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Cash Machine

A Virginia company encounters the horrors of Ohio courts, where the "for sale" signs never come down.

Denise Grollmus 

On an October Sunday in 2006, Dennis Blaeuer was curled up with The New York Times at his home in Virginia when a headline caught his eye: "Campaign Cash Mirrors a High Court's Rulings."

The story detailed how Ohio Supreme Court justices routinely sit on cases after receiving hefty campaign contributions from the parties involved. The Times detailed how judges sided with their benefactors 70 percent of the time. Some, like Justice Terrence O'Donnell, were ruling in favor of donors 91 percent of the time. And they had recused themselves just nine times over the previous decade.

Republican Justice Paul Pfeifer summed up Ohio's judiciary for a national audience: "I never felt so much like a hooker down by the bus station in any race I've ever been in as I did in a judicial race," he told The Times. "Everyone interested in contributing has very specific interests. They mean to be buying a vote."

Blaeuer felt ill. His company, Smart Media, had just lost a major civil suit in the Heart of It All. He was beginning to understand why.

In 1996, Smart Media developed a handheld bar-code scanner that would allow companies to directly compete for a shopper's business. If you went to Giant Eagle and scanned a 2-liter Coke, for example, a Pepsi ad would pop on the screen, offering the customer a better price.

So Smart Media took the invention to Akron's Telxon Corporation, whose bar-code scanners dominated the U.S. retail market. Telxon loved the idea and offered to finance the manufacturing and marketing of the product.

But after two years and millions of dollars in development, Smart Media was left without a manufacturer or marketing, according to court documents. Telxon hadn't kept its part of the deal. Smart Media threatened to sue for breach of contract.

But Telxon beat it to the punch. Afraid of having to wage a court fight in Virginia, Telxon filed a preemptive strike in Summit County, asking the court to rule that there was never any contract between the two companies.

Smart Media fired back, accusing Telxon of everything from fraud to emotional distress.

The case languished for five years, until it finally went to trial in 2003. After three weeks of testimony, a jury sided with Smart Media, granting the company $212 million in damages, plus another $8 million for William Dupre, a former Smart Media employee largely responsible for developing the scanner. It was the largest award in Summit County history.

Two years later, the Ninth District Court of Appeals overturned the verdict. In a 112-page decision, Judge William Batchelder ruled that Smart Media never actually had a contract. "It was problem after problem," Batchelder says of the case. "This was a miserable trial. There were all sorts of testimony that the judge shouldn't have allowed in."

Smart Media appealed to the Ohio Supreme Court, which declined to hear the matter, claiming it had no jurisdiction.

But a year later, Blaeuer read The Times article, discovering that while you can't always buy justice in Ohio, it's never hard to get a favorable lease.

He called his attorney, Gregory Melick, hoping to find out if Batchelder had ever received campaign contributions from Telxon officials. Melick soon unveiled a damning trail leading from Telxon to the judge's front door.

Batchelder had been a name-brand player in Ohio politics for four decades. First elected to the state House at the tender age of 24, he was re-elected 18 times, suggesting that the people of Medina County seemed pleased with his service.

In 1998, Batchelder moved to the Medina County bench before going to the Court of Appeals in Summit County two years later, then finally returning to the House again in 2006.

It was an impressive career, naturally accompanied by an impressive flow of campaign dollars. And none of it looked pretty to Smart Media.

Melick discovered that during his 1996 campaign, Batchelder even went to Telxon CEO Bob Meyerson's home to pick up a check. "We were never friends," Batchelder says. But the check was written for a very friendly amount: $15,000, which represented one-third of Batchelder's total funds that year.

Then, in 2000, as the Smart Media case sat in court, Meyerson gave $300,000 to the Summit County Republican Party. The party, in turn, dumped $20,000 into Judge Batchelder's coffers.

The following year, Meyerson donated another $202,500 to the party. And in 2003, he specifically earmarked $50,000 for the local GOP's "Judicial Fund."

During the seven years that the Smart Media case was in court, Meyerson donated over $1 million to the Summit County Republican Party.

Smart Media's lawyers were stunned. "We had no idea that Bob Meyerson was a contributor to anyone," says Brian Kenney, the lawyer representing inventor William Dupre. "And it never occurred to us to even look. My client was devastated."

In a 30-page motion, Melick and Kenney blasted Batchelder for not recusing himself and demanded that the judge's decision be reversed. But they soon discovered that while such conflicts would be alarming elsewhere in the country, they're no big deal in Ohio.

Since Batchelder worked in the very court that was hearing the conflict motion, administrative judge Lynn Slaby asked the Ohio Supreme Court to appoint visiting judges. Among them was Judge William Baird.

The two worked alongside each other until Baird retired in 2004. He was also a fixture at Summit County GOP fund-raisers. But instead of recusing himself, Baird wrote a 16-page decision ruling that Batchelder's behavior was aboveboard.

The only dissent came from Judge Robert Nader, who wrote: "A $212 million plus judgment erased on appeal by a panel whose local political party received approximately $1 million in contributions from a very financially interested individual since the inception of the case, creates a classic scenario giving rise to every nuance of political influence in our courts which calls for self-disqualification."

Smart Media is appealing once again to the Ohio Supreme Court.

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