Justices rule on East Chicago casino-revenue case

The Indiana Supreme Court has dodged a question about whether state lawmakers should be able to cram multiple unrelated issues into a single piece of legislation, leaving in place what some call the practice of “legislative logrolling” that hasn’t been specifically shot down in almost four decades.

In a nine-page ruling today in Foundations of East Chicago v. City of East Chicago, No. 49S02-0908-CV-00383, the justices reversed a decision by Marion Superior Judge S.K. Reid that had gone in favor of the city on the case involving a casino-revenue agreement in East Chicago.

The case involves two non-profit entities that received riverboat casino revenue through a local development agreement with the city. But East Chicago officials later redirected to the city some of the money that had been going to the successor of the two non-profits by using an ordinance allowed through Section 302 of the 2007 state budget bill, which gave municipalities the ability to void terms of these agreements ultimately signed off on by the Indiana Gaming Commission. The Foundations sued.

Judge Reid ruled for the city and found the Foundations didn’t have standing to sue, and the Indiana Court of Appeals affirmed that judgment in a divided April 2009 opinion. But the lower appellate court declined to answer the question about statute constitutionality, and justices accepted transfer. With its decision, the justices have found a way to bypass the constitutionality issues raised in the appeal.

“A number of these may be plausible,” Chief Justice Randall T. Shepard wrote, citing the constitutional questions about taking private property without just compensation, requiring bills to be confined to a single subject, constraints against special or local legislation, and separation of powers principles. “Still, we avoid constitutional declarations when a dispute can be resolved through non-constitutional means. For all that appears, Section 302 did not alter the legal options of the combating parties in any substantial way, and we thus conclude that a constitutional declaration is unwarranted.”

Indiana Lawyer has previously reported that the last time the justices used the single-subject provision to strike down a law was with a decision in 1971, involving legislation that modified criminal sentences but also revised prison employee compensation law.

Reviewing that Section 302 of the budget bill that became Indiana Code §4-33-6-7 (2008), the justices determined the provision didn’t change the gaming commission’s ability to regulate the license details: “we see no impairment of contractual rights presenting a colorable alarm under the applicable state or federal provisions,” Chief Justice Shepard wrote.

At several points in the ruling, justices referred to the guidance offered from previous rulings in the related cases of City of East Chicago v. East Chicago Second Century, 908 N.E.2d 611 (Ind. 2009), and Zoeller v. East Chicago Second Century, Inc., 904 N.E.2d 213 (Ind. 2009), which both reinstated the Attorney General’s claims against that for-profit corporation about the casino revenue agreements.

On the issue of whether the Foundations is able to receive funds under the gaming license as the two non-profit predecessors did, the justices left that open as an administrative law matter the gaming commission should decide. But the Foundations does have a sufficient interest as a party in this litigation in that it was receiving money through the arrangement, and that gives the organization standing in this case. The justices unanimously reversed the trial court’s holding on the Foundations’ standing, but otherwise affirmed the judgment.

Please enable JavaScript to view this content.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets on
{{ count_down }}