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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. Ah yes... Echoes of 1963 as a ghostly George Wallace makes his stand at the Schoolhouse door. We now know about the stand of personal belief over service to all constituents at the Carter County Clerk door. The results are the same, bigotry unable to follow the directions of the courts and the courts win. Interesting to watch the personal belief take a back seat rather than resign from a perception of local power to make the statement.

  2. An oath of office, does it override the conscience? That is the defense of overall soldier who violates higher laws, isnt it? "I was just following orders" and "I swore an oath of loyalty to der Fuhrer" etc. So this is an interesting case of swearing a false oath and then knowing that it was wrong and doing the right thing. Maybe they should chop her head off too like the "king's good servant-- but God's first" like St Thomas More. ...... We wont hold our breath waiting for the aclu or other "civil liberterians" to come to her defense since they are all arrayed on the gay side, to a man or should I say to a man and womyn?

  3. Perhaps we should also convene a panel of independent anthropological experts to study the issues surrounding this little-known branch of human sacrifice?

  4. I'm going to court the beginning of Oct. 2015 to establish visitation and request my daughters visits while she is in jail. I raised my grandchild for the first two and half years. She was born out of wedlock and the father and his adopted mother wantwd her aborted, they went as far as sueing my daughter for abortion money back 5mo. After my grandchild was born. Now because of depression and drug abuse my daughter lost custody 2 and a half years ago. Everyting went wrong in court when i went for custody my lawyer was thrown out and a replacment could only stay 45 min. The judge would not allow a postponement. So the father won. Now he is aleinating me and my daughter. No matter the amount of time spent getting help for my daughter and her doing better he runs her in the ground to the point of suicide because he wants her to be in a relationship with him. It is a sick game of using my grandchild as a pawn to make my daughter suffer for not wanting to be with him. I became the intervener in the case when my daughter first got into trouble. Because of this they gave me her visitation. Im hoping to get it again there is questions of abuse on his part and I want to make sure my grandchild is doing alright. I really dont understand how the parents have rights to walk in and do whatever they want when the refuse to stand up and raise the child at first . Why should it take two and a half years to decide you want to raise your child.The father used me so he could finish college get a job and stop paying support by getting custody. Support he was paying my daughter that I never saw.

  5. Pence said when he ordered the investigation that Indiana residents should be troubled by the allegations after the video went viral. Planned Parenthood has asked the government s top health scientists at the National Institutes of Health to convene a panel of independent experts to study the issues surrounding the little-known branch of medicine.

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