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Friday, July 30, 2004

Indiana Courts - U.S. Steel sues citizen group

There are stories today in both the Munster Times and the Gary Post-Tribune reporting that U.S. Steel is suing a Miller citizens group [MCC] for language the group used in its brief. The Times reports:

The dispute revolves around what is being hailed as possibly the largest property tax settlement in Indiana's history. The steel giant has agreed to pay $44 million in back taxes to local government agencies, donate 200 acres of lakefront land to the city of Gary and invest $150 million in its Gary Works plant in the next four years.

The state also agreed to pay Lake County the $8.9 million in property tax replacement credits it would have received had U.S. Steel not withheld its taxes in previous years.

Judge Thomas Fisher of Indiana's Tax Court denied the Miller Citizens' petition to intervene in the U.S. Steel tax settlement. He also scheduled a hearing Oct. 8 for a request by U.S. Steel to assess damages against the group for inappropriate language used in its petition to intervene.

The judge sealed the exact wording of the petition.

"What I said was that since U.S. Steel doesn't pay its business tangible taxes, that leaves a huge void in the budgets of the city of Gary, Calumet Township and Lake County," Reed said.

"They (want to settle now), because they need all the revenue they can get. So they are willing to let go of a huge amount of revenue. I said it is kind of like a drug dealer; you get an addict hooked and he will do anything to get his bag of cocaine. "We are not calling U.S. Steel drug dealers. I'm just saying that is the kind of pressure used."

The Tribune has a lengthy story. Some quotes from the story, headlined "U.S. Steel fires back at tax foes":
U.S. Steel is seeking damages from the citizen group that challenged the company’s property tax assessments, claiming it used “unbecoming” legal language.

Siding with the company, Tax Court Judge Thomas Fisher has denied a motion by the Miller Citizens Corp. to enter the assessment challenge case. Instead, Fisher set Oct. 10 to hear testimony in Crown Point on U.S. Steel’s argument that it was damaged by the Miller Citizens Corp.’s five-page brief, filed July 14, in support of Calumet Township Assessor Booker Blumenberg’s battle against the county’s past-due tax settlement with the steel maker.

U.S. Steel had challenged the MCC request to file a brief and now has asked for damages under Indiana Appellate Rule 41, citing a “tone unbecoming and inappropriate to members of the legal profession” in the documents filed by the Gary citizens group. * * *

[Tom Atherton, attorney for U.S. Steel] said U.S. Steel was upset by the tone and content of the brief by the citizens group, which compared U.S. Steel to a drug dealer.

“U.S. Steel is sort of in a position of a drug dealer who manages to get the addict hooked and then is able to make the addict do anything it wants the addict to do by dangling a couple of bags of crack cocaine,” the brief states.

[Ken Reed, attorney for MCC] said it’s an apt metaphor for cash-strapped Lake County, which continues to reel from the effects of reassessment. MCC attorneys plan to file a petition today, asking Fisher to re-hear the case.

More from the story:
Members of MCC also have talked openly about challenging the legality of Public Law 1858. Beginning with the 2004 tax bills, the 2003 law will allow U.S. Steel, Ispat Inland, International Steel Group and BP to claim steeper depreciation on their equipment than other industries in Indiana.

Asked if the request for damages was designed to quiet the citizens group, Reed said, “I have to be careful what I say but you could draw that conclusion.”

The Tribune story goes on to speculate about whether the U.S. Steel effort could be considered a SLAPP suit:
In 1997 the state passed a law limiting lawsuits against citizen groups acting on behalf of the public, called Strategic Lawsuits Against Public Participation, with the lawsuits becoming known as SLAPP suits.

The law was passed after NiSource and the town of Chesterton sought damages from the Hoosier Environmental Council, when the council challenged a zoning change for NiSource’s Coffee Creek Center.

SLAPP suits are illegal in some states. Indiana law allows citizen groups to file a motion early in the case, asking a judge to rule whether the request for damages is a SLAPP suit, said Tim Maloney, executive director of the Hoosier Environmental Council.

SLAPP suits chill free speech by draining time and money from citizen groups, Maloney said. “Even if they win, when you force someone into spending a lot of time and expense to defend themselves, it really accomplishes what a SLAPP suit intended,” he said.

Thoughts. First, without U.S. Steel's actions, I sure would never have known what was in the Miller group's petition. A check shows that the AP has now picked up the story, you can read a version here, for instance, in the Kansas City Star.

Second, the case closest to this in my recollection is In re Wilkins, where Attorney Wilkins was initially suspended from the practice of law for one month by the Indiana Supreme Court because of a footnote in a brief. See the earlier Indiana Law Blog entry here. I don't recall that there was ever a question of sealing the brief in Wilkins.

Third, I may be wrong, but I seem to recall from law school that legislators are protected against defamation suits for things said on the floor of the legislature, and that things said in legal filings may be similarly protected.*

Fourth, I can't locate the Indiana Strategic Lawsuits Against Public Participation (SLAPP) statute, but when/if I do, I will post the citation here. [Update] The Indiana statute is IC 34-7-7. The statute was discussed by the Court of Appeals in a 2003 decision - access the Indiana Law Blog entry here.

Fifth, re the quote from the Times story, "U.S. Steel had challenged the MCC request to file a brief and now has asked for damages under Indiana Appellate Rule 41," Rule 41 is "Motion to Appear as Amicus Curiae." Perhaps the reference is to Rule 42, "Motion to Strike," which provides:

Upon motion made by a party within the time to respond to a document, or if there is no response permitted, within thirty (30) days after the service of the document upon it, or at any time upon the court’s own motion, the court may order stricken from any document any redundant, immaterial, impertinent, scandalous or other inappropriate matter.
but makes no mention of damages or sealing of the petition.
______
*In Oregon, at least: "The doctrine of absolute privilege arose from the theory that there are certain circumstances in which the ability to speak freely — usually in the context of governmental functions — is so important that it outweighs the interest that an individual has in his or her reputation. Absolute privileges attach to statements made in the course of or incident to judicial proceedings, including statements made by witnesses and parties. An absolute privilege also attaches to statements made during quasi-judicial proceedings, such as proceedings before administrative boards, commissions, and disbarment actions. Statements made as part of a legislator's duties are also absolutely privileged, although it should be noted that statements made by a legislator to the press outside the actual legislative meeting place and not during the legislative process are not absolutely privileged."

Posted by Marcia Oddi on July 30, 2004 05:21 PM
Posted to Indiana Courts