Indiana Law Review


Statutory Interpretation in State Courts — A Study of
Indiana Opinions

William D. Popkin*

I. Historical Background

Prior to 1980, statutory interpretation seemed to be a moribund

academic field. The dominant academic approach was established by

the Hart & Sacks Legal Process materials,' which reconciled the tra-
ditional creative power of common law courts with the policy of
deference to legislation. The Legal Process '^solution'* was to presume

that statutes were texts with a purpose, that the purpose was what

reasonable people would pursue, and that courts, sharing in that rea-

sonable vision, could apply that purpose to resolve uncertainties within

statutory gaps. Statutes therefore set the framework within which courts

engaged in reasoned elaboration of legislative purpose. This system

preserved both legislative supremacy and judicial creativity.

Wide acceptance of the Legal Process solution appeared to end
academic debate about statutory interpretation. Except for Reed Dick-

erson's efforts to keep the subject alive,^ the literature was sparse.

That changed in the last decade, and statutory interpretation became

a subject of intense academic interest. In retrospect, it appears that

the Legal Process solution matured around the time when new legislative
tensions were beginning to render its vision of the legislative process

obsolete. The romanticized idea of a reasonable legislature whose pur-

pose(s) the court discerns now seems almost quaint after the recent
political turmoil over civil rights, income redistribution, budgets, and

deregulation. By the 1980s, the literature on statutory interpretation
began to catch up with the reality of the legislative process and to

put forth new visions of the judicial role.^
Two modern academic movements undermined the Legal Process

perspective. The Law and Economics perspective described the legislative
process as anything but reasonable and purposive. Instead, it depicted

the legislative process as one of bargaining by private interests producing

* Professor of Law, Indiana University School of Law-Bloomington.

1. H. Hart & A. Sacks, The Legal Process: Basic Problems In The Making
And Application of Law (tent. ed. 1958).

2. His basic work is R. Dickerson, The Interpretation and Application of
Statutes (1975).

3. For a review of the literature, see Frickey & Eskridge, Legislation Scholarship
and Pedagogy in the Post-Legal Process Era, 48 U. Pnr. L. Rev. 691 (1987).



1156 INDIANA LAW REVIEW [Vol. 24:1155

a document with no underlying purpose except that of limiting the

other side's advantage/ This undermined the notion that courts could

be creative in elaborating purpose and still be faithful to the statute.^

The main rival to the Law and Economics movement is the Law
and Literature movement. It also undermined the Legal Process ap-

proach, but from a different point of view. While the Law and Ec-
onomics perspective pulled the judge away from creative elaboration

of legislative purpose, the Law and Literature perspective emboldened
the judge to interpret statutory texts creatively.^ Unlike the Legal Process

approach, however, judicial creativity did not fit snugly within the gaps

set by historical legislative purpose. Instead a statute was embedded

in the broader legal framework, consisting of evolving background

norms that were critical to the judge's attribution of statutory meaning.^

In this untidy, post-Legal Process world, not everyone shares these

perspectives on statutory interpretation. Both the Economics and the

Literature perspectives are vulnerable to two contrasting objections.

First, as perspectives on legal interpretation, they underestimate the

power relationships that law privileges, sharing some of the complacency
of the Legal Process approach. The feminist critique of statutory
interpretation is the most articulate expression of this point of view.^

Second, rather than being too complacent about law, *'Law and"
perspectives pay insufficient attention to the traditional legal values of

commitment to the statutory text and legislative intent. The legislative
text and historical legislative purpose are realities the interpreter cannot

neglect, even though their meaning cannot be perfectly recreated by

the judicial reader. An interpretive process that takes these traditional
legal values seriously will be different from one that freely indulges

interpretive presumptions about private interest legislative bargaining

or evolutionary background norms.

Many advocates of **Law and" approaches are coming to recognize
the importance of traditional concerns with legislative text and intent.

4. See Easterbrook, Statutes' Domains, 50 U. Cm. L. Rev. 533 (1983).
5. Critiques of the Law and Economics description of the legislative process appear

in Farber & Frickey, The Jurisprudence of Public Choice, 65 Tex. L. Rev. 873 (1987);
Hovenkamp, Legislation, Well-Being, and Public Choice, 57 U. Cm. L. Rev. 63 (1990).
See also Mashaw, The Economics of Politics and the Understanding of Public Law, 65

Chi.HKent. L. Rev. 123 (1989).

6. A recent review and critique of the Law and Literature movement appear in
Weisberg, The Law-Literature Enterprise, 1 Yale J. L. & Hum. 1 (1988).

7. See Aleinikoff, Updating Statutory Interpretation, 87 Mich. L. Rev. 20 (1988);

Eskridge, Dynamic Statutory Interpretation, 135 U. Pa. L. Rev. 1479 (1987).

8. See West, Communities, Texts, and Law: Reflections on the Law and Literature
Movement, 1 Yale J. L. & Hum. 129 (1988).



1991] STATUTORY INTERPRETATION 1157

For example, in the Law and Economics school, Judge Posner now
leans toward the traditional Legal Process view that the judge's task

is to imaginatively reconstruct legislative purpose.^ And some com-
mentators, who would be sympathetic with the Law and Literature
movement, have shied away from its more radical implications, which

appear to disregard, or at least minimize, the role of the text and

legislative intent. They instead search for ways in which text and intent

can constrain the judge without denying a creative judicial role.'°

The tempering of '*Law and" perspectives to take account of
traditional concerns with text and intent has led to the development

of another school of thought based on legal pragmatism and practical

reason.'^ In this view, no single approach to statutory interpretation

is acceptable, whether it is a presumption of private bargaining, ev-

olutionary interpretation, or single-minded commitment to text and
intent. The importance of one or another criterion of interpretation
varies with the area of law and the statutory text; and, further, depends

on what the interpreter learns about statutory meaning from her en-

counter with the facts of the case.'^

State court cases have not appeared prominently in the recent

literature on statutory interpretation. Three reasons may account for
this neglect. First, the arena for politically contentious legislation has

shifted to Congress. Law reform, once predominantly the domain of
state legislation (as in Workers' Compensation and the Uniform Com-
mercial Code), is now largely dealt with by federal statutes (such as
securities law, replacing state fraud law; environmental law, superceding

state nuisance law; and civil rights law, supplanting state contract law).

Redistribution law is now either addressed by federal statute or by
state statutes complying with federal standards (as in tax, welfare, and

social insurance law).

Second, scholars interested in state law have traditionally focused

on the common law rather than statutory interpretation.'^ And, third,
state judicial opinions appear less self-conscious about interpretive the-

ory than federal opinions, tending instead toward black letter canons

9. R. Posner, The Federal Courts: Crisis and Reform 286-93 (1985).
10. See Eskridge & Frickey, Statutory Interpretation as Practical Reasoning, Al Stan.

L. Rev. 321, 353-62 (1990).

1 1

.

See Eskridge & Frickey, supra note 10; Posner, The Jurisprudence of Skepticism,
86 Mich. L. Rev. 827 (1988); Popkin, The Collaborative Model of Statutory Interpretation,

61 S. Cal. L. Rev. 543 (1988).

12. See generally Eskridge, Gadamer/Statutory Interpretation, 90 Colo. L. Rev. 609

(1990).

13. A major exception is G. Calabresi, A Common Law for the Age of Statutes
(1982).



1158 INDIANA LAW REVIEW [Vol. 24:1155

of construction. This approach appears to leave little room for academic
comment, except to repeat the traditional criticism of these canons."^

The neglect of state statutory interpretation is unfortunate. Two
of the issues prominent in contemporary literature can be profitably

explored in the context of state cases. First, the reliance on black letter

canons in state court decisions is a symptom of an emphasis on the
statutory text and legislative intent.'^ If we are experiencing a revival
of traditional interest in text and intent in statutory interpretation,

state court cases are a good place to consider its advantages and pitfalls.

Second, the fact that state court opinions tend to be innocent of

interpretive theory makes them fertile ground for observing how judges
actually make interpretive choices, including whether they behave in
the manner predicted by any of the **Law and'* approaches to statutory

interpretation.

Part IIA of this Article will explain how Indiana decisions apply
traditional concerns for the statutory text and legislative intent. Part

IIB will analyze the cases for what they reveal about the process of

judicial choice to determine statutory meaning. The primary source

material was a Westlaw search of opinions specifying the West Statute

Keynote (number 361) during the period from 1980 to July 1990. The

prior and later history of each case was also examined. This revealed

a potential shortcoming in gathering data because the statute keynote

number was not always used by West even though the case involved
an interesting interpretive issue. '^

One note of caution is in order before we begin examining Indiana
cases. Judicial rhetoric about statutory interpretation is often unhelpful.

Responding to the need to speak authoritatively and yet be deferential

to the legislature, courts will refer to a Htany of interpretive criteria

including plain meaning of the text and legislative intent,'^ with little

14. The classic criticism is Llewellyn, Remarks on the Theory of Appellate Decision

and the Rules or Canons About How Statutes Are to be Construed, 3 Vand. L. Rev. 395
(1950).

15. There is a cautious revival of interest in the canons. See Eskridge, supra note

12, at 662-64; Sunstein, Interpreting Statutes in the Regulatory State, 103 Harv. L. Rev.

405, 451-54 (1989).

16. The first citation in the following cases does not refer to the statute key number,

but the second citation does. Koske v. Townsend Eng'g Co., 551 N.E.2d 437 (Ind. 1990),

rev'g, 526 N.E.2d 985 (Ind. Ct. App. 1988); Wallis v. Marshall County Comm'rs, 531 N.E.2d

1223 (Ind. Ct. App. 1988), rev'd, 546 N.E.2d 843 (Ind. 1989); Community Hosp. v. McKnight,

482 N.E.2d 280 (Ind. Ct. App. 1985), rev'd, 493 N.E.2d 775 (Ind. 1986); Rensing v. Indiana

State Univ. Bd. of Trustees, 444 N.E.2d 1170 (Ind. 1983), rev'g, 437 N.E.2d 78 (Ind. Ct.

App. 1982); Indiana Dep't of Revenue v. Glendale-Glenbrook Assocs., 404 N.E.2d 1178 (Ind.

Ct. App. 1980), rev'd. 429 N.E.2d 217 (Ind. 1981).

17. See, e.g.. In re Middlefork Watershed Conservancy Dist., 508 N.E.2d 574, 577



1991] STATUTORY INTERPRETATION 1159

apparent concern for the complexity of the underlying concepts or

whether they have any explanatory power in deciding a case. It is

therefore sometimes necessary to separate what the court says from

what it does.

In one respect, the rhetoric in Indiana cases is especially misleading.

Indiana courts often state that a text with a plain meaning blocks

statutory interpretation.^^ The image of a text as a barrier to inter-

pretation fails to capture the practical reasoning process by which

judicial readers explicate a text. A text is more accurately viewed, not
as a barrier, but as a starting point and as one of many interpretive
criteria. The judge makes an initial pass at the relevant text (narrowly

defined to be just one or a few words), and, considering the facts,

makes a tentative judgment about whether the facts obviously come
within the text. Then begins the back and forth process of deciding
whether the tentative judgment should prevail. Evidence of legislative

intent and a consideration of important background values may place
pressure on the initial text-based conclusion. The statutory language

is examined again and may be expanded to include more words within
the relevant statute and other statutes. If this back and forth process

converges to a single meaning, the temptation to say that the meaning

is plain and to describe the text as a barrier may be irresistible. But
the barrier would be breached in an appropriate case and is, in fact,

tentatively breached as the interpretive process unfolds, perhaps un-

consciously.'^

(Ind. Ct. App. 1987) (intent; goals, reasons and policy; context; plain meaning of text;

presumption against illogical or absurd meaning; etc.); Alvers v. State, 489 N.E.2d 83, 89

(Ind. Ct. App. 1986) (statute not viewed in isolation; words given plain meaning; look to

subsequent enactments; presumption against illogical or absurd meaning; narrow construction

of criminal statute; etc); Herbert v. State, 484 N.E.2d 68, 70 (Ind. Ct. App. 1985) (clear

language barrier to interpretation; legislative intent fundamental); Jones v. Hendricks County

Plan Comm'n, 435 N.E.2d 82, 83-84 (Ind. Ct. App. 1982) (is language uncertain; if so,

determine legislative intent; primarily use language; rely on plain, ordinary meaning); Indiana

Alcoholic Beverage Comm'n v. Osco Drug, Inc., 431 N.E.2d 823, 833-34 (Ind. Ct. App.
1982) (will not interpret unambiguous language; if ambiguous look at intent, with spirit

prevailing over letter of law; legislature presumed aware of existing statutes; statutes interpreted

in pari materia; specific prevails over general; change of text implies change of meaning; and

legislative inaction implies acquiescence).

18. Well over 40 of the 333 opinions examined contained this statement. See, e,g.,

Heltzel V. Thomas, 516 N.E.2d 103, 106 (Ind. Ct. App. 1987) (may not interpret language

plaiin on its face).

19. Occasionally a decision will acknowledge this complexity: "[lit is not the clarity

or ambiguity of the words used in a statute that determine whether judicial construction of

the statute is appropriate; rather it is the clarity or ambiguity of the meaning those words

give to the statute as a whole." Winona Memorial Found, v. Lomax, 465 N.E.2d 731, 737

(Ind. Ct. App. 1984) (emphasis in original).



1160 INDIANA LAW REVIEW [Vol. 24:1155

II. Criteria for Statutory Interpretation

A. The Statutory Text and Legislative Intent

1. Conception of the text,—A court that is determined to rely
on the statutory text must still decide what the relevant text is. It can

focus narrowly on the plain meaning of a word or two, on the statute

as a whole, on the entire body of statute law, or on changes in statutory

language over time. This section considers Indiana courts' conception

of the statutory text.

a. Plain meaning, common understanding, and literalism

Judges often claim to focus on the plain meaning of one or two

key words in a statutory text,^*' but there is a right and a wrong way
to do this. The right way is to identify the audience intended by the
legislative author and to determine whether that audience and the

statute's likely public audience share a common understanding about
what the words mean. When these two meanings converge, there is a
common understanding between author and reader, and the text can
be said to have a plain meaning. ^^

Another form of **plain meaning" interpretation goes by the pe-
jorative label **literalism." This is the wrong way to go about inter-
preting texts. The literalist is not really concerned with how an audience
understands language but instead disregards what the audience is likely

to understand. Indiana courts usually avoid literalism in this sense of

the term. 22

Literalism can occur in two ways. First, the court disregards the

text's intended and likely audience. This often has the effect of priv-

ileging colloquial usage over technical meaning. For example, in Indiana

Department of State Revenue v. Food Marketing Corp.,^^ the issue
was the meaning of '*cost of goods sold" for determining the amount
deductible in computing taxable gross income. The dissent appealed to
the colloquial meaning of the term,^'* which, in its view, included not

much more than the price paid for the product sold. The majority

20. See, e.g., Herbert v. State, 484 N.E.2d 68, 70 (Ind. Ct. App. 1985) ("may"

implies discretion).

