Whistle Stop Inn, Inc. v. City of Indianapolis

• Decision Date: 11 April 2016
• Docket Number: No. 49S02–1604–MI–175.,49S02–1604–MI–175.
• Citation: 51 N.E.3d 195
• Parties: WHISTLE STOP INN, INC. and Louise Liford d/b/a Thirsty Turtle, Appellants–Plaintiffs, v. CITY OF INDIANAPOLIS, Mayor Greg Ballard, Indianapolis City–County Council, and Hoosier Park, LLC, Appellees–Defendants Appellee–Intervening Defendant.
• Court: Indiana Supreme Court

51 N.E.3d 195

WHISTLE STOP INN, INC. and Louise Liford d/b/a Thirsty Turtle, Appellants–Plaintiffs

v.CITY OF INDIANAPOLIS, Mayor Greg Ballard, Indianapolis City–County Council, and Hoosier Park, LLC, Appellees–Defendants Appellee–Intervening Defendant.

No. 49S02–1604–MI–175.

Supreme Court of Indiana.

April 11, 2016.

Mark Small, Indianapolis, IN, Attorney for Appellants.

J. Lee McNeely, Cynthia A. Bedrick, Scott A. Milkey, McNeely Stephenson, Shelbyville, IN, Attorneys for Amici Curiae Indiana Association of Cities and Towns and Indiana Municipal Lawyers Association.

George A. Gasper, Eric J. McKeown, Ice Miller LLP, Indianapolis, IN, Attorneys for Amicus Curiae City of Gary.

Andrew P. Seiwert, Adriana Katzen, Amanda J. Dinges, Pamela G. Schneeman, Office of Corporation Counsel, Indianapolis, IN, Attorneys for Appellee City of Indianapolis, Mayor Greg Ballard, Indianapolis City–County Council.

A. Scott Chinn, Anne K. Ricchiuto, Brian J. Paul, Faegre Baker Daniels LLP, Mark Crandley, Peter J. Rusthoven, Barnes & Thornburg LLP, Indianapolis, IN, Attorneys for Appellee Hoosier Park, LLC.

On Transfer from the Indiana Court of Appeals, No. 49A02–1407–MI–519

DICKSON, Justice.

We uphold Indianapolis' non-smoking ordinance (“Ordinance”), finding that it does not violate the Equal Privileges and Immunities Clause of Article 1, Section 23 of the Indiana Constitution. While the Ordinance provides an exemption to satellite gambling facilities but not to bars and restaurants, Article 1, Section 23 does not prohibit this disparate treatment. We affirm the trial court's grant of summary judgment in favor of the city.

Indianapolis first passed the Ordinance in 2005, banning smoking in public businesses but providing some exemptions, including for bars and taverns that had liquor licenses and neither served nor employed anyone under the age of eighteen. See City of Indianapolis and Marion County, Ind., Rev.Code tit. III ch. 616 (2005). A 2012 amendment removed the exemption for bars and taverns, but exempted businesses licensed as satellite gambling facilities by April 1, 2012.¹ Indianapolis Rev.Code tit. III ch. 616 sec. 204(a)(5) (2012). The plaintiffs sued, claiming that the Ordinance violated the Equal Privileges and Immunities Clause of the Indiana Constitution because it applied to them as bars and restaurants but exempted satellite gambling facilities. Hoosier Park, as a licensed satellite gambling facility² exempted from the Ordinance, intervened as a defendant. The defendants filed motions for summary judgment, which the trial court granted, finding that the Ordinance's exemptions did not violate the Indiana Constitution.

The plaintiffs appealed, arguing that the trial court erred by denying the plaintiffs' motions for emergency relief and judgment on the pleadings, by granting Hoosier Park's Motion to Intervene, and by granting summary judgment for the defendants on the Equal Privileges and Immunities claim. The defendants responded to these arguments and the City also asserted that the plaintiffs' claims were barred by res judicata. The Court of Appeals reversed the trial court, holding that the plaintiffs' claims were not barred by res judicata, that Hoosier Park was properly permitted to intervene, that judgment on the pleadings would have been inappropriate, and that the Ordinance's exemption for satellite facilities violated the Equal Privileges and Immunities Clause as compared to bars and restaurants. Whistle Stop Inn, Inc. v. City of Indianapolis, 36 N.E.3d 1118, 1130 (Ind.Ct.App.2015). The Court of Appeals severed the satellite facility exemption, finding that the rest of the Ordinance could still be given its intended effect. Id. The plaintiffs and Hoosier Park each petitioned for transfer,³ and we now address the constitutionality of the Ordinance's exemptions under the Indiana Constitution's Equal Privileges and Immunities Clause, and, except for severability,⁴ summarily affirm the Court of Appeals on the other issues.

Article 1, Section 23 of the Indiana Constitution provides that “The General Assembly shall not grant to any citizen, or class of citizens, privileges or immunities, which, upon the same terms, shall not equally belong to all citizens.” This Court in Collins v. Day “adopted a preeminent two-part standard for determining a statute's validity” under this provision:

First, the disparate treatment accorded by the legislation must be reasonably related to inherent characteristics which distinguish the unequally treated classes. Second, the preferential treatment must be uniformly applicable and equally available to all persons similarly situated.

