Court: private cause of action allowed

Jennifer Nelson
January 1, 2008
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Tackling an issue of first impression, the Indiana Court of Appeals determined the "Equal Access Law" in Indiana Code creates a private cause of action for bail agents.

In Dave Galloway in his capacity as Hendricks County Sheriff v. David Hadley, d/b/a D & D Bonding, No. 32A-04-0707-CV-400, Galloway appealed the trial court order granting Hadley a preliminary injunction against the use of a "preferred agent list" by the Hendricks County Sheriff's Department. The list contains the names of preferred bail agents, and at the request of an arrestee, an officer can contact an agent on the arrestee's behalf by using the list.

For years, Hadley, a licensed bondsman, was on this list; however, once Galloway took office as sheriff, Hadley's name was removed. The new preferred agent list only contained the names of bail agents who had made financial contributions to Galloway's political committee during his 2006 campaign. When Hadley discovered he was no longer on the list, he filed a complaint and sought a preliminary injunction against the use of the list.

At a hearing, Galloway testified he had learned from jail officers that Hadley wasn't on the list because he won't write bonds for African-Americans or Hispanics. Hadley said his insurance carrier prevents him from issuing bail for illegal immigrants. Hadley testified his business had sustained a dramatic reduction in volume since his name was taken off the list.

The court issued the injunctive order that prevented Galloway from using the preferred agent list.

In a matter of first impression, the Court of Appeals had to decide whether the Equal Access Law creates a private cause of action, which would allow the trial court subject-matter jurisdiction to hear Hadley's complaint.

Indiana's Equal Access Law, I.C. 27-10-3-18, states: "A person who holds a valid bail agent's license issued by the insurance commissioner and registered as required in section 17 of this chapter may have equal access to the jails of this state for the purpose of making bond, subject to this article and rules adopted under this article."

A statute creates a private cause of action when a statute imposes a duty for a particular individual's benefit, but not when the duty is for the public's benefit, wrote Judge Edward Najam. However, if the public receives an ancillary benefit when the duty is for an individual's benefit, it will not preclude a private cause of action. In this instance, the Equal Access Law doesn't explicitly state whether it confers a public or private benefit. The Court of Appeals ruled it confers a private benefit to bail agents, but the public does receive benefit as well, so Hadley can bring his private cause of action.

Galloway argued private causes of action can't be brought because the Indiana Department of Insurance has the authority to enforce Indiana's Bail Law, and when a statute includes a specific enforcement provision, a private cause of action cannot occur. However, the IDOI's jurisdiction doesn't pertain to the enforcement of the Equal Access Law, wrote Judge Najam, so Hadley's private cause of action is allowable.

The Court of Appeals also affirmed the grant of the preliminary injunction on the use of the preferred agent list. The trial court found that Hadley satisfied all of the requirements for a preliminary injunction, including that Hadley suffered irreparable harm, and there is a threat of continuing injury and harm if the injunction is not ordered.

Galloway argued Hadley wasn't denied access to the jail, the trial court abused its discretion in finding Hadley suffered irreparable harm, the court erroneously concluded no harm would befall Galloway should the injunction incur, the court abused its discretion in ruling public interest would be served by granting the injunction, and Hadley cannot seek injunctive relief because he has unclean hands.

The Court of Appeals was not persuaded by Galloway's arguments on each of the challenges he raised. In regards to Galloway's unclean hands argument, Judge Najam wrote that even though Hadley had once been a part of the preferred agent list it does not mean he has unclean hands. While Hadley's position is hypocritical in that he now has a problem with the use of the list, hypocrisy is not a cognizable legal issue.

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