21. The most common way in which the intended and the likely public audience can
differ is when an old statute contains terms whose meaning changes over time.

22. The term "literalism" is not always used to describe the approach to interpretation

that I have criticized. Sometimes it is used as a synonym for plain meaning in the sense of

common understanding.
23. 403 N.E.2d 1093 (Ind. Ct. App. 1980).

24. Id. at 1098 (Staton, J., dissenting).



1991] STATUTORY INTERPRETATION 1161

adopted the more technical accounting meaning that included various

indirect overhead costs attributable to the goods purchased for resale."

The majority's reading made more sense in a tax statute aimed at a
technically sophisticated audience, ^^ and therefore deserves to be char-

acterized as an effort to identify plain meaning in the correct sense

of **common understanding.*'

Second, '^literalism" emphasizes the grammar of the text with little
regard for how language is actually used and understood. Examples
include treating use of the singular or plural as dispositive, assuming

that the disjunctive **or" always means an alternative, and according

conclusive weight to punctuation. English language writers are not

always grammatically precise, and a literal
*

'grammatical" approach

may therefore be unfaithful to how meaning is communicated. Realizing
this, Indiana courts are reluctant to adopt too grammatical an approach

to statutory interpretation. ^^

b. Statute as a whole

A text-based alternative to focusing on one or two words of a
statute is to consider the text of the whole statute, as Indiana courts

frequently do.^^ The instinct to examine the entire text is well entrenched

25. Id. at 1096-97. See also Foremost Life Ins. Co. v. Dep't of Ins., 274 Ind. 182,

186-87, 409 N.E.2d 1092, 1097 (1980), in which the majority appealed to a technical distinction

in the industry between insurance and reinsurance to define the statutory language, and

determined that "reinsurance" was not
*

'insurance." The dissent relied on a more colloquial

meaning of the statutory terminology ("insurance," "insurer," and "insured"), and applied

what it considered an ordinary definition of "insured" to include reinsurance contracts. Id.

at 1098-99 (Stanton, J., dissenting).

26. The majority actually claimed that it was adopting the ordinary rather than the

technical meaning of the phrase "cost of goods sold," Food Mktg. Corp., 403 N.E,2d at

1096, but the dissent correctly characterizes the majority opinion as adopting a technical

definition. Id. at 1098 (Stanton, J., dissenting).

27. Singular and plural: see, e.g., Watkins v. Alvey, 549 N.E.2d 74, 77 (Ind. Ct.

App. 1990) (plural not relied on); Northwest Ind. Educ. Assoc, v. School City of Hobart,

503 N.E.2d 920, 922 (Ind. Ct. App. 1987) (singular not relied on).

Disjunctive "or": see, e.g., Dague v. Piper Aircraft Corp. 418 N.E.2d 207, 210 (Ind.

1981) (reading "or" as providing for £ilternatives would defeat obvious legislative intent).

Punctuation: see, e.g.. Hill v. State, 488 N.E.2d 709, 710 (Ind. 1986) (punctuation not

dispositive), rev'g. 482 N.E.2d 492, 494 (Ind. Ct. App. 1985) (relying on ordinary meaning

of punctuation). But cf. Spears v. State, 412 N.E.2d 81, 83 (Ind. Ct. App. 1980) (court

relied on the literal use of commas to block consideration of legislative intent).
28. See e.g.. Kinder v. Doe, 540 N.E.2d 111, 114-15 (Ind. Ct. App. 1989) (court

looked to all sections dealing with immunity and confidentiality in child abuse reporting

situations to determine when identity of a news reporter could be obtained); Sears & Roebuck
& Co. V. Murphy, 511 N.E.2d 515, 516 n.2 (Ind. Ct. App. 1987) (statute construed so
language consistent with other parts of the statute); Selmeyer v. Southeastern Ind. Vocational



1162 INDIANA LAW REVIEW [Vol. 24:1155

in some of the traditional canons of construction such as ejusdem

generis (general words embrace things similar to prior specific references)

and expressio unius est exclusio alterius (reference to one thing excludes

others; or, as Indiana courts often put it, **what is unsaid is as important

as what is said'').^^ Using the expressio canon, however, is often as

misguided as being literalist, by attributing to an omission from the

text the same sanctity that the literalist accords to a single word or

**rule" of grammar without regard to what the statute's audience would
infer. ^^ The main objection to the expressio canon is that the legislature

will often specify a result about facts to which it has paid attention,

without prejudging situations about which it is silent. The basic instinct

of the Indiana courts to look at the whole statute is sound, however,

whatever the execution.

c. Other statutes

The frequency with which Indiana courts consider the entire body
of statute law to help interpret a particular statute was an unexpected

finding, based on prior familiarity with federal cases. It is not known
whether the Indiana pattern is typical of other states, but there are

two plausible reasons for possible differences between state and federal

approaches. First, state law encompasses more subjects than federal
law, even though the impact of state law is now politically less dramatic.
The potential for several statutes covering the same issue is therefore

greater. Second, legislative history in the conventional sense of com-

School, 509 N.E.2d 1150, 1152 (Ind. Ct. App. 1987) (two sections read together to limit

applicability of first section); Gary Community Mental Health Center, Inc. v. Indiana Dep't

of Pub. Welfare, 507 N.E.2d 1019, 1022 (Ind. Ct. App. 1987) (in light of other provisions

requiring "hospital care," the court interpreted statute requiring services to be performed "in

a hospital" to mean services provided "by a hospital"); Indiana Tele. Ass'n. v. Public Serv.

Comm'n 477 N.E.2d 911, 916-17 (Ind. Ct. App. 1985) (words in one part of statute construed
to have same meaning in other parts of the act); Edward Rose of Ind. v. Fountain, 431

N.E.2d 543, 545 (Ind. Ct. App. 1982) (because none of surrounding sections pertaining to

notice referred to tenant obligations, statutory notice provision interpreted to apply only to

landlords); Suburban Homes Corp. v. Harders, 404 N.E.2d 629, 632 (Ind. Ct. App. 1980)
(reference in preceding section to constructed drain indicates that another section does not

apply to "natural" watercourse).

29. Health & Hosp. Corp. of Marion County v. Marion County, 470 N.E.2d 1348,
1355, 1356 (Ind. Ct. App. 1984) (reference to expressio canon); Metropolitan Dev. Comm'n
of Marion County v. Villages, Inc., 464 N.E.2d 367, 369 (Ind. Q. App. 1984) (what is not
said is important; also reference to expressio canon); In re Turrin, 436 N.E.2d 130, 132 (Ind.

Ct. App. 1982) (what statute does not say is important).

30. See. e.g., Seymour Nat'l Bank v. State, 422 N.E.2d 1223, 1227 (Ind. 1981)

(exception for false arrest and imprisonment imphes no other exceptions); Reusing v. Indiana

State Univ. Bd. of Trustees, 444 N.E.2d 1170 (Ind. 1983) (exclusion of certain employees

implies inclusion of university athletes), rev'd, A3>1 N.E.2d 78, 84 (Ind. Ct. App. 1982).



1991] STATUTORY INTERPRETATION 1163

mittee reports is often unavailable at the state level, and clues to

statutory meaning must be found elsewhere, such as in the texts of

other statutes.^'

There are several ways in which multiple statutes are considered

by Indiana courts. First, similar language in statutes with a common
purpose (statutes in pari materia) is interpreted in the same way.^^ It

is also a short step from inferring that the use of the same language

in different statutes implies a common result to assuming that different
language implies different results. Although the court will make that
assumption in many cases," mechanical application of this approach

3 1

.

Testimony of the legislative drafter occasionally substitutes for traditional legislative

history. See Irmscher v. McCue, 504 N.E.2d 1034, 1037 (Ind. Ct. App. 1987) (testimony by

one of statute's drafters); Indiana Dep't of Revenue, Ind. Gross Income Tax Div. v. Glendale-

Glenbrook Assoc, 429 N.E.2d 217, 219 n.l (1981) (testimony by state legislator about statutory

purpose). See also Winona Memorial Found, of Indianapohs v. Lomax, 465 N.E.2d 731,
739-40 n.7 (court cited law review articles written by drafters who lobbied for medical
practitioners in support of a position contrary to their interest).

Another form of legislative history is the change in text as the statute works its way

through the bill drafting process. See Gallagher v. Marion County Victim Advocate Program,

Inc., 401 N.E.2d 1362, 1365-66 (Ind. Ct. App. 1980) and id. at 1370-71 (Chipman, J.,

dissenting) (both majority and dissent relied on changes made during the drafting process,

but they disagreed about their significance).

32. In re Paternity of Joe, 486 N.E.2d 1052, 1055 n.l (Ind. Ct. App. 1985) ("best

interests of child" given same meaning in contexts of visitation and child custody under

paternity and divorce statutes); Beasley v. Kwatnez, 445 N.E.2d 1028, 1031 (Ind. Ct. App.

1983) ("vending machine" given same definition in property tax and gross retail sales tax

laws); Barr v. Sun Exploration Co., Inc., 436 N.E.2d 821, 825 (Ind. 1982) ("operation for

oil and gas" given same meaning in two statutes). Cf. Tobias v. Violent Crime Compensation

Div., 470 N.E.2d 105, 108 (Ind. Ct. App. 1984) (pecuniary loss concept, developed by cases

under workers' compensation, has same meaning when in Victims Compensation Act).

Common law and statutory rules may also be harmonized. See DeHart v. State, 471
N.E.2d 312, 315 (Ind. Ct. App. 1984) (statutory violation inferred on basis of analogy to

common law nuisance law).
State statutes may be given the same meaning as similar federal statutes. Alvers v.

State, 489 N.E.2d 83, 87-89 (Ind. Ct. App. 1986) (Indiana's anti-racketeering statute and

federal RICO statute); United Steelworkers of Am., AFL-CIO-CLC v. Northern Ind. Pub.
Serv. Co., 436 N.E.2d 826, 829 n.2 (Ind. Ct. App. 1982) (Indiana's Anti-Injunction Act and

federal Norris LaGuardia Act); In re CTS Corp., 428 N.E.2d 794, 798-99 (Ind. Ct. App.
1981) (Indiana's Business Take-Over Act and federal Williams Act); In re City Investing Co.,

41 1 N.E.2d 420, 427 (Ind. Ct. App. 1980) (same); Indiana Dep't of State Revenue, Inheritance

Tax Div. V. Estate of Wallace, 408 N.E.2d 150, 157 (Ind. Ct. App. 1980) (Indiana and

federal estate tax law). But see Flynn v. Klineman, 403 N.E.2d 1117, 1122 (Ind. Ct. App.

1980) (state and federal securities law interpreted differently).

33. See Blood v. Poindexter, 534 N.E.2d 768, 771 (Ind. T.C. 1989) (language of

Trust Code and Probate Code varies); Minton v. State, 400 N.E.2d 1177, 1179 (Ind. Ct.

App. 1980) (language of two criminal statutes differs with reference to inclusion of guilty

pleas). Cf. Lake County Beverage Co. v. 21st Amendment, Inc., 441 N.E.2d 1008, 1012-13

(Ind. Ct. App. 1982) (language and interpretation of Indiana statute and federal Robinson-

Patman Act differ).



1164 INDIANA LAW REVIEW [Vol. 24:1155

is as misguided as mechanical application of the expressio canon.

Language differences are not routinely indicative of differences in

meaning. For example, language may be added to clarify one statute, ^"^

not to differentiate its meaning from another statute. The court may
even be justified in incorporating the approach indicated by the text

of one statute into another law, despite language differences.^^

Second, two statutes that deal with same subject must be harmonized

(also sometimes referred to as statutes in pari materia)?^ The canon
that specific statutes prevail over general statutes is usually applied

without controversy,^^ implementing the idea that the text that is more

focused on the facts of the case should prevail. The specific prevails

even when the general statute is the later-passed law,^^ despite the

34. See Lincoln Nat'l Bank v. Review Bd. of Ind. Employment Sec. Div., 446 N.E.2d

1337, 1339-40 (Ind. Ct. App. 1983) (language was added to a statute to affirm an interpretation

reached in a case; the interpreted language also appeared unamended in another statute, which

the court interpreted in the same way, even though it had not been amended).

35. Holland v. King, 500 N.E.2d 1229, 1235-37 (Ind. Ct. App. 1986) (statute omits

reference to "last known address," which appears in another statute; the court concluded

that both statutes require mailing to last known address).

36. Hines v. Behrens, 421 N.E.2d 1155, 1159 (Ind. Ct. App. 1981) (stay of execution

statute and foreclosure statute); In re Lemond, 413 Ind. 228, 245-46, 413 N.E.2d 228, 245-

46 n.l5 (1980) (Uniform Child Custody Jurisdiction Act and Child in Need of Services Act).

37. See, e.g., Wayne Township of Allen County v. Hunnicutt, 549 N.E.2d 1051, 1053
(Ind. Ct. App. 1990); Ferguson v. Modern Farm Sys. Inc., 555 N.E.2d 1379, 1383-84 (Ind.

Ct. App. 1990); Southwest Forest Indus., Dunlap Div. v. Firth, 435 N.E.2d 295, 297 (Ind.

Ct. App. 1982); In re Waltz' Estate, 408 N.E.2d 558, 560-61 (Ind. Ct. App. 1980).

