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. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

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