Indiana Court Decisions – March 10-23, 2022

Indiana Supreme Court

March 10

Indiana Office of Utility Consumer Counselor, et al. v. Duke Energy Indiana, LLC, et al.

21S-EX-432

Majority justices rule Duke can’t retroactively recover coal-ash cleanup costs

Indiana Supreme Court justices were divided on an issue of first impression brought by Duke Energy and the Indiana Utility Regulatory Commission, ultimately ruling that the utility cannot recover past coal-ash cleanup costs adjudicated under a prior rate order by treating the costs as a capitalized asset.

Duke Energy produces electricity using coal, which creates coal ash. But things had to change when the Environmental Protection Agency enforced new rules for treating coal ash and remediating ash ponds in 2015.

When Duke learned that some of its ash-management areas violated Indiana’s solid waste management rules, it began trying to bring them into compliance with state and federal law.

To cover those costs, Duke asked the Indiana Utility Regulatory Commission in 2019 to increase its rates for retail consumers. It specifically sought to recover roughly $212 million for coal-ash site closures, remediation and financing costs it incurred from 2010-2018 and expected to incur during 2019 and 2020, with the bulk of the coal-ash costs having been incurred from 2015-2018.

Duke proposed amortizing the costs across an 18-year span, prompting objections from the utility consumer counselor on behalf of ratepayers and several other parties. But the IURC partially granted Duke’s petition in a June 2020 order that permitted Duke to recover its coal-ash costs.

The Court of Appeals of Indiana affirmed, rejecting two issues on appeal: whether the IURC erred in accepting Duke’s jurisdictional separation study allocating costs between Duke’s retail and wholesale electri-city customers, or by granting in full Duke’s request to recover operating and maintenance costs at its Edwardsport power plant.

However, a split panel of the Indiana Supreme Court reversed after concluding that a utility cannot recoup its past costs adjudicated under a prior rate case.

Justices in Indiana Office of Utility Consumer Counselor, et al. v. Duke Energy Indiana, LLC, et al., 21S-EX-432, affirmed on the issues before the COA regarding the separation study and the Edwardsport plant, but found differently on a third issue of approving the coal-ash recovery costs.

The court concluded that Duke’s attempt to recover coal-ash costs from 2010-2020 was retroactive ratemaking “insofar as it permitted Duke to recover the costs it incurred before the June 2020 order.”

Justice Christopher Goff, concurring in part on the separation study and Edwardsport issues, parted ways with the majority on the third issue. He opined that Duke’s accounting method was reasonable under the circumstances and that the IURC had the statutory discretion to approve a utility’s accounting practices.

The dissenting justice found that the consumers failed to show the IURC’s order stands contrary to law, or that its conclusion that Duke’s remediation costs were “properly deferred” and recoverable was “a reasonable one entitled to deference.”

“Finally, it’s worth noting that environmental-remediation costs may run into the hundreds of millions of dollars, as the evidence here clearly shows,” Goff wrote. “If Duke were forced to absorb such a significant cost alone, it could actually hurt consumers in the long run.

“It makes sense, then, in my view, to allocate those costs among thousands — if not millions — of customers over a period of years,” Goff continued. “… After all, the purpose of the IURC is to balance ‘the public’s need for adequate, efficient, and reasonable service with the utility’s need for sufficient revenue to meet the cost of furnishing service and to earn a reasonable profit.’”

But the high court majority disagreed with both Duke and the dissent’s assertion that the Supreme Court should give deference to the IURC.

“The issue here is not whether Duke used a proper accounting method to track its remediation costs in its balance sheet,” Justice Geoffrey Slaughter wrote. “The issue is whether the commission can approve reimbursement for a deferred asset, even one properly accounted for, without violating the statutory bar against retroactive ratemaking. This question — whether the commission’s order was retroactive ratemaking under (Indiana Code) section 8-1-2-68 — is a question of law.”

The majority noted the dissenting justice argued that the commission order did not violate the law because the appellate court in NIPSCO v. Indiana Office of Utility Consumer Counselor, 826 N.E.2d 112 (Ind. Ct. App. 2005), held that accounting decisions fall within the commission’s discretion.