When a general statute prevails over a specific statute, there is usually a sound textual
basis. See, e.g., K-mart Corp. v. Novak, 521 N.E.2d 1346, 1350-51 (Ind. Ct. App. 1988)

(Violent Crimes Compensation Act cross references Workers' Compensation statute, implying

that more specific Crimes Act did not supercede Workers' Compensation law); Citizens Action

Coalition of Ind., Inc. v. Public Serv. Comm'n of Ind., 425 N.E.2d 178, 184-85 (Ind. Ct.
App. 1981) (general statute prevails because it contains a provision that it applies unless

"expressly provided by statute"). See also State ex rel. Indiana Life & Health Ins. Guar.
Assoc. V. Superior Court of Marion County, Room No. 7, 272 Ind. 421, 426-27, 399 N.E.2d
356, 359 (Ind. 1980) (prior enabling act granting jurisdiction to the superior court survives

passage of later special proceeding act requiring certain claims to be filed in the circuit court,

when prior law expressly provides for concurrent and co-extensive jurisdiction within the

circuit court).

It is usually easy to tell which is the more specific statute. But see Gilbert v. State,

411 N.E.2d 155, 157 (Ind. Ct. App. 1980) ("private road" more specific than "not a part

of a through highway," on the ground that latter phrase might include more than a private

roadway).

38. Johnson v. LaPorte Bank & Trust Comm'rs, 470 N.E.2d 350, 355 (Ind. Ct. App.
1984); County Council of Bartholomew County v. Department of Pub. Welfare of Bartholomew

County, 400 N.E.2d 1187, 1191 (Ind. Ct. App. 1980).

Often the opinion is silent as to which statute is earlier. See Sanders v. State, 466

N.E.2d 424, 428 (Ind. 1984); Bell v. Bingham, 484 N.E.2d 624, 627-28 (Ind. Ct. App. 1985);



1991] STATUTORY INTERPRETATION 1165

presumption that a later statute usually takes priority in cases of conflict

over an earlier law.^^

In other instances, several statutes may deal with the same general
area of law but there is no more specific text to prevail over the more

general language of another law. The court, in such cases, must work

out a sensible pattern to harmonize the statutes/^

A number of theories might explain the courts' purpose in consulting
several statutory texts to interpret one of them/' One theory is that
examining several statutes implements legislative intent because the

drafter is likely to have the entire body of law in mind when writing

statutes.'*^ This cannot, however, explain all of the cases in which

multiple statutory texts are considered. The refusal to allow a general

statute to take precedence over a specific law rests on the assumption

that the legislative drafter did not focus carefully on the specific statute,

but that the legislature would have wanted the specific law to survive

if it had paid attention. Moreover, when later law influences the meaning
of prior law,^^ the court is not likely to be making a genuine inference

about what an omnipotent legislative drafter intended.

Hoage V. State, 479 N.E.2d 1362, 1363-64 (Ind. Ct. App. 1985); State v. Souder, 444 N.E.2d

891, 893 (Ind. Ct. App. 1983); Sexton v. Johnson Suburban Utils., 422 N.E.2d 1293, 1296

(Ind. Ct. App. 1981); Wagner v. Kendall, 413 N.E.2d 302, 304-305 (Ind. Ct. App. 1980).

39. Blood V. Poindexter, 524 N.E.2d 824, 825 (Ind. T.C. 1988).

40. See, e.g., McClaskey v. Bumb & Mueller Farms, Inc., 547 N.E.2d 302, 304 (Ind.
Ct. App. 1989) (Marketable Title Act relieves the covenants imposed by a warranty deed

only to the extent that a claim is extinguished by the Act, thereby harmonizing the Act with

another statute governing warranties of title); State v. Magnuson, 488 N.E.2d 743, 751 (Ind.

Ct. App. 1986) (Department of Safety and Police Department statutes dealing with statistics

gathering were harmonized by concluding that earlier statute imposing obligation to gather

statistics was not impliedly repealed by later law dealing with same general subject); Wright

V. Gettinger, 428 N.E.2d 1212, 1219-20 (1981) (voting procedure statutes harmonized to

determine that prior law requiring clerk to sign ballots survives in part after passage of

Electronic Voting System Act); County Council of Monroe County v. State ex rel. Monroe

County Bd. of Pub. Welfare, 402 N.E.2d 1285, 1288-91 (Ind. Ct. App. 1980) (agency powers

harmonized under State Personnel Act, Welfare Act of 1936, and county council statutes).

41. This discussion may also apply to language in the same statute, if the drafter

does not consider carefully how the portions of the text interact. Moreover, if different parts

of the same statute are not passed during the same session, the text resembles two statutes

passed at different times. See, e.g., Indiana Tel. Assoc. Inc. v. Public Serv, Comm'n, 477

N.E.2d 911, 914 (Ind. Ct. App, 1985) (parts of the Public Service Commission Act passed

in 1913 and 1951).

42. Indiana cases incorporate this idea when the. courts state that the legislature is

presumed to be aware of prior law. See Wayne Township of Allen County v. Hunnicutt,
549 N.E.2d 1051, 1054 (Ind. Ct. App. 1990); Blood v. Poindexter, 534 N.E.2d 768, 771

(Ind. T.C. 1989).

43. See, e.g., Gallagher v. Marion County Victim Advocate Program, Inc., 401 N.E.2d

1362, 1368 (Ind. Ct. App. 1980) (the language "required ... by any rule or regulation of



1166 INDIANA LAW REVIEW [Vol. 24:1155

A second theory explaining why courts examine the entire body
of statute law is that sophisticated readers will consider this body of

law when deciphering the meaning of any one statute. However, this
explanation also seems farfetched because it rests on the possibly

unwarranted assumption that the text is being read by very sophisticated

readers.

Much as courts dislike admitting it, judicial reliance on the text
of multiple statutes may not implement legislative intent or the un-
derstanding reached by sophisticated readers. Instead, examining mul-

tiple statutes may achieve a number of institutional goals, such as
forcing the legislature to pay closer attention to what it writes, en-

couraging lawyers to read the entire body of statute law, and dis-

couraging judges from excessively creative speculation about legislative

purpose. Finally, the examination of multiple statutes may simply be
a judicial method for dealing with an absence of legislative history to
provide concrete evidence of legislative intent.

d. Change in statute over time

Indiana courts also rely on the relationship between several statutory

texts when there is a change in statutory language over time. They
often presume that a change in language implies a change in meaning"^"^

any administrative body or agency" contziined in a 1953 statute was read in light of a 1969

statute specifying how an agency makes rules). The dissent questioned how a later law could

be used to interpret a prior statute. Id. at 1369 n.l (Chipman, J., dissenting).

44. Relevant events in cases arose after passage of the second statute: Wallis v.

Marshall County Comm'r, 546 N.E.2d 843, 844 (Ind. 1989); Bonge v. Risinger, 511 N.E.2d

1082, 1084 (Ind. Ct. App. 1987); Second Nat'l Bank of Danville v. Massey-Ferguson Credit

Corp., 478 N.E.2d 916, 918 (Ind. Ct. App. 1985); Metropolitan School Dist. of Martinsville

V. Mason, 451 N.E.2d 349, 352 (Ind. Ct. App. 1983); Ware v. State, 441 N.E.2d 20, 22-

23 (Ind. Ct. App. 1982); Aeronautics Comm'n of Ind. v. State ex ret. Emmis Broadcasting
Corp., 440 N.E.2d 700, 709 (Ind. Ct. App. 1982); Landers v. Pickering, 427 N.E.2d 716,

718 (Ind. Ct. App. 1981); Froberg v. Northern Ind. Constr. Inc., 416 N.E.2d 451, 453-54

(Ind. Ct. App. 1981); Indiana Dep't of State Revenue, Inheritance Tax Div. v. Lees, 418

N.E.2d 226, 228 (Ind. Ct. App. 1980).

Relevant events in cases probably arose after passage of the second statute: Lake County

Beverage Co., v. 21st Amendment, Inc., 441 N.E.2d 1008, 1011 (Ind. Ct. App. 1982); Tarver

V. Dix, 421 N.E.2d 693, 698 (Ind. Ct. App. 1981); In re Wisely's Estate, 402 N.E.2d 14,

16 (Ind. Ct. App. 1980).

Relevant events in cases arose before passage of the second statute: State v. Page, 472

N.E.2d 1271, 1273 (Ind. Ct. App. 1985); Wright v. Fowler, 459 N.E.2d 386, 389-90 (Ind.

Ct. App. 1984); Pierce Governor Co. v. Review Bd. of Ind. Employment Sec. Div., 426

N.E.2d 700, 702-03 (Ind. Ct. App. 1981); Van Orman v. State, 416 N.E.2d 1301, 1305 (Ind.
Ct. App. 1981).



1991] STATUTORY INTERPRETATION 1167

unless the better explanation for the change is an attempt to clarify

the law/5 Perhaps the inference that legislative drafters have prior

statutes in mind is more plausible when statutory texts are changed
than in other cases in which statutory texts are interpreted as part of

an integrated body of law.

When changes in later law are used to infer the meaning of prior
law, as happened in a number of the cases cited above/^ two problems
arise. First, the intent of a later legislature is often very doubtful

evidence of what the legislature adopting the prior statute meant. "^^ The

influence of later law on the meaning of a prior statute is therefore

an example of retroactive legislation, which runs counter to the usual

presumption against retroactive statutes."^^ Second, the retroactive impact

may be unfair if the events are governed by the earlier statute and
arise prior to passage of the second statute. There is no way the
affected parties can draw inferences about the meaning of prior law

from statutes not passed when the events occur. "^^

This is not to suggest that the use of a later statutory text to

influence the meaning of prior law is necessarily wrong. Retroactive

texts are very familiar when they occur in the form of common law
opinions. Perhaps the use of later statutes to interpret prior law is an

45. The relevant events in the following cases arose before passage of the clarifying

statute. Watkins v. Alvey, 549 N.E.2d 74, 77 (Ind. Ct. App. 1990) (statute explicitly states

it is a clarification); Alvers v. State, 489 N.E.2d 83, 88-89 (Ind. Ct. App. 1986); Pike County

V. State, 469 N.E.2d 1188, 1194 (Ind. Ct. App. 1984) (some events before and some after

second statute); Indiana State Highway Comm'n v. Bates & Rogers Constr., Inc., 448 N.E.2d
321, 325 (Ind. Ct. App. 1983); Marsym Dev. Corp. v. Winchester Economic Dev. Comm'r,

447 N.E.2d 1138, 1144 (Ind. Ct. App. 1983); H.W.K. v. M.A.G., 426 N.E.2d 129, 134 (Ind.

Ct. App. 1981).

46. See supra notes 44-45.

47. See Wechter v. Indiana Dep't of State Revenue, 544 N.E.2d 221, 223 (Ind. T.C.

1989) affd. 553 N.E.2d 844 (1990)(later law bad evidence of original intent); Bailey v. Menzie,

505 N.E.2d 126, 128 (Ind. Ct. App. 1987) (intent of a later legislature is unreliable evidence

of intent of legislature that passed earlier statute). See also Hobbs v. State, 451 N.E.2d 356,

359 (Ind. Ct. App. 1983) (the court rejected a statement in a preamble about the meaning

of prior law). When the second law is passed during the same legislative session, however,
the second statute may reflect the intent of those enacting the prior law. C/. H.W.K. v.
M.A.G., 426 N.E.2d 129, 134 (Ind. Ct. App. 1981) (the fact that a change occurred within

five months of original passage supports the view that the second law was a clarification).

48. See Appendix § V.

49. The retroactive impact of a later statute is not unfair if the events precede the

effective date of the later law but follow the passage of the statute. This occurred in American

Underwriters Group, Inc. v. Williamson, 4% N.E.2d 807, 809 n.3 (Ind. Ct. App. 1986);
State Farm Fire & Casualty Co. v. Strutco Div., King Seeley Thermos Co., 540 N.E.2d 597,
597-98 (Ind. 1989), rev'g, 530 N.E.2d 116, 119 (Ind. Ct. App. 1988) (treating addition of

language as change in law). As long as the events follow passage, there is notice of the later

statute on which the parties can rely.



1168 INDIANA LAW REVIEW [Vol. 24:1155

unacknowledged example of the assimilation of statute law to a pattern

of lawmaking long familiar in the common law.

e. Summary

In sum, Indiana cases are rarely literalist in their approach to the

statutory text: quite the opposite. They are committed to a broad

definition of the text, often placing great weight on the use of language

in other statutes and in earlier and later versions of the same statute.

Defining the text broadly may not, however, serve the public reliance
values that are usually associated with judicial deference to the text.

Courts may instead be looking at the entire body of statutory law to
force legislatures and lawyers to think of statutes as an integrated body

of law, in much the same way that the common law has traditionally
been viewed as a seamless web.

2. Conflict Between Text and Intent.—
a. Defining the problem

The concept of legislative intent is as complex as the concept of

a "text."^^ One meaning of **intent** is the broad concept of legislative
purpose, such as ** favoring social insurance claimants." Those who
object to creative judicial elaboration of legislative intent usually have

this concept in mind because judicial speculation about purpose may
exaggerate one of several purposes (often one side of a legislative

bargain) or underestimate the extent to which an overbroad statute was

purposely adopted. -^^ The better definition of legislative intent, and the

50. The values supported by deference to legislative intent are not the same as those

served by deference to the text. Adherence to a fairly narrow definition of the text (excluding

other statutes, for example) will usually preserve reliance interests by adhering to the most

straightforward reading of the text, reduce discretion in interpreting the law, and preserve

the integrity of political language. Adherence to legislative intent (assuming it can be identified

with some confidence) implements legislative supremacy. When the evidence of the text's
meaning and legislative intent points to the same result, as they often do, there is no tension

between these two criteria. But tensions between the meaning of the text and legislative intent

sometimes appear and must be resolved.

These generalizations about the effect of relying on text and intent require some

qualification. If the text is given an expansive definition, its meaning becomes less certain,

undermining the ability of deference to the text to protect reliance interests and discourage

interpretive creativity. It is often asserted that judicial speculation about legislative intent is

a common means by which interpreters exercise discretion, as observations about actual intent
shade off into plausible intent and, finally, into speculation that the legislature would pursue

good policy. But sticking to the text may also give rein to interpretive discretion when a
choice must be made between narrower and broader definitions of the relevant text.

