The Associated Press has a story on yesterday’s lawsuit over the toll road privatization. The hearing was primarily on the issue of whether this was a “public lawsuit” and therefore whether the State Defendants could possibly seek to have a bond imposed that would be so prohibitive as to prevent the suit from being heard on its merits.
The AP story focused on arguments centering around a semi-colon in the statutory definition of “municipal corporation.” The Indiana Law Blog does a good job of laying out the relevant statutes.
IC 34-6-2-86 defines a municipal corporation as:
(1) a:
(A) local subdivision of the state; or
(B) public instrumentality or public corporate body created by state law;
including but not limited to cities, towns, townships, counties, school corporations, special taxing districts, conservancy districts, and any other local public instrumentality or corporation that has the right to sue and be sued;
The “local subdivision” portion doesn’t apply, and really, I think the rules of statutory construction let you drop off the “including but not limited to” clause. So, really the crucial question is whether the Indiana Finance Authority is “a public instrumentality or public corporate body created by state law.” The Indiana Finance Authority is created by IC 4-4-11-4 which says:
There is created for the public purposes set forth in section 2.5 of this chapter a body politic and corporate, not a state agency but an independent instrumentality exercising essential public functions, to be known as the Indiana finance authority. The authority is separate and apart from the state in its corporate and sovereign capacity, and though separate from the state, the exercise by the authority of its powers constitutes an essential governmental, public, and corporate function.
It’s a close call, but it sounds to me like the State went out of its way to make the Indiana Finance Authority a non-public instrumentality, making it instead an independent instrumentality that exercises public functions. And that’s if you disregard the “local” parameters one would naturally be inclined to require of something designated a “municipal” corporation.
Even so, if the Indiana Finance Authority shoe horns its way into the definition of “municipal corporation,” then the judge has to go on to the question of whether the Finance Authority can meet the standard that would be required to be granted a preliminary injunction — essentially: likelihood of success on the merits and the harm to the State of not granting the injunction outweighs the harm to the Plaintiffs of granting the injunction. If the Finance Authority meets that standard, then the judge would have to impose the bond.
Doug – I think in IC 34-6-2-86(1), in “and any other local public instrumentality or corporation that has the right to sue and be sued” the phrase “local public” modifies both “instrumentality” and “corporation.” In other words, it should NOT be read:
“and any other (i) local public instrumentality or (ii) corporation that has the right to sue and be sued”
which would bring in all sorts of corporations, public and private, but rather SHOULD BE READ:
“and any other local public (i) instrumentality or (ii) corporation that has the right to sue and be sued.
OK, strike my 4th from the bottom line above:
all sorts of coporations, public and private.That is wrong.It is easier than that. The phrase “and any other local public instrumentality or corporation that has the right to sue and be sued†is echoing and expanding on what preceeds it:
“(B) public instrumentality or public corporate body created by state law”
So “local” is the operative word.
But it’s in that dependent “including” clause. So I don’t think it ends up being relevant to determining whether the Indiana Finance Authority is a municipal corporation.
I think it’s fairly clear that the IFA isn’t a municipal corporation by virtue of being one of those things specified by the including clause, but the including clause doesn’t limit the universe of things covered by the primary clause. The way the definition is drafted, I think every “public instrumentality” and “public corporate body created by state law” satisfies the definition.
Just on the basis of these statutes it seems to me that Marcia’s correct and that the statute applies only to ‘local public’ entities, meaning entities with jurisdiction over territory less than the whole state.
The word ‘municipal’ isn’t applied to state-wide applications in common parlance. It refers to a governmental activity limited in impact to a specific geographic area, most typically cities, towns and conservancy districts. While the list is intended for illustrative purposes, all of the examples given fit into that category.
Then consider the functioning of the statute — it takes away (derogates) citizen’s rights. Therefore courts are normally hesitant to apply it beyond its clear intent.
The semi-colon is a bit of a red herring IMO — much better to divine legislative intent by getting a feel for the spirit of the non-inclusive list.
All-in-all, I like the plaintiffs’ chances to get by this hurdle.