Pharos-Tribune

September 6, 2013

Kitchell, city argue suit before state court

Decision date yet to be determined

by Mitchell Kirk
Pharos-Tribune

---- — INDIANAPOLIS — Oral arguments for a lawsuit filed by a Logansport citizen against city officials took place at the Indiana Supreme Court Thursday.

The suit was first filed in Cass County Superior Court II in March by Julie Kitchell against Logansport Mayor Ted Franklin and City Council. It claims legislation authorizing the city to negotiate with power plant developer Pyrolyzer LLC is invalid because it was adopted out of order in a sequence defined by state statutes.

The suit alleges an ordinance authorizing the city to engage in the public-private agreement process with Pyrolyzer is invalid because it was adopted after issuing a request for proposals regarding the project.

In the suit, Kitchell's attorney, Jim Brugh, cites the Indiana Code's 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 issuing the request for proposals.

Justice Steven David queried Brugh on this matter.

"Do you agree the cart before the horse issue would be much stronger had the city actually entered into a definitive contract rather than something less than that?" he asked.

The city adopted the ordinance after the request for proposals was issued and after Pyrolyzer was chosen, but negotiations with the company are expected to continue through October.

Brugh said because the city is now dealing exclusively with Pyrolyzer to establish a public-private agreement, Kitchell "thinks that she is riding on the horse and the cart is behind her."

Mark Crandley is representing Franklin in the case and John Molitor is representing the council.

They argue against Brugh's application of the Home Rule Act to the state's public-private agreements statute, saying the law in this regard only applies to large municipalities and that it is optional for cities like Logansport.

Crandley told the justices that Kitchell's "entire claim is built on a legal assumption."

One of the elements of Crandley's and Molitor's filings that led to the case's dismissal at the county level was their citation of a state statute that allows for the ratification of previous actions. They argue even if the ordinance was adopted out of order, this ratification statute would allow it to maintain its validity.

Justice Loretta Rush brought this up during the proceedings as well.

Brugh argued, as he has in previous motions, that there is only precedent for this ratification statute in instances involving contracts, not ordinances.

Justices asked attorneys for both sides if there would be any financial consequences regarding the project should Kitchell win.

Brugh said there hasn't been any evidence of financing for the project yet. Molitor said the financing is there, but the details have not been made public.

"A wise man once said, 'When possible, use someone else's money,'" Molitor told the justices. "That's what we have here — private financing."

David asked Brugh what he thought would ultimately happen should Kitchell win the case. Justice Robert Rucker asked what would be accomplished.

"They would have to do it again the right way," Brugh said, going on to say what would be accomplished is that "the law has been obeyed."

Crandley said the consequences would be far more substantial.

"Mr. Brugh's point is that it has no effect," he said. "It has a huge effect on my client."

Crandley went on to predict the possibility of the project losing financing if the bidding process was to start all over again.

"All of these losing bidders know what the winning bid was," he said. "Now we have an unfair process."

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

EDITOR'S NOTE: An earlier version of this story failed to state Jim Brugh's first name on first mention and did not identify him as Kitchell's lawyer. We regret the error.