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Tuesday, May 18, 2010

Ind. Decisions - Supreme Court decides one today

The ILB has had a number of entries about this case -- for background, start with this one from Oct. 29, 2009. Several interesting constitutional issues had been raised. In its opinion, the Court concludes "a constitutional declaration is unwarranted."

In Foundations of East Chicago v. City of East Chicago, et al., a 9-page, 5-0 opinion, Chief Justice Shepard writes:

At the outset of riverboat gambling in this state, the Indiana Gaming Commission issued a license for operation of a boat at East Chicago. It incorporated as a condition of this license the terms of a local economic development agreement between the operator and the City of East Chicago, with the result that certain gaming revenue flowed from the operator to several local entities. During its 2007 session, the Indiana General Assembly enacted a provision declaring that if the license at East Chicago transferred to a new operator (which it has), the City could void its agreement with the former operator.

The present appeal represents a challenge to the constitutionality of the 2007 legislation by certain recipients of the revenue. We conclude that the 2007 provision did not alter in any substantive way the statutory framework under which the Gaming Commission regulates licenses and license conditions, and thus find it unnecessary to rule on its constitutionality. * * *

FEC filed this action challenging the validity of Section 302 under numerous provisions of the United States and Indiana Constitutions. The Attorney General intervened to defend the statute's validity. After conducting a bench trial, the trial court entered judgment against FEC, holding that FEC did not have standing to maintain the challenge and rejecting its constitutional arguments. * * *

I. Does FEC Have Standing? * * * At least for now, FEC is receiving substantial revenue from the casino license and the original local development agreements. The fact that Section 302 has the potential to set in motion events under which the Commission might eliminate that flow of money is sufficient to find standing under these circumstances.

II. Does Section 302 Impair FEC’s Interests? As the local corporations argued in the two earlier appeals, FEC contends that Section 302 directly impairs contract rights it possesses as a beneficiary of the agreements the City and the operator tendered to the Gaming Commission. Specifically, FEC contends that the section “directly and purposely authorizes the City to eliminate the Foundations' contract rights.” The Attorney General and the City both argue, however, that Section 302 does not substantially impair any such interests because FEC had no reasonable expectation that its ability to receive riverboat revenue would continue indefinitely. * * *

Section 302 does not by its terms even purport to alter the Commission's regulatory authority. The flow of funds for economic development are subject to any terms and conditions in the license issued by the Commission. The Commission incorporated various arrangements into the East Chicago gaming license on advice of the city government and other stakeholders and interested citizens. They may be revised by the Commission, with or without Section 302.
In light of the foregoing conclusions, we see no impairment of contractual rights presenting a colorable alarm under the applicable state or federal provisions. U.S. CONST. art. I, § 10 and IND. CONST. art. 1, § 24.

C. Other Constitutional Claims

FEC's challenge to Section 302 covers a considerable list of constitutional provisions, from, bar on taking private property without just compensation (U.S. CONST. amend. V, XIV and IND. CONST. art. 1, § 21), to the requirement that bills be confined to a single subject (IND. CONST. art. IV, § 19), to the constraint on special and local legislation (IND. CONST. art. 4, § 22), to the separation of powers principle (IND. CONST. art. III, § 1). A number of these may be plausible. Still, we avoid constitutional declarations when a dispute can be resolved through non-constitutional means. Superior Const. Co. v. Carr, 564 N.E.2d 281 (Ind. 1990). For all that appears, Section 302 did not alter the legal options of the combating parties in any substantial way, and we thus conclude that a constitutional declaration is unwarranted.


We reverse the trial court's holding on FEC's standing, but otherwise affirm the judgment.

Dickson, Sullivan, Boehm, and Rucker, JJ., concur.

Posted by Marcia Oddi on May 18, 2010 02:02 PM
Posted to Ind. Sup.Ct. Decisions