Friday, July 03, 2009

TRO Quietly Issued By Judge Hanley This Week Turning Heads

As a state budget deadline loomed this week, Gov. Mitch Daniels announced a shutdown plan that included the closing of the state's licensed gaming facilities. Unknown to the general public, not to mention the State of Indiana, the Indiana Gaming Association went into Marion Co. Superior Court Judge John Hanley's courtroom and obtained a temporary restraining order that would have allowed the casinos to remain open if the legislature failed to approve a new state budget by the end of Tuesday. The Indiana Attorney General's office was not even been permitted to respond to the Gaming Association's request before the TRO was issued! The Indiana Legislative Insight reports on this highly unusual court order:

The prospective shutdown of state government might not have been quite as sweeping, complete, or devastating as the Governor painted it in the days leading up to July 1. While he threatened to shut down the casinos, our sister newsletter, INDIANA GAMING INSIGHT, reports that the Casino Association of Indiana late last Tuesday afternoon quietly obtained a Temporary Restraining Order from Marion County Superior Court Judge John F. Hanley, a former chair of the Indiana Alcoholic Beverage Commission, that would have allowed the state's 11 casinos and two racinos to remain open. The Office of the Attorney General says that it did not have the opportunity to appear and respond prior to issuance (the Hanley TRO was time-stamped by court personnel at 4:20 p.m.).

Judge Hanley's detailed TRO specifically finds that "Gaming agents are essential employees in that they are necessary to protect and preserve the State's financial assets and resources by allowing Plaintiffs' casinos to operate and pay taxes to the State," theoretically opening the door to other state employees (such as those with the Department of Revenue) being labeled "essential" in any future such scenario. He also notes that for each day the casinos are closed, the State of Indiana [and local governments] would lose approximately $3 million in tax revenue. Additionally, approximately 16,000 employees would be laid off; casinos would potentially lose valuable trained employees and the various state funds and local governments benefitting from casino operations would suffer greatly." Judge Hanley also finds that the State's removal of gaming agents from casinos, forcing their closure, "would constitute a taking of property," triggering due process protections. "Since all expenses associated with the Gaming Commission and the gaming agents are required to be paid directly by Plaintiffs the State of Indiana will incur no benefit by shutting down Plaintiffs" casinos. However, the injury to Plaintiffs would be catastrophic and total negative effect of such action by Defendants is unpredictable. By shutting down Indiana casinos, the State will lose millions of dollars in tax revenue and receive no benefit. Both Plaintiffs and Defendants would benefit by the continued operation of Plaintiffs' casinos."


iPOPA said...

AI: I'm not familiar with the law at issue here. Did the gaming industry have a strong likelihood of prevailing on the merits? I ask because the irrevocable loss seemed pretty likely, so I can't say I'd disagree with Hanley on that issue. Were you disagreeing with the decision itself, the manner in which it was rendered, or both? Thanks.

Advance Indiana said...

Based on my experience, I find it unusual that the TRO was issued against a proposed action of the government without an opportunity for the government to be heard. I agree with you on the loss the casinos would suffer, and even if the government had been afforded an opportunity to respond, they might well have still prevailed. There are strong arguments in support of the order.