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March 19, 2013

Logansport responds to new lawsuit

Attorneys have filed motions for dismissal on behalf of Mayor Ted Franklin and the Logansport City Council regarding a lawsuit filed against the city last week stating the city did not properly authorize itself to seek the development of a new power plant.

Last November, Logansport Municipal Utilities issued a request for proposals from companies interested in entering into a public-private agreement to develop a plant powered by refuse derived fuel. In January, LMU endorsed a proposal submitted by Pyrolyzer, LLC, a renewable energy consulting firm based in Boca Raton, Fla. Logansport City Council has since voted to engage in negotiations with the company.

Last week, local attorney Jim Brugh filed a lawsuit against the city in Cass County Superior Court II on behalf of his client Julie Kitchell, a Logansport citizen. The lawsuit cites a part of Indiana Code that states a city must adopt a provision pertaining to public-private agreements before entering into one.

City council adopted the public-private agreement provision at its March 4 meeting. Brugh and Kitchell are saying it needed to be done before the request for proposal was submitted in November.

John Molitor, an Indianapolis-based attorney working as special counsel for the city, said Franklin has hired a litigation specialist, attorney Mark Crandley of Indianapolis-based Barnes & Thornburg LLP, to handle the case. Crandley filed a motion to dismiss the case on behalf of the mayor Monday. Crandley’s motion includes a brief for the judge’s     consideration as to why Crandley believes the case should be immediately thrown out on the basis that it has no merit.

Molitor agreed.

“We’re hoping the plaintiff comes to her senses and decides that it’s not worth it to continue to litigate this and that the whole thing in the first place was brought in bad faith,” Molitor said. “There’s no requirement in law that the statute had to be adopted in advance of the [request for proposal] issuance or advance of the mayor getting the authority to move forward with negotiations.”

Franklin shared a similar sentiment.

“I question the very merits of her claims,” Franklin said. “I think she’s received some horrible legal advice that is unfounded and probably is more the desire of the attorney than of the plaintiff.”

Brugh disagrees with Crandley, Molitor and Franklin. In his lawsuit, he cites the part of the Indiana Code called the Home Rule Act, part of which states, “If there is a constitutional or statutory provision requiring a specific manner for exercising a power, a unit wanting to exercise the power must do so in that manner.” He applies this law to the public-private agreement provision, concluding that the city had to first adopt the provision before even issuing the request for the power plant.

Molitor referred to the resolution passed by city council March 4, which not only adopted the public-private agreement provision, but adopted a provision of Indiana Code that states the council can ratify all actions previously taken regarding the power plant.

Brugh disagrees with this as well, adding that the Home Rule Act holds more weight than this statute.

“It’s just a cleanup law,” Brugh said of the ratification provision. “The words in that law, in my opinion, do not trump the more detailed choice of words in the Home Rule Act. It’s a question of statuatory construction. Local governments don’t have power. Local governments are created by the state, so that’s why within municipal law, there has to be a specific statuatory creation of the power. There’s already a law that says the city can enter into contracts. Why is there a specific one for [public-private agreements]? It’s because they’re unusual. You have to enable yourself to have this power if you’re going to presume to exercise it.”

Molitor said not only is the ratification provision legitimate in this matter, but is being used in the city’s motion for dismissal to illustrate the frivolousness of Kitchell’s lawsuit.

“They filed the lawsuit knowing that the city had duly ratified all those prior actions, so even if their legal theories held any water, the ratification of the prior actions of the city would override them completely. They had to know that, which is why we’re suggesting that this litigation has been filed in bad faith.”

Should the judge also find the case frivolous, Crandley goes on to request in his brief that the court award the city its costs and attorneys’ fees. Molitor said Kitchell would then be obligated to provide this reimbursement.

As city council is listed alongside the mayor as a defendant in the lawsuit, Molitor filed an appearance on its behalf as well. He said the council will meet in executive session Thursday to discuss strategy.

“We have no reason to think the council will have a different approach than the mayor has,” Molitor said.

Franklin said he hopes to resolve the matter soon.

“We just want to make sure that we dispose of this as quickly as possible, because there’s a tremendous amount of money on the line, not only for the city but for the investors and they have a right to know if they’re going to be welcomed here or not.”

Mitchell Kirk is a staff reporter at the Pharos-Tribune. He can be reached at 574-732-5130 or mitchell.kirk@pharostribune.com.

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