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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. It really doesn't matter what the law IS, if law enforcement refuses to take reports (or take them seriously), if courts refuse to allow unrepresented parties to speak (especially in Small Claims, which is supposedly "informal"). It doesn't matter what the law IS, if constituents are unable to make effective contact or receive any meaningful response from their representatives. Two of our pets were unnecessarily killed; court records reflect that I "abandoned" them. Not so; when I was denied one of them (and my possessions, which by court order I was supposed to be able to remove), I went directly to the court. And earlier, when I tried to have the DV PO extended (it expired while the subject was on probation for violating it), the court denied any extension. The result? Same problems, less than eight hours after expiration. Ironic that the county sheriff was charged (and later pleaded to) with intimidation, but none of his officers seemed interested or capable of taking such a report from a private citizen. When I learned from one officer what I needed to do, I forwarded audio and transcript of one occurrence and my call to law enforcement (before the statute of limitations expired) to the prosecutor's office. I didn't even receive an acknowledgement. Earlier, I'd gone in to the prosecutor's office and been told that the officer's (written) report didn't match what I said occurred. Since I had the audio, I can only say that I have very little faith in Indiana government or law enforcement.

  2. One can only wonder whether Mr. Kimmel was paid for his work by Mr. Burgh ... or whether that bill fell to the citizens of Indiana, many of whom cannot afford attorneys for important matters. It really doesn't take a judge(s) to know that "pavement" can be considered a deadly weapon. It only takes a brain and some education or thought. I'm glad to see the conviction was upheld although sorry to see that the asphalt could even be considered "an issue".

  3. In response to bryanjbrown: thank you for your comment. I am familiar with Paul Ogden (and applaud his assistance to Shirley Justice) and have read of Gary Welsh's (strange) death (and have visited his blog on many occasions). I am not familiar with you (yet). I lived in Kosciusko county, where the sheriff was just removed after pleading in what seems a very "sweetheart" deal. Unfortunately, something NEEDS to change since the attorneys won't (en masse) stand up for ethics (rather making a show to please the "rules" and apparently the judges). I read that many attorneys are underemployed. Seems wisdom would be to cull the herd and get rid of the rotting apples in practice and on the bench, for everyone's sake as well as justice. I'd like to file an attorney complaint, but I have little faith in anything (other than the most flagrant and obvious) resulting in action. My own belief is that if this was medicine, there'd be maimed and injured all over and the carnage caused by "the profession" would be difficult to hide. One can dream ... meanwhile, back to figuring out to file a pro se "motion to dismiss" as well as another court required paper that Indiana is so fond of providing NO resources for (unlike many other states, who don't automatically assume that citizens involved in the court process are scumbags) so that maybe I can get the family law attorney - whose work left me with no settlement, no possessions and resulted in the death of two pets (etc ad nauseum) - to stop abusing the proceedings supplemental and small claims rules and using it as a vehicle for harassment and apparently, amusement.

  4. Been on social security sense sept 2011 2massive strokes open heart surgery and serious ovarian cancer and a blood clot in my lung all in 14 months. Got a letter in may saying that i didn't qualify and it was in form like i just applied ,called social security she said it don't make sense and you are still geting a check in june and i did ,now i get a check from my part D asking for payment for july because there will be no money for my membership, call my prescription coverage part D and confirmed no check will be there.went to social security they didn't want to answer whats going on just said i should of never been on it .no one knows where this letter came from was California im in virginia and been here sense my strokes and vcu filed for my disability i was in the hospital when they did it .It's like it was a error . My ,mothers social security was being handled in that office in California my sister was dealing with it and it had my social security number because she died last year and this letter came out of the same office and it came at the same time i got the letter for my mother benefits for death and they had the same date of being typed just one was on the mail Saturday and one on Monday. . I think it's a mistake and it should been fixed instead there just getting rid of me .i never got a formal letter saying when i was being tsken off.

  5. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

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