Court Opinion

ID: 2725124
Source: CourtListenerOpinion
Date Created: 2014-09-08 20:45:31.469212+00
Date Added: 2024-06-11T10:03:07.459856
License: Public Domain

Apr 29 2014, 9:57 am
FOR PUBLICATION

ATTORNEYS FOR APPELLANT:                       ATTORNEYS FOR APPELLEE:

GREGORY F. ZOELLER                             LINDA L. PENCE
Attorney General of Indiana                    DAVID J. HENSEL
                                               JULIE SMITH
ELLEN H. MEILANENDER                           Indianapolis, Indiana
Deputy Attorney General
Indianapolis, Indiana

                               IN THE
                    COURT OF APPEALS OF INDIANA

STATE OF INDIANA,                              )
                                               )
       Appellant-Plaintiff,                    )
                                               )
              vs.                              )      No. 49A02-1309-CR-756
                                               )
DAVID LOTT HARDY,                              )
                                               )
       Appellee-Defendant.                     )

                    APPEAL FROM THE MARION SUPERIOR COURT
                         The Honorable William J. Nelson, Judge
                           Cause No. 49F18-1112-FD-86926

                                     April 29, 2014

                              OPINION – FOR PUBLICATION

PYLE, Judge
                                 STATEMENT OF THE CASE

          The State of Indiana appeals the trial court’s dismissal of its charges against David

Lott Hardy (“Hardy”) for four counts of Class D felony official misconduct.1

          We affirm.

                                             ISSUE

    Whether the trial court abused its discretion when it granted Hardy’s motion to dismiss.

                                            FACTS2

          Hardy is the former Chairman of the Indiana Utility Regulatory Commission

(“IURC”). During his time as Chairman, Hardy was involved in the approval process for

a petition filed by Duke Energy Indiana (“Duke”) and Southern Indiana Gas and Electric

Company, d/b/a Vectren Energy Delivery of Indiana (“Vectren”), to build an integrated

gasification combined cycle generating facility (“IGCC Project”) in Edwardsport,

Indiana. In their petition, Duke and Vectren also asked the IURC to approve ratemaking

changes so that they could recover the project’s construction, operation, and maintenance

costs.

          On December 9, 2011, the Marion County grand jury indicted Hardy on three

charges of Class D felony official misconduct for matters relating to his performance on

the IGCC Project. Four days later, the State moved to amend the indictment to add a

fourth charge of Class D felony official misconduct. The trial court granted the motion

1
    Ind. Code § 35-44-1-2.
2
 We held an oral argument in this case on March 31, 2014 in the Supreme Court Courtroom. We thank
counsel for their preparation and presentation.
                                                2
on January 23, 2012. The four charges were based on ethical and administrative, but not

criminal, violations that Hardy allegedly committed between 2008 and 2010.

       During that time frame, the official misconduct statute provided that a public

servant commits official misconduct if that person “knowingly or intentionally performs

an act that the public servant is forbidden by law to perform.” I.C. § 35-44-1-2 (2010)

(emphasis added). However, on July 1, 2011, after Hardy’s indictment, the Indiana

Legislature amended the statute to provide that a person commits official misconduct if

that person “knowingly or intentionally . . . commits an offense” in the performance of

his or her official duties. I.C. § 35-44.1-1-1 (emphasis added). The Indiana Code defines

“offense” as “a crime.” I.C. § 35-41-1-19.

       On April 4, 2012, Hardy filed a motion to dismiss the indictment. He cited several

pre-2011 court cases that he argued interpreted the official misconduct statute as

requiring an underlying offense to be criminal in nature.        He then pointed to the

discrepancy between these narrow court interpretations and the broad language of the

prior official misconduct statute as evidence that the legislature’s 2011 amendment was a

remedial amendment meant to conform the statutory language to court precedent. Based

on this interpretation, he argued that the amended version of the statute should apply

retroactively to him and that the trial court should dismiss his charges because they were

not founded on criminal offenses.

       Hardy also raised two constitutional arguments: (1) that the State’s application of

the official misconduct statute rendered it unconstitutionally vague and a nullity; and (2)

that Counts II-IV were based on an unconstitutional delegation of legislative authority.

                                             3
Finally, Hardy argued that Counts II-IV failed to state his offenses with sufficient

certainty.

