Indiana Toll Road lawsuit goes before judge

News Northwest Indiana News May 12, 2006
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Key questions emerged as St. Joseph Superior Court Judge Michael Scopelitis heard testimony on Thursday, May 11, in a legal challenge to leasing the Indiana Toll Road.

Lawyers for Gov. Mitch Daniels' administration want Scopelitis to invoke a 1998 state law intended to keep "public" lawsuits from stalling things like sewer improvements or school construction, the Northwest Indiana News reported.

A public lawsuit label would force the challengers, led by West Lafayette farmer and activist Steve Bonney, to prove a "substantial likelihood of success," or post a bond as high as $3.8 billion--the bounty a Spanish-Australian consortium has offered for a 75-year Toll Road lease, according to the newspaper.

"We think it's clear from the statute that that is a public lawsuit," said Michael Wukmer, an attorney with Ice Miler, an Indianapolis firm representing the state.

Lease challengers contend that public lawsuit statute protects only towns, school districts and other municipal corporations. They argue that the law only applies to the financing or construction of new assets.

"What it's designed to do is ensure that the courthouse or the school building gets built," said Arend Abel, lead counsel for the plaintiffs. "The Toll Road is already there."

Abel said the public lawsuit law has been tested some 60 times, but never in a case involving the state.
Scopelitis questioned why lawmakers would shield cities and schools but not state government.

"I can't always explain why the Legislature chooses and uses the words that it does," said Wukmer, arguing the law extends to all state entities.

Abel said a semicolon in the statute shows legislators intended the law to apply only to municipal corporations. If the semicolon argument proves central to the decision, it will be a very valuable piece of punctuation, the newspaper reported.

State Budget Director Chuck Schalliol testified that Cintra-Macquarie can walk away from its $3.8 billion if the Toll Road lawsuit still is alive by the lease closing deadline of June 30.

Meanwhile, the three losing bids expired last month and probably could not be revived, Schalliol said during his two hours on the stand.

According to the Northwest Indiana News, the state wants the lease to fund a decade of road construction and up to $120 million for the Northwest Indiana Regional Development Authority.

Indiana Public Finance Director Ryan Kitchell followed Schalliol on the stand, and said the state would reap only $1.4 billion over 75 years without the lease.

Schalliol and Kitchell oversee the Indiana Finance Authority, which is responsible for issuing state debt and holds title over the Toll Road and other assets.

Scopelitis will hear more testimony Monday. The case could end quickly if he declares it a public lawsuit and sets a high bond.

Otherwise, the actual trial would most likely begin in June. Scopelitis suggested he could rule the lease challenge itself a public lawsuit while letting other issues, such as how the proceeds are to be spent, move forward without a bond.

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