119 N.E.3d 70
Ind.2019Background
- Indiana Code § 36-1-20-5 contains two interacting provisions: a $5 cap on local rental-registration fees (the "Fee Restriction") and an exemption for political subdivisions with rental-registration/inspection programs created before July 1, 1984 (the "Fee Exemption"), which as enacted applied only to Bloomington and West Lafayette.
- Hammond charged and collected higher rental-registration fees (up to $80) and sued for a declaratory judgment after the General Assembly enacted the $5 cap with the narrow exemption; Herman & Kittle (a landlord) refused to pay the higher fees.
- Hammond challenged the Fee Exemption as unconstitutional special legislation under Art. 4, § 23 (and § 22), and argued the exemption was nonseverable from the Fee Restriction.
- The trial court upheld the Fee Exemption; the Court of Appeals struck down the entire § 36-1-20-5. The State intervened to defend the statute; Herman & Kittle defended the exemption.
- The Indiana Supreme Court held the Fee Exemption unconstitutional under Art. 4, § 23 because the proponent failed to show Bloomington and West Lafayette possess unique characteristics justifying exclusive relief, but held the exemption severable, so the $5 cap applies statewide.
Issues
| Issue | Hammond's Argument | Herman & Kittle / State's Argument | Held |
|---|---|---|---|
| Whether the Fee Exemption is unconstitutional special legislation under Art. 4, § 23 | The exemption singles out two cities though a general law could be made applicable | Exemption is justified because Bloomington and West Lafayette have: (1) unusually high renter shares, (2) many unsophisticated student renters, and (3) long-running programs | Fee Exemption is unconstitutional; proponents failed to prove unique characteristics justify exclusive treatment |
| Whether the Fee Exemption is severable from § 36-1-20-5 | If nonseverable, the whole section (including $5 cap) must fall | Because statute lacks a nonseverability clause, the statutory presumption favors severability under I.C. § 1-1-1-8(b); legislature intended to curb rising fees statewide | Fee Exemption is severable; Fee Restriction ($5 cap) remains valid and applies statewide |
| Burden of proof on special-legislation challenges | N/A | Proponents of special legislation must show a general law cannot be made applicable by linking unique characteristics to the special remedy | Court confirms proponent bears initial burden; burden is low but unmet here |
| Standard of review for constitutional challenge and summary judgment | N/A | N/A | De novo review; presumption of constitutionality applies but insufficient to save exemption |
Key Cases Cited
- Heckler v. Conter, 206 Ind. 376 (1933) (court—not legislature—decides whether a general law can be made applicable)
- Ind. Gaming Comm’n v. Moseley, 643 N.E.2d 296 (1994) (special-in-form statutes may be "special as applied"; uniqueness must relate to legislative purpose)
- State v. Hoovler, 668 N.E.2d 1229 (1996) (upheld special legislation where EPA designation created unique county liability)
- Williams v. State, 724 N.E.2d 1070 (2000) (two-step test: is law general or special; if special, is it constitutionally permissible)
- City of S. Bend v. Kimsey, 781 N.E.2d 683 (2003) (proponent must provide factual basis linking unique characteristics to special treatment; general laws required if conditions are statewide)
- State ex rel. Att’y Gen. v. Lake Superior Court, 820 N.E.2d 1240 (2005) (upheld special statute where county’s unique tax-assessment history justified special relief)
- Alpha Psi Chapter of Pi Kappa Phi Fraternity v. Auditor of Monroe Cty., 849 N.E.2d 1131 (2006) (struck special legislation where no unique circumstances distinguished the class)
- State v. Buncich, 51 N.E.3d 136 (2016) (upheld special legislation for Lake County where scale/degree of issue justified differential treatment)