51. See, e.g., M & K Corp. v. Farmers State Bank, 496 N.E.2d 111, 112-13 (Ind.
Ct. App. 1986) (statute conclusively presumes that the risk of loss for employee forgery rests

on employer and does not allow proof that a negligent bank was better able to prevent loss

in a particular case).



1991] STATUTORY INTERPRETATION 1169

one we will be concerned with here, is specific intent in the sense that
the legislature would have wanted a particular result on the facts of

the case.

A judge often has difficulty guessing what the legislature's specific
intent would be. Translating general purpose into specific intent is

often very difficult. Background values such as the presumption that

statutes are not in derogation of the common law and the liberal
interpretation of social legislation are not sufficiently persuasive in most

cases to be confidently equated with legislative intent." Nonetheless,

an honest attempt to identify legislative intent will sometimes produce

the conviction that intent and text conflict, requiring a judicial reso-

lution. When such a conflict occurs, judicial rhetoric is available to
permit trumping the text with intent. Thus, an absurd interpretation

of the text is to be avoided and absurdity is often determined by

reference to presumed legislative intent." The court can also invoke
background values in support of legislative intent, even in the weak
form of preserving '^public convenience. "^"^

b. Specific legislative intent

Two Indiana cases in which specific legislative intent clearly trumped
the text involve tax issues. In both, the Indiana Supreme Court reversed

the lower court's adherence to the letter of the law. One decision
imposed a tax, counter to the traditional pro-taxpayer presumption,

and the other permitted an exemption in contradiction of the pre-

sumption against tax exemptions. ^^ In Park 100 Development Co. v.

Indiana Department of State Revenue,^^ the court considered a statute

taxing partnerships with a corporate partner. The intent of the statute

was to prevent corporate taxpayers from avoiding the corporate tax

by forming partnerships. The state tried to tax a partnership with three

52. Other problems with determining specific legislative intent include determining how

evolutionary the author's intent might be, regardless of the document's historically contingent

context, and deciding whose intent counts (the intent of a legislative committee, for example).

53. Hill V. State, 488 N.E.2d 709, 710 (Ind. 1986) (absurd to read statute as allowing

exempt retail sales of fireworks, given legislative intent). See also U.S. Steel Corp. v. Northern

Ind. Pub. Serv., Inc., 486 N.E.2d 1082, 1084 (Ind. Ct. App. 1985) (literal reading of "public

utility" rejected because it would include homeowner engaged in backyard gardening in the

definition); Vickery v. City of Carmel, 424 N.E.2d 147, 149-50 (Ind. Ct. App. 1981) (court

corrects textual anomaly that would exempt property outside city from eminent domain

procedure applicable to property in city).

54. See, e.g.. State ex rel. Stream Pollution Control Bd. v. Town of Wolcott, 433
N.E.2d 62, 65 (Ind. Ct. App. 1982) (prevent absurdity and hardship and favor public

convenience); Sidell v. Review Bd. of Ind. Employment Sec. Div., 428 N.E.2d 281, 284 (Ind.

Ct. App. 1981); Walton v. State, 398 N.E.2d 667, 671 (Ind. 1980) (same).

55. See Appendix § IV.

56. 429 N.E.2d 220 (Ind. 1981), rev'g, 388 N.E.2d 293 (Ind. Ct. App. 1979).



1170 INDIANA LAW REVIEW [Vol. 24:1155

partners, one of which was a partnership that itself had a corporate

partner. The corporate partner was attempting to avoid the statute by
interposing a partnership between it and another partnership. The court

of appeals applied the letter of the law, permitting the use of the

intervening partnership to avoid tax. The supreme court applied stat-

utory intent to impose tax.^^

Indiana Department of Revenue, Indiana Gross Income Tax Di-

vision V. Glendale-Glenbrook Associates'^ dealt with the same statute

taxing partnerships with a corporate partner. The facts of the case,
however, involved an otherwise exempt corporation (an insurance com-

pany) that was a partner. The supreme court upheld the exemption,
overruling the lower court's decision to impose tax by relying on the

statutory text.^^

Another case of intent trumping text runs counter to an even more

hallowed presumption — the narrow construction of criminal law. In
Hill V. StatCy^ a semicolon in the wrong place made the text appear
to permit retail sales of fireworks if a retail buyer affirmed his intent

to ship the fireworks out of state. The court, however, invoked leg-

islative intent to permit only wholesale sales, reversing the lower court's

decision that the criminal accused was entitled to the letter of the law.^'

c. Background values

Another way a court can prefer legislative intent over the text is
by appealing to background values in the light in which the legislature

is presumed to have acted. Statutory interpretation cases abound with

such substantive presumptions, such as: narrowly interpreting statutes

in derogation of the common law, and its antidote, the liberal inter-
pretation of welfare statutes; strict interpretation of criminal law; nar-

57. Id. at 222-23. Another case in which the taxpayer was denied the benefit of plain

meaning is Indiana State Bd. of Tax Comm'rs v. Ropp, 446 N.E.2d 20, 25 (Ind. Ct. App.

1983) (notice of hearing amounted to substantial compliemce with statutory requirements

because any error did not prejudice the taxpayers).

58. 429 N.E.2d 217 (Ind. 1981), rev'g, 404 N.E.2d 1178 (Ind. Ct. App. 1980).

59. Id. at 218-19 (the statute clearly intended to close a loophole that the taxpayer

was not attempting to exploit).

60. 488 N.E.2d 709, 710 (Ind. 1986), rev'g, 482 N.E.2d 492 (Ind. Ct. App. 1985).

See also Watkins v. Alvey, 549 N.E.2d 74, 77 (Ind. Ct. App. 1990) (intent of criminal law

prevails over literal construction of statute dealing with pyramid schemes).

61. Effective after this case, the Indiana legislature amended the statute to exempt

retail sales if the fireworks were shipped out of state within five days of purchase. Apparently,

a written signed statement from the purchaser will protect the seller. Ind. Code Ann. § 22-

ll-14-4(a)(l)(B), (b)(4) (Burns 1986) (as amended by Pub. L. No. 229-1985 § 2, April 19,

1985). Whether this means that the court misread the enacting legislature's intent or that the

fireworks industry now had sufficient political clout to get its way is unclear.



1991] STATUTORY INTERPRETATION 1171

row construction of taxing statutes; and, looking in the other direction,

construing tax exemptions against the taxpayer; and, the presumption

that statutes are prospective unless they are remedial or procedural. It

is usually a mistake to assume that these presumptions implement

legislative intent in any realistic sense of the term. A presumption
serves that purpose only when the reader can confidently say that the
legislature's failure to incorporate the presumption into the text is an

obvious oversight, that applying the presumption **goes without say-

ing." Instead, these presumptions are usually obsolete generalities. At

best, they have little predictive value for the results of a case.^^ This

is documented in the Appendix to this Article, reporting Indiana cases
that both follow and refuse to follow the presumptions traditionally

invoked to justify specific statutory interpretations. At worst, judicial

discussion of a presumption obstructs analysis, as when the judge
speculates about whether a tax deduction should be subject to the

presumption disfavoring tax exemptions," or the majority invokes the

presumption against taxation and the dissent invokes the maxim dis-
couraging tax exemption.^"* The best course would be for the court not

to invoke the substantive presumptions at all, a trend that may be
discernible in at least some tax cases. ^^

The only presumption with much explanatory power for predicting
judicial decisions is that favoring the accused. Many of the cases on
this issue, cited in Section III of the Appendix, gave the accused the

benefit of the doubt, even to the point of allowing the appellate court

62. See Llewellyn, supra note 14.

63. Indiana Dep't of State Revenue v. Endress & Hauser, Inc., 404 N.E.2d 1173,
1176 (Ind. Ct. App. 1980) (it is not clear whether deductions are strictly construed, like

exemptions; but, in any event, the case did not deal with a deduction per se because the

issue was whether a deduction that was clearly allowed under the federal income tax is allowed

under the Indiana income tax); Indiana Dep't of State Revenue v. Food Mkt. Corp., 403

N.E.2d 1093, 1101-02 (Ind. Ct. App. 1980) (Staton, J., dissenting) (deductions are strictly

construed, like exemptions).

64. Indiana Dep't of State Revenue v. Food Mktg. Corp., 403 N.E.2d 1093 (Ind.

Ct. App. 1980) (majority says tax statute should be interpreted in favor of taxpayer, id. at

1096, and Judge Staton, in dissent, says deductions are like exemptions, to be interpreted

against taxpayer, id. at 1101-02); Dep't of State Revenue v. National Bank of Logansport,

402 N.E.2d 1008 (Ind. Ct. App. 1980) (majority says no ambiguity so no room to apply

presumption against tax exemption; in any event, should interpret tax law in favor of taxpayer,

id. at 1010, and Judge Buchanan, in dissent, applies a presumption against tax exemption,

id. at 1011).

65. For example, no presumption was mentioned in the following tax cases: Blood

V. Poindexter, 534 N.E.2d 768 (Ind. T.C. 1989); Matter of Souder's Estate, 421 N.E.2d 12

(Ind. Ct. App. 1981); Matter of Waltz' Estate, 408 N.E.2d 558 (Ind. Ct. App. 1980); Matter

of Wisely's Estate, 402 N.E.2d 14 (Ind. Ct. App. 1980).



1172 INDIANA LAW REVIEW [Vol. 24:1155

to reverse a trial court's finding on a question of fact.^^ In a few

criminal cases, the background value favoring strict construction may
explain the court's reading of the mens rea requirement into the text.^"^

It is possible that another reader of Indiana opinions would uncover

other cases in which intent appears to trump a clear text, but the

effort would not be worthwhile. The statutory text can be defined in

so many ways by expanding and contracting the relevant language that
a plausible claim of textual uncertainty can often be made. Intent can

also be identified in different ways, so that at least one plausible

definition will coincide with a text-based argument. Clear conflict be-

tween text and intent is therefore unusual; probably only in a small

number of cases there would be agreement that such a conflict existed.
In the meantime, more interesting statutory interpretation problems

might be neglected. These problems concern how to interpret statutes
with a complex text and with different types of evidence of legislative

intent and background considerations, all of which must be filtered

through the judge's perspective on which criteria of statutory meaning

are most important. The following Part IIB turns to these issues.

B. Judicial Choice and Statutory Interpretation

How do Indiana courts make choices about what weight should
be attributed to different criteria of statutory meaning and whether to

apply any of the '*Law and" approaches to statutory interpretation?
Section IIBl discusses cases in which the court appears to choose the

plain meaning of the text as the dominant interpretive criterion, but

in which there is evidence that policy considerations are driving the

court's decision to defer to the text. The back and forth process of
evaluating statutory language, legislative intent, and background con-

siderations may eventually alight on the text, but the decision to favor
the text over non-text based interpretive criteria seems influenced by

the particular values served by this result.

Section IIB2 examines Indiana decisions to determine whether the

*'Law and" approaches to statutory interpretation have had any impact.
Some evidence exists that the Law and Economics perspective, which

66. See Sheppard v. State, 484 N.E.2d 984, 988 (Ind. Ct. App. 1985) (the appellate

court rejected a finding of fact by the trial court that phone calls were "coercive" and

therefore constituted obstruction of justice).

67. State v. Keihn, 542 N.E.2d 963, 965-68 (Ind. 1989), rev'g, 530 Ind. App. 747

(Ind. Ct. App. 1988); Miller v. State, 496 N.E.2d 592, 593 (Ind. Ct. App.), vacated, 502

N.E.2d 92, 94 (Ind. 1986).



1991] STATUTORY INTERPRETATION 1173

expects private interest bargaining to underlie a statute, has sometimes

prevailed. The evolutionary approach to statutory interpretation is also

occasionally adopted, but the courts are loathe to admit it. In any

event, **Law and" perspectives are selectively applied, in keeping with

a pragmatic and practical reasoning approach to statutory interpretation,

rather than in the spirit of a devotee wholeheartedly committed to a

particular '*Law and'' perspective.

7. Judicial **Choice'* to Rely on the Text.—The judicial decision
to rely on the text appears deferential, but we should not necessarily
take judicial rhetoric at face value. The text may sometimes be chosen
as part of a complex interpretive process whereby text, legislative intent,

and background considerations interact to determine statutory meaning.

This process can be observed in a group of Indiana cases deahng with

law enforcement, means-tested welfare, and land use control by property

owners. These areas of law raise difficult and contentious policy issues,

and the court will often argue that it is simply deferring to the plain

meaning of the text, eschewing policy concerns. There is no easy way
to determine whether deference to the text is a neutral principle or

whether the court defers to the text because it serves a particular policy

objective, that remains unstated. However, we are entitled to be sus-
picious about the claim that deference to the text is a neutral principle

if the text is rejected in other cases to implement the very same policies

which were served by deference to the text in another case. This

suspicion is reinforced if those policies are favored in deciding a case

in which the statutory text is unclear. Policy choices, in other words,

may sometimes drive the decision to defer to the text.

a. Lawsuits involving law enforcement

Two cases seem to apply the statutory text's plain meaning to
prevent lawsuits that might disrupt law enforcement. In Seymour Na-
tional Bank v. State,^^ the statute provided governmental immunity,
as follows: a

*

'governmental entity or an employee acting within the

scope of his employment is not liable if a loss results from . . . the

adoption and enforcement of, or failure to adopt and enforce, a law,

. . . unless the act of enforcement constitutes false arrest or false

imprisonment."^^ A plaintiff injured in a high speed police chase sued
the state. The plain meaning of the text indicated that the defendant
was immune and the majority agreed, stating that the statute granting
immunity for '^enforcement of . . . law" was clear.

68. 422 N.E.2d 1223 (Ind.), reh'g granted, 428 N.E.2d 203 (Ind. 1981).

69. Id. at 1223-24 (quoting Ind. Code § 34-4-16.5-3(7) (1974) (as amended in 1976)).



1174 INDIANA LAW REVIEW [Vol. 24:1155

The dissenting judges thought that granting complete immunity to

police officers engaged in law enforcement was harsh^° and unreason-

able.^^ Justice Hunter rejected the view that the legislature intended a

literal application of the statutory language, and invoked the image

of a police car crashing into a playground. ^^

On rehearing, ^^ the majority adhered to its view that the text was
clear, but then qualified its earlier opinion to preclude immunity if

the acts were *'so outrageous as to be incompatible with the performance

of the duty undertaken. . . . Such acts, whether intentional or willful

or wanton, are simply beyond the scope of employment."'''^ The court

did nothing to dispel the idea that plowing into a playground might

be within the scope of employment and, therefore, immune.

