A Citizen's Guide to Indiana

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Toll Road Lawsuit: Bond Request

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As has been widely reported (here is an AP story), the Daniels Administration is trying to quash the lawsuit (pdf) by the Citizens Action Coalition challenging the constitutionality of the Toll Road privatization legislation.

Specifically, Article 10, section 2 of Indiana’s Constitution says:

All the revenues derived from the sale of any of the public works belonging to the State, and from the net annual income thereof, and any surplus that may, at any time, remain in the Treasury, derived from taxation for general State purposes, after the payment of the ordinary expenses of the government, and of the interest on bonds of the State, other than Bank bonds; shall be annually applied, under the direction of the General Assembly, to the payment of the principal of the Public Debt.

The Daniels Administration is attempting to quash the lawsuit without addressing its merits under IC 34-13-5 which sets the procedure governing “public lawsuits.” In particular IC 34-13-5-7 allows a defendant (in this case, the State) to request that bond be posted. The court is required to set a hearing on the petition. Judge Scopelitis has set a hearing date of May 11.

The statute instructs the judge to use the standard for granting a preliminary injunction as the standard for determining whether a bond is required. This standard essentially requires the judge to weigh the harm if the requested relief is granted (delaying the sale), the harm if the requested relief is denied (allowing the sale to go through while the lawsuit is pending), and the plaintiff’s likelihood of success on the merits. If the judge decides that the CAC is likely to succeed on the merits of the case and that allowing the sale to proceed will cause greater harm than delaying the sale pending trial of the case, he will deny bond. If he decides to the contrary, he is instructed to set bond at a level that that would compensate the defendant for damages and costs accrued to the defendant by reason of the pendancy of the lawsuit.

Regardless of whether bond is approved or denied, either party can appeal the decision directly to the Supreme Court within 10 days of the trial court’s decision. So we’re likely to have a read on the Supreme Court’s opinion on the applicability of the Constitutional provision before too long.

My thoughts: 1) I question whether a statute such as IC 34-13-5 is permitted to essentially render a Constitutional provision a nullity. To take a hyperbolic example from the federal Constitution, what if Congress said a citizen had to post $1 billion to bring a lawsuit to stop a free speech violation by the government? Clearly Congress would not be permitted to make an end run around the Constitution in that fashion. 2) The consequences of a delay in entering into the privatization agreement while litigation is pending is less harmful than the consequences of potentially entering into the agreement illegally. The Toll Road isn’t going anywhere and there is no evidence that its value is diminishing. Unraveling the privatization deal once it goes into effect would likely be expensive and difficult, particularly if the State distributes the proceeds from the sale of its property rights in the Toll Road. 3) The State’s apparent reliance on characterization of the deal as a lease rather than a sale seems superficial and misguided. A lease is merely a particular kind of sale of property rights. Not to get all Property 101 on you, but the Daniels administration seems to be taking the position that the word “sale” in the Constitution refers only to a sale of a fee simple absolute interest in the Toll Road Property and that any other kind of sale is not subject to the constitutional provisions, including sale of a leasehold interest in the Toll Road Property for a term of years.

Grant Smith on Telecom “Deregulation” Bill

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Grant Smith, of the Citizen’s Action Coalition, has a scathing column in the Fort Wayne Journal Gazette on HB 1279 which lifts regulations on local telephone companies. The short version: “Telecom bill raises rates, reduces jobs.” Mr. Smith contends that, despite telecom company claims to the contrary, this bill does not do much to encourage broadband competition between telecom companies and cable companies. A couple of quotes:

Broadband was defined in the legislation to accommodate copper-wire data transfer speeds, not high-speed fiber optic cable. Why? It’s an underhanded way to base automatic rate increases on investments already made. Rate increases will occur in areas where 50 percent of customers in an exchange have access to (not actually have) broadband service – in other words, in urban areas.

. . .

