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COA: No preliminary injunction against casinos

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A panel of Indiana Court of Appeals judges agreed a city isn't entitled to a preliminary injunction to order riverboat casinos to make payments to the city, but the judges disagreed as to why the city didn't meet its burden to prove an injunction was necessary.

In City of Gary, Ind. v. The Majestic Star Casino, et al., No. 49A02-0807-CV-625, Gary appealed an order denying its motion to transfer venue and an order denying the city's motion for a preliminary injunction to compel Majestic Star I and II casinos to make payments from adjusted gross receipts to the city.

In addition to the city's agreement with the casinos, the city entered into an agreement with Gary New Century to redevelop property; several years later, GNC's rights to a portion of the redevelopment property were assigned to Majestic Star I.

In 2005, the city, GNC, and the casinos amended their original agreements. A dispute arose about the validity and meaning of the 2005 amendment, and the casinos stopped paying a portion of their adjusted gross receipts to the city as in the original agreement and deposited it into a separate bank account to be distributed in accordance with an arbitration award.

The casinos and GNC filed a complaint in Marion County against the city and the Indiana Gaming Commission alleging the city failed to fulfill its obligations under the GNC agreement and the 2005 amendment. Gary filed a motion to transfer venue to Lake County and for a preliminary injunction to make the casinos resume payments to the city, arguing the lack of money hurt the general public because it affects the city's ability to pay overtime for public workers and repair infrastructure. The trial court denied both motions.

The Court of Appeals unanimously agreed it didn't have jurisdiction over Gary's appeal of its motion to transfer venue because the city filed its appeal after the 30-day deadline had passed under Ind. App. R. 14(A).

The judges also affirmed the trial court's denial of Gary's motion for a preliminary injunction, although their reasons for doing so differed. Judge Elaine Brown wrote there are other options for Gary to continue with its city services, such as issuing bonds, instead of cutting essential services. Because the casinos are depositing payments into a segregated bank account and Gary has the capacity to issue general obligation bonds, Judge Brown wrote the city failed to show an inadequate remedy at law, thus causing irreparable harm pending resolution of the substantive action.

Judge Terry Crone, in a separate concurring-in-result opinion, believed the appellate court shouldn't consider the city's ability to issue bonds in assessing the nature and extent of its alleged damages and the availability of alternative remedies.

"Only rarely should the judiciary intervene in such matters, and I believe that we should refrain from serving as the City's de facto budget director in this case," he wrote.

Although the judge believes the casinos' withholding of payments to the city to be clearly against the public interest, the city has an alternate remedy through an arbitration clause in the agreement, so a preliminary injunction isn't necessary. Judge Cale Bradford, concurring in result in a separate opinion, agreed with Judge Crone to the extent the arbitration clause provides Gary an alternate remedy at law.

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  1. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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