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Sunday, April 26, 2009

Ind. Decisions - Interesting order issued in appeal pending opinion

Ed Feigenbaum's bi-weekly publication, Indiana Gaming Insight ($$ - subscribe here), has an interesting front-page story this week that I am reprinting with permission:

The Indiana Court of Appeals heard oral argument more than seven months ago in Frontiers of East Chicago, Inc. v. Attorney General, No. 49A02-0711-CV-00987.

This litigation arose over controversial last-minute insertion of language in the 2007 budget bill that authorized the City of East Chicago to void riverboat local development agreements upon the sale of the then-Resorts East Chicago Casino, a circumstance that was about to happen as the sale to Ameristar Casinos, Inc. was then pending.

[ILB note: Here is the case summary the Court posted on its oral argument calendar at the time: "Foundations of East Chicago v. City of East Chicago - In 2007 the general assembly passed a statute that would authorize East Chicago to void any term of a contract between the local casino licensee and Foundations of East Chicago, Inc. to provide money from gambling revenues for local economic development. East Chicago did so, and redirected to itself the money the Casino had been paying to Foundations. Foundations challenged the statute as unconstitutional. The trial court determined Foundations had no standing to bring its challenge, but then went on to find the statute did not violate the constitution."]

The Foundations of East Chicago, Inc. filed a December motion in which the recipients of LDA largesse sought to supplement the record with City of East Chicago e-mail messages allegedly related to the passage of the Code section, the "constitutionality of which is at issue in this appeal," as the court noted.

[ILB note: On Nov. 18, 2008 the docket reads: "Foundations' motion to supplement the record with public records of the City related to passage of contract voiding section." On Dec. 8, 2008 the docket records: "City of East Chicago's objection to Foundation verified motion to supplement the record."]

Earlier this month [April 6, 2009], Chief Judge John Baker responded to the motion, issuing an Order denying the request by the Foundations. He explains that:

It is a fact ... that Indiana does not record its legislative history. [citations omitted]

To determine the meaning and purpose of a statute, therefore, we focus primarily on the wording of the statute itself.

It may also be helpful to examine past versions of the statute, if any, and other statutes in the Indiana Code.

But we do not and may not look to the intent of individual legislators, lobbyists, or constituents who may have contacted their legislators to ask for a particular vote.

What matters in this state is the language of the statute, and that is where our analysis begins and ends.

Thus, the documents at issue in this motion [which include East Chicago emails discussing why it was lobbying for the passage of IC 4-33-6-7] are entirely irrelevant to our analysis of the substance of the appeal. The constitutionality of this statute is in no way affected by the machinations of the parties and legislators behind the scenes. Instead, we will examine the wording of the statute and render our decision based solely thereon.

ILB observations:

Oral argument was held Sept. 17, 2008 in Evansville, before Chief Judge Baker and Judges May and Brown.

Here is IC 4-33-6-7. The history line shows that the section first became law in 1993 and was amended in 2007:

As added by P.L.277-1993(ss), SEC.124. Amended by P.L.234-2007, SEC.302.
PL 234-2007 was HEA 1001 from that year. Taking a look at that law, we see that it was the 2007 budget bill. Looking at SECTION 302, we see that the change was to add a new subsection (c), dealing with an owner's license issued for the City of East Chicago, to the existing language.

Here is the wording of the new subsection (c), added in 2007, which went into effect upon passage:

(c) This subsection applies to an owner's license issued for the City of East Chicago. If a controlling interest in the owner's license is transferred, the fiscal body of the City of East Chicago may adopt an ordinance voiding any term of the development agreement (as defined by IC 36-1-8-9.5) between:
(1) the city; and

(2) the person transferring the controlling interest in the owner's license;

that is in effect as of the date the controlling interest is transferred. The ordinance may provide for any payments made under the redevelopment agreement, including those held in escrow, to be redirected to the City of East Chicago for use as directed by ordinance of the city fiscal body. A requirement to redirect a payment is valid to the same extent as if the requirement had been part of the original agreement. If the ordinance provides for the voiding and renegotiation of any part of a redevelopment agreement, the mayor of the City of East Chicago may negotiate with the person acquiring a controlling interest in the owner's license to replace any terms voided by the ordinance. Terms negotiated under this subsection must be ratified in an ordinance adopted by the city legislative body.
We've heard a lot again this session about various provisions being shoveled into the budget bill at the end of the session. I'm reminded of a great Indianapolis Star editorial, Logrolling: how bad laws get passed, lead editorial, Indianapolis Star, Sunday, January 7, 2001:
For years now, Indiana lawmakers have blithely ignored a section of the Indiana Constitution that bluntly mandates that every bill passed into law be “confined to one subject.”

Despite this admonition lawmakers passed a bill in 1991 that combined hold-your-nose legislative redistricting with the school funding formula, a bill that absolutely had to be passed. That’s how Indiana got such heavily gerrymandered districts that favor Democrats in the House and Republicans in the Senate.

In 1993, lawmakers again used the budget and school funding formula to pass a riverboat gambling that would never have passed on its own merits.

And in 1995, Republican lawmakers rammed through a repeal of the state’s prevailing wage law by stuffing it into a bill cutting auto excise taxes. It was a hard-to-swallow sandwich for many lawmakers, but they didn’t have much choice. Who wants to vote against a tax cut?

The constitutionality of these efforts has often been challenged in lawsuits, but the Indiana Supreme Court has been reluctant to strike down laws solely because they originated in multi-subject bills.

. . . [L]ogrolling has reached such outrageous levels that lawmakers might as well just stuff everything they do into one giant bill each session and send the entire mess to the governor in a wheelbarrow with a take-it-or-leave-it note.

[More at 6:00 PM] Here is a little more on the appeal, via a September 2008 Indiana Gaming Insight artcle:
As we told you here more than 18 months ago, the original lawsuit alleged the inclusion of the item in the budget bill violates assorted provisions in the Indiana and United States constitutions, and sought a permanent injunction that would prohibit the Indiana Gaming Commission or the City of East Chicago from acting upon the language.

The complaint alleged that the section, added courtesy of Sens. Frank Mrvan (D) of Hammond and Sam Smith (D) of East Chicago, constitutes unconstitutional special legislation; breaches the Constitution’s single subject matter restrictions; abrogates state constitutional protections for contracts; goes against the state takings clause; transgresses the Indiana “Due Course of Law” clause; violates principles of equal protection; and was enacted illegally, “seem[ing] simply to ‘appear’ at the last minute, with no discussion or debate, and no identification of its author or sponsor.”

The original complaint also cited alleged violations of the U.S. Constitution’s contracts, takings, and due process clauses.

The trial court determined Foundations had no standing to bring its challenge, but then went on to find the statute did not violate the Indiana Constitution.

Chief Judge John Baker, and judges Melissa Mattingly May and Elaine Becher Brown comprise the appellate panel hearing the matter.

Posted by Marcia Oddi on April 26, 2009 11:45 AM
Posted to Ind. App.Ct. Decisions