The entire ill-gotten deal smacks of crony capitalism. Those legislators who sponsored the legislation should apologize profusely to their constituents and vow to reverse the ill-advised passage of HB 1279. Higher utility rates and fewer jobs are not a good combination for the Indiana economy.

Toll Road is privatized

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I got to bed early tonight only to be woken up by my crying 7 month old daughter. Advance Indiana and Taking Down Words are reporting that the House has passed HB 1008, privatizing the Toll Road and authorizing the Governor, without further approval from the legislature, to create I-69 as a privately operated toll road from Evansville to Martinsville but not from Martinsville to Indianapolis. Perhaps my daughter was crying for the road that won’t belong to Indiana again until she is 75. Probably it was just gas.

I don’t believe in an advantage that the Democrats can’t fritter away somehow, but this was something of a Ben Kenobi/Darth Vader moment for the Democrats, particularly in northern Indiana. You might recall the famous Star Wars scene where Ben and Darth are fighting and Ben says, “You can’t win Darth. If you strike me down, I will become more powerful than you can possibly imagine.” With this vote of 51 to 48, I believe the Republicans have created a solid blue strip across the north on the electoral map from Illinois to Ohio.

Governor Daniels has 3 years to rehabilitate himself in the minds of citizens. Representatives that have hitched their wagons to the Governor and his unpopular agenda items have only 8 months and two time changes to get the job done. And they might be able to do it if the Dems are as politically tone deaf as Advance Indiana reports Craig Fry (D-Mishawaka) as being.

Fry urged opposition to the toll road privatization on the grounds that nuclear waste could now be transported across Indiana on a highway controlled by foreigners. That’s just a little stupid. The foreignness of the toll road purchaser has never been the problem, it’s the privateness. And, even more, it’s the fact that the motorists of Northern Indiana will be paying for road construction in other parts of the state, and it’s the fact that future motorists will be paying for road construction in the present.

Another objectionable trait I notice in those who have backed two of Governor Daniels most controversial initiatives, Toll Road privatization and Daylight Saving Time, is a sort of inferiority complex they have on behalf of Indiana. With DST, the question was almost never whether the change would be best for Hoosiers in their every day lives, it was almost always a question of what those in other states think of us. “They’re laughing at us,” you could almost hear the proponents whine. And we have echoes of this once again in the reporting of Advance Indiana on Rep. Randy Borror’s (R-Ft. Wayne) sentiments, a sentiment I’ve heard before from the Governor:

Rep. Randy Borror (R-Ft. Wayne), the bill’s chief sponsor, got it right. We need to let the folks in California and New York know that there is something in between, and that something is Indiana.

I believe Indiana is already a great state, and I’m not particularly concerned what people in California or New York think of us. If we have problems we need addressed, we need to fix them ourselves.

Well, my daughter has stopped crying (and bless my wife, by the way, for taking care of her). I guess it was just gas.

Update

  • Niki Kelly has an article for the Journal Gazette.

    Democrats focused on the loud popular opposition to leasing the Toll Road for the next 75 years in exchange for money to bridge the state’s highway transportation gap.

    “We are gobbling up everything … and we’re going to grab it right now. We’re not going to leave it for our kids,” Moses said. “Then we’re going to turn around and we’re going to spend it, and we’re going to spend it right away.”

    Ms. Kelly does a good job of explaining the general provisions of both the privatization contract and HB 1008.

  • Theodore Kim has an article for the Indy Star. A previous edition of the story I cannot locate at the moment had more of a focus on northern Indiana Republican Jackie Walorski. I get the feeling that she is in Troy “I’ll never vote for it” Woodruff territory as far as electoral endangerment. First she failed to show up when she could have killed Daylight Saving Time in committee. Then she amended the toll road privatization bill to form a district to harvest more money from the deal for parts of her district, but left her St. Joseph County constituents out in the cold. Now she votes for the bill when it’s clear that her constituents are against it.

