Paul Stieler Enterprises, Inc. v. City of Evansville

RUSH, J.,

dissenting.

I respectfully dissent from the majority opinion and would uphold the constitutionality of Evansville's riverboat exemption under the Equal Privileges and Immunities Clause of the Indiana Constitution. Expanding a smoking ban to cover bars, taverns, and private clubs, but exempting a riverboat, is reasonably related to a riv*1280erboat's inherent characteristies-fiscal impact on the local economy and tax revenues, and out-of-town clientele that other local businesses lack. The Indiana Constitution does not require treating bars as equivalent to riverboats merely because they both serve alcohol. Ever since Collins v. Day, we have consistently held that plaintiffs who allege unconstitutional privilege must negate "every conceivable basis which might have supported the classification." The City's Amended Ordinance passes under this standard because the Petitioners present no substantial reason to overturn an ordinance tailored to fit local preferences.

Evansville may exempt the Casino Aztar ("the Riverboat") from its smoking ban if the exemption is "reasonably related to inherent characteristics which distinguish the unequally treated classes" and "uniformly applicable and equally available to all persons similarly situated." Collins v. Day, 644 N.E.2d 72, 80 (Ind.1994). In applying Collins, we must defer to legislative discretion and presume an enactment is constitutional, "placling] the burden upon the challenger 'to negative every conceivable basis which might have supported the classification.'" Id. at 79-80 (quoting Johnson v. St. Vincent Hosp., Inc., 273 Ind. 374, 392, 404 N.E.2d 585, 597 (1980)). The separation of powers demands that we avoid "substitut[ing] our judgment for that of the legislature." Id. at 80 (quoting Chaffin v. Nicosia, 261 Ind. 698, 701, 310 N.E.2d 867, 869 (1974)); see also Bunker v. Nat'l. Gypsum Co., 441 N.E.2d 8, 11 (Ind.1982). Here, our job is to examine all inherent characteristics of the Riverboat that reasonably justify the City's decision to exempt it from the smoking ban. If those characteristics are not an "arbitrary or manifestly unreasonable" basis for the exemption, then we must respect the will of the people of Evansville. See Collins, 644 N.E.2d at 80.

The fiscal impact on the local economy and City tax revenues is the first inherent characteristic that sets the City's only riverboat apart from other non-exempt entities. The State of Indiana has licensed the Riverboat as one of only ten riverboat casinos throughout the State. Ind.Code § 4-33-6-l(a) (2012)-inherently making the Riverboat a destination for visitors and an important asset to the local economy. Indeed, failing to exempt the Riverboat would reduce the City's annual budget by $4.3 million, reduce local suppliers' annual revenue by over $1.5 million, and eliminate $6.3 million in Riverboat employee wages. Common Council of the City of Evansville, City Council Minutes (Jan. 28, 2012) (Joint Exhibit No. 1) at 5-6 (PowerPoint slides). The record does not indicate that failing to exempt bars, taverns, and private clubs would have the same impact.

Local governments that consider the fiscal impact that public health legislation will have on landmark attractions like the

Riverboat aren't playing favorites-they're acting responsibly by facing economic reality.1 "[The courts owe deference to legis*1281lative line-drawing that has fiscal implications." Mahowald v. State, 719 N.E.2d 421, 425-26 (Ind.Ct.App.1999) (holding that fiscal considerations allow the General Assembly to provide better retirement benefits to some, but not all, state legislators who have served for at least ten years).2 Local governments cannot protect the public health in a vacuum, and city councils don't have unlimited resources-which is why we have always given "considerable deference to the manner in which the legislature has balanced the competing interests involved." Collins, 644 N.E.2d at 79-80 (citing Johnson, 273 Ind. at 404-05, 404 N.E.2d at 604). The fiscal impact of the Riverboat is an inherent characteristic that distinguishes it from other venues the City didn't exempt.