Paul Stieler Enters., Inc. v. City of Evansville, 2 N.E.3d 1269, 1273 (Ind.2014) (quoting Collins v. Day, 644 N.E.2d 72, 80 (Ind.1994) ). This test applies to municipal ordinances as well as state statutes, and both prongs must be satisfied for the enactment to be constitutional. Id. “Whether a statute or ordinance is constitutional on its face is a question of law and we review the matter de novo, ” though it “stands before this Court clothed with the presumption of constitutionality until clearly overcome by a contrary showing.” Id. at 1272–73 (internal quotations and citations omitted).

As established in Collins, we “must accord considerable deference to the manner in which the legislature has balanced the competing interests involved.” 644 N.E.2d at 80 (citation omitted). We “[p]resum[e] the statute to be constitutional,” placing “the burden upon the challenger to negat[e] every conceivable basis which might have supported the classification.” Id. (internal quotation omitted). This deference, however, does “not eviscerate the two-prong constitutional test established,” but “merely emphasize[s] the importance of appropriate legislative deference, especially with regard to legislative classifications.” Paul Stieler, 2 N.E.3d at 1277. “[I]t is within the province of this Court to determine whether the exercise of legislative discretion violates express provisions of the Indiana and Federal constitutions.” Id. (emphasis in original).

The plaintiffs argue that applying the Article 1, Section 23 test may be unnecessary because “[i]f Paul Stieler controls, there is no need for further analysis.” Appellants' Br. at 25. While Paul Stieler did involve a superficially similar ordinance and constitutional claim, important differences prevent it from controlling our decision here. Instead, we apply anew the two-part Collins test to the challenged exemptions in this Ordinance. Because of differing views among the parties, we particularly address inherent characteristics of classes and the role of legislative deference.

1. The First Collins Prong

Under the first prong of the Collins test, “the disparate treatment accorded by the legislation must be reasonably related to inherent characteristics which distinguish the unequally treated classes.” 644 N.E.2d at 80. In this case, the disparately treated classes are satellite gambling facilities, which are exempted from the Ordinance, and bars and restaurants, where the Ordinance bans smoking. “In analyzing a Section 23 challenge, it is the disparate classification alleged by the challenger, not other classifications, that warrants review.” Myers v. Crouse–Hinds Div. of Cooper Indus., Inc., 53 N.E.3d 1160, 1165, 2016 WL 825111 at *3 (Ind.2016). But those classifications must “have a sufficient basis in the challenged legislation.” Id. Here, the plaintiffs argued in their Motion for Judgment on the Pleadings that the Ordinance violates Article 1, Section 23 “in that smoking is banned in taverns and restaurants but allowed in satellite gambling facilities.” Appellants' App'x at 85. See also Appellants' Br. at 13 (arguing that Indianapolis “has not established the inherent qualities that justify unequal treatment of Bar Owners and Hoosier Park”). This class distinction has a sufficient basis in the Ordinance, which exempts “[a]ny business that on or before April 1, 2012 held a license pursuant to IC 4–31–5.5 to operate a satellite facility in the consolidated city and county” but did not exempt bars and restaurants such as the plaintiffs. Indianapolis Rev.Code tit. III ch. 616 sec. 204(a)(5). Under this first prong we therefore examine whether the Ordinance's disparate treatment is reasonably related to any of these classes' inherent characteristics.

a. Inherent Characteristics

The plaintiffs and defendants apply different definitions of “inherent” when identifying potentially inherent characteristics. The plaintiffs cite several dictionaries, arguing that “inherent” characteristics are “permanent,” “essential,” “intrinsic,” and “inalienable.” Appellants' Br. at 31. Hoosier Park responds that under Indiana case law, “different regulatory treatment between legislatively created classes” may be “inherent for purposes of equal privileges and immunities analysis.” Appellee Hoosier Park's Pet. to Tr. Reply Br. at 1. Under Indiana's Equal Privileges and Immunities Clause, “inherent” does not refer only to immutable or intrinsic attributes, but to any characteristic sufficiently related to the subject matter of the relevant Collins classes.

Collins itself was not concerned with dictionary definitions of “inherent,” but with longstanding precedent that “[t]here must be inherent differences in situation related to the subject-matter of the legislation which require, necessitate, or make expedient different or exclusive legislation with respect to the members of the class.” 644 N.E.2d at 78 (quoting Heckler v. Conter, 206 Ind. 376, 381, 187 N.E. 878, 879 (1933) ). Such difference must have “reference to the subject matter.” Collins, 644 N.E.2d at 80. Differences unrelated to the subject matter cannot satisfy the Equal Privileges and Immunities Clause's inherency requirement, which “incorporates and satisfies the often expressed concerns that such legislative classifications be ‘just,’ ‘natural,’ ‘reasonable,’ ‘substantial,’ ‘not artificial,’ ...