    • HB 1010 – Eminent domain

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    HB 1010, the eminent domain bill passed as a reaction to Kelo took an awfully long time to pass, but they finally got it done. I didn’t read it especially closely, but it looks to be a bit watered down from the original language. It imposes more burdensome procedures but allows eminent domain to be exercised by government entities and private persons if they are utilities. It also allows the department of transportation to seize private property for the benefit of a private entity so long as the benefit is in the term of lease (no time limits on the lease). It also allows seizure of private property for the benefit of another private entity if the property seized is run down and the seizure serves a public purpose beyond increasing the tax base. The government is required to give a windfall to the owner of the run down property in the amount of 125% of the market value in the case of agricultural land and 150% of the market value in the case of owner-occupied residences. Attorneys fees are permitted up to $25,000 for the property owner if they get a judgment above what the condemnor offered for the property.

    This was a pretty casual review, so you’d probably want to take a look at the statute if you have any serious interest in the bill.

    Pi Day

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    Today, 3-14, is Pi Day. I have missed the preferred time of celebration of the “mathematical mystery” – 1:59.

    For Hoosiers, there is no better way to celebrate pi than to consider what might have been. In 1897, the House passed HB 246-1897:

    A Bill for an act introducing a new mathematical truth and offered as a contribution to education to be used only by the State of Indiana free of cost by paying any royalties whatever on the same, provided it is accepted and adopted by the official action of the Legislature of 1897.

    Basically, the House of Representatives was seeking to legislate the value of pi. Among other things, the bill specified that “the ratio of the diameter and circumference is as five-fourths to four” which is to say “5/4 divided by 4”, which is to say “3.2.” After the House passed the bill 67 to 0, it was referred to the Senate Committee on Temperance which reported it favorably to the full Senate. Fortunately, Purdue mathematics professor Clarence Abiathar Waldo was in town lobbying the the legislature and was able to explain the bill to members of the Senate and that it was incorrect. Like all truly fun bills, this one died in the Senate when Senator Hubbell moved to postpone consideration of the bill indefinitely. Senator Hubbell was quoted as saying, “the Senate might as well try to legislate water to run up hill as to establish mathematical truth by law.”

    Of course, we should not laugh too much at the benighted souls of the 19th century. We have our own band of unreflective legislators and constituents who would seek to legislate medical truths (also see here) by law.

    But I digress. For more information on Indiana’s Pi legislation, check out this page, from everybody’s favorite economist, Larry DeBoer.

    EHB 1158: Service of process fee

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    EHB 1158 does several things, but the only one I am concerned with at the moment is the amendment to IC 33-37-5-15. It states:

    The sheriff shall collect a service of process fee of thirteen dollars ($13) from a party requesting service of a writ, an order, a process, a notice, a tax warrant, or any other paper completed by the sheriff.


    The first thing this is going to do is to cost courts a lot more in the form of certified mail costs. IC 33-37-3-6 provides:

    Court costs fees under this chapter include service of process by certified mail, unless service by the sheriff is requested by the person who institutes the action.

    So, as a plaintiff’s attorney, it is in my client’s best interest for me to serve by certified mail anything that is able to be served that way.

    The next thing it is going to do is raise the question of whether a plaintiff is the “requesting party” when a court finds a defendant in contempt of court for failing to appear for a hearing by virtue of the fact that it was the plaintiff that requested the defendant’s appearance. My guess is that the answer is “yes” and, consequently, there will be fewer consequences for failing to obey a court’s order to appear because it will be too expensive for plaintiffs requesting a defendant’s appearance.

    Obesity

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    The General Assembly has a lot on its plate this session with respect to obesity.

  • HB 1113 concerning liability connected with consumptionof food and beverages has been passed by the House and Senate. It grants immunity to pretty much everyone in the food and beverage industry from civil suits from a claim concerning “generally known conditions allegedly caused by or likely to result from the long term consumption of food or beverages.” It also provides immunity for claims concerning weight gain, obesity, or a health condition associated with weight gain or obesity.