Being one of only ten riverboats statewide also means the Riverboat attracts many out-of-town visitors, which is another inherent characteristic that reasonably justifies the City's exemption. The vast majority-87%-of all Riverboat patrons come from outside of Evansville City Council Minutes (Jan. 23, 2012) at 5-6 (PowerPoint slides). During two public hearings, Evansville council members heard testimony that the Riverboat's clientele is so distinct that it doesn't even compete with local business and restaurants for customers. Id. at 7; Common Council of the City of Evansville, Smoking Ordinance Comm. Meeting Minutes (Feb. 18, 2012) (Joint Exhibit No. 2) at 9. The City could rationally choose to expand its smoking ban to protect Evansville residents' health before visitors'. And in fact, the Amended Ordinance explicitly states that its "purpose ... is to protect the public health and welfare of all its residents," Evansville, Ind., Ordinance G-2012-1, Preamble (Feb. 14, 2012) (emphasis added), citing a recent survey from the Robert *1282Wood Johnson Foundation ranking Van-derburgh County 7T7ist out of the 92 Indiana counties in overall health. Id. Moreover, the Amended Ordinance allows hotels and motels to designate up to 20% of their rooms as smoking rooms-further proof that, the City chose not to burden entities that host non-residents. Id. at § 3. Admittedly, the City's Amended Ordinance fails to protect the 13% of the Riverboat's patrons who are Evansville natives. But classifications need not be "framed with such mathematical nicety as to include all within the reason of the classification and to exclude all others," as long as they have "some reasonable basis." Collins, 644 N.E.2d at 80 (quoting Cincinnati, H. & D. Ry. Co. v. McCullom, 183 Ind. 556, 561, 109 N.E. 206, 208 (1915). The Riverboat's clientele is an inherent characteristic that reasonably relates to the City's policy of protecting its residents' health first and foremost.

The City's preference for its residents also justifies the incremental approach of the Amended Ordinance. "'Exact exclusion and inclusion is impractical in legislation, " Collins, 644 N.E.2d at 80 (quoting Cincinnati, H. & D. Ry. Co., 183 Ind. at 561, 109 N.E. at 208), and all legislation has "competing interests" that local governments must balance, id. Accordingly, "the legislature must be allowed leeway to approach a perceived problem incrementally." FCC v. Beach Commc'ns, Inc., 508 U.S. 307, 316, 113 S.Ct. 2096, 124 LEd.2d 211 (1993). The City Council explicitly stated that its policy was incremental, and that it hoped to eventually expand its smoking ban to the Riverboat. Smoking Ordinance Comm. Meeting Minutes (Feb. 13, 2012) at 46. For example, when Councilman O'Daniel voted to approve the riverboat exemption, he stated "I would really love to see a comprehensive ban," but even a partial extension of the existing ban is "still progress and so for that reason I will [vote] yes for the exemption." Id. Other council members expressed similar aspirations, even while voting to exempt the Riverboat. Id. at 44-46. Expanding the Ordinance with a focus on local residents' health was a reasonable incremental step. But the majority opinion forecloses incrementalism by effectively requiring local governments to legislate with an "exact exclusion and inclusion" that our precedent does not demand.

In each regard, the record establishes that the City Council did not rely solely on the Riverboat's fiscal impact to justify its exemption. But the majority opinion overlooks all non-fiscal, inherent characteristies-specifically, the Riverboat's clientele-because those characteristics "are not embodied in the Amending Ordinance as prerequisites for the riverboat exemption to the Smoking Ban and thus are clearly not inherent distinguishing charac-teristies[.]" Op. at 1275. Because the majority has restricted its focus to the classification "embodied" in the ordinance, it is unable to find a "conceivable basis which might have supported the classification." I disagree for two reasons.

Foremost, the majority departs from Collins by looking only to the language of the Ordinance to uncover inherent characteristics, thereby diminishing our deference to legislative discretion. We have deferred to legislative discretion at every stage of the Collins analysis, not only when examining the express classifications used by the legislature. As we've paraphrased in another opinion, challengers must "negative every reasonable basis for the burden ... imposed," not just the "classification" assigned. Indiana High Sch. Athletic Ass'n, Inc. v. Carlberg, 694 N.E.2d 222, 240 (Ind.1997) (emphasis added) (applying Collins ). See also Dvorak v. City of Bloomington, 796 N.E.2d 236, 240 (Ind.2003); Mahowald, 719 N.E.2d at 426. *1283Our comprehensive use of the "every conceivable basis" standard is consistent with our practice of clothing all legislation "with the presumption of constitutionality until clearly overcome by a contrary showing." Boehm v. Town of St. John, 675 N.E.2d 318, 321 (Ind.1996). We do not limit this presumption of constitutionality to the language used in statutes and ordinances but extend it to all legislative action in toto. Under today's opinion, however, legislatures and local governments who hope to obtain the benefit of the "every conceivable basis" standard must now list all inherent characteristics in a statute or ordinance because they can no longer trust this. Court to defer to their judgment. Our Constitution requires no such formalism.

