ILNews

Court rules on privatization, public bidding

Michael W. Hoskins
January 1, 2007
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The Indiana Court of Appeals ruled today that state officials violated the law by not adhering to the public bidding process when privatizing a Fort Wayne development center two years ago.

In Anita Stuller, et al. v. Mitchell Daniels Jr., et al., 02A05-0601-CV-22, the court unanimously reversed and remanded the case to Allen Superior Judge Nancy Boyer with instructions to hold a hearing to determine if a preliminary injunction should be granted.

The 27-page opinion points out that Judge Boyer misinterpreted a state statute governing bidding processes when ruling it didn't apply to an agreement between the state's Family and Social Services Agency and a Pennsylvania-based healthcare company in managing the Fort Wayne State Developmental Center, which housed developmentally disabled adults.

Filed in December 2005 against Gov. Mitch Daniels, Family and Social Services Administration Secretary Mitch Roob, and a third FSSA employee, the suit contends that administration officials ignored a state law requiring bids for a public-private agreement. The complaint stemmed from action earlier that year when Indiana entered a $3 million contract for 18 months with Liberty Healthcare Corp. to manage the center.

An employee, Anita Stuller, and her union, AFSCME Council 62, filed suit to stop the takeover of the facility and require the state to go through a public bidding process before giving control of the center to a private firm. But later that month, Judge Boyer refused to grant the injunction after reading another law authorized the FSSA to use "any procedure it deemed appropriate to acquire Liberty's services."

If that holding stood, the appellate judges wrote that it would practically nullify the provisions of Indiana Code § 5-23-5 in dealing with public-private agreements. Therefore, the trial court's decision "goes against the logic and effect of the facts and circumstances."

"In this sense, every operating agreement may feasibly contain a phrase or particular service which is better served by the unique qualifications of an outside vendor, thereby placing all contracts outside the purview of public-private agreements," Judge Patricia Riley wrote, joined by Judges Michael Barnes and Terry Crone. "Accordingly, based on the evidence before us, we conclude the agreement is properly characterized as a public-private agreement, subject to the mandatory public bidding process."

As the FSSA committed a clear violation of the public bidding procedures, the plaintiffs-appellants suffered irreparable harm per se, according to the court. Touching on whether a preliminary injunction would serve public interest, the court noted the agreement could be as high as $95 million in taxpayer money and used that to reinforce its holding on I.C. 5-23 and the bidding process.

"An abandonment of these requirements would result in a situation where the government is encouraged to grant part of its public duties to private entities without any inquiry from the public," the opinion says. "While we do not object to the government turning to private companies in a desire to minimize costs and to enhance efficiency and flexibility, public oversight is nevertheless statutorily mandated for contracts falling within the realm of I.C. § 5-22."
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  1. I like the concept. Seems like a good idea and really inexpensive to manage.

  2. I don't agree that this is an extreme case. There are more of these people than you realize - people that are vindictive and/or with psychological issues have clogged the system with baseless suits that are costly to the defendant and to taxpayers. Restricting repeat offenders from further abusing the system is not akin to restricting their freedon, but to protecting their victims, and the court system, from allowing them unfettered access. From the Supreme Court opinion "he has burdened the opposing party and the courts of this state at every level with massive, confusing, disorganized, defective, repetitive, and often meritless filings."

  3. So, if you cry wolf one too many times courts may "restrict" your ability to pursue legal action? Also, why is document production equated with wealth? Anyone can "produce probably tens of thousands of pages of filings" if they have a public library card. I understand this is an extreme case, but our Supreme Court really got this one wrong.

  4. He called our nation a nation of cowards because we didn't want to talk about race. That was a cheap shot coming from the top cop. The man who decides who gets the federal government indicts. Wow. Not a gentleman if that is the measure. More importantly, this insult delivered as we all understand, to white people-- without him or anybody needing to explain that is precisely what he meant-- but this is an insult to timid white persons who fear the government and don't want to say anything about race for fear of being accused a racist. With all the legal heat that can come down on somebody if they say something which can be construed by a prosecutor like Mr Holder as racist, is it any wonder white people-- that's who he meant obviously-- is there any surprise that white people don't want to talk about race? And as lawyers we have even less freedom lest our remarks be considered violations of the rules. Mr Holder also demonstrated his bias by publically visiting with the family of the young man who was killed by a police offering in the line of duty, which was a very strong indicator of bias agains the offer who is under investigation, and was a failure to lead properly by letting his investigators do their job without him predetermining the proper outcome. He also has potentially biased the jury pool. All in all this worsens race relations by feeding into the perception shared by whites as well as blacks that justice will not be impartial. I will say this much, I do not blame Obama for all of HOlder's missteps. Obama has done a lot of things to stay above the fray and try and be a leader for all Americans. Maybe he should have reigned Holder in some but Obama's got his hands full with other problelms. Oh did I mention HOlder is a bank crony who will probably get a job in a silkstocking law firm working for millions of bucks a year defending bankers whom he didn't have the integrity or courage to hold to account for their acts of fraud on the United States, other financial institutions, and the people. His tenure will be regarded by history as a failure of leadership at one of the most important jobs in our nation. Finally and most importantly besides him insulting the public and letting off the big financial cheats, he has been at the forefront of over-prosecuting the secrecy laws to punish whistleblowers and chill free speech. What has Holder done to vindicate the rights of privacy of the American public against the illegal snooping of the NSA? He could have charged NSA personnel with violations of law for their warrantless wiretapping which has been done millions of times and instead he did not persecute a single soul. That is a defalcation of historical proportions and it signals to the public that the government DOJ under him was not willing to do a damn thing to protect the public against the rapid growth of the illegal surveillance state. Who else could have done this? Nobody. And for that omission Obama deserves the blame too. Here were are sliding into a police state and Eric Holder made it go all the faster.

  5. JOE CLAYPOOL candidate for Superior Court in Harrison County - Indiana This candidate is misleading voters to think he is a Judge by putting Elect Judge Joe Claypool on his campaign literature. paragraphs 2 and 9 below clearly indicate this injustice to voting public to gain employment. What can we do? Indiana Code - Section 35-43-5-3: Deception (a) A person who: (1) being an officer, manager, or other person participating in the direction of a credit institution, knowingly or intentionally receives or permits the receipt of a deposit or other investment, knowing that the institution is insolvent; (2) knowingly or intentionally makes a false or misleading written statement with intent to obtain property, employment, or an educational opportunity; (3) misapplies entrusted property, property of a governmental entity, or property of a credit institution in a manner that the person knows is unlawful or that the person knows involves substantial risk of loss or detriment to either the owner of the property or to a person for whose benefit the property was entrusted; (4) knowingly or intentionally, in the regular course of business, either: (A) uses or possesses for use a false weight or measure or other device for falsely determining or recording the quality or quantity of any commodity; or (B) sells, offers, or displays for sale or delivers less than the represented quality or quantity of any commodity; (5) with intent to defraud another person furnishing electricity, gas, water, telecommunication, or any other utility service, avoids a lawful charge for that service by scheme or device or by tampering with facilities or equipment of the person furnishing the service; (6) with intent to defraud, misrepresents the identity of the person or another person or the identity or quality of property; (7) with intent to defraud an owner of a coin machine, deposits a slug in that machine; (8) with intent to enable the person or another person to deposit a slug in a coin machine, makes, possesses, or disposes of a slug; (9) disseminates to the public an advertisement that the person knows is false, misleading, or deceptive, with intent to promote the purchase or sale of property or the acceptance of employment;

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