    Immunity does not apply if the claim alleges adulteration or misbranding of food or beverage if the adulteration or misbranding relates to a labeling or purity requirement under state or federal law.

    Personally, I would have also made an exception to the immunity if the defendant knowingly or intentionally made misrepresentations concerning the health effects of the food or beverage. If everybody knows the food is junk and the manufacturer or restaurant is either saying that it’s junk or saying nothing at all, then I can pretty much agree that you make your own decisions and ought to live with them. But if the manufacturer or restaurant is touting the food or beverage as healthy, then there ought to be consequences if it is not.

    Also, I think I would have been inclined to condition immunity for foods or beverages that have been “spiked” with extra salt or sugar or the like to make them more habit forming. I would have conditioned the immunity on the manufacturer or seller labeling the product as having the extra ingredient added with a warning that the ingredient may make the product more habit forming.

    Holding consumers responsible for their consumption is entirely appropriate, but only if they are being given accurate information and, probably more importantly, the immune party is not permitted to put out disinformation. Otherwise, I figure you let a jury sort it out.

  • SB 266 concerns bariatric surgery. The bill absolves a physician of his or her duty to monitor a bariatric surgery patient for five years if the physician is unable to locate the patient after a reasonable effort. Prior to performing the surgery, the physician must discuss with the patient the requirements to qualify for the surgery, the details of the surgery, and the possible complications and side effects of the surgery, including lifestyle changes and dietary protocols. The bill also requires six months of supervised nonsurgical treatment before health insurance or a health maintenance organization must cover surgical treatment for morbid obesity.
  • SB 111 Student nutrition and safety. It requires a school board to set up an advisory committee to make recommendations on a local “wellness policy” for the school corporation. The school board is supposed to take the recommendations into account when it develops a policy on child nutrition and physical activity. Sounds like a lot of bureaucratic hoo-ha to me, but maybe it’s a start. No regulations are placed on sale of junk food after school hours or as part of a school lunch or breakfast program unless it is sold as part of an a la carte line, not part of a federal program. Junk food and beverages are permitted to be sold during school hours but they can only make up 50% of the available choices. The remaining choices must qualify as “better choice foods.” Basically fruit juices, water, milk, and isotonic sports drinks qualify for the beverages and foods with less than 30% of calories from fat and less than 35% of weight from artificial sugars. No vending machines of food or beverages are permitted at elementary schools.

    • Toll Road: Selling v. leasing

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    The Indy Star had an article a couple of days ago on Mitch Daniels’ “Aiming Higher” PAC’s ad blitz in favor of the Toll Road privatization. The primary thrust of the article was to look at the PAC, its origins, and the sources of its money. But one of the things the article mentions is one of the PAC ads that contains the line “We’re only renting the highway. We’re not selling it.” I’ve heard this before from pro-privatization activists. It strikes me as, at best, a distinction without a difference and, more likely, wrong.

    My property law teacher taught his classes to think of property as a bundle of rights one has in something. You can sell the bundle a piece at a time or all at once. When you rent a building you own, you are selling your right to occupy that building for the term of the lease. When you grant an easement, you are selling your right to exclude that person from your property. So, the proposed Toll Road deal is a sale. The State is selling its right to operate the road for the next 75 years. It is selling its right to collect tolls for the next 75 years. Probably most importantly, it is selling its right to make the road toll free sometime during the next 75 years. And, it is selling its right to upgrade U.S. 20 sometime in the next 75 years. And the fact that the sale is for a term of 75 years means that, from the perspective of those of us currently in our adulthood, it is functionally the same as a sale for eternity. Also, I suppose it’s worth noting that the agreement itself specifies that the transaction should be deemed to be a sale for tax purposes.

    I think the Governor is hoping he can score public relations points with his somewhat dishonest foray into semantics and is hoping citizens won’t investigate the details and will be falsely reassured if the transaction is labeled a lease rather than a sale.

