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5/15/2006
SPECIAL REPORT: Indiana Toll Road case resumes

A faction of Indiana residents opposing the lease of the state's toll road are back in court this week, with a judge scheduled to hear testimony about whether the group should have to post a $3.85 billion bond to continue their constitutional challenge of the deal.

Court action began Thursday, but it was far from dramatic or conclusive. Very little got resolved and there were no rulings from Judge Michael Scopelitis of the St. Joseph County Superior Court in South Bend, IN.

The judge is hearing arguments about a motion by the state's attorneys that seeks to have the lawsuit be considered "public" under the Indiana code. If the judge rules that it is "public," the Indiana residents' group would have to ante up a $3.85 billion bond to proceed.

"Public" lawsuits are defined by Indiana law as suits that challenge the construction, financing or leasing of public improvements. Indiana has only previously seen them filed in cases involving municipalities.

Plaintiff Steve Bonney, an activist and resident of West Lafayette, IN, said the first day of court was uneventful for the most part.

"It was like watching paint dry," he said after court adjourned Thursday.

The residents who filed the suit include OOIDA Member Randy Nace, who was out on the road and not in the courtroom Thursday.

"I don't know what I missed," he told Land Line. Apparently, it wasn't much.

Attorneys - up to 14 or 15 in the courtroom at one time, according to Bonney - are jockeying for position and arguing about what type of lawsuit the toll road challenge is supposed to be. There was also a discussion about language and punctuation in the Indiana State Code.

The state called two witnesses, Charles E. Schalliol, Indiana Finance Authority chairman, and Ryan Kitchell, state public finance director. The attorney for the Indiana residents did not call any witnesses.

The first day in court ended at about 5 p.m. local time and action was set to resume Monday, May 15, for at least one more day of evidence presentation, a clerk in the judge's office said.

The Indiana residents, backed by the Citizens Action Coalition group and money raised chiefly from the trucking community, filed the lawsuit April 12 against Indiana Gov. Mitch Daniels, the Indiana Finance Authority and others involved in the 75-year lease of the Indiana Toll Road. The toll road is part of Daniels' "Major Moves" transportation program.

The residents claim the Indiana Constitution requires that the $3.85 billion cash payment the state is set to receive from the foreign investment consortium, Cintra-Macquarie, should only go to pay off public debt and not for other road projects that Daniels' government has already earmarked.

Daniels, after the state legislature approved the lease in March, signed the lease the same day the challengers filed their lawsuit in St. Joseph County Court in South Bend, IN.

Daniels, in a motion filed April 20 by the law firm of Ice Miller, claimed the lawsuit is "public" and therefore the plaintiffs would need to post a bond equivalent to the toll road lease -$3.85 billion - to continue.

The attorney for the plaintiffs, Arend Abel, fired back with a motion on May 9 in an attempt to show that the lawsuit is not "public" by definition under state law and precedents.

Bonney told Land Line he was ready for this week's proceedings.

"Right now the whole course of action depends on the judge and what he is going to rule," he said.

"The main argument is that it's not a frivolous lawsuit, and that we shouldn't have to post a bond," he said. "In our claim, we have nine counts, and seven of those counts point to unconstitutional points (in the lease)."

The Indiana residents want to see what the other bids were on the toll road lease, but the state has a precedent that they don't have to be made public until after the lease is activated - in this case June 30.

The highest bidder on the toll road lease, Cintra-Macquarie, is the same foreign investment group that operates a 99-year lease of the Chicago Skyway.

- By David Tanner, staff writer
david_tanner@landlinemag.com

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