Ohio Code 133.70 – Complaint for validation of authority to issue or enter into securities
(A) As used in this section, supplementing the definitions of the terms contained in section 133.01 of the Revised Code:
Terms Used In Ohio Code 133.70
- Affirmed: In the practice of the appellate courts, the decree or order is declared valid and will stand as rendered in the lower court.
- Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
- Appellate: About appeals; an appellate court has the power to review the judgement of another lower court or tribunal.
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- County auditor: means the county auditor of the county in which the subdivision is located. See Ohio Code 133.01
- Debt charges: means the principal, including any mandatory sinking fund deposits and mandatory redemption payments, interest, and any redemption premium, payable on securities as those payments come due and are payable. See Ohio Code 133.01
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Fractionalized interests in public obligations: means participations, certificates of participation, shares, or other instruments or agreements, separate from the public obligations themselves, evidencing ownership of interests in public obligations or of rights to receive payments of, or on account of, principal or interest or their equivalents payable by or on behalf of an obligor pursuant to public obligations. See Ohio Code 133.01
- Habeas corpus: A writ that is usually used to bring a prisoner before the court to determine the legality of his imprisonment. It may also be used to bring a person in custody before the court to give testimony, or to be prosecuted.
- in writing: includes any representation of words, letters, symbols, or figures; this provision does not affect any law relating to signatures. See Ohio Code 1.59
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Issuer: means any public issuer and any nonprofit corporation authorized to issue securities for or on behalf of any public issuer. See Ohio Code 133.01
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Legislation: means an ordinance or resolution passed by a majority affirmative vote of the then members of the taxing authority unless a different vote is required by charter provisions governing the passage of the particular legislation by the taxing authority. See Ohio Code 133.01
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Oral argument: An opportunity for lawyers to summarize their position before the court and also to answer the judges' questions.
- Person: includes an individual, corporation, business trust, estate, trust, partnership, and association. See Ohio Code 1.59
- Plaintiff: The person who files the complaint in a civil lawsuit.
- Proceedings: means the legislation, certifications, notices, orders, sale proceedings, trust agreement or indenture, mortgage, lease, lease-purchase agreement, assignment, credit enhancement facility agreements, and other agreements, instruments, and documents, as amended and supplemented, and any election proceedings, authorizing, or providing for the terms and conditions applicable to, or providing for the security or sale or award of, public obligations, and includes the provisions set forth or incorporated in those public obligations and proceedings. See Ohio Code 133.01
- Property: means real and personal property. See Ohio Code 1.59
- Public obligations: means both of the following:
(1) Securities;
(2) Obligations of a public issuer to make payments under installment sale, lease, lease purchase, or similar agreements, which obligations may bear interest or interest equivalent. See Ohio Code 133.01
- Securities: means bonds, notes, certificates of indebtedness, commercial paper, and other instruments in writing, including, unless the context does not admit, anticipatory securities, issued by an issuer to evidence its obligation to repay money borrowed, or to pay interest, by, or to pay at any future time other money obligations of, the issuer of the securities, but not including public obligations described in division (GG)(2) of this section. See Ohio Code 133.01
- state: means the state of Ohio. See Ohio Code 1.59
- Summons: Another word for subpoena used by the criminal justice system.
- Taxing authority: means in the case of the following subdivisions:
(1) A county, a county library district, or a regional library district, the board or boards of county commissioners, or other legislative authority of a county that has adopted a charter under Article X, Ohio Constitution, but with respect to such a library district acting solely as agent for the board of trustees of that district;
(2) A municipal corporation, the legislative authority;
(3) A school district, the board of education;
(4) A regional water and sewer district, a joint ambulance district, a joint recreation district, a fire and ambulance district, or a joint fire district, the board of trustees of the district;
(5) A joint township hospital district, the joint township hospital board;
(6) A detention facility district or a district organized under section 2151. See Ohio Code 133.01
- Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
(1) “Issuer” also includes any person issuing fractionalized interests in public obligations, an obligor, and, in the case of public obligations, the public issuer.
(2) “Securities” also includes public obligations as defined in division (GG)(2) of section 133.01 of the Revised Code and fractionalized interests in public obligations, both referred to in this section as “division (A)(2) securities.”