In Burks v. Bolerjack, the plaintiff sued a sheriff for false im-

prisonment.^^ The statute protected government employees from suit,
as follows: "A judgment rendered with respect to or a settlement made
by a governmental entity bars an action by the claimant against an

employee whose conduct gave rise to the claim resulting in the judgment

or settlement."''^ A claim against the government arising from the same
facts had been dismissed because the plaintiff failed to provide timely

notice, and a subsequent suit against a sheriff was then dismissed under

the statute on the ground that the statutory text's plain meaning barred

the suit.

The court of appeals considered this result **absurd,"^^ and the

supreme court's dissent deemed it **arbitrary and inequitable."^^ The
lower court concluded that the claim would not have been barred if

the plaintiff had sued the sheriff directly, without first suing the

government. It therefore made no sense to bar the plaintiff from suing
the government employee just because its suit against the government

was not timely. ^^ The supreme court's dissent interpreted the statute
to apply only when the suit against the government was resolved on

70. Id. at 1227 (DeBruler, J., dissenting).

71. Id. at 1228 (Hunter, J., dissenting).

72. Id. at 1227-28 (Hunter, J., dissenting).

73. Seymour Nat'l Bank v. State, 428 N.E.2d 203 (Ind. 1981).

74. Id. at 204. At the same time, however, the majority admitted that immunity was

unnecessary when acts v/ere beyond the scope of employment because the government would

not then be liable, and said nothing to dispel the impression that the state would not be

liable if a police car engaging in a high speed chase crashed into a playground. Id.

75. 427 N.E.2d 887, 888 (Ind. 1981).

76. Id. at 889 (citing Ind. Code Ann. § 34-4-16.5-5 (Bums Supp. 1980).
77. Burks v. Bolerjack, 411 N.E.2d 148, 151 (Ind. Ct. App. 1980)).

78. Burks, All N.E.2d at 891 (DeBruler, J., dissenting).

79. Burks, 411 N.E.2d at 151.



1991] STATUTORY INTERPRETATION 1175

the merits, in effect extending the government's res judicata claim to

employees. ^^

The opinions in these two cases could be analyzed as simply a

conflict between the statutory text and the potentially harsh policy

implications of applying its clear meaning. In this view of the inter-

pretive process, the harsh policy implications of tort immunity were

irrelevant. The text simply prevailed. Another decision suggests, how-

ever, that policy concerns about disrupting law enforcement played a

significant role in the court's decision to rely on the text.

Gallagher v. Marion County Victim Advocate Program, Inc.^^ dealt

with access to public records. The statute made available to the public
"any writing in any form necessary, under or required, or directed to

be made by any statute or by any rule or regulation . . . ."^^ The
writings at issue were material prepared by police officers at the scene

of a crime or accident setting forth the location, time, and description

of the event, with names of victims, witnesses, or suspects. These

writings were sought by an association whose purpose was to aid victims

of violent crime."

The text-based arguments marginally favored disclosure. As the
dissent noted, the statute explicitly required a liberal construction of

its provisions favoring disclosure,*'* and explicit exceptions from dis-

closure in other statutes did not mention the type of records in this

case.^^ The dissenting judge also could not accept the dramatic con-
sequences of barring disclosure, which left public access to routine

police records at the unfettered discretion of the police department.*^

The majority decided, however, that these records were kept in
accordance with discretionary police practice, which did not fall within

the statute mandating disclosure of records "required" by "statute,

rule or regulation."*^ The court took the somewhat unusual position

80. Burks, All N.E.2d at 891 (DeBruler, J., dissenting).

81. 401 N.E.2d 1362 (Ind. Ct. App. 1980).

82. Id. at 1363 (citing Ind. Code Ann. § 5-14-1-2(1) (Burns Supp. 1976)).
83. Id.

84. Id. at 1369-70 n.2 (Chipman, J., dissenting).

85. The majority dealt satisfactorily with the fact that a special exception from disclosure

of police records had been deleted as the bill passed through the legislature. The draft from

which this was deleted contained a broad definition of publicly available records. The final

bill both deleted the exception and narrowed the definition. Id. at 1366. According to the

majority, the combination of the deletion and the narrowing of the definition precluded any

inference about disclosure of police records in the final statute. The dissent made much of
the deletion, arguing that the deletion of an exception for police records implied a "conscious

legislative decision to include police records within the definition of public records." Id. at

1370 (Chipman, J., dissenting).

86. Id. at 1369, 1371.

87. Id. at 1367-68.



1176 INDIANA LAW REVIEW [Vol. 24:1155

that a later statute determining how agency rules were to be adopted
defined what constituted a **rule" under the prior statute, even though

the legislature whose intent was at issue could not have been aware

of the later provision about adopting agency rules. ^^

The majority was quite aggressive in asserting its disinterest in

policy concerns, stating that **[i]n the construction of statutes, we have
nothing to do with questions of policy and political morals; such matters

are for the consideration of the Legislature. . . . Consideration of

hardships cannot properly lead a court to broaden a statute beyond

its legitimate limits."*^ The majority protested too much. Certainly,
nothing in the statute's text forced or even strongly indicated a decision

one way or the other. If anything, the text favored disclosure. It is
hard to imagine that the court reached its decision without making a

policy judgment that law enforcement might be too disrupted by per-

mitting access to police records. We may, therefore, infer that the
decisions relying on the text to provide immunity from suits that might

interfere with law enforcement^^ were also influenced by the fact that

deference to the text served the same goals. ^' This inference is further

reinforced by the fact that Indiana courts in nonlayv enforcement

contexts do not favor sovereign immunity.^^

b. Means-tested welfare

Indiana Department of Public Welfare v. Guardianship of Mc-
Intyre^^ involved a Welfare Department claim to recoup government

payments of medical expenses from a welfare recipient's subsequent

88. Id. at 1368. The dissent explicitly disagreed with this analysis. Id. at 1369 n.l

(Chipman, J., dissenting).

89. Id. at 1364.

90. See supra notes 68-81 and accompanying text.

91. Justice Hunter's opinion on rehearing in Seymour Nat'l Bank v. State, 428 N.E.2d

203, 205 (Ind. 1981) (Hunter, J., dissenting in part, concurring in part), also illustrates how
text-based arguments are sensitive to policy concerns. Confronted with the majority's concession

that the most extreme cases of wanton and willful misconduct did not constitute "enforcement

of law" and were therefore not immune, id. at 204, he shifted the grounds of his dissent

(which was unfavorable to immunity) to argue that the "enforcement of a law" language

was ambiguous, rather than that its literal meaning should not be applied. Id. at 205-06

(Hunter, J., dissenting).

92. For example, in Indiana State Highway Comm'n v. Indiana Civil Rights Comm'n,
424 N.E.2d 1024 (Ind. Ct. App. 1981), the statute permitted suits against "persons." Despite

a tradition against interpreting the statutory term "person" to include the state, the court

permitted the suit, using very strong anti-immunity language. Id. at 1032 ("The logic of the

law today does not support the use of sovereign immunity to bring the State outside a statute,

when the statute strongly implies otherwise.").

93. 471 N.E.2d 6 (Ind. Ct. App. 1984).



1991] STATUTORY INTERPRETATION 1177

tort recovery. The statute gave the government a lien against tort
recoveries **to the extent of the amount paid by the department,'*^'*

in effect according the government a right of subrogation based on

the financial aid it provided the tort victim. The court held that this

language clearly gave the state a first claim to the entire tort recovery.

An initial pass at this language seems to support the majority's
conclusion that the statute

*

'clearly" gives the government first claim.

According to the dissent, however, policy considerations suggested that

the funds should be allocated in accordance with the court's discretion. ^^

Insurance ceilings and defendant insolvency made recoveries inadequate
and the plaintiff often had additional injury-related expenses that could

be paid out of some portion of the recovery, if the government did

not get it all. Without a clear statement in the statute, the dissent

concluded that the statute incorporated the traditional judicial practice

of exercising equitable discretion when distributing recoveries to holders
of subrogation rights.

As for the statutory language, the dissent compared the language
of the Indiana law to a Wisconsin statute^^ which stated that, after

attorney fees, the money **paid by the state should be deducted next
and the remainder paid to the public assistance recipient."^'' That was

clear language giving the government first claim to the tort recovery.

Under pressure from the dissent's policy concerns and traditional

equitable discretion practice, the majority was not so certain that the

statute's text was clear. It justified its result by expanding the relevant

text to include a prior statute that had used the word "subrogation"
and had been interpreted to give courts equitable discretion. ^^ However,

the term ** subrogation" had been deleted from the statute by the time

this case arose, which suggested that the discretionary judicial power

to qualify the government's recoupment rights had been withdrawn. ^^

The majority did not explicitly reinforce its commitment to the
text with policy justifications for not allowing judicial apportionment

of tort recoveries, even though a concern for protecting government

revenue was a strong candidate. Should we therefore assume that such
policy concerns played no part in the decision? Was the text the most
important criterion, with other considerations playing only a tangential

role? Or was the text a convenient way to implement the policy of
protecting government revenue?

94. Id. at 8.

95. Id. at 10 (Young, J., dissenting).

%. Id.
97. Id. at 9.

98. Id. at 8.

99. Id. at 8-9.



1178 INDIANA LAW REVIEW [Vol. 24:1155

The decision in another welfare case involving eligibility for a state

medical assistance program covering hospital treatment'°° suggests that

the text is not the dominant criterion the court might have us believe.

The statute made eligibility dependent on the claimant being '^financially
unable to defray" medical costs. '°' The administering agency decided

to use the financial standards in the federal-state Aid to Dependent

Children (ADC) program. Because the claimant had too much income
to receive ADC, she was not considered **unable to defray'' medical
costs. The court allowed the agency to use that standard to determine

eligibility for state medical assistance, thereby making the claimant

inehgible and forcing the hospital to seek recovery of the costs from

the claimant. '^^

No one would pretend that the statutory phrase **unable to defray"
costs was clear, but the dissenting opinion favoring the welfare claimant

seemed to have the better text-based argument. The dissent noted
another statute that stated that the Welfare Department '*may" recover

medical expenses from a recipient who is able to repay medical costs
over a period of time.^°^ This would have provided a mechanism by

which the claimant could have received medical assistance from the

state and paid it back out of funds in excess of the ADC financial
eligibility level. The majority resisted treating this statutory mechanism

as a reason for precluding agency use of ADC standards for threshold
eligibility. It interpreted the statute's text as applying only to future

recoveries by the claimant after receipt of medical assistance, not to

assets held at the time the medical help was provided. '^"^ The dissent

objected to this distortion of the text, noting that the statutory re-

payment mechanism said nothing about payment only out of '* future"

recoveries but provided for execution of repayment contracts whenever

the welfare department determined that repayment was possible. '°^

The dissent also called attention to the strange policy effects created

by the majority's decision. If the case involved the federal-state Medicaid

program rather than a state aid program, the excess income would not

have disqualified the claimant. Instead, any "excess" over minimum
income levels for ADC eligibility would have been used to reimburse
the government for the medical assistance. The state was therefore

depriving the claimant of medical benefits by borrowing a federal-state

100. Trustees of Ind. Univ. v. County Dep't of Pub. Welfare of Kosciusko County,

426 N.E.2d 74 (Ind. Ct. App. 1981).

101. Id. at 75.

102. Id. at 76.

103. Id. at 77 (Staton, J., dissenting)

104. Id. at 76.

105. Id. at 77 (Staton, J., dissenting)



1991] STATUTORY INTERPRETATION 1179

ADC income standard that the federal-state Medicaid program itself
would not have used.'^^ Finally, the effect of the majority's decision

was to encourage claimants to defer purchase of medical help, which

in the long run increases medical costs.
'^'^

The dissent's discussion explicitly called attention to a theme the

majority never acknowledged — that the real issue was how strongly
to protect government revenues by making the hospital, rather than

the government, seek reimbursement of medical costs out of any excess

income. '^^ Given the fact that the dissent had the better text-based

argument, the suspicion arises that a concern with government revenues

strongly influenced the majority's decision to place the financial burden

on the hospital. This also supports the suspicion that relying on the

text to give the government first claim to recoup medical costs from

subsequent tort recoveries was influenced by the fact that it preserved

government revenue. '^^

c. Land use by property owners

Another example of a text-based opinion probably influenced by

policy considerations is Adult Group Properties, Ltd, v. ImlerJ^^ The
case questioned whether a residential facility for the developmentally

disabled could be excluded from a subdivision by a covenant limiting

use to residential purposes, on grounds that the facility was run as a

business. The majority read the statutory text very closely to favor the

property owner's power to make land use decisions with minimal
restraints.

The statute contained two sections, one limiting zoning laws hostile

to residential facilities for the developmentally disabled, and the other

limiting private covenants hostile to such facilities for both the disabled

and mentally ill. The court compared the two sections. The zoning
section stated that a zoning ordinance could not exclude a residential

106. Id. at 76 (Staton, J., dissenting).

107. Id. at 77 (Staton, J., dissenting).

108. Id. Compare Gary Comm. Mental Health Center, Inc. v. Indiana Dep't of Pub.
Welfare, 507 N.E.2d 1019 (Ind. Ct. App. 1987), in which the court limited government aid

to medical services provided "by a hospital." The statute provided for aid for services "in"

a hospital but other portions of the statute referred to the services being provided "by" the

hospital.

But see State ex. rel. Van Buskirk v. Wayne Township, Marion County, 418 N.E.2d
234 (Ind. Ct. App. 1981), in which the township trustee tried to limit welfare shelter benefits

to renters, not owners. The court denied the trustee this power, observing that this would

encourage mortgage default and homelessness. The consequence of the decision was, however,

to deny discrimination between renters and homeowners, not necessarily to increase costs.

109. See supra notes 94-100 and accompanying text.

110. 505 N.E.2d 459 (Ind. Ct. App. 1987).



1180 INDIANA LAW REVIEW [Vol. 24:1155

facility for the developmentally disabled **solely because the residential

facility is a business." The covenant section used different language.'''

