125 N.E.3d 584
Ind.2019Background
- In 2013 Marion County law enforcement seized vehicles used allegedly to transport marijuana; owners later recovered vehicles after charges were dismissed.
- Taxpayers (citizens/taxpayers) sued Marion County, the City of Indianapolis, and the Marion County Prosecutor’s Office challenging Indiana’s Civil Forfeiture Statute as diverting forfeiture proceeds from the Common School Fund in violation of Indiana Const. art. 8, § 2.
- The pre-2018 statute allowed prosecutors to seek case-specific reimbursement of law‑enforcement costs before transferring remaining forfeiture proceeds to the Common School Fund; the 2018 amendment replaced that with a formulaic allocation (attorneys’ fees, one‑third to prosecutor’s forfeiture fund, 85% of remainder to executing law enforcement or state general fund, and 10% to the Common School Fund).
- Trial court upheld the statute; this Court accepted direct appellate review because the case raised substantial questions of public importance.
- The Supreme Court held (majority) that (1) the taxpayer‑plaintiffs have standing under a narrowed taxpayer‑standing standard; (2) Article 8, § 2 applies to civil forfeitures; and (3) the General Assembly may determine how and when forfeiture proceeds accrue to the Common School Fund, including permitting pre‑accrual allocation to cover certain costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing: may taxpayers sue to enforce Art. 8, § 2? | Taxpayers: citizens/taxpayers may enforce public rights; taxpayer standing applies to protect Common School Fund. | City/Prosecutor: framers intended state officials (not private parties) to enforce Art. 8; no private right. | Yes. Court adopts Justice Sullivan’s Embry concurrence standard: (1) challenge an express constitutional limitation on public funds, (2) show some personal stake as taxpayers, and (3) show "extreme circumstances." Taxpayers satisfied all three. |
| Applicability: does Art. 8, § 2 cover civil forfeitures? | Taxpayers: section broadly covers "all forfeitures which may accrue." | Prosecutor/City: civil forfeitures were unknown or outside framers’ scope. | Art. 8, § 2 applies to civil forfeitures; historical sources and antecedent practice show forfeitures (including in rem/civil forfeiture) were understood at ratification. |
| Scope: may legislature offset forfeiture proceeds pre‑accrual to reimburse law enforcement? | Taxpayers: "all forfeitures" must go to the Fund; no diversion allowed; principal ‘‘shall never be diminished.’' | City/Prosecutor: legislature may define when/procedurally how forfeitures accrue; cost awards are not forfeitures to the state. | Legislature may determine how and when forfeitures "accrue" to the Fund; history, text, and structure permit pre‑accrual allocations (including reimbursement) for contingent revenue sources. The civil‑forfeiture statute was upheld. |
| Limits: are percentage or formulaic allocations constitutional absent tie to actual case‑specific costs? | Taxpayers: allocations that divert funds (including fixed percentages) violate Art. 8’s protection of the Fund. | Defendants: allocation schemes by statute fall within legislative authority. | Majority: did not adopt a strict per‑case actual‑cost requirement; held legislature may set accrual rules. (Concurring/dissenting opinions argued the statute could be unconstitutional if it does not ensure the Fund increases.) |
Key Cases Cited
- Serrano v. State, 946 N.E.2d 1139 (Ind. 2011) (on civil forfeiture framework in Indiana)
- Pence v. State, 652 N.E.2d 486 (Ind. 1995) (limiting taxpayer/public standing; "extreme circumstances")
- Embry v. O'Bannon, 798 N.E.2d 157 (Ind. 2003) (concurrence by Sullivan articulating taxpayer‑standing standard applied here)
- United States v. Ursery, 518 U.S. 267 (U.S. 1996) (federal history of in rem civil forfeiture proceedings)
- State v. Denny, 67 Ind. 148 (Ind. 1879) (upholding legislative commission/compensation arrangements tied to collection of contingent revenues)
- Bartholomew Cnty. v. State ex rel. Baldwin, 19 N.E. 173 (Ind. 1888) (distinguishing trust funds held for specific beneficiaries from contingent forfeiture revenues)