Court Of Appeals Slaps Down Roob

The Indiana Court of Appeals slapped down FSSA Secretary Mitch Roob for ignoring Indiana's Public-Private Agreements Act in awarding a no-bid contract to Liberty Health Care Corporation to undertake the management and operation of the Fort Wayne Developmental Center, which is now closed. The Court wrote, in part:

Accordingly, based on the evidence before us, we conclude that the agreement is properly characterized as a public-private agreement, subject to the mandatory public bidding process enacted in I.C. § 5-23-5 et seq. Thus, we find that the trial court misapplied the law by relying on I.C. § 5-22-6-1, authorizing the FSSA to use any procedure it deems appropriate to acquire Liberty’s services. .... Therefore, we hold that Appellants showed a reasonable likelihood of success at trial by presenting a prima facie case on the merits. * * *

I.C. § 5-23 et seq. places certain constraints on the way the government may award its public-private agreements. An abandonment of these requirements would result in a situation where the government is encouraged to grant part of its public duties to private entities without any inquiry from the public. In the instant case, while the government provided the funds, set programmatic goals and requirements, its private partner, Liberty, gained effective control over patients, which were in a relation of dependence in a social welfare program. While we do not object to the government turning to private companies in a desire to minimize costs and to enhance efficiency and flexibility, public oversight is nevertheless statutorily mandated for contracts falling within the realm of I.C. § 5-23 et seq.

Based on these observations, we cannot say that the public interest is disserved by the issuance of an injunction that requires only that the FSSA complies with the clear dictates of the law by submitting the agreement to a public bidding procedure to ensure public scrutiny. Thus, we conclude that the trial court’s decision is against the logic and effect of the facts and circumstances.

Ironically, Mitch Roob was a high-ranking member of the administration of former Indianapolis Mayor Steve Goldsmith (R), who first proposed the Public-Private Agreements Act as statutory authority for his aggressive privatization agenda. It is surprising he would not be conscious of the requirements of this law. It was more surprising, however, that one of the state's largest law firms could tell the City of Lawrence a few years ago it could ignore this law when it privatized its water utility by handing control of it over to a company owned by close associates of former Mayor Tom Schneider without undertaking a public bidding process.

Hat tip to the Indiana Law Blog.