Indiana Bail Project Lawsuit Rejected by Federal Judge

Court holds Legislators have a Clear Public Interest in Regulating Charitable Bail

A challenge to a recently passed and much-needed Indiana bill to regulate charitable bail funds in the state was rejected in late June by a federal judge in the United States District Court for the Southern District of Indiana.  The Bail Project, via the ACLU of Indiana, had filed a request for a preliminary injunction against the state's insurance commissioner, in an attempt to stop House Bill 1300[1] from taking effect on July 1.

H.B. 1300 creates a statewide framework to regulate the operation of charitable bail organizations that use crowdsourced funding to post cash bail for criminal defendants.  The bill covers regulatory issues, clarifies what categories of charges are eligible for charitable bail, introduces a licensing component, and other guidelines.

The bill was passed by the Indiana legislature in late February and signed into law by Governor Eric Holcomb in March.  Immediately afterward, The Bail Project responded by insisting that the act of bailing an individual out of jail is projected first amendment speech, a premise not widely supported by legal experts.  The weakness of the case it filed subsequently was borne out by the District Court in its opinion on the matter.  In his 20-page order, U.S. District Court Judge James Patrick Hanlon wrote, "[t]he expressive component that the Bail Project ultimately relies on is not created by the conduct itself but by the speech that accompanies it.”[2]

The Bail Project also claimed that HB 1300 violated the equal protection clause.  In order for the bill to be lawful, the District Court was required to determine that the Indiana legislature had a rational basis to regulate charitable bail in the state.  The court left no doubt in its findings, citing Indiana Supreme Court precedent, writing “The Indiana General Assembly undoubtedly has an interest in regulating pretrial release of defendants in criminal cases.”  Elaborating on the point, the court went on to say that the legislature was correct to conclude that "without regulation, charitable bail organizations wouldn't have the financial accountability and incentives that the statutory scheme otherwise assumed were present.”

"The decision by a federal judge clearly indicates that legislators have the public's best interests in mind when they draw lines around the conduct of charitable bail organizations," said Jeff Clayton, Executive Director of the American Bail Coalition.  "They are held to the same standards as private bonding agents are through state commissioners of insurance, who also regulate them."

Ultimately, it was determined by the District Court that "The Bail Project has not shown a likelihood of success on the merits to justify a preliminary injunction” in rejecting the organization's request.  To that point, Clayton added, "The Bail Project had the audacity to insist they are deserving of special protection simply because of what they claim to believe and do not feel they should be required to comply with any regulations."

The court's rejection comes in the face of two facts that the legislature had before it: 1) judges in Indianapolis had already shut down The Bail Project and 2) crowdsourced bail was considered insufficient sureties as a matter of law as presented through uncontroverted evidence during hearings for HB 1300.

"Unfortunately, The Bail Project resisted a modicum of transparency and oversight by unsuccessfully making a federal case out of Indiana's HB 1300, despite not having done so in other states that have passed similar laws."

[1] http://iga.in.gov/legislative/2022/bills/house/1300

[2] https://ambailcoalition.org/download/182/bail-project-vs-indiana/6234/bail-project-injunction-denied.pdf