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Tuesday, April 28, 2009
Ind. Decisions - COA rules in Foundations of East Chicago case
Well, it could have been a pretty spectacular ruling, coming on the next to last day of the session, and addressing the issue of the constitutionality of non-related legislation inserted into the budget bill. But it was not to be, although the Court of Appeals issued its 2-1 decision today in the case of Foundations of East Chicago v. City of East Chicago and State of Indiana, with three separate opinions.
This case name may sound familiar to you, the ILB wrote a long entry about it just this last Sunday, talking about both an order issued by CJ Baker some days ago about the admissibility of "legislative history" in Indiana, and about the ILB's take on the constitutionality of provisions shoveled together into a budget bill at the end of a legislative session.
CJ Baker clears the decks of the constitutionality issue in the first paragraph of the opinion today, writing:
In this appeal, the issue as presented by the appellant is the constitutionality of a statute. Inasmuch as we find that the constitutionality of the statute has no effect on the ultimate relief sought, however, we decline to answer the question.More from the opinion:
Appellant-plaintiff Foundations of East Chicago, Inc. (Foundations), appeals the trial court's order entering final judgment in favor of appellee-defendant City of East Chicago (East Chicago). Foundations challenged legislation that permitted East Chicago to exercise its authority to select the recipients—including itself—of economic development funding provided by a riverboat casino. Finding that East Chicago has always had the authority to enact an ordinance to that effect—regardless of the legislature's enaction of the statute at issue—we affirm the trial court's order dismissing the complaint. * * *[SECTION 302 of the 2007 Budget Act authorized the City of East Chicago to adopt an ordinance voiding any term of the development agreement.]
Shortly thereafter, East Chicago passed an ordinance pursuant to the authority granted by SECTION 302 to redirect to itself all of the money that the casino had been paying to Foundations and its predecessors.
On May 3, 2007, Foundations filed a complaint challenging the validity of SECTION 302 under multiple provisions of the Indiana and United States Constitutions. The State eventually intervened to defend the statute's validity. * * *
Foundations is not entitled to its requested relief. Notwithstanding East Chicago I, we can only conclude that the East Chicago Common Council has always retained the authority to modify the arrangement encapsulated in the letter agreements—regardless of SECTION 302. * * *
To enforce this policy [that the agreements could not be modified] would be akin to permitting a corrupt public official to enter into an agreement that would bind his or her constituents in perpetuity; it would also bind a community to its current needs, notwithstanding the fact that it might need a park today and a hospital five years from now. To enforce such a policy would be profoundly unwise.
We hold, therefore, that the only way in which these letter agreements can be logically—and prudently—interpreted is to conclude that East Chicago has always retained the authority to change the recipient of the licensee's local economic development funds. In other words, the licensee is obligated to support the community at a certain level, but it is left to the East Chicago Common Council to determine the identity of the payee(s), and the Council has the authority to pass a new ordinance changing the identity of the payee(s) at any time. This is true regardless of the constitutionality of SECTION 302.
The judgment of the trial court is affirmed.
BROWN, J., concurs in result with opinion.
MAY, J., dissents with opinion.[Judge Brown's concurring opinion begins on p. 11] I concur in the result reached by Judge Baker and note initially that it is the duty of this court to not enter upon the consideration of a constitutional question where the court can perceive another ground on which it may properly rest its decision. * * *
[Judge Brown then analyzes all the related cases and concludes:] East Chicago had the right to terminate or modify the letter agreements, I concur in the result of affirming the trial court.
[Judge May's dissent in total, on p. 21] For the reasons expressed in my opinion in City of East Chicago v. East Chicago Second Century, Inc., 878 N.E.2d 358, 365-68 (Ind. Ct. App. 2007), (“East Chicago I”), reh’g denied, trans. granted, I must respectfully dissent.
Posted by Marcia Oddi on April 28, 2009 12:50 PM
Posted to Ind. App.Ct. Decisions