Just a Cost of Doing Business

The Indiana Supreme Court has issued yet another unanimous ruling in a case that legal observers considered–at the very least–a close call.

A few weeks ago, the Court upheld the use of the state’s educational voucher program to pay parochial school tuition, despite language in the Indiana Constitution that prohibits the payment of state dollars “for the benefit of” any religious organization or institution.  Unlike courts in other states with similar constitutional provisions (sometimes referred to as “Blaine Amendments”), the Indiana Supremes ruled that parents, not schools, benefitted from the program.

Like vouchers or not, the notion that parochial schools do not benefit from this new source of income is–well, let’s just say it’s quaint.

Now, the Court has unanimously ruled that Indiana’s cap on punitive damages is constitutionally fine and dandy, overturning a widely-praised lower court ruling by Judge David Dreyer to the contrary. Dreyer had ruled that the arbitrary ceiling on such awards violated both separation of powers and the right to trial by jury. This week, the Indiana Supreme Court ruled that the imposition of caps on such awards was constitutionally permissible.

Let’s accept the Court’s ruling on the law. (We have no choice.) What about the policy implications? After all, even if caps are constitutional, they certainly aren’t constitutionally required.

The whole point of punitive damages (which, by the way, are rarely awarded) is to teach a lesson to a defendant that has engaged in egregiously bad behavior. These damages aren’t meant to compensate a plaintiff for injury; they are meant to punish wrongdoing and deter similar behavior by others. When a corporation or other well-capitalized institution is responsible for the bad behavior in question, the amount awarded is supposed to be high enough to hurt the perpetrator’s bottom line. That’s the whole point.

In Indiana, punitive damages are capped at three times the amount of actual damages, or 50,000, whichever is higher.

For most large and medium-sized businesses in today’s economy, $50,000 is chicken feed. In cases where a company is profiting handsomely from the misbehavior in question, that fifty thousand dollars can be considered part of the cost of doing business.

In rescuing the cap, the Court has effectively erased the utility of punitive damage awards in such cases. We will undoubtedly hear that this ruling reinforces Indiana’s “business-friendly” legal climate. Count me as one who is less than thrilled that we are hanging out the welcome sign to businesses eager to control the costs of their own reprehensible practices.

With the departure of Randy Shepard, Frank Sullivan and Ted Boehm, Hoosiers are left with Mitch Daniels’ Supreme Court. It is a much-diminished body.

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Follow the Money

Many years ago, when I was practicing real estate law, I represented the developers of the Indianapolis Westin. I still remember a meeting with a mortgage broker from New Jersey; he asked me how long it took to pull a building permit, and I responded “About a day.” He looked at me as if I’d sprouted wings. In New Jersey, he informed me, it took about five years. And presumably—although he didn’t say this aloud—several bribes.

Whatever our problems in Indianapolis, we have historically been spared the sort of corruption that plagues other American cities. There have been exceptions, of course, but by and large, we’ve run an honest city government.

That may be changing.

There has been a lot of conversation, via media and especially the local blogs (see here and here), about SB 621, the “imperial Mayor” bill. The criticisms are all accurate enough—the outrage over the process, which entirely bypassed those who will be affected, the irony of Republicans giving increased power to the Mayor’s office given the probability that the increased authority will be exercised in the future by a Democratic Mayor, the gutlessness of the Governor’s signature on a bill that violates every principle he claims to support.

I don’t disagree with those criticisms, but my focus is on one part of the bill that has received far too little scrutiny: the provision giving the Mayor effective control of the Development Commission.

Another story may be instructive.  A former member of the City-County Council recently told me about a contentious zoning decision made by the Commission —a denial of a zoning change that would have increased the value of a particular parcel of land by several million dollars. The denial was appealed to the Council, and the developer who owned the land called upon the Councilor. During the visit, he explained that the Council member could expect continued financial and political support—if the Commission’s denial was reversed.

Before SB 621, the Mayor controlled four of the nine seats on the Development Commission. After January, he will control five.

It will be interesting to see who profits from decisions made by the Commission during the remainder of Ballard’s term, and how “connected” they are.

Administration defenders of the indefensible imperial Mayor bill are claiming—presumably with a straight face—that SB 621 is all about “accountability.” That’s rich, given the utter lack of accountability for a number of highly questionable spending decisions made by this mayor. (Perhaps if we had local newspaper reporters….but we don’t.) Case in point: barely a month ago, Ballard made what seemed to be an offhand remark about a cricket field during a trip to India. Last week, construction contracts were awarded. Contractors cannot bid without plans and specifications—they can’t price work in the abstract. Clearly, the cricket plans had been in the works for a long enough period to allow for the necessary documentation to be prepared. The Administration didn’t see fit to include the City-County Council or the public in the planning process—probably anticipating the criticism that is now being leveled at a fail accompli.