“But even assuming we agreed with the appellate decision, NIPSCO simply said that reasonable accounting practices are left to the commission’s discretion,” Slaughter wrote. “It did not say that anytime accounting is implicated in a commission order, a reviewing court cannot consider whether the order violates other laws.”

After applying the principle that a utility cannot recover unforeseen past losses, the majority held that the commission violated the bar against retroactive ratemaking by readjudicating in 2020 coal-ash costs governed by its 2004 rate order.

“Thus, the commission exceeded its statutory authority,” the court concluded.

It therefore held that absent specific statutory authorization, a utility cannot recoup its past costs adjudicated under a prior rate case. The high court reversed the portion of the commission’s June 2020 order that approved those costs and remanded to the commission for proceedings.

Also, the justices summarily affirmed the COA on the separation study and Edwardsport plant issues.

Court of Appeals of Indiana

March 16

In re the Matter of the Adoption of I.B., A.B. (Father) v. B.B. (Stepfather)

21A-AD-1792

COA reverses adoption petition after mother ‘thwarted’ father’s communication efforts

An Indiana woman’s efforts to keep her child’s biological father from communicating with their daughter for a year has resulted in a reversal by the Court of Appeals of Indiana on a petition to adopt.

I.B. was born in 2009 to father A.B. and mother S.B., who never married. The mother was awarded primary custody of the child while the father was granted parenting time and ordered to pay child support.

But in April 2017, the St. Joseph Probate Court entered, “[b]y agreement of the parties,” an order reducing the father’s parenting time to exclude overnights and requiring A.B. to “submit to an anger/psychological parenting time assessment and follow all recommendations.” Three months later, the trial court entered an order requiring A.B.’s parenting time to be supervised because he had not followed the previous order.

S.B. married B.B. in September 2017. The trial court suspended A.B.’s parenting time in 2018, noting pending criminal charges against him for possession of marijuana and “Father’s non-compliance regarding anger management and drug screens.” His parenting time has never been reinstated.

Stepfather B.B. petitioned to adopt I.B. in 2019, and S.B. filed her consent. But A.B. filed a motion to contest the adoption, and an evidentiary hearing was held on the issue in June 2020.

During that hearing, A.B. presented evidence that from July 2018 until approximately June 2019, he sent S.B. multiple text messages asking to speak to their child. The father also testified he attempted to call the child, but all his calls would go “straight to voicemail.”

S.B. did not respond to the text messages and testified that I.B. did not call her father because “[s]he would have refused the call. She does not want to talk to her father.” Additionally, when S.B. and B.B. relocated to a new residence with the child in July 2019, the mother did not file a notice of intent to relocate in the paternity action and did not tell A.B. her new address because “it’s too scary for him to know where I live.”

A.B. sent gifts for his daughter to her maternal grandmother’s address in 2019, but they were returned unopened. He also provided evidence that he paid $49,502.96 in child support payments from October 2009 to June 2020. A.B. maintained health insurance for I.B. during that time, as well.

In October 2020, the trial court issued its order finding A.B.’s consent to the child’s adoption by B.B. wasn’t required because A.B. hadn’t significantly communicated with his child for one year prior to the date B.B. had filed the adoption petition. After hearing evidence in May 2021, the trial court granted the petition.

But pointing to the Indiana Supreme Court decision in J.W. v. D.F., 93 N.E.3d 759 (Ind. 2018), which addressed a custodial parent’s efforts to thwart a noncustodial parent’s communication with a child when the child reportedly refused to speak to the noncustodial parent, the Court of Appeals reversed, finding A.B.’s consent was required.

“Mother relocated without filing a request to relocate in the paternity action as required by Indiana Code section 31-17-2.2-1 and without informing Father of her and Child’s new home address. Father sent Mother multiple text messages asking to speak with Child, called Mother and was sent to her voicemail, and sent Child gifts that were returned unopened,” Judge Melissa May wrote. “It was Mother’s responsibility as Child’s custodial parent to take reasonable steps to encourage communication between Child and Father, regardless of her feelings about Father or Child’s alleged wishes.