       The trial court held a hearing on the motion on June 11, 2012. On June 25, 2012,

it found that Counts II-IV of the indictment failed to state a claim with sufficient

certainty, but it allowed the State to file an amended indictment to cure the defect. The

second amended indictment, which the State filed on July 9, 2012, detailed Hardy’s four

charges of Class D felony official misconduct as follows:

       COUNT I: OFFICIAL MISCONDUCT

              On or about and between April 2010 and August 3, 2010, DAVID
       LOTT HARDY, Chairman of the Indiana Utility Regulatory Commission
       and supervisor of Scott Storms, did knowingly aid and abet Scott Storms by
       communicating with employees of Duke Energy regarding Scott Storms’
       prospective employment while allowing Scott Storms to perform an act that
       Scott Storms was forbidden by law to perform, that is: Scott Storms, an
       administrative law judge with the Indiana Utility Regulatory Commission,
       had a conflict of economic interest (I.C. [§] 4-2-6-9), in that he knowingly
       participated in decisions and/or votes when Scott Storms had a financial
       interest in the outcome of the matter arising from prospective employment
       as counsel for Duke Energy;

       COUNT II: OFFICIAL MISCONDUCT

              On or about and between March 17, 2008, and October 5, 2010,
       DAVID LOTT HARDY, a public servant, to wit: the Chairman of the
       Indiana Utility Regulatory Commission, did knowingly perform an act that
       DAVID LOTT HARDY was forbidden by law to perform, that is: DAVID
       LOTT HARDY received a communication in violation of I.C. [§] 8-1-1-
       5(e), to wit: communications from Jim Turner and/or Jim Stanley on or
       about March 17, 2008, regarding revised cost estimates of the Edwardsport
       IGCC Project, and failed to disclose such communication in the manner
       required by 170 IAC 1-1.5-6, to wit: by failing to tender to the record of
       the proceeding a memorandum stating the substance of the oral
       communications received, all oral responses made and the identity of each
       person from whom the communication was received and advise all parties
       that such items had been tendered to the record;

                                            4
      COUNT III: OFFICIAL MISCONDUCT

              On or about and between February 24, 2010, and October 5, 2010,
      DAVID LOTT HARDY, a public servant, to wit: the Chairman of the
      Indiana Utility Regulatory Commission, did knowingly perform an act that
      DAVID LOTT HARDY was forbidden by law to perform: that is: DAVID
      LOTT HARDY received a communication in violation of I.C. [§] 8-1-1-
      5(e), to wit: communications from James Rogers, Jim Turner, and/or Jim
      Stanley on or about February 24, 2010, regarding revised cost estimates of
      the Edwardsport IGCC Project and/or contemplated mitigation procedures
      to minimize the impact of increased cost estimates upon energy consumers,
      and failed to disclose such communication in the manner required by 170
      IAC 1-1.5-6, to wit: by failing to tender to the record of the proceeding a
      memorandum stating the substance of the oral communication received, all
      oral responses made and the identity of each person from whom the
      communication was received and advise all parties that such items had been
      tendered to the record;

      COUNT IV: OFFICIAL MISCONDUCT

              On or about and between August 19, 2010, and October 5, 2010,
      DAVID LOTT HARDY, a public servant, to wit: the Chairman of the
      Indiana Utility Regulatory Commission, did knowingly perform an act that
      DAVID LOTT HARDY was forbidden by law to perform, that is: DAVID
      LOTT HARDY received a communication in violation of I.C. [§] 8-1-1-
      5(e), to wit: communication from Michael Reed on or about August 19,
      2010, regarding settlement negotiations involving pending proceedings
      before the Indiana Utility Regulatory Commission in regard to the
      Edwardsport IGCC project, and failed to disclose such communication in
      the manner required by 170 IAC 1-1.5-6, to wit: by failing to tender to the
      record of the proceeding a memorandum stating the substance of the oral
      communications received, all oral responses made and the identity of each
      person from whom the communication was received and advise all parties
      that such items had been tendered to the record;

             All of which is contrary to statute and against the peace and dignity
      of the State of Indiana.

(App. 204-06).

                                           5
       On July 20, 2012, Hardy filed a motion to dismiss the second amended indictment,

incorporating the arguments from his first motion to dismiss. The trial court denied the

motion on July 30, 2012, and, on August 27, 2012, Hardy filed a motion to certify the

order for interlocutory appeal. The trial court granted the motion, but this Court declined

to accept jurisdiction over the interlocutory appeal and also denied Hardy’s subsequent

petition for a rehearing.

