At a Tuesday afternoon hearing lasting around an hour, the two sides in an ongoing annexation lawsuit between the City of Bloomington and Gov. Eric Holcomb presented oral arguments.
Judge Frank Nardi did not issue a ruling from the bench. The March 26 hearing was held at the Charlotte Zietlow Justice Center in downtown Bloomington.
The City of Bloomington filed the lawsuit in 2017 over the state legislature’s decision to build into its budget bill a change to state annexation law. It was a change that effectively singled out Bloomington and paused any annexation plans by the city for five years.
Bloomington contends that because the new annexation law was incorporated into the 2017 biennial budget bill, it violates the State Constitution’s requirement that legislation be confined to a single subject.
Bloomington’s lawsuit also states that the new annexation law violates the State Constitution’s clause prohibiting “special” legislation. The constitutional claim involving special legislation hinges not merely on the fact that the new annexation law applies only to Bloomington. The claim arises from the city’s contention that the attempted justification for the law’s unique application is not adequate.
To some extent, the two sides spent their time on Tuesday rehashing arguments they’d already submitted to the court.
The oral presentations, however, featured a slightly different flavor from the written briefs—especially on the part of the city, and its claim that the new annexation law is unconstitutional under the special legislation clause. The ingredient that city attorney Mike Rouker added to his oral remarks was “burden.”
Rouker was able to add a healthy measure of “burden” to the mix on Tuesday, in part because a recent Indiana Supreme Court case clarified exactly where the burden falls in disputes about violations of the special legislation clause.
On March 15, less than two weeks before the March 26 hearing, the state Supreme Court issued an opinion on Hammond vs. Herman & Kittle. The case dealt with a claim that a state statute regulating rental property inspection fees was impermissible special legislation under the State Constitution.
In the Hammond case, the court clarified that the burden falls on the legislation’s proponent to demonstrate that the uniquely affected class has “unique characteristics that justify the particular form of differential treatment provided by the special law.”
So Rouker took care to establish early in his remarks on Tuesday what was required of Holcomb: He needed to demonstrate that the characteristics he was claiming to be unique to Bloomington, really were unique to Bloomington and tied to the law in a way that justified the law’s specialness.
In broad strokes, the three characteristics claimed by Holcomb to be unique to Bloomington were: the “urgency” with which Bloomington approached its annexation process; the way Bloomington used remonstrance waivers; and the “significant public resistance” that arose in connection with Bloomington’s annexation process.
Unique Because: Urgency?
Rouker countered the idea that Bloomington acted too fast by pointing to the 133-day time period—four and a half months—that was planned for Bloomington’s annexations in 2017. The span fell within the statutory requirements for annexations, Rouker said, and was similar to the Boonville’s recent 154-day process for annexation.
Rouker also made the piquant observation that 133-days was a couple weeks longer than the state legislature’s long session (adjourned in odd years by April 30) and much longer than the one day the General Assembly had spent deliberating on the annexation legislation. Rouker concluded that 133 days was surely a reasonable amount of time for legislative deliberation.
Deputy attorney general Julia Payne argued the governor’s side at the March 26 hearing. She said the idea that Bloomington’s annexation was too fast did not depend on the timeline, but rather on the “urgency” with which Bloomington acted. She traced Bloomington’s desire to expand territorially to Mayor John Hamilton’s campaign platform, and said that Hamilton had been “aghast” that Bloomington had not annexed any territory since 2004. Hamilton, who attended Tuesday’s hearing, did not appear to react to Payne’s characterization.
Payne also gave some evidence that Hamilton was hoping to complete the annexation process before the state legislature could enact some changes to state law. Based on legislation pending at the time, changes might have, among other things, given a county the ability to veto a proposed annexation by a city. Payne also said that the Indiana Supreme Court’s “matter of degree” principle should be considered.
Judge Nardi gave the two sides ample opportunity to rebut. In response, Rouker said the notion of “urgency” was vague and subjective. The idea of “urgency” could not be applied in a clear way to other situations, he said. In contrast, a timeline can be objectively measured, Rouker said. Payne responded by saying that “mathematical precision” is not necessary in order to find that Bloomington is unique.
Unique Because: Waivers?
Some of the properties planned for annexation by Bloomington had remonstrance waivers attached. State law gives property owners the right to object to having their land annexed into a city. But if a property owner signs a waiver, then this right is given up. The waiver runs with the land.
