Opinion ID: 852257
Heading Depth: 2
Heading Rank: 2

Heading: Does Section 302 Impair FEC's Interests?

Text: As the local corporations argued in the two earlier appeals, FEC contends that Section 302 directly impairs contract rights it possesses as a beneficiary of the agreements the City and the operator tendered to the Gaming Commission. (Appellant's Br. at 17-18.) Specifically, FEC contends that the section directly and purposely authorizes the City to eliminate the Foundations' contract rights. (Appellant's Br. at 18.) The Attorney General and the City both argue, however, that Section 302 does not substantially impair any such interests because FEC had no reasonable expectation that its ability to receive riverboat revenue would continue indefinitely. (State's Br. at 10; City's Br. at 2.) Standard judicial practice clothes every statute with a presumption of constitutionality. Boehm v. Town of St. John, 675 N.E.2d 318 (Ind.1996). The party challenging the constitutionality of a statute bears the burden of proof, and all doubts are resolved against that party. Id. If there are two reasonable interpretations of a statute, one of which is constitutional and the other not, we will choose the path which permits upholding the statute. Id. The legislature enacted the Riverboat Gambling Act, Ind.Code § 4-33-1-1 et seq. (2008), intending that the gambling industry would benefit the people of Indiana by promoting tourism and economic development, subject to the strict regulation of facilities, persons, associations and gambling operations. Ind.Code § 4-33-1-2. After the decisions by the trial court and the Court of Appeals in this case, we had occasion to analyze the structure and operation of the Act and the East Chicago local development agreements. The decisions in those two appeals largely drive the resolution of the present case.
In our earlier cases, we considered the regulatory scheme as it stood before Section 302 was added. In Zoeller v. East Chicago Second Century, Inc ., we concluded that the funding arrangements memorialized in the local development agreements and incorporated into the riverboat license have always been subject to alteration, through the administrative processes of the Gaming Commission. Speaking specifically to the local economic development agreements, we said: [T]he agreement is not like an ordinary commercial contract at all. This agreement was a mode of implementing the casino's obligation to contribute to local economic development. Its terms were intended to control the rights and duties of East Chicago and the casino licensee in relation to each other; they were not intended to control the rights of any non-parties. Zoeller, 904 N.E.2d at 221. We also observed that gaming revenue flows, ultimately, as a result of decisions made by the Indiana Gaming Commission in the course of issuing, transferring, or revoking a license: The Commission's role in these events is a central one. Indiana's Riverboat Gambling Act provides: A license to operate an excursion gaming boat: (1) is a revocable privilege granted by the state ... ... The Code also provides that any sale or transfer of a license is subject to the approval by the Gaming Commission, requires that a proposed acquirer must meet the same criteria applicable to any initial applicant, and directs the Commission to adopt rules reflecting the standards applicable to transfers. East Chicago, 908 N.E.2d at 623. Moreover, we concluded: While the Foundations and Second Century are correct that the agreements imbedded in the license do not appear terminable at will, the City is correct that they are subject to periodic alteration (through the administrative processes of the Gaming Commission). As the city's motion for summary judgment sought a court order to turn over to the City all funds that Second Century and the Foundations had received and would receive from the riverboat operations, the trial court was warranted in denying the motion. Id. at 624. Lastly, this Court declared, the City alone could not redirect gaming revenue presently flowing to the private entities by means of the ordinance it adopted in 2005, or by other means, for that matter. Id. at 623.
In interpreting a statute, our goal is to determine and give effect to the General Assembly's intent. Where the statute is unambiguous, the Court will read words and phrases for their plain and ordinary meaning. Porter Dev., LLC v. First Nat. Bank of Valparaiso, 866 N.E.2d 775 (Ind.2007). When a statute is clear, courts do not impose other constructions upon it. Huffman v. Office of Envtl. Adjudication, 811 N.E.2d 806 (Ind.2004). Viewed in the light of these canons of construction, Section 302 is fairly straightforward. It authorizes the City to make changes to the local agreements which sought to facilitate economic development in East Chicago. The statute says this power may be exercised unilaterally by the City. This idea is obviously at odds with the idea of an agreement between the City and the licensees, but it is consistent with our earlier declaration that even without Section 302, the City was free to change its mind about how gaming resources might best foster economic development and seek the Gaming Commission's concurrence with its altered plans. The original licensee's successors seem not to have been too concerned about where the 3.75% was deployed, playing something like the role of an interpleader who regards the economic development payments simply as a cost of doing business, while largely content to leave it to the government to decide on the best strategy for advancing local economic development. Section 302 does not by its terms even purport to alter the Commission's regulatory authority. The flow of funds for economic development are subject to any terms and conditions in the license issued by the Commission. The Commission incorporated various arrangements into the East Chicago gaming license on advice of the city government and other stakeholders and interested citizens. They may be revised by the Commission, with or without Section 302. In light of the foregoing conclusions, we see no impairment of contractual rights presenting a colorable alarm under the applicable state or federal provisions. U.S. CONST. art. I, § 10 and IND. CONST. art. 1, § 24.
FEC's challenge to Section 302 covers a considerable list of constitutional provisions, from, bar on taking private property without just compensation (U.S. CONST. amends. V, XIV and IND. CONST. art. 1, § 21), to the requirement that bills be confined to a single subject (IND. CONST. art. IV, § 19), to the constraint on special and local legislation (IND. CONST. art. 4, § 22), to the separation of powers principle (IND. CONST. art. III, § 1). (Appellant's Br. at 16-37.) A number of these may be plausible. Still, we avoid constitutional declarations when a dispute can be resolved through non-constitutional means. Superior Const. Co. v. Carr, 564 N.E.2d 281 (Ind.1990). For all that appears, Section 302 did not alter the legal options of the combating parties in any substantial way, and we thus conclude that a constitutional declaration is unwarranted.