Posted by: Patricia Salkin | August 15, 2013

Indiana Appeals Court Holds Evidence of Biased Statements by Decision Maker Qualifies an Exemption to Exhaustion of Administrative Remedies

Van Kalker Family Limited Partnership, Lake County Trust Company, and Singleton Stone, LLC (collectively, “Singleton”) were developers who sought to rezone an area of Lake County, Indiana to construct a stone quarry.  Gary Scheub, chairman of the Drainage Board and a member of the Plan Commission, was vehemently and publicly opposed to Singleton’s project.  Scheub organized public opposition to the project and even persuaded the Plan Commission to issue a negative recommendation for it.  Ultimately, the Lake County Council approved Singleton’s project but required that it get a permit from the Drainage Board.  Knowing that Scheub, chairman of the Council, was opposed to the project, Singleton requested that Scheub recuse himself from the permit application.  When Scheub declined to recuse himself, Singleton filed a complaint against Scheub and the Lake County Drainage Board (“Drainage Board”) (collectively, “Appellants”), seeking a declaratory judgment against Scheub’s participation in the permit application.  Singleton argued that Scheub’s biased participation would deprive Singleton of due process.

The parties ultimately came to a settlement, agreeing that Scheub would recuse himself as long as the matter could continue after Scheub’s primary election for re-nomination as Lake County Commissioner.  After Scheub was successfully re-nominated, he supposedly “changed his mind” and refused to recuse himself.  Singleton filed a motion to enforce the agreement, which the trial court granted.  The trial court also denied Appellants’ motion to dismiss for lack of subject matter jurisdiction.  Appellants appealed the trial court decision to the Court of Appeals of Indiana.

The single issue on appeal was whether the trial court properly denied Appellants’ motion to dismiss for lack of subject matter jurisdiction.  Appellants’ main argument was that the trial court lacked jurisdiction because Singleton failed to exhaust all administrative remedies before filing a complaint with the trial court.  In response, Singleton contended that it did not need to exhaust administrative remedies because (1) it presented a pure question of law and did not seek judicial review, and (2) “administrative remedies would be futile” as Scheub refused to recuse himself from the matter as Singleton requested.

The Court of Appeals noted the importance of exhaustion of administrative remedies to promote efficiency in the judicial system, but that exceptions to this general rule exist when the administrative agency would be “powerless to effect a remedy” and turning to the agency would thus be futile.  The court then cited to Ripley County Bd. of Zoning Appeals v. Rumpke of Indiana, Inc., in which specific examples of a board member’s bias were submitted as evidence.  The court held that “when a biased [board] member participates in a decision, the decision will be vacated.”  The Rumpke court declined to remand for another hearing without the biased board member only because Rumpke never requested the member’s recusal.

In the present case, the court listed the numerous examples of Scheub’s bias and public opposition to the project.  When Singleton requested Scheub’s recusal from the permit application, Scheub refused to do so.   As a result, Singleton’s complaint seeking declaratory judgment was properly filed with the trial court as opposed to seeking further action from the Drainage Board.  The court here found that Scheub’s actions unquestionably amounted to an “actual bias” and would thus render any decision from the Drainage Board futile.  Since “any decision in which a biased Board Member participates will be vacated,” the Court of Appeals of Indiana concluded that the trial court had proper subject matter jurisdiction and affirmed its decision.

Scheub v. Van Kalker Family Limited Partnership, 2013 WL 3190095 (IN App. 6/25/2013)

The opinion can be accessed at: http://scholar.google.com/scholar_case?case=825733195729665451&hl=en&as_sdt=2&as_vis=1&oi=scholarr

 


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