It stated that a covenant could not both allow residential use and

prohibit a residential facility for the developmentally disabled and

mentally ill. It failed to say that the covenant prohibition could not

be based on the ground that the facility was a business. The court

took this to mean that any business could be excluded by a covenant,
including residential facilities for the developmentally disabled."^ The

majority also concluded that the residential facility was a business

because of the landlord's profit-making motive, rather than the activities

of those living in the house. "^

This was a very close reading of the statute indeed given the statute's

obvious purpose, noted by the dissent,'"* of mainstreaming the devel-

opmentally disabled."^ Admittedly, there was a difference in the lan-

guage of the zoning and covenant sections. However, it is more than
likely that the statement in the zoning section, that a residential facility

for the developmentally disabled cannot be zoned out on the ground

that it is a business, applied to both the zoning and the covenant

section. The drafting could have been more careful, but it is the
majority's reading of the text that seems strange given the statutory

purpose of mainstreaming the developmentally disabled."^ It also seems

unlikely that the real estate developers and their advisors who are the
likely audience for this statute would read it to permit private covenants

to prohibit residential facilities that zoning laws could not prohibit. A
policy preference for protecting a property owner's right to choose his

neighbors almost certainly influenced the majority's decision to adopt

a close text-based reading."^

111. The court emphasized that the sections were drafted the same year, reinforcing

its argument that the difference was purposive. Id. at 462-63.

112. Id. at 463-64.

113. Id. at 469, 474 n.4 (Miller, J., dissenting).

114. Id. at 467 (Miller, J., dissenting).

115. Id. at 473-74 (Miller, J., dissenting).

116. After this decision, the Indiana legislature retroactively prohibited private covenants

from excluding residential facilities for the developmentally disabled and mentally ill from

residential areas on the ground that the residents are unrelated or for any other reason. Ind.

Code § 16-13-21-14 (1988). The retroactive impact of this statute was upheld in Minder v.

Martin Luther Home Found., 558 N.E.2d 833 (Ind. Ct. App. 1990), rev'g, Clem v. Christole,
Inc., 548 N.E.2d 1180 (Ind. Ct. App. 1990). The opinion was written by Judge Miller, who
had dissented in Adult Group Properties, Ltd., 505 N.E.2d 459.

117. The court noted that the covenant limiting use to residential purposes was important

to the property owners. Adult Group Properties, Ltd., 505 N.E.2d at 461. The court also

noted that any other reading of the statute would permit an unconstitutional taking of the

landowner's property. Id. at 464-65.



1991] STATUTORY INTERPRETATION 1181

2. "Law and** Theories.—We have said little in this review of
Indiana cases about the '*Law and" perspectives that appear so prom-

inently in the current literature on statutory interpretation. There is a

good reason for this. **Law and" perspectives provide only a partial

description of the interpretive process. Despite the rhetoric, their pur-

pose is to assure that a particular point of view receives some attention,

not to completely explain the interpretive process. Thus, the Law and
Economics perspective is an antidote for judges who engage in too
freewheeling an extrapolation of statutory purpose, especially when that

would undermine the text. And evolutionary perspectives brought by
the judicial reader to the statute suggest that judges can sometimes

update legislation, contrary to the common law view of statutes as
static, time-bound documents.

There are, not surprisingly, some Indiana cases that look closely

for the private interest bargain struck by the statute and others that

consider the need to update statutes under certain circumstances. These

cases are described in this section. There is no evidence, however, that

these approaches are applied with a single-minded commitment.

a. Implementing the bargain

There are several ways the law and economics perspective on leg-

islative bargaining can provide insight into statutory meaning. First,

it can call attention to the possibility that the legislative intent consisted

of a bargain. This occurred in a case in which a statute allocated

service areas to electricity providers. ^'^ A rural electric cooperative and
investor-owned company filed a joint petition allocating a service area
to the cooperative pursuant to the statutory procedures that required

petitions to be filed by a certain date. The Utility Regulatory Com-
mission failed to meet its statutory deadline for approving or disap-

proving the petition. After the specified time limits, the investor-owned

company filed a petition to modify, which the Commission approved. ^'^

The question was whether the statutory time limits were mandatory or

whether the Commission could approve a modification after those limits

had expired.

The court held that the time limits were mandatory, so that the

Commission was not authorized to approve a petition to modify after

the deadline. '2° It supported its conclusion with an explanation of the

background for the statutory deadlines which was one of endless dis-

118. United Rural Elec. Membership Corp. v. Indiana & Mich. Elec. Co., 549 N.E.2d
1019 (Ind. 1990), rev'g, 515 N.E.2d 1135 (Ind. Ct. App. 1987).

119. Id. at 1020.

120. Id. at 1023-24.



1182 INDIANA LAW REVIEW [Vol. 24:1155

putes over service areas. The court observed that both rural electric
cooperatives and investor-owned companies supported the legislation

to bring these disputes to a halt,*^' strongly implying that the deadlines

were the product of an agreement between these two contesting interest

groups. Permitting a later petition by the investor-owned company to
challenge the prior petition filed in accordance with the statutory

guidelines would unsettle the statutory bargain.

Second, the Law and Economics perspective can highlight the fact
that a bargain omits certain groups. For example, the supreme court

rebuffed an effort by a lower court to treat athletes as
*

'employees"

for Workers' Compensation. '^^ Its opinion rested on a text-based ar-

gument about the meaning of the language "contract of employ-

ment."'" But the court also could have noted how unlikely it was that
university athletes were included in the bargain underlying Workers'

Compensation whereby a plaintiff gives up potentially large tort claims

in exchange for certain but limited Workers' Compensation benefits. '^"^

Third, the Law and Economics perspective counsels against favoring
one of the interests represented in the statutory bargain. Other interests,

pushing in the other direction, may have negotiated limits to the statute's
impact. Thus, favoring employees who apply for unemployment in-
surance when they are indirectly involved in a labor dispute may
improperly displace the concerns of employers, who are also parties
to the governing statute.'"

The use of the Law and Economics approach as an antidote to
*

'liberal" interpretation of one of several conflicting legislative purposes'^^

is both a strength and potential weakness. It is important to recognize

statutory limits, but equally important to understand the role of judicial

choice in defining those limits. Two interests m.ay bargain to a statutory
result, but identifying where the point of equipoise lies when the statute

121. Id. at 1021.

122. Rensing v. Indiana State Univ. Bd. of Trustees, 444 N.E.2d 1170 (Ind. 1983),

rev'g, 437 N.E.2d 78 (Ind. Ct. App. 1982).

123. Id. at 1172-73.

124. A complete argument about the statutory bargain would examine the state of the
law when the Workers' Compensation statute was passed. If state university employees could

not sue in tort, it is unlikely that they were part of the statutory bargain because they had

nothing to give up in exchange. If student athletes can now sue in tort, an evolutionary
approach to statutory interpretation might include them in the statute.

125. See, e.g., Aaron v. Review Bd. of Ind. Employment Sec. Div., 416 N.E.2d 125,

132-33 (Ind. Ct. App. 1981) (court held that when nonstriking employees of a multi-plant

employer are laid off as a result of a selective strike of that employer, they are directly

interested in the labor dispute and therefore not eligible for unemployment benefits, if the

nonstriking employees are in the same bargaining unit as the striking employees).

126. See Appendix § II.



1991] STATUTORY INTERPRETATION 1183

is applied to specific cases depends on the strength and weakness of

the values each interest group contributes to the statute. Defining that

point requires policy judgments concerning those values, which is not

mandated by what the legislature has done. An example from the
Indiana cases concerns the interpretation of the Medical Malpractice

Act, which requires choosing between protection of medical care prov-

iders and tort plaintiffs.

The Medical Malpractice Act was passed to protect health care

providers from medical malpractice claims so that medical insurance

would not drive them out of business. It is therefore readily understood

as a private interest bill, protecting a group of potential defendants

from common law liability. But how much protection should they
receive?

*

'Malpractice" is defined as any **tort . . . based on health care

or professional services rendered, or which should have been rendered,

by a health care provider, to a patient. "'^^ "Health care" is defined

as any "act or treatment performed or furnished, or which should

have been performed or furnished, by a health care provider for, to,

or on behalf of a patient during the patient's medical care, treatment,

or confinement."'^^ The statute established a panel of doctors to review
claims, and permitted its conclusions about standard of care to be

admitted into evidence. '^^ It also imposed damage ceilings'^° and a
special statute of limitations.'^'

In two cases, the court invoked the Act's policy of protecting health

care providers as support for a broad definition of those covered by

the statute. For example, the statute covered suits by a "patient or

his representative." Representative was defined by the statute to include

the patient's "parents." The parents were therefore subject to the act
even when they sued on their own behalf, not for their child. '^^ Ad-
ditionally, a plaintiff who had been committed to an institution at his
wife's request by a doctor who did not examine him was still a "patient"
under the statute.'" The court determined that the statute did not
require the plaintiff to have a contract with the doctor, as long as his

wife had one.

When the courts reached the question of the type of activity covered
by the statute, however, they had more trouble interpreting the law.

127. IND. Code Ann. § 16-9.5-l-l(h) (Burns 1990).
128. Id. § 16-9.5-l-l(i).

129. Id. § 16-9.5-9-1 to -10.

130. Id. § 16-9.5-2-2.

131. Id. § 16-9.5-3-1.

132. Sue Yee Lee v. Lafayette Home Hosp. Inc., 410 N.E.2d 1319, 1323-24 (Ind. Ct.
App. 1980).

133. Detterline v. Bonaventura, 465 N.E.2d 215, 217-19 (Ind. Ct. App. 1984).



1184 INDIANA LAW REVIEW [Vol. 24:1155

In the 1982 case of Methodist Hospital of Indiana, Inc. v. Rioux, the

plaintiff fell and broke a hip, alleging that the health care provider

had ** negligently . . . failed to provide appropriate care to prevent said

fall and injury.'*'^'* The court made the case sound simple, stating that
the very broad language of the statute did not need construction, and

that the **duty to provide a safe environment*' was within the Medical

Malpractice Act.'^^ This construction favored the statute's pro-defendant

purpose.

Two years later, however, the same district had second thoughts
in Winona Memorial Foundation of Indianapolis v. Lomax, another
**slip and fall" case.^^^ The plaintiff alleged that the defendant was
negligent in not maintaining the floor properly, causing her to trip on

a protruding floorboard. Now the court thought that the statute needed
construction, •^^ and looked closely at the statutory purpose. It found

that the statute applied only to **classic" medical malpractice, not

liability for ordinary nonmedical accidents, '^^ even though the statute's

broad language defined **health care" as **any act ... by a health

care provider." The court looked at the text of the entire statute and
pointed out that other provisions required an expert medical panel to

give its opinion on whether the health care provider met customary

standards of care. The panel's expertise seemed important only if the

behavior being judged was medical malpractice.'^^ Rioux was distin-

guished on the ground that the plaintiff in that case had alleged failure

to provide appropriate care, and not, as in Lomax, negligence in
maintaining the floor. •'^^

As a result of these decisions, the plaintiff's ability to proceed to
settlement negotiations without the Act's limitations depends on careful

drafting of the pleadings. •"*' The plaintiff who alleges negligence in

134. 438 N.E.2d 315, 316 (Ind. Ct. App. 1982).

135. Id. at 317 n.2.

136. 465 N.E.2d 731 (Ind. Ct. App. 1984).

137. Id. at 737-38.

138. Id. at 738-39. The court referred to statements by the statute's drafters, who
represented the medical profession, that failed to mention general negligence claims as causing

an insurance crisis for the profession. Id. at 739-40 n.7.

139. Id. at 735.

140. Id. at 741-42.

141. See also Ogle v. St. John's Hickey Memorial Hosp., 473 N.E.2d 1055 (Ind. Ct.

App. 1985) in which a hospital patient admitted because of suicidal tendencies was raped.

Her claim was within the Act because she asserted that the hospital negligently failed to

provide her with proper security, which the court interpreted to mean a failure to properly

confine her, even though the reason why confinement was necessary was her suicidal tendencies,

not a concern with being sexually assaulted. Presumably, if she had alleged negligent supervision

of the rapist, her claim would not have been for malpractice and would be outside the Act.



1991] STATUTORY INTERPRETATION 1185

building maintenance avoids the Act, at least at the initial stages of

the lawsuit before the facts are developed, but a plaintiff who alleges
improper medical care falls within the statute. This obviously creates

significant liability exposure for medical care providers. The court's

decision to accept this risk depends on its policy judgment about where

to locate the point of statutory equipoise between the concerns of

negligence plaintiffs and defendant health care providers.

The court explicitly accepted these implications later in Methodist

Hospital of Indiana, Inc. v. Ray,^^^ in which a patient contracted

Legionnairre's disease while in a hospital. The plaintiff alleged that

faulty maintenance of the premises, rather than a nonsterile environ-

ment, was responsible for contracting the disease. The court held that

this was sufficient to prevent the Act from applying at the outset of

the case, but acknowledged that the Act might apply if the development

of the facts subsequently demonstrated that medical malpractice was

really at issue.
'"^^

The shift in the court's attitude from Rioux to Lomax and Methodist
Hospital toward permitting the plaintiff's pleadings to avoid initial

coverage by the Medical Malpractice Act demonstrates a shift in the

court's view of the appropriate balance between the statute's pro-

defendant purpose and the plaintiff's traditional common law negligence
claims. This balance is not determined by the statute, even a statute

with strong private interest antecedents, but depends on the court's

choice about how to balance the conflicting policies that underlie the
statute.

b. Evolutionary interpretation

The common law always has been associated with evolutionary
change, but courts have a much harder time justifying evolutionary
interpretation of statutes. Except for some statutes with the appropriate

But see Reaux v. Our Lady of Lourdes Hosp., 492 So. 2d 233, 234 (La. Ct. App, 1986)

(Louisiana medical malpractice act does not cover case in which health care provider failed

to provide security from intruders).

