Justices issue ruling in casino revenue case

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The Indiana Supreme Court ruled today on an ongoing appeal about how casino revenue is funneled to a for-profit organization in East Chicago, an issue that has also been raised in an ongoing federal racketeering suit in northern Indiana.

In its decision today in City of East Chicago v. East Chicago Second Century, et al., No. 49S02-0808-CV-00436, the justices went into great detail about which of the city's claims should survive dismissal, but more significantly they determined that any existing arrangements involving casino money can be altered only through administrative channels such as the Indiana Gaming Commission, which may incorporate advice from city officials and others on what it might "deem best for the future of East Chicago's residents."

The case is one of many appeals stemming from the casino operating agreements and license put in place during the 1990s, under former Mayor Robert Pastrick. At the time, the casino entered into a local development agreement with East Chicago where some of the casino revenue would flow to the city for development projects. That arrangement continued through 2005, when Pastrick was ousted and a new mayor began scrutinizing the casino revenue arrangements.

In 2005, Second Century sought a declaratory judgment that Resorts East Chicago would be required to continue the payments as required by a license from the Indiana Gaming Commission. Part of that stipulates the casino contributes 3.75 percent of its adjusted gross receipts - 1 percent to the city of East Chicago, 1 percent to the non-profit Twin City Education Foundation, 1 percent to the non-profit East Chicago Community Foundation, and 0.75 percent to the for-profit East Chicago Second Century Inc. Through June 2006, the Second Century group received about $16 million from the casino operation, according to the Indiana Supreme Court ruling.

A separate federal civil racketeering suit also raises these casino revenue issues, as they are connected to the former Pastrick administration that has been dubbed a "corrupt enterprise." Second Century and the foundations have recently asked to intervene in that five-year-old suit in federal court, but this state appellate ruling is not connected to that case.

Ruling on multiple issues, the Indiana justices found that then-Marion Superior Cale Bradford didn't err in dismissing several counts relating to breach of fiduciary duty; however, he did err in dismissing other claims. Specifically, justices ruled that the judge had erred in dismissing these claims outright: inducement of breach of fiduciary duty/participating in breach; breach of fiduciary duty; accounting; and two claims involving a declaratory judgment/return of public funds.

In deciding those issues and each claim, justices determined also that the city's argument that any fraudulent concealment of money should toll the statute of limitations.

"As respects those counts or parts of counts which we have held above should not survive Second Century's motion to dismiss, it is very difficult to see why equity ought to estop Second Century and the Foundations from asserting the statutes of limitation," Chief Justice Randall T. Shepard wrote. "The counts centered on attacking the formation and confirmation of the original agreements seek to challenge action taken ten or fifteen years ago in full glare of the public arena. It simply asks too much to embrace the idea that these were 'fraudulently concealed' from the City or anyone else."

On other counts, the Supreme Court found that the city doesn't have the authority to unilaterally terminate or alter the terms of the license issued by the Indiana Gaming Commission. That falls to the state commission and lawmakers, though the city is able to make periodic changes through the commission's administrative process.

Justice Brent Dickson concurred with several of the counts, but dissented with respect to aspects of Part III involving constructive fraud/unjust enrichment claim and how it addresses the other issues of the overall suit.


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  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  3. Paul Hartman of Burbank, Oh who is helping Sister Fuller with this Con Artist Kevin Bart McCarthy scares Sister Joseph Therese, Patricia Ann Fuller very much that McCarthy will try and hurt Patricia Ann Fuller and Paul Hartman of Burbank, Oh or any member of his family. Sister is very, very scared, (YES, I AM) This McCarthy guy is a real, real CON MAN and crook. I try to totall flatter Kevin Bart McCARTHY to keep him from hurting my best friends in this world which are Carolyn Rose and Paul Hartman. I Live in total fear of this man Kevin Bart McCarthy and try to praise him as a good man to keep us ALL from his bad deeds. This man could easy have some one cause us a very bad disability. You have to PRAISAE in order TO PROTECT yourself. He lies and makes up stories about people and then tries to steal if THEY OWN THRU THE COURTS A SPECIAL DEVOTION TO PROTECT, EX> Our Lady of America DEVOTION. EVERYONE who reads this, PLEASE BE CAREFUL of Kevin Bart McCarthy of Indianapolis, IN My Phone No. IS 419-435-3838.

  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.