       On January 10, 2013, the trial court judge recused himself, and the case was

reassigned. Subsequently, Hardy filed a renewed motion to dismiss. He raised as new

evidence a September 2010 report the Indiana Inspector General had submitted to the

Indiana General Assembly. In the report, the Inspector General characterized the official

misconduct statute’s phrase “forbidden by law” as ambiguous. Noting this ambiguity, the

Inspector General requested that the legislature amend the statute to clarify that an

underlying offense for official misconduct must be criminal in nature. In his renewed

motion to dismiss, Hardy argued that this report, in combination with the legislature’s

subsequent 2011 amendment, was evidence of the legislature’s intent for its amendment

to be remedial in nature, and that the trial court should apply the amendment retroactively

to him. Hardy also renewed the arguments from his previous motions to dismiss. The

trial court granted Hardy’s motion with respect to all four counts, agreeing that the

Inspector General’s report was evidence that the legislature had intended its 2011

amendment to be remedial and that the amendment should apply retroactively to Hardy.

       The State now appeals. We will provide additional facts as necessary.

                                            6
                                           DECISION

       On appeal, the State argues that the trial court erred in retroactively applying the

amended version of the official misconduct statute to Hardy because the legislature’s

amendment was not remedial in nature and because there was no compelling reason to

give it retroactive effect. In response, Hardy argues that the amendment was remedial

and, regardless, should still have retroactive effect. Alternatively, Hardy contends that

we should affirm the trial court on any basis supported by the record. He reiterates the

arguments he raised in his motions to dismiss, including that: (1) the State’s application

of the prior official misconduct statute to the instant case renders the law

unconstitutionally vague; (2) Counts II-IV are improperly based on an unconstitutional

delegation of authority; and (3) Counts II-IV do not properly allege a crime.

       Throughout these proceedings, neither party has disputed that the previous version

of the statute was in effect when Hardy allegedly committed the violations underlying his

charges, and neither party has disputed the fact that none of Hardy’s charges are based on

criminal offenses. Accordingly, the issues before us are purely legal. We generally

review a trial court’s decision on a motion to dismiss under an abuse of discretion

standard, but we do not do so when the ruling depends on the interpretation of a statute or

other questions of law. See McCown v. State, 890 N.E.2d 752, 756 (Ind. Ct. App. 2008).

We evaluate questions of law under a de novo standard and do not owe any deference to

the trial court’s legal conclusions. Id.

       We conclude that the trial court properly granted Hardy’s motion to dismiss,

although our rationale differs from the trial court’s. In its order granting Hardy’s motion,

                                              7
the trial court found that the Inspector General’s report was conclusive evidence that the

legislature had intended its 2011 amendment to be remedial in nature. Based on this

finding, the trial court determined that the current amended version of the official

misconduct statute should apply retroactively to Hardy. However, we need not go so far

as to interpret the Inspector General’s report or the nature of the 2011 amendment

because Hardy’s charges were also improper under the former version of the statute.

       Our conclusion is based on the Indiana Supreme Court’s decision in State v.

Dugan, 793 N.E.2d 1034 (Ind. 2003), which Hardy cited in all of his motions to dismiss.

Dugan concerned an Indiana State Excise Police officer who was charged with official

misconduct for allegedly accepting gratuities from the owner of two companies that were

permitted to sell alcoholic beverages. See id at 1035. The State’s charging information

alleged that Dugan violated Indiana Code § 7.1-5-5-2, which makes it unlawful for an

officer of the Indiana State Alcoholic Beverage Commission to receive a gratuity from a

person “applying for or receiving a permit to sell alcoholic beverages.” Id. at 1040. On

appeal, the Supreme Court determined that the State had properly charged Dugan with

official misconduct. Id. In its opinion, the Court explained the requirements for the

official misconduct statute as follows:

       Although the language of Ind. Code § 35-44-1-2(1) is broad and general,
       the heart of the issue in an official misconduct charge is explicit: whether
       the act was done by a public official in the course of his official duties.
       There must be a connection between the charge and the duties of the office.
       A charge for misconduct must rest upon criminal behavior that is related to
       the performance of official duties. Needless to say, if the misconduct bears
       no relation to the official duties, there is no official misconduct.