 Thanks to SB 621, the Mayor will no longer have any accountability to the Council or to voters. Thanks also to the provisions of SB 621 and the general lack of understanding of the power exercised by the Development Commission, the administration will have the remainder of Ballard’s term to enrich “connected” folks.

And if a Democrat wins the Mayor’s office next time, the Indiana legislature can simply change the rules again.

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And the Beat Goes On…

Frank Bruni’s Op Ed in yesterday’s New York Times reinforces a theme that has become all too common on this blog–a lament, really. He titled it “America the Clueless.”

Did you know (I didn’t) that despite the incredible amount of media devoted to “Obamacare” over the past few years, that forty percent of Americans don’t know it’s a law?

Some think it’s been repealed by Congress. Some think it’s been overturned by the Supreme Court. A few probably think it’s been vaporized and replaced with a galactic edict beamed down from one of Saturn’s moons. With Americans you never know.

Sixty-five percent of us can’t name a single Supreme Court Justice. Twenty-one percent believe that UFO really did crash in Roswell, and that the government has been covering it up ever since. As Bruni says, “That we Americans are out to lunch isn’t news. But every once in a while a fresh factoid like the Obamacare ignorance comes along to remind us that we’re out to breakfast and dinner as well. ”

As Bruni points out, engagement doesn’t necessarily correlate with information–just because someone is heavily involved in the political process is no guarantee that he or she possesses actual knowledge about the process or even the particular campaign or issue with which they are involved.

In 2010 in California, I covered a Tea Party rally at which Carly Fiorina, vying for the Republican nomination for a United States Senate seat, was scheduled to speak. I approached a couple whose profusion of hats and buttons and handmade signs — along with their willingness to spend hours in a crowded field under a punishing sun — led me to believe that they were at least somewhat politically engaged. I asked them if they were inclined to support Fiorina. With great seriousness, they said that they hadn’t yet decided between her and Meg Whitman. Whitman was running not for senator but for governor, in a race that hardly wanted for coverage. They didn’t have to choose.

My absolute favorite “factoid” from Bruni’s compendium, however, was this:

Months later a different poll asked voters about President Obama’s religious affiliation, persistently mistaken by some Americans to be Muslim. The good news? The share of voters making the Muslim error had dropped, to 10 percent. The weird news? Eighteen percent said Obama was Jewish.

I guess this answers my repeated question about how people like Louis Gohmert, Michelle Bachmann, Paul Broun et al get elected.

And speaking of religion, I have a favor to ask of those of you who pray. Would you please pray for a more enlightened, more rational America?

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That Was Quick…..

Heritage Foundation analyst Jason Richwine, the co-author of a study claiming the immigration reform bill pending in the Senate would cost taxpayers $6.3 trillion, has decided to spend more time with his family. Or something. His departure from Heritage was hasty, to say the least.

Among other things, Richwine’s “study,” which was widely panned (even Paul Ryan has criticized its methodology) came to conclusions that were diametrically opposed to a previous study issued by Heritage just a couple of years ago. But that earlier effort was issued before Jim DeMint became Heritage’s new chief.

The study’s conclusions were based in large part upon Richwine’s assertion that today’s immigrants have low IQ’s that they will pass on to their children–a racist assumption for which there is no credible evidence. In the wake of the report, Richwine’s dissertation–in which he espoused similar theories–became public, as did the fact that he had written articles in 2010 for a website founded by Richard Spencer, a self-described “nationalist” who writes frequently about race and against “the abstract notion of human equality.”

Heritage could hardly have been unaware of Richwine’s history; evidently, they saw his beliefs as a feature, not a bug.

The think tank has always had an ideological agenda, but the organization has previously made a show, at least, of actual scholarship. This episode has badly damaged whatever credibility Heritage retained. Richwine’s abrupt departure only underscores the damage.

Ironically, had they issued a less “over the top” report, opponents of immigration reform would undoubtedly have accepted it unquestioningly and used it as ammunition to derail reform. This product was so flawed, however, that it has been left to Rush Limbaugh to defend it. As a Maddow Blog post put it “The irony is, Heritage produced this report for exactly one reason: to provide some semblance of political cover to Republicans who needed a credible excuse to reject a bipartisan reform plan. The goal was to help the GOP and the far-right cause. The extent to which this backfired is extraordinary.”

It’s hard not to wonder how long Jim DeMint–an anti-science zealot who wouldn’t know real scholarship if he fell over it–will last.

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