“Therefore, we conclude the trial court erred when it determined Father had ‘fail[ed] without justifiable cause to communicate significantly’ with Child for at least one year prior to August 2019 when Stepfather’s adoption petition was filed,” May continued.

The case is In re the Matter of the Adoption of I.B., A.B. (Father) v. B.B. (Stepfather), 21A-AD-1792.

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March 17

Latuwan Anthony Partee v. State of Indiana

21A-CR-1529

Unruly defendant did not have to be explicitly told he could attend trial if he behaved

A so-called sovereign citizen who was removed from his own trial because of his disruptive behavior, then tried to get his conviction overturned by arguing he was not told he could remain in the courtroom if he behaved, did not get any sympathy from the Court of Appeals of Indiana, which instead commended the trial court for its patience in handling such a difficult defendant.

Latuwan Partee asked to represent himself two days before his trial on drug charges was scheduled to begin. When the Marion Superior Court, suspecting Partee was just trying to delay the hearing, refused, he began a “tirade of semi-coherent claims of not being subject to the trial court’s jurisdiction.”

Partee was then removed from the courtroom, but when he was brought back in he continued to rant, which caused some of his relatives to become disruptive, as well.The trial court then ordered a competency evaluation. Although he did not fully cooperate, a psychologist and psychiatrist found him competent to stand trial.

Partee filed several notices with the court and, in court, “spoke over the judge and made meritless arguments.” Finally, he was removed and the trial was held in his absence. The defense counsel objected “for the record” but stated she understood the court could not continue with Partee present.

Subsequently, a jury convicted Partee of dealing in cocaine, a Level 2 felony, and possession of marijuana, a Class B misdemeanor, along with being a habitual offender. He was sentenced to an aggregate of 27½ years, with five years suspended and two years of reporting probation.

On appeal, Partee asserted the trial court erred by failing to inform him that he could return to the courtroom if he promised to conduct himself in an appropriate manner. Pointing to Illinois v. Allen, 397 U.S. 227, 228, 90 S. Ct. 1057 (1970), he argued a defendant must be advised he has the right to confront the witnesses against him and must be given the opportunity to return to the courtroom if he promises to behave.

However, the appellate panel held that a careful reading of Allen shows the court did not “explicitly require” the defendant to be advised he can return if he settles down. Instead, the precedent provides that a trial court can remove an unruly defendant “until he promises to conduct himself properly.”

The panel noted that despite multiple opportunities, Partee did not curtail his disruptive conduct.

“Here, Partee never indicated that he was willing to conform his behavior to that required in a judicial proceeding,” Judge Elizabeth Tavitas wrote for the court in Latuwan Anthony Partee v. State of Indiana, 21A-CR-1529. “To the contrary, the trial court repeatedly brought Partee back into the court and attempted to warn him that he could be excluded from trial.

“Nor did the trial court immediately expel Partee from the courtroom due to his behavior,” Tavitas continued. “Instead, the trial court attempted less-drastic measures: first warning Partee, then holding him in contempt, then placing him in administrative segregation. Even then, the trial court twice attempted to bring Partee back into the courtroom for the trial, only to have Partee continue to cause a disturbance.”

However, the Court of Appeals noted, and the state conceded, that the trial court’s sentencing order erroneously referred to Count 1 as originally charged and not as amended. Thus, the COA remanded with instructions for the scrivener’s error to be corrected.

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March 21

Seth Mann, Steven E. Hillman, Douglas Carter, and the Indiana State Police v. Catherine J. Arnos, as Personal Representative of the Estate of Lucius D. Washington, Deceased, and Cameron Deshonta Washington

21A-CT-1634

COA reverses for ISP in wrongful death, civil rights violation suit

The Indiana State Police, including its superintendent in his individual capacity, has secured a win in a wrongful death case after the Court of Appeals of Indiana reversed in the civil rights lawsuit filed by the estate of a Black man who was shot and killed by a trooper nearly a decade ago.

“We rule in favor of the State Defendants in all respects. Accordingly, we reverse,” the COA held in reversing the denial of the state defendants’ motion for summary judgment.

