John Petsche, a former member of the Brecksville, Ohio City Council, was indicted by a grand jury for violating Ohio law regarding financial conflicts of interest. The charges stemmed from Petsche's role as a roofing subcontractor on a new police station project while he simultaneously voted on city ordinances to fund and approve that same project. Although Petsche was ultimately acquitted after a bench trial, he filed a civil rights lawsuit under 42 U.S.C. § 1983 against the mayor, law director, and other council members. He alleged that these officials knowingly withheld information about his financial interest from the Ohio Ethics Commission and prosecutors in retaliation for his public criticism of the city council's handling of a separate debt issue. Petsche argued this conduct constituted retaliatory prosecution and malicious prosecution. The district court granted summary judgment for the defendants, and Petsche appealed, limiting his challenge to his federal civil rights claims.
The Sixth Circuit, writing for the panel, affirmed the lower court's decision by analyzing the legal requirements for retaliatory prosecution and malicious prosecution. The court began by establishing that to prevail on these claims, a plaintiff must prove the absence of probable cause for the underlying criminal charges. The court noted that a grand jury indictment creates a conclusive presumption of probable cause. While this presumption can be rebutted if a plaintiff presents substantial evidence that the indictment was tainted by false statements or fabricated evidence, Petsche failed to meet this burden. The court examined Petsche's argument that city officials misled the Ethics Commission by omitting their knowledge of his financial interest. The court reasoned that this omission was irrelevant because Petsche's conduct violated the statute regardless of the officials' knowledge. Under Ohio law, the affirmative defense for financial conflicts of interest requires that the public official take no part in the deliberations or voting regarding the contract. Since Petsche voted on multiple ordinances to advance the police station project, he was ineligible for the affirmative defense. Consequently, the court found that probable cause existed as a matter of law. The court also addressed Petsche's claim against the City of Brecksville, arguing that the Supreme Court's decision in Lozman v. City of Riviera Beach created an exception to the probable cause requirement. The Sixth Circuit distinguished Lozman, noting that Lozman involved a retaliatory arrest where high-level policymakers explicitly ordered the arrest based on a premeditated plan. In contrast, Petsche's case involved a prosecutorial decision, which is presumed regular. The court held that Lozman's exception does not extend to retaliatory prosecution, and Petsche presented no evidence of a similar 'smoking gun' policy of retaliation by the City itself.
The decision reinforces the high bar for plaintiffs challenging criminal prosecutions as retaliation, confirming that a grand jury indictment generally shields officials from liability unless the indictment itself is proven to be a sham. It clarifies that the Lozman exception for retaliatory arrests does not apply to prosecutorial decisions, maintaining the requirement that plaintiffs prove a lack of probable cause in retaliatory prosecution cases. The ruling effectively ends the liability of the Brecksville officials and the city for these specific claims, leaving the question of whether Lozman applies to other non-arrest contexts unresolved.
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