The 7th Circuit Court of Appeals ruled today that an estate's interpretation of a 2003 amendment to Indiana Code would threaten the fiscal health of governmental entities and that the amendment isn't retroactive.

"Making the entities suddenly responsible for liability imposed during the first term of the Reagan Administration would neither preserve the treasury nor discourage excessive litigation," wrote Judge Robert M. Dow Jr., sitting in designation from the Northern District Court of Illinois.

The federal appellate court decided in Estate of Christopher A. Moreland v. Erich Dieter and Michael Sawdon, and St. Joseph County Board of Commissioners, et al., No. 08-1478, that an amendment to Indiana Code Section 34-13-4-1 didn't apply retroactively to a judgment imposed against St. Joseph County jail officers Erich Dieter and Michael Sawdon. The two were found civilly liable for the beating death of inmate Christopher A. Moreland in 1997. The jury returned a $56.5 million verdict, with $29 million in compensatory damages, against the two in 2002; a third officer was found not liable in September 2003.

The estate relied on the 2003 amendment to attempt to recover the $29 million from St. Joseph County and its board of commissioners. The amendment made changes to the state's statutory schemes covering indemnification by governmental entities for the conduct of their employees. It converted a discretionary indemnification provision into a mandatory one for non-punitive damages and when the entity defends or has the chance to defend the employee.

The District Court denied the estate's motion for writ of execution to collect against the county.

The 7th Circuit rejected the estate's three arguments on appeal: that the amendment applies to the judgment because the interpretation that it seeks isn't retroactive at all; the language of the amendment requires retroactive application; and the amendment was a remedial statute whose purpose requires retroactive application.

The estate relies on re-enacted language, which makes it difficult for the judges to "swallow" the argument that the legislature intended to give retroactive effect to the 2003 amendment by resorting to language that already existed in Indiana code, wrote Judge Dow.

"In sum, the language to which the Estate points falls far short of the unambiguous language that Indiana courts require for a statute to be applied retroactively. Tellingly, Indiana's legislature has revealed itself more than capable of making its statutes explicitly retroactive ...," he wrote.

The estate's argument the amendment is remedial also fails, because it's doubtful the amendment qualifies as remedial as the state's courts use the term in evaluating retroactivity and giving retroactive effect to the amendment would allow one purpose of it to trump other purposes that are evident from the structure and language of the statute, wrote the judge.

"The Estate's interpretation would threaten the fiscal health of governmental entities by opening them up to twenty years' liability, because that is how long a person has to enforce an Indiana judgment," wrote Judge Dow.

St. Joseph County may choose to compensate the estate for the conduct of its officers, but because I.C. Section 34-13-4-1 isn't retroactive, it's not a choice the Circuit Court has the authority to impose.