no smoking” signs, removing ashtrays, and requesting patrons to stop smoking, the act is rationally related to its stated obj ective. Although appellants complain that the Smoke Free Act is not being enforced against actual smokers themselves, the
evidence establishes that ODH has not rece ived a complaint against an individual smoker. The trial court may have also questioned how much a property owner can do, but the evidence also establishes that during their on-site visits, the investigators did not witne ss appellants or their employees asking patrons to stop smoking or removing the makeshift ashtrays being used. It is not unreasonable or arbitrary to hold responsible the propr ietors of public places and places of employment for their failure to comply with the Smoke Free Act. {¶ 52} Appellants would have us limit the police power to simply abating public nuisances. Although the “state may use its police power to enjoin a property owner from activities akin to public nuisances without offending either the Due Process or Takings Clause,” State ex rel. Pizza v. Rezcallah , 84 OhioS UPREME C OURT OF O HIO

22 St.3d 116, 125, 702 N.E.2d 81 (1998), we have not expressly limited the police power to nuisance and decline to do so.

“The police power is inherent in sovereignty; and its exercise is justified by the nece ssity of the occasion. Its foundation is the right and duty of the government to provide for the common welfare of the governed. It is tersely expressed in the maxim,

‘ salus populi suprema lex .’ 5 While, therefore, a broad discretion is given to the Legislature to provi de for the general welfare, it necessarily is not an arbitrary or unlimited discretion * * *.”

(Footnote added.) State v. Martin , 168 Ohio St. 37, 40, 151 N.E.2d 7 (1958), quoting State v. Boone , 84 Ohio St. 346, 351, 95 N.E. 924 (1911). In R.C. 3794.04, the state declared the necessity fo r regulating smoking in public places and places of employment. Our review of the act leads us to conclude that it is neither unduly oppressive nor arbitrary in its restrictions. Appellants’ own witness testified that most patrons who are asked to stop smoking readily do so. {¶ 53} We therefore hold that the Smoke Free Act is a valid exercise of the state’s police power by Ohio’s voters. 2. The Smoke Free Act Does Not Amount to a Taking {¶ 54} Appellants contend that the Smoke Free Act is unconstitutional because it effects a regulatory taking w ithout just compensation. Specifically, appellants argue that R.C. Chapter 3794 c onfiscates a proprietor’s control over its
indoor air. But the standard to be used depends on the type of regulatory taking
involved:

5. This phrase has been translated as “[t]he safety of the people is the supreme law.” Black’s Law Dictionary 1870 (9th Ed.2009).January Term, 2012

23 Two types of regulatory actions will be deemed to be per se takings for Fifth Amendment purposes: first, those government actions that cause an owner to suffer a permanent physical invasion of property, see Loretto v. Teleprompter Manhattan CATV Corp. (1982), 458 U.S. 419, 435-440, 102 S.Ct. 3164, 73 L.Ed.2d 868 (state law requiring landlords to permit cable companies to install cable facilities in apartment buildings effected a taking); and second, government regulations that completely deprive an owner
of “ all economically beneficial uses” of the property. (Emphasis sic.) Lucas v. South Carolina Coastal Council (1992), 505 U.S. 1003, 1019, 112 S.Ct. 2886, 120 L.Ed.2d 798. A Lucas taking is also known as a categorical, or total, taking, and in such a case, the government must pay just compensation for the total property taken except to the extent that “background principles of nuisance and property law” independently re strict the owner's intended use of the property. Id. at 1030. “ ‘Outside these two relatively narrow categories (and the specia l context of land-use exactions * * *), regulatory takings challenges are governed by the standards
set forth in Penn Cent. Transp. Co. v. New York City , 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978).’ ” Lingle v. Chevron U.S.A., Inc. (2005), 544 U.S. 528, 538, 125 S.Ct. 2074, 161
L.Ed.2d 876.

