A proposal that would leave the long-criticized Marion County township small claims courts intact with modest changes has cleared the Indiana Senate. The bill would raise the limit on disputes from the current $6,000 to $8,000.
The proposal stops short of recommendations from the Indiana Supreme Court to abolish the current system of nine township courts.
The township small claims courts for years have been the subject of much scrutiny and calls for reform because of allegations of forum-shopping and practices that catered to large-volume debt collection filers. The bill would ensure each township in Marion County retains a court within its boundaries. Several calls for reform proposed consolidating the small claims venues in Indianapolis.
Senate Bill 523, authored by Sen. Michael Young, R-Indianapolis, would divide the county’s nine township courts into these three districts:
- Wayne, Decatur and Perry townships;
- Pike, Washington and Center townships; and
- Lawrence, Warren and Franklin townships.
Candidates for judges in the township courts would run at-large in each district, and the top three vote recipients in each district would be elected and later appointed to specific township courts.
These districts also would define jurisdiction for small claims matters, giving preference to the district in which “a defendant has consented to venue in a writing signed by the defendant,” over where a transaction took place or where a defendant resides.
Last year, an en banc panel of the 7th Circuit Court of Appeals ruled Marion County townships were judicial districts, and that venue is proper only in the township where a transaction occurred or where the defendant lives.
The bill also would require each township court except Decatur and Franklin townships to pay $1 of each case-filing fee to those townships.
Senators voted 35-14 to move the bill to the House.