                                            8
Id. at 1039 (internal citations omitted) (emphasis added). As this passage demonstrates,

the Supreme Court interpreted the “forbidden by law” language of the official misconduct

statute as requiring an underlying violation to be criminal in nature. See id.

       The State dismisses that interpretation here, arguing that it was merely dicta.

Obiter dictum—dicta—refers to statements that a court makes that are not necessary in

the determination of the issues presented. Koske v. Townsend Engineering Co., 551
N.E.2d 437, 443 (Ind. 1990). They are not binding and do not become the law, although

we may consider them persuasive. Id.; BLACK’S LAW DICTIONARY 1102 (8th ed. 2004).

In support of its argument, the State claims that the dispositive issue in Dugan concerned

prosecutorial discretion.   We agree with the State that one of the issues on appeal

concerned prosecutorial discretion, but we cannot agree that the Court’s discussion of the

official misconduct statute was dicta.

       Before the Supreme Court granted transfer in Dugan, this Court held that the State

should have charged Dugan under a different statute than the official misconduct statute

and that the charges were, thus, improper. See Dugan, 793 N.E.2d at 1039. We noted

that Indiana Code § 7.1-5-1-8 was intended to cover violations of Indiana Code Title 7.1

that did not have a specific penalty attached. Id. Because Indiana Code § 7.1-5-5-2, the

statute that Dugan had allegedly violated, did not have a specific penalty attached, we

concluded that the State should have charged Dugan under Section 7.1-5-1-8 instead of

the official misconduct statute. See id. Accordingly, one issue that the Supreme Court

addressed on appeal was whether the State had the discretion to charge Dugan under

either of two, equally applicable statutes. See id. The Supreme Court held that the State

                                             9
did have this discretion.        Id. at 1040.       As a result, we agree with the State that

prosecutorial discretion was one issue on appeal.

        However, prosecutorial discretion was not the only issue. Because the Supreme

Court determined that the State did have discretion in choosing the statute under which to

charge Dugan, the Court then had to address whether or not the State’s original charges

under the official misconduct statute were valid. See id. It was in this context that the

Court wrote the above quoted language where it analyzed the official misconduct

statute’s requirements. See id. at 139. As the Supreme Court’s analysis of the statute’s

language was necessary for its determination of the issues in Dugan, we find that its

interpretation of “forbidden by law” was not dicta.

        Dugan’s subsequent history supports this conclusion. Since Dugan, we have cited

the Supreme Court’s language in multiple cases, including Kinnon v. State, 908 N.E.2d
666, 668 (Ind. Ct. App. 2009); Heinzman v. State, 895 N.E.2d 716, 723-24 (Ind. Ct. App.

2008), trans. denied; and State v. Lindsay, 862 N.E.2d 314, 319 (Ind. Ct. App. 2007),

trans. denied. Also, the State was not able to advise us of any cases since Dugan where

the State has charged a defendant with official misconduct based on civil, ethical, or

administrative violations, rather than criminal offenses.3 In light of this history, it is clear

3
  The State cites Moran v. State, 477 N.E.2d 100 (Ind. Ct. App. 1985), in which Moran’s charges of
official misconduct were based on underlying administrative violations. However, the Court decided
Moran prior to the Supreme Court’s decision in Dugan. We are bound by our Supreme Court’s decisions,
and its precedent is binding until it is changed by the Supreme Court or legislative enactment. Culbertson
v. State, 929 N.E.2d 900, 906 (Ind. Ct. App. 2010), trans. denied. Accordingly, we are bound by Dugan
rather than Moran. Moreover, because we ultimately dismissed Moran’s charges because they did not
state his offenses with sufficient certainty, our discussion in Moran regarding the official misconduct
statute was dicta. See Moran, 477 N.E.2d at 104.
                                                   10
that Dugan unequivocally established that a charge of official conduct must be based on a

criminal offense. See Dugan, 793 N.E.2d at 1039.

      The Supreme Court’s holding in Dugan was controlling law eight years prior to

the legislature’s 2011 amendment, as well as during the time period when each of the

violations underlying Hardy’s charges occurred.       Because our Supreme Court has

interpreted the official misconduct statute to require a charge of official misconduct to

rest upon criminal behavior that is related to the performance of official duties, we

conclude that the trial court did not abuse its discretion when it dismissed the State’s

charges against Hardy. We need not address any of the State’s or Hardy’s remaining

arguments.

      Affirmed.

MATHIAS, J., and BRADFORD, J., concur.

                                           11