Moreover, the majority opinion does not follow the very rule it announces by focusing on a distinguishing characteristic that is not found anywhere in the Ordinance, while overlooking one that is. I agree that the Riverboat's fiscal impact is clearly important, but the Ordinance makes no mention of it as a basis for the exemption. And as discussed above, the Ordinance expressly declares its focus on local residents' health, Evansville, Ind., Ordinance G-2012-1, Preamble (Feb. 14, 2012)-yet the majority opinion does not address that distinguishing characteristic. Even if we were limited to characteristics specifically enumerated by the legislature, the Amended Ordinance would pass muster.

In conclusion, Evansville's only riverboat is inherently distinct from bars, taverns, and private clubs, and not just because it floats. It significantly impacts the local economy and attracts mostly out-of-town visitors-visitors who are not the primary focus of the Cfy's effort to expand its public health law protecting its residents from second-hand smoke. The City's exemption of the Riverboat from its public smoking ban does not violate the Equal Privileges and Immunities Clause because the exemption is reasonably related to those inherent characteristics. Holding otherwise would prevent cities like Evansville from acting incrementally to protect the public health and would unnecessarily encroach upon legislative prerogative. For these reasons, I respectfully dissent from the majority opinion.

RUCKER, J., concurs.

. The Delegates of the Constitutional Convention of 1850 to 1851 did not see Article 1, Section 23 as an obstacle for legislation that advanced the public good. Many of the Delegates spoke just as much about exceptions to Article 1, Section 23 as about its general meaning. For example, Delegate Othniel L. Clark of Tippecanoe County is well-cited as one who voted for Section 23 after initially opposing it. But the reason for his switch is often overlooked. He stated, "I say I voted for it, simply because I think it means nothing.... They have not told us what legislation it will prohibit, and what it will permit." 2 Report of the Debates and Proceedings of the Convention for the Revision of the Constitution of the State of Indiana 1397 (Wm. B. Burford Printing Co.1935) (1850). Delegate Clark always maintained that the legislature could grant privileges when public necessity de*1281manded it. Citing the example of legislatures granting limited river ferry licenses he said,

I think there are cases in which it would be right to grant monopolies-in case of a ferry, if you choose. I would grant a monopoly, so far as a ferry is concerned, by providing that there should not be another within a certain distance, so as to make it the interest of the party to whom the privilege is granted, to invest a necessary amount of capital, to provide for the public convenience .... [Where we grant to an individual a ferry, it is upon the condition that he shall be prepared with the necessary accommodations for the public, and not charge beyond a certain price. It is done for public good, and not for private benefit."

Id. (emphasis added). Other Delegates made similar comments, Delegate John B. Niles from LaPorte County stated ""If exclusive privileges be permitted to any number of men over all others, it can be justified only on the ground of some over-ruling public necessity, and for the sake of the public interests. And would it not be better to make such cases exceptions to the general rule?" Id. at 1394 (emphasis added). And Delegate Horace P. Biddle, representing Cass, Howard, and Pulaski counties, also discussed ferry licenses and said that the legislature could define exceptions for granting privileges: "I undertake to say that this proposition [does not] interfere[ ] with the legislative power to grant the privilege of the use of the ferry from year to year as it is now granted. It does not mean that every citizen of Indiana has a right to a ferry license before granted to another; it only means that every citizen may apply under the same circumstances and on similar terms." Id. (emphasis added). The Delegates were not opposed to privilege that advanced the public good.

. See also Indiana High Sch. Athletic Ass'n, Inc. v. Carlberg, 694 N.E.2d 222, 240 (Ind. 1997) (upholding under an Equal Privileges and Immunities challenge the IHSAA's transfer rule limiting athletic eligibility of transferees, in part, because of the financial cost of monitoring the motives of transferees); Hochstedler v. St. Joseph Cnty. Solid Waste Mgmt. Dist., 770 N.E.2d 910, 921 (Ind.Ct.App. 2002) (holding that a waste management district is "entitled to consider the fiscal implications of having an all-inclusive mandatory recycling program" under the Equal Privileges and Immunities Clause).