Marvel Comics has introduced dozens of superheroes into the popular culture – Spider-man, Hulk, Iron Man, Captain America – and that only scratches the surface. In recent years, the characters have jumped off the pages of comic books and onto the big screen. Marvel has tapped into a gold mine, cranking out one superhero blockbuster movie after another.
In June 2013, the Marvel universe came to Cleveland. A company called Vita-Ray Productions, L.L.C., was there to film scenes for the movie Captain America: The Winter Soldier.
Vita-Ray applied for a permit to close a portion of West Third Street in downtown Cleveland for 16 days. The city approved the permit, determining that the closure was necessary to enable the filming. The city also reckoned that the film production would bring jobs and tax revenue, and would positively promote Cleveland to potential visitors.
But not everybody was happy about the decision. A company called Cuyahoga Lakefront Land, L.L.C. (“Lakefront”) owns a parking lot downtown known as “the Pit.” The Pit abuts both West Third and West Ninth Streets, with entrances on both streets.
With the street closure, one of the two entrances to the Pit was inaccessible. Lakefront claimed that this loss of access caused a substantial impairment of its business and its property rights.
However, Lakefront was able to continue operating the Pit during the closure. Customers entered the lot through its West Ninth Street entrance, and signs were placed in the area directing drivers to the alternative entrance.
In addition, the production company contracted with Lakefront to pay for 325 spaces in the lot for two days during the closure, at a rate higher than the revenue per car that Lakefront’s damages expert used in his calculations of its claimed lost profits.
Lakefront’s expert witness nevertheless found a loss of revenue for June 2013 – plus losses during the following six months – that he attributed to a reduction in business because of the closure, for a total claimed loss of revenue of $61,399.
Lakefront engaged in multiple legal actions regarding the street closure. It filed two suits in court during the closure – one against the movie studios that were producing Captain America and one against Cleveland. Lakefront reached a monetary settlement with the movie studios. After that, Lakefront voluntarily dismissed both cases.
Later, however, Lakefront filed an original action with the court of appeals, arguing that the temporary closure of the street caused a “taking” of its property without just compensation. The court of appeals concluded that Cleveland had, indeed, “taken” Lakefront’s property without just compensation and issued what’s called a “writ of mandamus.” The writ ordered Cleveland to commence proceedings to determine how much compensation was owed to Lakefront.
Cleveland appealed that ruling, and the case came before us – the Ohio Supreme Court – for a final review.
To be entitled to the writ, Lakefront had to establish a clear legal right to the requested relief, a clear legal duty on the part of Cleveland to provide it, and the lack of an adequate remedy in the ordinary course of the law.
In making its argument that the street closure was a “taking” of its property, Lakefront maintained that the closure violated Article I, Section 19 of the Ohio Constitution.
The purpose of the takings clauses in both the Ohio and United States Constitutions is “to prevent government from ‘forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.’”
But over the years, determining what constitutes a “taking” has proven to be a complex issue. Courts at all levels have examined the question, and even the United States Supreme Court has “been unable to develop any ‘set formula’ for determining when ‘justice and fairness’ require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons.’”
Lakefront correctly asserted that access to a public roadway abutting a property is an elemental right of real property ownership. In previous cases, our court has held that a property owner has an easement to the public street on which the owner’s property abuts and if that easement is substantially, materially, or unreasonably interfered with by the government, even if there is another access point to the land, the owner has a right to just compensation.
On the other hand, we have also recognized that mere circuitry of travel –necessarily and newly created – to and from a piece of property does not of itself result in legal impairment of the right of access to and from such property, “where any resulting interference is but an inconvenience shared in common with the general public and is necessary in the public interest to make travel safer and more efficient.”
In Lakefront’s case, access to an abutting roadway was cut off. A majority of our court concluded that the closure resulted in “mere circuitry of travel,” an inconvenience shared by the general public and by many other businesses. The property was still accessible to the public but customers had to take a different route to access it.
The majority noted that the restriction of access to the Pit was temporary – lasting only 16 days – rather than permanent. Ohio courts have held that temporary interference with access to property during highway construction or repair does not rise to the level of a compensable “taking.”
The majority also maintained that the temporary loss of Lakefront’s access to West Third Street during the filming did not substantially, materially, or unreasonably interfere with Lakefront’s easement and did not create a compensable “taking” of Lakefront’s property under Ohio law.
Therefore – by a six-to-one vote – our court reversed the judgment of the court of appeals.
I dissented because I would have affirmed the court of appeals’ judgment that the street closure – which resulted in the loss of revenue – was a “taking.” But I needed the superpowers of a Marvel hero – Captain Persuasion, maybe – to convince the majority otherwise.
Paul Pfeifer is an associate justice of the Supreme Court of Ohio.