142. 551 N.E.2d 463 (Ind. Q. App. 1990).
143. Id. at 468-69. A conflict between the Act's reach and limits was also resolved in

Collins V. Thakkar, 552 N.E.2d 507, 511 (Ind. Ct. App. 1990). A doctor performed a
nonconsensual abortion incident to an examination for pregnancy on a patient with whom
he had had an affair. Because the doctor's action was an intentionjil tort not performed to

provide medical services, it did not come within the Act. The dissent, id. at 512 (Sullivan,

J.), determined that the Act applied to intentional torts performed in the defendant's capacity

as a medical care provider, smd was not limited to cases of medical negligence. See also

Midtown Community Mental Health Center v. Estate of Gahl, 540 N.E.2d 1259, 1262 (Ind.

Ct. App. 1989) (Medical Malpractice Act does not apply to suit against doctor for failing

to warn decedent that a former patient was dangerous).



1186 INDIANA LAW REVIEW [Vol. 24:1155

text and legislative intent (the classic example is the '^restraint of trade"

language in the antitrust laws),"*'* courts are reluctant to admit that

they update statutes, even when their opinions are best explained in
evolutionary terms. '"^^

Courts have the easiest time updating statutes when the statute
incorporates a common law power, but even then, judges seem unwilling
to admit to what they are doing. They instead describe the exercise

of this power as an application of the statute. An Indiana case dealing
with the "open and obvious danger" defense to a strict liability tort

claim illustrates this approach."*^

The plaintiff in Koske v. Townsend Engineering Co., had been
injured by a machine. The 1978 Product Liability Act explicitly stated
that

the common law of this state with respect to strict liability in
tort is codified and restated as follows: (a) One who sells any
product in a defective condition unreasonably dangerous to any

user or consumer or to his property is [liable under some
circumstances].''*^

In Bemis Co. v. Rubush^"^^ and later cases, Indiana common law was
held to include the **open and obvious danger" defense. Nonetheless,

in Koske the supreme court did not incorporate the common law
doctrine into the statute, despite this statutory language. The court
instead focused on other parts of the statutory text and found

the implication unmistakable that the open and obvious danger

rule, as developed in Bemis and its progeny, was excluded from

the Act's codification and restatement of the law of strict

liability in tort. The Act not only employed the language of
Restatement (Second) of Torts § 402A without explicitly in-
corporating the words open and obvious, or requiring that a

defect be latent or concealed, but it also expressly delineated

the allowable defenses to strict liability in tort to include eval-

144. See United States v. Associated Press, 52 F. Supp. 362, 370 (S.D.N.Y. 1943),

aff'd, 326 U.S. 1 (1945).

145. In one case, reluctance to admit a judicial power to change law led the court to

insist that separation of powers required deferring to legislative intent when the legislature

failed to reverse a long line of cases. The concurring judge got it right, however, when he

affirmed the judge's power to decide whether its own decisions remained valid. Cf. Miller
V. Mayberry, 506 N.E.2d 7, 11 (Ind. 1987) with id. at 12 (Shephard, C.J., concurring).

146. Koske v. Townsend Eng'g Co., 551 N.E.2d 437, 442 (Ind. 1990), rev% 526
N.E.2d 985 (Ind. Ct. App. 1988).

147. Id. at 441-42 (citing Ind. Code § 33-1-5.1-3 (1988)).
148. 427 N.E.2d 1058 (Ind. 1981), cert, denied, 459 U.S. 825 (1982).



1991] STATUTORY INTERPRETATION 1187

uation of the product user's conduct only by a subjective rather

than an objective standard.''*^

Rejection of the common law **open and obvious danger" defense
was a reasonable application of the common law as of 1990 but a
forced reading of the 1978 statutory text. The court of appeals, which

had felt compelled to apply the common law rule because of the
statutory language stating that the law was a codification and restate-

ment of the common law, noted the current '*trend away from rigid
application of the rule.'*'^° If the statute incorporated an evolving

common law, however, the court was free to reject the open and
obvious danger rule in 1990. Only an unwillingness to admit a surviving

evolutionary common law power'^' can explain the court's forced read-
ing of the statutory text.'"

149. Koske, 551 N.E.2d at 442.

150. Koske v. Townsend Eng'g Co., 526 N.E.2d 985, 989 (Ind. Ct. App. 1988).

Actually, the statute did not compel incorporation of the Bemis rule because that case was

decided in 1981, after passage of the 1978 statute, and Bemis^ therefore, was not part of

the statute's context.

151. This decision seems aberrational when compared to a 1989 case affirming liability

to bystanders under the 1978 statute. State Farm Fire & Casualty Co. v. Strutco Div., King
Seeley Thermos Co., 540 N.E.2d 597, 597-98 (Ind. 1989). The court emphasized the statute's

incorporation of the common law, which covered bystanders. It shunted aside the statute's
silence about bystanders, contrary to its approach in Koske, supra notes 148-50 and accom-

panying text, in which silence about the "open and obvious" rule was stressed as a factor

excluding the defense. The only way to reconcile the two cases is on the ground of a judicial

power to develop the common law that survives passage of the statute.
152. The court's reluctance to admit an evolutionary power sometimes extends to cases

in which a common law power parallels statutes that deal partially with a particular problem.
For example, in Clipp v. Weaver, 451 N.E.2d 1092 (Ind. 1983), a guest asserted an ordinary

negligence claim against a boat operator. Indiana statutes provide limited liability for guests

of car and aircraft operators (since 1929 and 1951 respectively). Id. at 1093-94, 1094 n.l.

The common law also provides limited liability to landowners, but that rule has been under
severe attack within legislatures and courts as unconstitutional denials of equal protection

under state constitutions. W. Keeton, Prosser and Keeton on the Law of Torts 216-17
(1984). The common law today would almost certainly favor ordinary negligence rules.

The court properly applied ordinary negligence standards to boat guests in what can be

best understood as an updating of the common law. But it did not rely entirely on the
common law. It cited a statute that boat owners were supposed to behave in a "careful and
prudent manner, having due regard for the rights, safety and property of other persons."

Clipp, 451 N.E.2d at 1094. Instead of just stating that it was using a statute as evidence of

the common law standard of care, the court asserted that the "legislature has determined
that a boat operator owes a duty of reasonable care to all persons, including guests," Id.

(emphasis in original), thereby minimizing the appearance of an exercise of independent judicial

power.

When a statute deals specifically with a problem, it may be difficult to know whether
a parallel common law power survives. See generally G. Calabresi, A Common Law for



1188 INDIANA LAW REVIEW [Vol. 24:1155

When the statute does not incorporate a common law power, the
court's authority to update a statute is more problematic. The court
appeared to exercise such authority, however, in a case where the court

adapted statutory rights to general welfare assistance to modern val-

ues J^^ Van Buskirk v. Wayne Township involved a decision by the
township trustee administering general assistance to provide shelter

assistance only to renters, not homeowners. The statute specified that

*'[p]ublic aid by an overseer of the poor may include and shall be
extended only when the personal effort of the applicant fails to provide
one or more of the following items: . . . shelter . . . ."•^'^ Township

trustees traditionally had great discretion in deciding how to help the
poor. Because of this history, an interpretation of the statute to create

mandatory duties to the poor was very questionable.'^^ Nonetheless,

the court held that the statute required provision of shelter and pro-

hibited discriminating between homeowners and renters. '^^ Despite a

THE Age of Statutes 36-37 (1982). A court reluctant to admit it has such a power may
find ways to disguise its. exercise. See, e.g., Call v. Scott Brass, Inc., 553 N.E.2d 1225 (Ind.

Ct. App. 1990), in which a common law wrongful discharge claim against an employer for
firing an employee who performed jury duty survived passage of a 1979 statute providing
for the same cause of action with a shorter statute of limitations than the common law
claim. The problem the court encountered was that under Indiana law, statutory rights are

exclusive if they create a right. Id. at 1227. The court held that the plaintiffs right predated

1979, even though it was based on a 1988 case, because the 1988 case evolved from a 1973

decision protecting a plaintiff who was discharged for filing a Workers' Compensation claim.
The more straightforward holding would have been that the court had an evolving common
law power which survived the 1979 statute.

An alternative holding almost said as much. The court stated that the statute did not
provide an exclusive remedy, even if the case law cause of action postdated the 1979 law.

Id. at 1229. The reasoning, however, still concealed the exercise of a surviving common law
power because the court emphasized the statute's failure to state that the remedy was exclusive.

But surely the court was not arguing for a new rule that all statutory remedies are nonexclusive,

absent a specific statutory statement. The court must have been exercising an evolving common
law power to decide on a case by case basis that employer retaliation against employees may
be actionable. The court tipped its hand in this respect when it explicitly noted the important

values underlying jury duty. Id. ("the jury is an indispensable part of our system of justice

. . .").

153. Van Buskirk v. Wayne Township 418 N.E.2d 234 (Ind. Ct. App. 1981).
A change in values should be distinguished from cases of changing facts, to which the

values implicit in an old statute might apply. See, e.g.. State v. McGraw, 480 N.E.2d 552,
554-55 (Ind. 1985) (computer use did not involve a "taking" when the user did not deprive

the owner of anything), rev'g, 459 N.E.2d 61 (Ind. Ct. App. 1984). The distinction between

fact and value, however, can be overdone. Judges may learn about the meaning of old values
by applying them to new facts.

154. Van Buskirk, 418 N.E.2d at 240 (citing Ind. Code § 12-2-l-10(b) (1976)).
155. See Rosenberg, Overseeing the Poor: A Legal-Administrative Analysis of the Indiana

Township Assistance Program, 6 Ind. L. Rev. 385, 385-86, 388-90 (1973).

156. Van Buskirk, 418 N.E.2d at 243.



1991] STATUTORY INTERPRETATION 1189

few half-hearted text-based arguments, '^^ the core of the decision was

that providing benefits only to renters encouraged owners to default

and become homeless. ^^^ It is hard to disagree with this policy and
equally hard to justify the result in terms of traditional township trustee

powers. The court was updating the statute to take account of modern
sensibilities.'^^

Conclusion

Our review of Indiana statutory interpretation cases helps to explain
why this area of law is so complex. The decisions involve many factors
that are easy to identify, but whose role in specific cases is hard to

evaluate.

In any multi-factor analysis, there are two concerns — the weight
and the value of particular variables. First, what weight does each

factor have. In statutory interpretation, for example: Is the text very

important, or just of modest weight? The same question can be asked

about legislative intent and background considerations. Second, what

value does a particular factor have on the facts of a particular case.

Thus, the text may have little value in a particular case because it is
obviously uncertain. And particular background considerations may
have different values for different judges.

Weight and value can interact in complex ways. A factor may have
a high value, such as concern for criminal or welfare claimants. But

that factor's weight may be low because an advocate of text-based
statutory interpretation does not believe that such concerns should ever

be weighty in determining statutory meaning. '^^ To complicate matters,
judicial rhetoric is notoriously misleading in explaining multi-factor

decisions, especially so in statutory interpretation cases, where the

appearance of deference to plain meaning or legislative intent seems

to implement legislative supremacy.

157. Id. at 241. As evidence that the legislature did not intend to limit "shelter" to

renters, the court cited the detailed rule requiring the provision of "medical supplies for

minor injuries and illness" as an example of when the legislature intended a provision to be

precisely limited. The court also referred to the statutory policy favoring a "liberal" inter-

pretation. Id. at 240-41 (citing Ind. Code. § 12-2-1-34 (1976)).

158. Id. at 241-42 n.6.

159. See also Indiana State Highway Comm'n v. Indiana Civil Rights Comm'n, 424
N.E.2d 1024, 1030-32 (Ind. Ct. App. 1981) (civil rights statute permitting cease and desist

order against "persons" applies to government defendants, to implement the strong statutory

policy; traditional rule exempting government from suits not apply in light of the decline of

sovereign immunity as a common law doctrine).
160. A text-based interpreter may use substantive concerns, such as reliance interests,

to support commitment to the text, but not care about their value in a particular case.



1190 INDIANA LAW REVIEW [Vol. 24:1155

The reality of statutory interpretation is far more complex than
claims of deference to plain meaning or legislative intent imply. The

text and legislative intent are themselves complex concepts. Moreover,

the judge's policy judgments inevitably play a role in shaping the

ultimate decision about what the statute means. At least that is what

the decisions (if not the rhetoric) in the Indiana cases show.



1991] STATUTORY INTERPRETATION 1191

Appendix - Interpretive Presumptions

The indeterminacy of substantive background presumptions, despite
their frequent invocation by courts, is well established. Although they

may play some role in the back and forth process of working out
statutory meaning, any general claim that they have predictive value

is misleading, as the following citation of Indiana cases indicate.

I. Narrow Interpretation of Statutes in Derogation of Common
Law

Followed ' Wallis v. Marshall County Comm'rs, 546 N.E.2d 843,
844 (Ind. 1989) (mentions presumption), rev'g, 531 N.E.2d 1223 (Ind.

Ct. App. 1988); State Farm Fire & Casualty Co. v. Strutco Div., King
Seeley Thermos Co., 540 N.E.2d 597, 598 (Ind. 1989) (mentions pre-
sumption), rev'g, 530 N.E.2d 116 (Ind. Ct. App. 1988); Johnson v.

Johnson, 460 N.E.2d 978, 979 (Ind. Ct. App. 1984) (mentions pre-

sumption); Thomas v. Eads, 400 N.E.2d 778, 780 (Ind. Ct. App. 1980)
(mentions presumption).

Not followed - Koske v. Townsend Eng'g Co., 551 N.E.2d 437,
442 (Ind. 1990) (presumption not mentioned), rev'g, 526 N.E.2d 985

(Ind. Ct. App. 1988); Seymour Nat'l Bank v. State, 422 N.E.2d 1223

(1981) (majority did not mention presumption, but Justices DeBruler

and Hunter in dissent did; Id. at 1227, 1229), modified, 428 N.E.2d

203, 204 (1981).

II. Liberal Interpretation of Social Legislation

A. Unemployment insurance
Followed - USS, a Div. of USX Corp. v. Review Bd. of Ind.

Employment Sec. Div., 527 N.E.2d 731, 737 (Ind. Ct. App. 1988)
(mentions presumption); Holmes v. Review Bd. of Ind. Employment
Sec. Div., 451 N.E.2d 83, 86 (Ind. Ct. App. 1983) (mentions pre-

sumption). Cf. Sidell V. Review Bd. of Ind. Employment Sec. Div.,

428 N.E.2d 281, 285 (Ind. Ct. App. 1981) (trade readjustment benefit

statute - mention presumption).

