CLEVELAND — The Cleveland Browns suffered a setback Monday as a magistrate in Columbus blocked the state from taking unclaimed funds to help pay for the team's stadium in Brook Park.
Franklin County Common Pleas Court Magistrate Jennifer Hunt granted a preliminary injunction in favor of Ohioans who sued state officials. The decision stops the state from taking ownership of roughly $1.7 billion to $1.9 billion in unclaimed funds while a lawsuit plays out.
It's an early win for people opposed to the state's plan to tap unclaimed funds to pay for pro sports facilities, starting with a $600 million grant for a new Browns stadium.
State lawmakers made major changes to Ohio's unclaimed funds program as part of the biennial budget last year. For the first time, they set a clock on people's ability to claim their funds — money from old bank accounts, insurance payouts, uncashed checks, utility deposits and other sources.
The General Assembly directed the state to take ownership of money that's been sitting for at least a decade, creating a grace period for people with long-languishing cash to file claims through Jan. 1, 2036.
A preliminary injunction is a hold that's meant to maintain the status quo during litigation. In this case, it replaces a temporary restraining order — a short-term pause — the court imposed in December and extended in January.
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In her decision, Hunt acknowledged that a preliminary injunction is "an extraordinary remedy."
But she found that the Ohioans who sued — people with unclaimed funds being held by the state — have standing. And they face imminent injury if the state takes their money and turns it into stadium grants.
Hunt believes those frustrated Ohioans have a good shot at prevailing with two arguments: First, that the state's move is an unconstitutional taking of private property for a use that's not really public. And second, that the state risks depriving people of that property without adequate notice.
It's possible the state has the right to tap unclaimed funds that "will clearly never be claimed by the rightful owner," Hunt wrote, noting that she does not "condone the inevitable waste of valuable resources that could have a significant impact for the good on Ohio's citizens."
But, she added, "the taking to accomplish such good must be for a public use and comply with due process requirements. Here, the amended statute fails in both aspects."
Lawyers for the state did not immediately respond to a request for comment. A Browns spokesman did not have an immediate reaction to the decision.
Site work for the $2.4 billion stadium is already under way in Brook Park. The team plans to move in 2029.
A preliminary injunction impacts more than just the Browns, though. Other sports teams, including the Cleveland Guardians, the Cleveland Cavaliers, the Cincinnati Bengals and the Columbus Clippers, are seeking new state grants using unclaimed funds.
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Ohio's Office of Budget and Management accepted grant applications earlier this year but is not scoring them or starting a detailed review process because of the litigation.
Attorneys for Ohio's Department of Commerce and the Division of Unclaimed Funds will get a chance to object to Hunt's decision. Then a Franklin County Common Pleas Court judge will decide whether to uphold that decision — or change it.
After that, the parties will have a chance to appeal.
CLICK HERE to read the injunction.