(Footnote omitted.) State ex rel. Shelly Materials, Inc. v. Clark Cty. Bd. of
Commrs. , 115 Ohio St.3d 337, 2007-Ohio-5022, 875 N.E.2d 59, ¶ 18. Because there is no physical invasion of appellants’ property and there is no claim that the Smoke Free Act deprives appe llants of all economically beneficial uses of theirS UPREME C OURT OF O HIO

24 property, the only possible taking involved is a partial regulatory taking under
Penn Cent. {¶ 55} With a Penn Cent. regulatory taking, a court engages in a factual inquiry of the following three factors: “(1) the economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfered with distinct investment-backed expectations, and (3 ) the character of the governmental
action.” Shelly Materials at ¶ 19, citing Penn Cent., 438 U.S. at 124, 98 S.Ct. 2646, 57 L.Ed.2d 631. {¶ 56} Appellants submitted evidence that their gross sales declined in 2009, but the Smoke Free Act became ef fective in December 2006, and in 2007 and 2008, appellants’ gross sa les actually increased. Furthermore, Columbus’s smoking ban, found at Columbus Code of Ordinances Chapter 715, is very similar to R.C. Chapter 3794 and went into eff ect in January 2005. Still, appellants’ gross sales increased in 2005 and 2006. Thus, appellants have failed to demonstrate that the Smoke Free Act has had a significant economic impact on
their business. {¶ 57} The second and third factors also do not support finding a taking in
this case. As the United St ates Supreme Court noted in Penn Cent. :

“Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law,” Pennsylvania Coal Co. v.
Mahon , 260 U.S. 393, 413 [43 S.Ct. 158, 67 L.Ed. 322] (1922), and this Court has accordingly recognized, in a wide variety of contexts, that government may execute laws or programs that adversely affect recognized economic values. Exercises of the taxing power are one obvious exam ple. A second are the decisions in which this Court has dismissed “taking” challenges on theJanuary Term, 2012

25 ground that, while the challenged government action caused economic harm, it did not interfere with interests that were sufficiently bound up with the reas onable expectations of the claimant to constitute “property” for Fifth Amendment purposes.

Penn Cent. at 124-125. The “taking” of appe llants’ indoor air space is not the type of taking contemplated by either the Fifth Amendment to the United States Constitution or the Ohio Constitution, Article I, Section 19. Appellants have also
failed to demonstrate that the Smoke Free Act interfered with a distinct investment-backed expectati on. The goal of this legislation is to protect the
health of the workers and other citizen s of Ohio. R.C. 3794.04. It does so by regulating proprietors of public places and places of employment in a minimally invasive way. We therefore hold that the Smoke Free Act does not constitute a taking.
III. Conclusion {¶ 58} Because appellants failed to exhaust their administrative remedies and may not use declaratory judgment as a collateral attack on a final judgment, the ten previous violations of the Smoke Free Act are res judicata. We also hold that the Smoke Free Act is a valid exercise of the state’s police power by Ohio voters and does not amount to a regulatory taking. The judgment of the court of appeals is affirmed. Judgment affirmed.
O’C ONNOR , C.J., and P FEIFER , L UNDBERG S TRATTON , C UPP , and M C G EE
B ROWN , JJ., concur.
O’D ONNELL , J., concurs in judgment only.

__________________ Michael DeWine, Attorney General, Alexandra T. Schimmer, Solicitor General, Elisabeth A. Long, Deputy Solicitor, and Stacy Hannan, RobertS UPREME C OURT OF O HIO

26 Moormann, and Angela M. Su llivan, Assistant Attorneys General, for appellees Theodore E. Wymsylo and Michael DeWine. Maurice A. Thompson, for appellants. Law Office of Joseph C. Lucas, L.L.C., and Tyler W. Kahler, urging
reversal for amici curiae Ohio Licensed Beverage Association, Buckeye Liquor Permit Holders Association, a nd Dr. Michael L. Marlow. Finney, Stagnaro, Saba & Patters on Co., L.P.A., and Christopher P. Finney; and Law Firm of Curt C. Hartman and Curt C. Hartman, urging reversal for amici curiae Ohio Liberty Council, Ohio Freedom Alliance, and Coalition Opposed to Additional Spending & Taxes. Ron O’Brien, Franklin County Prosecu ting Attorney, and Tracie M. Boyd, Assistant Prosecuting Attorney, urging affirmance for amicus curiae Franklin County District Board of Health. McTigue & McGinnis, L.L.C., Donald J. McTigue, Mark A. McGinnis, and J. Corey Colombo, urging affirmance for amici curiae American Cancer Society, East Central Division; American Cancer Society Cancer Action Network; Academy of Medicine of Cleveland & Northern Ohio; American Heart Association, Great Rivers A ffiliate; American Lung A ssociation of the Midland States; American Medical Association; Americans for Nonsmokers’ Rights; Association of Ohio Health Commissioners, Inc.; Campaign for Tobacco-Free Kids; Cleveland Clinic; Ohio Asthma Coalition; Ohio Chapter of the American College of Cardiology; Ohio Osteopathic Association; Ohio State Medical Association; and Tobacco Control Legal Consortium.

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