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6/13/2006
SPECIAL REPORT: Indiana’s high court hears toll road appeal

Oral arguments concluded today, June 13, in the appeal filed by plaintiffs in the constitutional challenge of Indiana Gov. Mitch Daniels' "Major Moves" transportation plan.

Four justices of the five-member Indiana Supreme Court heard the case. One justice, Justice Brent Dickson, excused himself without giving a public reason. If the justices vote 2-2, the lower court's ruling will stand.

Each side's lawyers were given 30 minutes to present their arguments Tuesday.

The court took the appeal under advisement, with Chief Justice Randall T. Shepard promising a timely ruling. Shepard cited the timeliness of the case, pointing to the $3.85 billion Indiana Toll Road Lease, which is to be signed June 30 by the private investment group, Cintra-Macquarie.

A group of Indiana residents, including OOIDA Member Randy Nace and the Citizens Action Coalition, filed a lawsuit in April challenging the constitutionality of the governor's "Major Moves" transportation plan, which included the toll road deal. The residents contend the Indiana Constitution requires revenue, such as that from the lease of the toll road, be spent to pay down the state's existing public debt.

The cornerstone of Daniels plan is to use the $3.85 billion from the toll road lease to pay for a 10-year transportation plan with 200 projects.

Daniels and the Indiana Finance Authority were among those named as defendants.

When St. Joseph County Superior Court Judge Michael Scopelitis ruled in the state's favor May 26 on a preliminary motion, the plaintiffs formulated their appeal, which promptly ascended to the Indiana Supreme Court after a motion from the state to skip the appeals court level.

Scopelitis ruled May 26 that the lawsuit is "public" as defined by statute and ordered the plaintiffs pay a $1.9 billion bond if they wanted to continue.

The state Supreme Court agreed to hear the plaintiffs' appeal challenging the application of the "public lawsuit" statute and the bond ordered in Scopelitis' ruling.

The plaintiffs are also contending that the Indiana Finance Authority is not a municipal corporation, something that Scopelitis had found in his ruling.

"Regardless of how the court rules ... the bigger and broader issue is still there," Dave Menzer of the Citizens Action Coalition told "Land Line Now." "Everyone realizes the public does not favor privatizing the nation's roads and freeway system."

The court challenge began with the plaintiffs' contention that "Major Moves" and the lease of the Indiana Toll Road to a private investor was unconstitutional because of how the $3.85 billion up-front lease payment would be spent.

Daniels and the Indiana Finance Authority have contended, in briefs filed with the court, that the finance authority is a "municipal" corporation and that the Indiana Toll Road belongs to that corporation and not the state of Indiana.

Cintra-Macquarie, set to sign the 75-year lease for the toll road on June 30, wants assurance from the state that the lease will not be held up in litigation at the time of the signing. The investment group built a walk-away provision into the negotiations.

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

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