(B)(1) An issuer, at any time prior to its issuance or entering into of securities, may file a complaint for validation and thereby commence an action for the purpose of obtaining an adjudication of its authority to issue or enter into and the validity of, and security for and source of payment of, the securities, and of the validity of all proceedings taken and proposed to be taken in connection therewith, including, but not limited to, any of the following:
(a) The levy of taxes or special assessments levied or to be levied;
(b) The lien of those taxes or special assessments;
(c) The levy or charge of rates, charges, rentals, lease payments, or tolls;
(d) Any underlying public obligation;
(e) The proceedings and remedies for the collection of the taxes, special assessments, rates, charges, rentals, lease payments, or tolls, or payments by an obligor.
(2) No such action shall be commenced except upon determination of its necessity by the taxing authority or other authority empowered to adopt the legislation or order for the issuance of the securities or, in the case of division (A)(2) securities, the obligor.
(3) Except as provided in division (B)(4) of this section, the action shall be commenced in the court of common pleas of the county in which the issuer, or in the case of division (A)(2) securities, the obligor, is located in whole or in part or has its or a principal office. The tax commissioner and the county auditor of the county in which the action is commenced shall be named as party defendants. Service of summons shall, unless waived, be made upon such parties in the manner provided for service of summons by the Rules of Civil Procedure. The property owners, taxpayers, and citizens of the issuer, or in the case of division (A)(2) securities, the obligor, nonresident owners of property subject to taxation or special assessment for payment of debt charges on the securities by the issuer or obligor, and all other persons affected by or interested in the issuance of the securities, shall be deemed joined as defendants without service to the same extent as if individually named in the complaint.
(4) If the issuer of the securities, or, in the case of division (A)(2) securities, the obligor, is the state or any state agency, such action shall be commenced in the court of common pleas of Franklin county. The tax commissioner shall be named as party defendant, and the taxpayers, property owners, and citizens of the state, nonresident owners of property subject to taxation or special assessment for payment of debt charges on the securities by the issuer or obligor, and all other persons affected by or interested in the issuance of the securities, shall be deemed joined as defendants without service to the same extent as if individually named in the complaint.
(C) The complaint for validation shall contain that which is required by the Civil Rules including, without limitation, in ordinary and precise language and by references or exhibits, statements or descriptions of all of the following:
(1) The issuer’s existence and authority for issuing the securities;
(2) The holding and result of any required election relating to the securities;
(3) If already passed or issued, the legislation, order, or proceeding authorizing the issuance of the securities and evidence of its passage or issuance;
(4) All other essential proceedings taken and proposed to be taken in connection with the securities;
(5) If not set forth in legislation, order, or proceeding already passed or issued, the approximate amount and general proposed terms of the securities;
(6) The county or counties in which the proceeds of the securities, or any part thereof, are to be expended;
(7) If the securities are division (A)(2) securities, the same information referred to in divisions (C)(1) to (4) of this section as to the obligor and its obligations, including any public obligations, relating to the division (A)(2) securities;
(8) Any other pertinent matters.
(D) Except as otherwise provided in this section, all proceedings pursuant to this section shall be governed by, as applicable, the Rules of Civil Procedure and the Rules of Appellate Procedure.
(E) Upon the filing of the complaint, the court shall issue an order in general terms in the form of a notice directed to the state and to “all property owners, taxpayers, citizens, and others having or claiming any right, title, or interest in any property or funds to be affected” by the issuance or entering into of the securities or “affected in any way thereby,” requiring the state through the attorney general and all such persons to appear and be heard before the court at a time to be designated in the order, and show cause why the prayer of the complaint should not be granted and the proceedings and the securities validated and confirmed as therein prayed.
(F) At least twenty days before the time fixed in the order for hearing, a copy of the complaint and order, unless waived in writing by the receiving attorney, shall be served upon the prosecuting attorney of the county in which the action is commenced, the prosecuting attorney of each county in which it is proposed to expend ten per cent or more of the proceeds of the sale of the securities, and the attorney general. No more than one copy of the complaint and order need be served upon any one prosecuting attorney. Each such attorney shall carefully examine the complaint and if it appears, or there is reason to believe, that the complaint is defective, insufficient, or untrue, or if in the opinion of the attorney the issuance of the securities or, if the case, the entering into of the public obligation, is not lawful or they have not been duly authorized, the attorney may enter an appearance for the county, or the state in the case of the attorney general, and assert any defense to the complaint that the attorney considers proper. The attorney may enter an appearance and assert any support for the complaint that the attorney considers proper.