Not followed - Aaron v. Review Bd. of Ind. Employment Sec.
Div., 416 N.E.2d 125 (Ind. Ct. App. 1981) (presumption not mentioned);

Jeffboat, Inc. v. Review Bd. of Ind. Employment Sec. Div., 464 N.E.2d
377 (Ind. Ct. App. 1984) (presumption not mentioned).

B. Means-tested welfare

Followed - Wilson v. Stanton, 424 N.E.2d 1042, 1045 (Ind. Ct.

App. 1981) (mentions presumption).

Not followed - Gary Community Mental Health Center v. Ind.
Dep't of Pub. Welfare, 507 N.E.2d 1019 (Ind. Ct. App. 1987) (pre-

sumption not mentioned).

III. Strict Construction of Criminal Law
Followed - Cook v. State, 547 N.E.2d 1118, 1119 (Ind. Ct. App.

1989) (mentions presumption); Douglas v. State, 484 N.E.2d 610, 613



1192 INDIANA LAW REVIEW [Vol. 24:1155

(Ind. Ct. App. 1985) (mentions presumption); Sheppard v. State, 484

N.E.2d 984, 988 (Ind. Ct. App. 1985) (mentions presumption); State

V. McGraw, 480 N.E.2d 552, 553 (Ind. 1985) (mentions presumption),
rev'g, 459 N.E.2d 61 (Ind. Ct. App. 1984); Doyle v. State, 468 N.E.2d

528, 533-34 (Ind. Ct. App. 1984) (mentions presumption); Gore v.

State, 456 N.E.2d 1030, 1033 (Ind. Ct. App. 1983); Och v. State, 431
N.E.2d 127, 131 (Ind. Ct. App. 1982) (mentions presumption); Pen-

nington V. State, 426 N.E.2d 408, 410 (Ind. 1981) (mentions pre-

sumption); Warren v. State, 417 N.E.2d 357, 359 (Ind. Ct. App. 1981)
(mentions presumption); Lasko v. State, 409 N.E.2d 1124, 1127 (Ind.

Ct. App. 1980) (mentions presumption).

Not followed - McAnalley v. State, 514 N.E.2d 831, 833-34 (Ind.

1987) (mentions presumption); Hill v. State, 488 N.E.2d 709 (Ind. 1986)
(presuumption not mentioned), rev*gy 482 N.E.2d 492 (Ind. Ct. App.

1985); Whitley v. State, 553 N.E.2d 511 (Ind. Ct. App. 1990) (pre-
sumption not mentioned); Alvers v. State, 489 N.E.2d 83, 89 (Ind.

Ct. App. 1986) (mentions presumption); Hanic v. State, 406 N.E.2d

335, 338 (Ind. Ct. App. 1980) (mention presumption).

IV. Tax Law
A. Interpret tax law in favor of taxpayer

Followed - Indiana Dep't of Revenue v. Estate of Eberbach, 535

N.E.2d 1194, 1196 (Ind. 1989) (mentions presumption); Wechter v.

Indiana Dep't of Revenue, 544 N.E.2d 221, 224 (Ind. T.C. 1989)
(mentions presumption), aff'dy 553 N.E.2d 844 (1990); Indiana Dep't

of State Revenue v. Food Mktg. Corp., 403 N.E.2d 1093, 1096 (Ind.
Ct. App. 1980) (mention presumption).

Not followed - Indiana State Bd. of Tax Comm'rs v. Ropp, 446
N.E.2d 20, 24 (Ind. Ct. App. 1983) (mention presumption).

B. Interpret tax exemptions against taxpayer

Followed - Indiana Dep't of State Revenue, Inheritance Tax Div.
V. Estate of Wallace, 408 N.E.2d 150, 154 (Ind. Ct. App. 1980)
(mentions presumption).

Not followed - Indiana Dep't of State Revenue v. Indianapolis
Pub. Transp. Corp., 550 N.E.2d 1277, 1278 (Ind. 1990) (mentions

presumption); Beasley v. Kwatnez, 445 N.E.2d 1028, 1030 (Ind. Ct.

App. 1983) (mentions presumption). Cf Ind. Dep't of State Revenue
V. National Bank of Logansport, 402 N.E.2d 1008, 1010 (Ind. Ct.
App. 1980) (majority says no ambiguity so no room to interpret statute
strictly against the taxpayer).

V. Rule That Statutes Are Prospective Unless They Are Remedial
or Procedural

Followed - Bailey v. Menzie, 505 N.E.2d 126, 129 (Ind. Ct. App.

1987) (statute providing new visitation rights in grandparents after
adoptive parents sever the status held by natural parents is prospective);



1991] STATUTORY INTERPRETATION 1193

Cardinal Indus, v. Schwartz, 483 N.E.2d 458, 460 (Ind. Ct. App. 1985)

(statute removing the Board's jurisdiction is remedial and therefore

retroactive); Tarver v. Dix, 421 N.E.2d 693, 696 (Ind. Ct. App. 1981)

(statute which codifies common law presumption about who is biological
father is procedural and retroactive). Cf. Wooley v. Comm'r of Motor
Vehicles, 479 N.E.2d 58, 61 (Ind. Ct. App. 1985) ("substantive change''

allowing habitual traffic offender to be eligible for probationary license

applied retroactively).

Followed but with some definitional uncertainty about whether
statute is remedial or procedural - Mounts v. State, 496 N.E.2d 37,

39 (Ind. 1986) (procedural statute retroactive; dissent, id. at 40, and

lower court, 489 N.E.2d 100, 102 (Ind. Ct. App. 1986), labelled the

statute
*

'substantive" as applied to the facts and therefore prospective);

Arthur v. Arthur, 519 N.E.2d 230, 232-33 (Ind. Ct. App. 1986) (*'sub-

stantial change in policy" regarding property rights was prospective),

affd, 531 N.E,2d 477 (Ind. 1988) (overruling court of appeals decision

in Sable v. Sable, 506 N.E.2d 495, 496-97 (Ind. Ct. App. 1987), which

had labeled the statute *' remedial" and retroactive).

Not followed - even remedial and procedural statutes can be pro-
spective - Gosnell v. Indiana Soft Water Serv., Inc., 503 N.E.2d 879,

880 (Ind. 1987) (allowing punitive damages is remedial but prospective);

State ex rel Indiana State Bd. of Dental Examiners v. Judd, 554 N,E.2d

829, 832 (Ind. Ct. App. 1990) (new statute requiring lapsed licensee

to take examination rather than pay fee impairs property rights; statute

labelled remedial but given prospective effect); Turner v. Town of
Speedway, 528 N.E.2d 858, 863 (Ind. Ct. App. 1988) ('^remedial"

statute prospective because creates new * 'right").
Decision on retroactivity made without labels - the case of statutes

of limitations - A statute can shorten the period of limitations, but
the courts engraft on the statute a "reasonable time" provision within

which plaintiffs can sue. See Kemper v. Warren Petroleum Corp., 451
N.E.2d 1115, 1117 (Ind. Ct. App. 1983). The courts also prohibit

revival of expired defendant liability, Indiana Dep't of State Revenue

V. Puett's Estate, 435 N.E.2d 298, 301-02 (Ind. Ct. App. 1982), but

this tidy "rule" will sometimes be violated. For example, a statute

passed after expiration of the two-year statute of limitations on the

mother's paternity cause of action permitted a child to sue for a

paternity determination until his twentieth birthday. R.L.G. v. T.L.E.,

454 N.E.2d 1268, 1270-71 (Ind. Ct. App. 1983). The decision applied

the statute granting the child a cause of action retroactively, even

though the mother's cause of action had expired before the statute

took effect. Undoubtedly the court was influenced because the best

interests of the child were involved. See Bailey v. Menzie, 542 N.E.2d

1015, 1018-19 (Ind. Ct. App. 1989) (parent did not have a vested



1194 INDIANA LAW REVIEW [Vol. 24:1155

constitutional right in avoiding statutes promoting the best interests of

the child, so statute could be applied retroactively).

VI. Legislative Acquiescence in Agency Rules.

The presumptions reviewed above are substantive in that they make
assumptions about what substantive impact the legislature is likely to

have intended. Another presumption — that the legislature intended
to acquiesce in agency rules — is institutional in the sense of allocating
rulemaking responsibility.

No clear rationale for this presumption is presented in the cases.
The three most prominent are that longstanding rules should be fol-

lowed, that the agency rule was contemporaneous with adoption of

the statute, and that the agency has expertise. These rationales are

grounded in different policy considerations. Longstanding rules are

likely to have been relied on and to reflect considered agency judgment.

Contemporaneous rules are supposed to reflect the intent of the leg-

islature adopting the governing statute. Agency expertise supports def-

erence to rules regardless of when and how long they have been in
effect. The courts are not only unable to agree on which rationale(s)
to rely on, but also fail to observe that none of them has anything

to do with legislative intent by the acquiescing legislature. Judicial

appeal to legislative acquiescence appears to be another example of

judicial rhetoric that forces judgments into a legislative intent mold

when the decision is based on other grounds.
Legislative acquiescence, even if it is an independent reason to

defer to agency rules, is also a thin reed on which to rest a decision.

Inaction by the legislature may be attributed to many reasons, having
nothing to do with its approval or disapproval of an agency rule. And,

in any event, legislative intent should be manifest through adoption

of a statute, not silence.

There is a fourth rationale for judicial deferrence to an agency

rule. If the legislature is aware of the rule and does not reject it, the

court might place the burden of inaction on the legislature by upholding

the rule. This is not a theory of legislative acquiescence, however, but

of legislative responsibility, for which there is also some evidence in

the Indiana cases.

The reliability of any of these rationales for deferring to agency
rules is, somewhat puzzlingly, called into question by judicial statements

that the court should not defer if the rule is ''wrong'' or ''incorrect.''

See Indiana State Bd. of Tax Comm'rs v. Fraternal Order of Eagles,
Lodge No. 255, 521 N.E.2d 678, 680 (Ind. 1988); Board of Trustees

of Pub. Employees' Retirement Fund v. Baughman, 450 N.E.2d 95,
96 (Ind. Ct. App. 1983); Lake County Beverage Co. v. 21st Amendment,
Inc., 441 N.E.2d 1008, 1014 (Ind. Ct. App. 1982); Beer Distrib. of

Ind. V. State ex rel. Alcoholic Beverage Comm'n, 431 N.E.2d 836,



1991] STATUTORY INTERPRETATION 1195

840 (Ind. Ct, App. 1982); Anderson v. Review Bd. of Ind. Employment

Sec. Div., 412 N.E.2d 819, 822 (Ind. Ct. App. 1980); Indiana Dep't

of State Revenue, Gross Income Tax Div. v. Commercial Towel &
Uniform Serv. Inc., 409 N.E.2d 1121, 1123-24 n.6 (Ind. Ct. App.

1980).

The following cases contain language advocating one or more of
the above rationales for assuming that the legislature has acquiesced

in an agency rule, although the cases vary in deciding whether the

agency rule should be followed.

A. The rule is longstanding

Fraternal Order of Eagles Lodge No. 255 v. Indiana State Bd. of

Tax Comm'rs, 512 N.E.2d 491, 495-96 (Ind. T.C. 1987), rev*d, 521
N.E.2d 678 (Ind. 1988); Lake County Beverage Co. v. 21st Amendment,
Inc., 441 N.E.2d 1008, 1014 (Ind. Ct. App. 1982); Beer Distrib. of

Ind. V. State ex rel. Alcoholic Beverage Comm'n, 431 N.E.2d 836,
840 (Ind. Ct. App. 1982); Astral Indus, v. Indiana Employment Sec.
Bd., 419 N.E.2d 192, 198 n.6 (Ind. Ct. App. 1981); Indiana DepH of
State Revenue, Gross Income Tax Div. v. Commercial Towel & Uniform
Serv., 409 N.E.2d 1121, 1123-24 n.6 (Ind. Ct. App. 1980); Indiana

Dep't of State Revenue v. Endress & Hauser, Inc., 404 N.E.2d 1173,
1174 (Ind. Ct. App. 1980).

B. The rule is contemporaneous with adoption of statute

Fraternal Order of Eagles Lodge No. 255 v. Indiana State Bd. of
Tax Comm'rs, 512 N.E.2d 491, 495 (Ind. T.C. 1987), revW, 521 N.E.2d
678 (Ind. 1988); Lake County Beverage Co. v. 21st Amendment, Inc.,
441 N.E.2d 1008, 1014 (Ind. Ct. App. 1982); Beer Distrib. of Ind. v.

State ex rel. Alcoholic Beverage Comm'n, 431 N.E.2d 836, 840 (Ind.
Ct. App. 1982); Indiana Dep't of State Revenue, Gross Income Tax
Div. V. Commercial Towel & Uniform Serv., 409 N.E.2d 1121, 1123-
24 n.6 (Ind. Ct. App. 1980); Indiana Dep't of State Revenue v. Endress

& Hauser, Inc., 404 N.E.2d 1173, 1174 (Ind. Ct. App. 1980).
C. The agency is knowledgeable

In re CTS Corp., 428 N.E.2d 794, 798 (Ind. Ct. App. 1981)
(specialized agency function requires deference). Cf. Indiana Bell Tel.

Co. V. Boyd, 421 N.E.2d 660, 667 (Ind. Ct. App. 1981) (construction

by agency charged with implementation); Aaron v. Review Bd. of Ind.
Employment Sec. Div., 416 N.E.2d 125, 139 (Ind. Ct. App. 1981)
(same).

D. The legislature is aware of the rule or had an opportunity to
amend the statute to reject the rule and did nothing

Fraternal Order of Eagles Lodge No. 255 v. Indiana State Bd. of
Comm'rs, 512 N.E.2d 491, 496 (Ind. T.C. 1987), rev'd, 521 N.E.2d
678 (Ind. 1988). Cf. Department of Revenue v. United States Steel

Corp., 425 N.E.2d 659, 662 (Ind. Ct. App. 1981) (legislature presumed



1196 INDIANA LAW REVIEW [Vol. 24:1155

to approve court's interpretation of law when it failed to take action
rejecting it); Thomas v. Eads, 400 N.E.2d 778, 783 (Ind. Ct. App.
1980) (same, when legislature made other amendments but did not
reject court's interpretation).