Tag Archives: Indiana Supreme Court

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.


…With A Little Help from My Friends

On my way to work this morning, WFYI informed me that today is the day Mark Massa will be sworn in as the newest Justice of the Indiana Supreme Court.

When Governor Daniels announced that he had chosen Massa, there was a good deal of criticism. Some observers expressed surprise that–once again–the Governor had ignored an opportunity to diversify the Court, that–once again–he had declined to appoint an eminently qualified woman. Adding insult to injury, Daniels claimed that his choice was based upon the candidates’ relative qualifications for the job, a manifestly bogus excuse.

I was not surprised by the choice, which I’d predicted well before the commission charged with winnowing the field even sent three names to the Governor. Nor do I believe it had any more to do with sexism than it did with merit.

This is Indiana–the crony state.

There’s a pretty robust academic literature dealing with political culture. Some states (Massachusetts, say) have a liberal culture that promotes public service; others (Arizona, Texas) take a considerably more conservative, parochial approach to the role of government. When I was researching state differences in political culture for a book on the Faith-Based Initiative, I asked George Geib–past Dean of History at Butler University and a long-time Indianapolis Republican operative–how he would describe Indiana’s political approach. His answer was that the framework within which we conduct our affairs is quid pro quo. 

Look around at the so-called “privatization” initiatives. Lucrative deals for parking and welfare intake have gone to well-connected ACS. The developer of the parking garage being built in Broad Ripple used to work for the Ballard Administration. A PR firm that gets city business just “happens” to employ Ballard’s son. These are just a few examples that come readily to mind; there are literally hundreds of others.

This isn’t new in Indiana, and it isn’t the exclusive provenance of Republicans. Both parties have practiced politics as spoils system, both have favored their cronies with appointments and contracts.

The problem women have in a crony system is that we are late to the party, and less likely to play the game–less likely to be one of the favored cronies. Nothing against our gender–if we were playing by the good old boys’ rules, we’d probably be equally likely to be rewarded with the plum jobs and/or contracts.

Mark Massa was counsel to the Governor; by all accounts, the two are friends. And in a state where doing business with your friends is the way business is done, his appointment was a foregone conclusion.