In May 2012, ISP trooper Seth Mann was on patrol in Fort Wayne when he saw three individuals striking a person on the ground near an intersection. Mann pursued the individual, later identified as Lucius Washington, that he saw striking the victim’s head.

Washington, a Black man, “picked up his pace” and started to climb a nearby fence before the trooper attempted to put him in a chokehold and pulled him off the fence.

The two fell to the ground, with Mann landing on his back and Washington landing on top of Mann. Mann felt Washington’s hand in the area of the left side of his gun belt, though his weapon was on his right, according to court documents.

Mann punched Washington’s midsection and pushed him off. The trooper then drew his handgun and fired nine times. Washington died as a result.

While the Allen County Prosecutor’s Office was investigating the matter, then-ISP Superintendent Paul Whitesell informed ISP Training Division Commander Major Brent Johnson that a firearms review board would be appointed to review the shooting after the prosecutor’s office concluded its investigation. Douglas Carter was appointed ISP superintendent in January 2013.

In February 2013, the Allen County Prosecutor’s Office announced it wouldn’t pursue charges because there was “insufficient evidence of any criminal liability on the part of Trooper Mann.”

A month later, Carter ordered that the review board convene to review Washington’s shooting. Pursuant to ISP Standard Operating Procedure ENF-048, the board consisted of five members appointed by the superintendent.

An April 4, 2013, finding by the review board unanimously agreed that its investigation revealed “several areas in need of attention regarding the thoroughness and conduct of the criminal investigation” of Washington’s shooting. In addition, “the Board identified a series of actions and inactions which ran contrary to established training and demonstrated poor judgment and decision making on the part of Trooper Mann.”

But the April 4 finding also determined Mann’s shooting of Washington was objectively reasonable, with one dissenting member.

However, according to the Court of Appeals, Carter believed the April 4 report “include[d] way more than it need[ed]” and did not just focus on whether the shooting was “objectively reasonable.” So, he asked Major Steve E. Hillman, the assistant chief of staff of the fiscal department, to “call the [B]oard together again, issue a new report, and bring that report more narrow into just looking at the shooting.”

On April 29, 2013, Hillman and the other five members of the board issued a statement of finding. Johnson received an electronic copy of the April 29 finding and was informed that the April 4 report had been amended, that Hillman had been assigned to oversee the amendment and that the amendment was going to be submitted.

The April 29 finding contained the same factual summary as the April 4 report and also concluded that Mann’s shooting of Washington was “objectively reasonable with one dissenting member.” However, the April 29 finding omitted all the findings in the April 4 report that related to the deficiencies in the investigation of the shooting and Mann’s violations of ISP policies and procedures.

Additionally, the April 29 finding did not recommend the incident be referred to the Office of Professional Standards to address the issues dealing with those violations.

After Johnson distributed the April 29 report to the board members, two of those members — Lt. Pete Wood and Sgt. Kevin Rees — were upset by the changes and “felt that it was unjust or improper to change the recommendation of the Board.” But Johnson told them that “we’re not the final authority on this,” and “[i]t is the Superintendent who will then make a decision on the final outcome.”

The April 29 report was then amended, and the amended version was submitted to and accepted by Carter on May 1, 2013. The May 1 report contained photographs that were not in the April 29 report, and the factual summary was somewhat different.

About four years later in March 2017, Catherine Arnos, who had a child with Washington, received copies of the April reports. From those, Arnos first learned that Washington was unarmed, chased by Mann, placed in a chokehold and shot nine times. A month later, Arnos was appointed personal representative of Washington’s estate.

The estate’s counsel emailed a request to ISP for an opportunity to review and make copies of the investigation file, but the ISP legal office emailed the estate’s counsel only a copy of a May 2012 form announcing the investigation into the shooting, stating, “The complete report is an investigatory record of our agency and is excepted from disclosure under Ind. Code 5-14-3-4(b)(1). Thank you.”

In May 2017, Arnos, on behalf of the estate and Washington’s minor son, filed a complaint asserting a wrongful death claim against Mann and ISP, as well as federal civil rights claims under 42 U.S.C. §§ 1981, 1985 and 1986 against Carter, Hillman and Mann in their individual capacities.