Under annexation law, if more than 50 percent of properties in an area have remonstrance waivers, property owners don’t have legal recourse to oppose annexation. In 2017, Bloomington proposed seven separate areas for annexation.
Arguing for the governor on Tuesday, Payne said that Bloomington’s had “gerrymandered” boundaries of the several proposed annexation areas. Bloomington had aimed to construct areas where more than 50 percent of properties had remonstrance waivers, she said. Holcomb’s papers filed with the court cite an email exchange between a financial consultant and a city staffer about the impact of removing waiver-encumbered properties from a proposed annexation area.
Rouker responded by saying that there was nothing untoward about the way Bloomington had considered such waivers in the annexation process. In fact, Rouker said, waivers are required by state law for a property to be hooked up to city sewer lines. Looking at which properties have attached remonstrance waivers is only natural for a city considering which areas to annex, Rouker said—because those are areas where sewer service is provided, which is an indicator of the urbanized character of the area. And those are exactly the areas that are suitable for annexation, Rouker said.
In any event, Rouker added, the number of remonstrance waivers attached to properties in a proposed area was only one of several different factors considered in determining where the annexation boundaries would run. He pointed to one proposed area that had only five percent of properties encumbered with remonstrance waivers.
Unique Because: Resistance?
Rouker responded to the claim in Holcomb’s filed papers that Bloomington’s annexation process was unique, in need of regulation by special legislation, because the city’s annexation proposals were met with “significant public resistance.” Bloomington was hardly unique as a city in experiencing opposition to the enactment of various ordinances, Rouker said, adding that Bloomington “does not run its operations based on popular referendum.”
Payne picked up on the point about not running operations based on referendum, saying it meant Bloomington is “committed to ignoring its citizens.”
The other constitutional issue argued on March 26 was whether the new annexation law violates a clause in the State Constitution, Section 161, which limits legislation to a single subject.
On Tuesday, the two sides didn’t offer much beyond what was in their filed papers. Bloomington says there’s not even a tenuous connection between Section 161 and the biennial budget: “Section 161 does not have even a remotely tenuous connection or relationship to, or any rational unity with the budget bill to which it was attached.”
Holcomb maintains there’s a connection between annexation of land into a city and the biennial budget as follows: “Because the annexation of property by a political subdivision will necessarily alter the tax burden of the residents within the annexed property and the revenue collected by the municipality, Section 161 concerns budgeting and public expenditures.”
The March 26 hearing was the culmination of nearly two years of legal wrangling by the two sides. At the hearing, both sides were asking the judge for summary disposition of the case in their favor.
Judge Nardi, a magistrate on the Brown County Circuit Court, was appointed as a special judge to the case in mid-2017 after Monroe County Circuit Judge Frances Hill disqualified herself.
After Judge Nardi eventually rules, it’s expected that whichever side loses will appeal. Nardi said as much at the end of the hearing, which was the only time he made any remarks. He said he assumed that “a higher court will look at this.”
Rouker, Bloomington’s city attorney, was first to present oral arguments on Tuesday. He spoke uninterrupted by Judge Nardi for nearly 40 minutes.
After that, Payne—a deputy attorney general—gave a 15-minute presentation, pausing a couple of times in case Judge Nardi had any questions. The judge did not ask any questions of either side during the hearing.
The Indiana Supreme Court’s Hammond vs. Herman & Kittle ruling had more of an impact on Bloomington’s case beyond the question of burden. The Hammond case also appears to have dispatched one of the avenues of defense Holcomb was pursuing—namely that Bloomington, as a city, did not have legal standing to file suit in this situation.
The court affirmed Hammond’s standing as a city to sue, including in a footnote: “We summarily affirm the excellently crafted Court of Appeals decision that Hammond has standing to pursue its constitutional challenges.”
During Tuesday’s hearing, Rouker pointed out the positive impact of the Hammond case on Bloomington’s lawsuit. In her presentation, Payne did not mention Holcomb’s defense based on Bloomington’s standing.
The Hammond case will affect Bloomington in another way, even though Bloomington was not a party in that lawsuit. In the Hammond case, the court struck down the special clause of a statute on rental inspection fees. That means Bloomington’s rental inspection fees are now subject to the same $5 cap as other cities.
The court documents that were filed in advance of the March 26 hearing are accessible to the public through MyCase. (Search by case for 53C06-1705-PL-001138. Or download most of the court records in a single compressed file here: City of Bloomington vs. Holcomb.)