(G) The clerk of the court in which the action is commenced shall cause a copy of the order to be published once a week for two consecutive calendar weeks, in a newspaper of general circulation in that county and in each other county the prosecuting attorney of which is required to be served under division (F) of this section. The first publication in each county shall be made not less than fourteen nor more than twenty-one days prior to the date set for hearing. Upon the last publication of the order, service upon all property owners, taxpayers, citizens, or others having or claiming any right, title, or interest in or against the plaintiff or property subject to taxation or special assessment for payment of debt charges on the securities or otherwise affected by or interested in the issuance or entering into of the securities described in the complaint is complete, and the court has jurisdiction of them to the same extent as if such defendants were individually named in the complaint and personally served.
(H) The attorneys referred to in division (F) of this section, and any other person made a defendant or his counsel, shall, subject to laws restricting public access to certain records, have reasonable access to all records and proceedings of the issuer and, if division (A)(2) securities are involved, the obligor, which pertain to the matters described in the complaint. Any officer, agent, or employee of the issuer, and in the case of division (A)(2) securities the obligor, who has charge, possession, custody, or control of any of those records and proceedings shall, on request of that person, make available for examination those records and proceedings and shall furnish such authenticated copies of them as the person requests and at that person’s expense.
(I) Upon motion of the issuer, whether before or after the date set for hearing as provided in division (E) of this section, the court may enjoin any person from commencing any other action or proceeding contesting the same or related matters as described in the complaint, as the complaint may from time to time be amended. The court may order a joint hearing or trial before it of all such related issues then pending in any action or proceeding in any court in the state, and may order any such action or proceeding consolidated with the validation complaint pending before it, and may make such order as may be necessary or proper to effect that consolidation and as may tend to avoid unnecessary costs or delays or multiplicity of suits. That order is not appealable.
(J) Any property owner, taxpayer, citizen, or person affected by or interested in the issuance or entering into of the securities may become a named party to the action by pleading to the complaint at or before the time set for the hearing provided in division (E) of this section, or thereafter by intervention upon leave of court.
(K) At the time designated in the order for hearing, the court shall proceed to hear and determine all questions of law and fact in the action and may make such interlocutory orders and adjournments as will enable it properly to try and determine the action and to render a final judgment with the least possible delay.
(L) Any party to the action may appeal from a final judgment of a court of common pleas under division (K) of this section to the court of appeals. The notice of appeal must be filed within ten days of the entry of final judgment by the court of common pleas. The appeal shall take priority over all other civil cases therein pending, except habeas corpus. No oral argument shall be permitted on appeal except at the request of the court on its own motion.
(M) All of the following apply to a final judgment of the court of common pleas, as finally affirmed or modified in any appeal, that determines that the issuer has authority to issue the securities upon the general terms set forth in the complaint for validation and that adjudicates the legality of all proceedings taken and proposed to be taken in connection with the securities and any underlying public obligation:
(1) The final judgment is forever binding and conclusive, as to all matters adjudicated, against the issuer, any obligor, and all other parties to the action, and those in privity with them, whether named in the action or included in the description in the notice provided for in division (E) of this section.
(2) If all procedural steps required to be taken for the completion of the authorization, issuance, sale, and delivery of the securities, and for entering into any underlying public obligation, after the date of the final judgment, are properly taken in accordance with the applicable provisions of law and the terms of the final judgment, the final judgment constitutes a permanent injunction against any person’s contesting, by any action or proceeding, any of the following:
(a) The validity of the securities and of any underlying public obligation generally described in the complaint;
(b) The validity of the taxes, special assessments, tolls, charges, rates, or other levies, or lease payments, or payments by an obligor, authorized, contracted, or covenanted to be imposed, made, or collected for the payment of the debt charges on the securities or of payment obligations under the public obligation;
(c) The validity of any pledge of or lien on revenue or property to secure the payment of the debt charges or payment obligations on the securities.
(3) A final judgment does not permanently enjoin any person not a named party to the action from raising a claim or defense seeking relief in whole or in part from any levy of taxes or special assessments, made or to be made or collected or to be collected against property owned by that person, authorized for the payment of any debt charges or payment obligations on the securities described in the complaint if the claim or defense is based upon a right that such person may have only in his individual capacity as an owner of the property subject to the tax or special assessment, including but not limited to any rights under sections 727.02, 727.15, 727.16, and 727.17 of the Revised Code.
(N) The costs of each action under this section shall be paid by the plaintiff and may be paid from the proceeds of the securities, except that if a taxpayer, citizen, or other person has contested, intervened in, or appealed the action the court may tax the whole or such part of the costs against that person as is equitable and just.