    Toll Road Round Up

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    Jennifer Whitson has an article in the Evansville Courier Press that does a good job providing an idea of where votes stand to be gained and lost on HB 1008, the Toll Road privatization bill. Some legislators are against the Perry Township provision which prohibits I-69 from going through Perry Township in Marion County if it is a toll road in that section. That, they say, will add long delays to the construction of an I-69 extension to Evansville. That provision is critical to some legislators vote, particularly those representing southwestern Indianapolis.

    Other legislators, notably Senator Bray of Martinsville, want a provision that prohibits replacing any portion of State Road 37 with a toll road. (S.R. 37 runs from Indianapolis through Martinsville to Bloomington and beyond).

    Meanwhile, Niki Kelly, writing for the Fort Wayne Journal Gazette, has an article discussing a Toll Road cost analysis commissioned by the Daniels’ administration that, unsurprisingly given the source, shows a state run Toll Road would net less than the sale of Toll Road operation rights for 75 years. That assumes a 22% rise in tolls every 7 years and 5% growth in operational expenditures.

    The article discusses a Democratic ad blitz, apparently in response to the ad blitz started by the Governor. Whereas the Governor’s ad campaign focuses on Democrats in Southern Indiana who voted against the bill (two of whom also turned down the Governor’s chief of
     staff’s suspiciously timed job offers with the State), the Democrats’ ads focus on Republicans in the northern part of the state: Mary Kay Budak, Steve Heim, Jackie Walorski, Marlin Stutzman, and Ralph Ayres. This regional division is a natural development in response to a bill that essentially taxes northern Indiana to pay for road construction in other parts of Indiana.

    Finally (for me anyway), the Indy Star has an editorial asking the Governor and his people to spare us the spin when they say that “Aiming Higher,” the organization running the pro-privatization ads is unconnected to the Governor:

    It comes as no surprise that the highway construction industry is giving generously to an organization run by close associates of Gov. Mitch Daniels and dedicated to the advancement of Major Moves, his road-building initiative.
    Just don’t insult the intelligence of the public by pretending this is all some kind of accidental intersection of folks interested in good government and Hoosier jobs.
    Community benefit may very well be on the minds of Aiming Higher and its contributors, but self-interest just might have at least a bit role as well. As for the efforts to downplay the connection to the governor, please.

    The Star is on record as supporting the toll road privatization, so their objection here isn’t a matter of being another avenue to express underlying objections to HB 1008.

    Legislative theologians

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    Niki Kelly has an article in the Fort Wayne Journal Gazette on the continuing efforts at wingnuttery with respect to HB 1172. This is the bill, the House version of which, decides by legislative fiat an issue that has confounded philosophers and theologians for millenia. They would decide that fully human life begins at the moment of conception, and they would use the power of the state (ultimately, men with guns if one fails to obey) to force doctors to  inform their patients of this legislated fact.  Doctors would also be required to tell their patients that fetuses may feel pain prior to twenty weeks of gestation, regardless of whether this is actually true or not.

    The article notes that all the conferees on the bill are men. The current version of the bill requires that 18 hours prior to an abortion, the pregnant woman be informed in writing that adoption alternatives are available with “many couples” who are willing to adopt a child, and that “adoptive parents may legally pay the costs of prenatal care, childbirth, and neonatal care.”  It also requires the pregnant woman to be notified that there are physical risks to the woman in having an abortion. The physical risks of pregnancy are not addressed.

    The author of the bill, Tim Harris, is trying to undo the changes made in the Senate and basically reconstitute the bill as it came out of the House, complete with the language regarding fetal pain and human life beginning at conception.

    Look, if abortion is murder then outlaw it. If it’s not, then don’t. I don’t see any real middle ground on that score. It seems ridiculous to try to fight murder by making a doctor hand out a pamphlet. The fact that anti-abortion activists are willing to take this approach indicates to me that, in their heart of hearts, they think abortion is something they don’t like, but something less than murder.