The state filed a summary judgment motion in January 2020, arguing that the complaint was untimely and that the federal claims failed as a matter of law.

Following a hearing, the Marion Superior Court denied summary judgment, finding there was a genuine issue of material fact as to whether the doctrine of fraudulent concealment tolled the time period to file an action. The trial court also found the defendants were not entitled to summary judgment on the federal claims because Carter, Hillman and Mann were each sued in their individual capacities and therefore were persons subject to suit under federal civil rights laws.

On interlocutory appeal, the Court of Appeals reversed.

First, the COA found the estate failed to establish an issue of fact material to its fraudulent concealment theory.

“For the Estate to rely on fraudulent concealment, there must be some evidence that the State Defendants made a statement or took some action to mislead her, and there is no designated evidence showing or supporting an inference that the State Defendants had any involvement in the prosecutor’s announcement,” Judge Terry Crone wrote for the unanimous appellate panel.

“Any of the ISP’s actions related to the organization of the Board occurred after the prosecutor’s announcement and therefore could not have had any effect on the prosecutor’s investigation,” Crone wrote. “Moreover, fraudulent concealment requires that the plaintiff reasonably rely on the defendant’s statement or conduct, and the Estate provides no cogent argument or case law to support the novel notion that the doctrine applies to statements or conduct by third parties. Therefore, this argument is waived.”

The COA also found the estate’s federal civil rights claims failed.

“… (Section) 1981 prohibits racial discrimination in the making and enforcement of contracts and private employment. However, the police shooting of Washington and the investigation and review of the shooting do not involve a contract with or employment of Washington,” Crone wrote. “The Estate baldly contends that the (standard operating procedure) is a contract, but it provides no cogent argument or authority to support that contention. Therefore, this contention is waived.”

Crone continued, “As for the Estate’s conspiracy claim under §§ 1981, 1985 and 1986, that also fails on the merits. Section 1985(3) is ‘a remedial statute that prohibits conspiracies to deprive a person of rights guaranteed by the Constitution or federal laws.’ … Here, Superintendent Carter, Major Hillman, and Mann all worked for the ISP, and therefore if the intracorporate conspiracy doctrine applies to public entities, they would not be subject to a § 1985(3) claim.

“Indiana courts have not addressed whether the intracorporate conspiracy doctrine applies to federal civil rights claims. We need not decide whether the doctrine applies because, due to the division of the federal courts on this issue, Superintendent Carter, Major Hillman, and Mann lacked the notice required to subject them to liability,” Crone concluded. “Accordingly, the § 1985(3) fails on the merits, as does the § 1986 claim. Therefore, the trial court erred by denying summary judgment to the State Defendants on the Estate’s conspiracy claim.”

The case is Seth Mann, Steven E. Hillman, Douglas Carter, and the Indiana State Police v. Catherine J. Arnos, as Personal Representative of the Estate of Lucius D. Washington, Deceased, and Cameron Deshonta Washington, 21A-CT-1634.

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March 23

Cory Chapman v. State of Indiana

21A-CR-421

Ex-band director’s texts to student splits COA on ‘harmful to minors’ debate

The Court of Appeals of Indiana has split on an internet-related issue in a case involving harmful content for minors after an ex-band director was handed a felony charge for text messages he sent to a former student.

Former Paoli Junior-Senior High School band director Cory Chapman allegedly sent memes involving jokes of a sexual nature to a former student following his resignation.

Chapman was charged with Level 6 felony disseminating matter harmful to minors but moved for a preliminary determination as to whether the “matter” at issue was “probably harmful to minors.” Following a preliminary hearing pursuant to Indiana Code § 35-49-2-4 (1983), at which copies of the memes were admitted into evidence, a Greene County judge concluded the memes were probably harmful to minors.

But Chapman in an interlocutory appeal argued that the memes did not meet the standard of “probably harmful to minors” and that, if they did meet the standard, it would constitute a violation of his First Amendment rights. For its part, the state argued the preliminary hearing procedure provided for in I.C. 35-49-2-4 was inapplicable in the case.

Indiana Court of Appeals Judges Margret Robb and Paul Mathias and Senior Judge Randall Shepard heard oral arguments in the case at Purdue University-Fort Wayne in November 2021.

On March 23, the majority appellate judges affirmed the trial court, with Robb dissenting.

At the outset, the majority noted the judges could not entirely rule out the applicability of I.C. 35-49-2-4.

“While we acknowledge the preliminary nature of a determination under this statute, we also envision the possibility that a defendant might use such a determination as a basis for a motion to dismiss,” Shepard wrote. “The grounds on which a defendant may seek dismissal are numerous, including ‘any other ground that is a basis for dismissal as a matter of law.’ … That being said, we make no decision on the resolution of such a motion as that issue is not before us in this case.”

Moving to the merits, the majority concluded that while the memes did not show any nudity or sadomasochistic abuse, “almost all, if not all” could be described or represented as sexual conduct or sexual excitement.

It also found that while Chapman argued the memes were simply humorous and did not fit the definition of “prurient,” they all suggested or used explicit language to refer to sexual activities or sexual situations in crude, vulgar and degrading terms.

Further, the majority found no error in the Greene Superior Court’s preliminary determination given that the trial judge reviewed the memes and deemed them patently offensive to prevailing standards in the adult community with respect to what is suitable matter for minors. And finally, it found the memes lacked serious literary, artistic, political or scientific value for minors.

“We therefore conclude the court was well within its discretion to determine the memes constitute matter that is probably harmful to minors,” Shepard wrote.

Additionally, the majority noted that “given the pervasive nature of the internet and social media in today’s society, especially with teens” it would be both prudent and necessary for Indiana lawmakers to address the statutory scheme to reflect the existence and use of social media platforms not yet in existence when the statute was enacted in 1983.

Likewise, in a separate concurrence, Mathias wrote that the “ubiquity of smartphones for teenagers, together with the instant availability and almost completely uncensored nature of content on the Internet have been at the heart of this coarsening of values for minors, and indeed for us all.”

The majority also found Chapman’s constitutional challenge was waived.

On that point, Judge Robb countered that Chapman’s entire argument “is that Indiana Code section 35-49-2-2 and the First Amendment are entwined because matter is presumptively protected by the First Amendment unless the State can prove it is matter harmful to minors as defined in section 35-49-2-2.”

“… (T)he very purpose of requesting a preliminary determination was to address whether the charges pass constitutional muster,” Robb wrote. “To the extent a constitutional analysis would be necessary, I would not consider it waived.”

The dissenting judge also disagreed with the majority’s determination that it “cannot entirely rule out the applicability” of I.C. 35-49-2-4. She maintained that because the state did not object to the preliminary determination proceedings, its argument should be waived.

Robb further opined that “our historical notions of ‘seizure’” should not limit the process of preliminarily determining whether matter is harmful. But the heart of Robb’s disagreement with the majority, she said, was whether the matter was patently offensive.

“The problem starkly illustrated by this case is that the law has not caught up with the internet age, which has expanded our definition of ‘community’ beyond town limits or county lines to the far reaches of the world,” Robb wrote. “Although the majority acknowledges and laments the cultural shift wrought by the internet, it fails to acknowledge how this shift applies to what it means to be patently offensive under the standard we use to evaluate content today.

“… I agree with Judge Mathias that the prevailing standards for what is suitable matter for minors in 2022 are not the same as they were when the statute was written,” Robb continued. “And yet the majority wishes to pretend the influx of material regularly shared amongst modern youth has not shifted the way we should view what is suitable for minors unless and until the legislature reconsiders the statute. But I cannot ignore these sweeping cultural changes.

“The sexually suggestive memes at issue are almost certainly in poor taste and I do not support the sharing of them with a seventeen-year-old. Nonetheless, I cannot find this material patently offensive to prevailing standards in the adult community with respect to what is harmful to a teenager on the cusp of adulthood in 2022,” the dissenting judge concluded.

Robb would reverse and remand for further proceedings in Cory Chapman v. State of Indiana, 21A-CR-421.•