Robert M. Baker, III
E. Kent Moore
Johnson Smith Pence Densborn
Wright & Heath
Attorney for Appellee
Laszynski & Moore
Robert M. Baker, III
E. Kent Moore
INDIANA HIGH SCHOOL ATHLETIC
ASSOCIATION, INC. and ROBERT B.
GARDNER, in his capacity as Commissioner
of the Indiana High School Athletic
Appellants (Defendants below),
FREDDY REYES, LAFAYETTE
JEFFERSON HIGH SCHOOL and DENNIS
C. BLIND, in his capacity as Principal of
Lafayette Jefferson High School,
Appellees (Plaintiffs below).
) Supreme Court No.
) Court of Appeals No.
This opinion is issued together with Indiana High School Athletic Ass'n v. Carlberg, No. 79S02-9605-CV-361 (Ind. December 19, 1997). Carlberg addresses at length the
approach Indiana courts take to resolving disputes involving the rules and enforcement
actions of the Indiana High School Athletic Association ("IHSAA"). Here we write primar
ily to resolve a conflict within the Court of Appeals concerning the enforceability of the
IHSAA's Restitution Rule.
Poor academic performance during the 1990-91 school year forced Freddy Reyes to
repeat the ninth grade in 1991-92 in a Puerto Rican school. During the spring and summer
of both 1991 and 1992, Reyes participated on an all star baseball team. In the summer of
1992, Reyes traveled with this baseball team to Lafayette, Indiana, to participate in the Colt
League World Series. In 1992, Freddy Reyes moved in with a host family in Lafayette and
enrolled as a sophomore at Lafayette Jefferson High School. Reyes was a member of the
baseball team during the springs of 1993 and 1994, his sophomore and junior years, and
earned all state honors.
At the beginning of the 1994-95 school year, the IHSAASee footnote
learned that Reyes had first
enrolled in ninth grade in the fall of 1990. The IHSAA notified Lafayette Jefferson that
Reyes was not eligible to participate in interscholastic athletics as a senior during the 1994-
95 school year due to the IHSAA's Eight Semester Rule, Rule 12-3 of the IHSAA General
Eligibility Rules. The version of the Eight Semester Rule applicable to Reyes's case
provided that after enrollment in the ninth grade, student athletes have a maximum of four
spring semesters and four fall semesters of athletic eligibility. Reyes appealed to the IHSAA
to grant him an extra year of eligibility under the IHSAA "hardship rule."See footnote
Executive Committee denied Reyes's request. See Reyes, 659 N.E.2d at 161-162 (detailing
the IHSAA Executive Committee's findings of fact and conclusions of law).
Reyes filed a verified complaint for injunctive relief on the grounds that the IHSAA Executive Committee's decision was arbitrary and capricious and in violation of his right to
equal privileges and immunities under Article 1, Section 23, of the Indiana Constitution.
The Tippecanoe Superior Court issued a temporary restraining order preventing the IHSAA
and Lafayette Jefferson from enforcing the Eight Semester Rule in Reyes's case. The
Tippecanoe Superior Court subsequently reversed the findings of the IHSAA Executive
Committee, found in favor of Reyes, and issued a permanent injunction against the IHSAA
and Lafayette Jefferson. Pertinent to this appeal, the trial court also prohibited the IHSAA
from sanctioning Lafayette Jefferson for the school's compliance with the court order.
The IHSAA initiated an appeal and filed a Petition to Stay Judgment Pending Appeal
with the trial court. The trial court denied the Petition to Stay. The Court of Appeals
reversed and held that (i) the IHSAA's determination to deny Reyes's application for an
exception under the hardship rule was not arbitrary and capricious; (ii) the IHSAA's
decision to deny Reyes's request for another year of eligibility was state action subject to
review under Article 1, Section 23, of the Indiana Constitution; (iii) the Eight Semester Rule
and the hardship rule did not violate the right to equal privileges and immunities under
Article 1, Section 23, of the Indiana Constitution; and (iv) the IHSAA Restitution Rule is
In the Petition to Transfer, Lafayette Jefferson High School and Dennis C. Blind, in his capacity as principal (together referred to in this opinion as "Lafayette Jeff"), do not challenge the decision of the Court of Appeals as to Parts I, II, or III. We therefore now
summarily affirm, expressly adopt, and incorporate by reference Parts I, II, and III of the
opinion of the Court of Appeals. Ind.Appellate Rule 11(B)(3). However, Lafayette Jeff in
its Petition to Transfer asks this Court to resolve the apparent conflict between two Court of
Appeals decisions addressing the validity of the IHSAA's Restitution Rule. Cf. Reyes, 659
N.E.2d 158 (upholding the Restitution Rule) with Ind. High Sch. Athletic Ass'n v. Avant,
650 N.E.2d 1164 (Ind. Ct. App. 1995) (holding the Restitution Rule invalid), trans. denied.
In addition, Lafayette Jeff asks this Court to vacate the Court of Appeals opinion and
reinstate the trial court's prohibition against the IHSAA enforcing its Restitution Rule
against Lafayette Jeff.
the appropriate standard; (iii) address Lafayette Jeff's argument that the Restitution Rule
should not apply to the school in this particular case where the school was a defendant in the
original action challenging enforcement of the eligibility rule; and (iv) address the general
policy concerns raised by this case.
The Restitution Rule of the IHSAA General Eligibility Rules provides that the IHSAA may sanction member schools by requiring them to forfeit victories, return trophies and awards, and return certain funding in the event an ineligible student athlete participates in violation of the IHSAA Eligibility Rules, but in accordance with an injunction or restrain ing order which is later vacated, stayed, reversed or finally determined to have been unjusti fied.See footnote 3 A school and student are subject to the Restitution Rule when a student athlete
participates in interscholastic competition where that student athlete is declared ineligible by
the IHSAA but participates in accordance with a court's restraining order or injunction that
is later vacated or overturned. In the present case, Reyes's participation as a member of the
Lafayette Jeff baseball team for the 1994-95 baseball season made Lafayette Jeff subject to
the provisions of the Restitution Rule.
Nothing in the trial judge's conclusions of law speaks to the validity of the IHSAA
Restitution Rule. Only in the Judgment does the trial judge allude to the Restitution Rule:
"Having enjoined both the IHSAA and Lafayette Jefferson High School, it is apparent to the
Court that no IHSAA sanctions should apply against Lafayette Jefferson High School for
complying with this Court's Order." (R. at 27.) Assuming that this judgment in fact was
intended to enjoin the IHSAA from enforcing its Restitution Rule, the trial judge gave no
legal basis for such action.See footnote
In the Court of Appeals, Lafayette Jeff argued that it would be manifestly unreason able to allow the IHSAA to enforce its Restitution Rule. Without stating a particular standard under which the Restitution Rule is unenforceable, Lafayette Jeff contended that
the issue of the validity of the IHSAA Restitution Rule previously had been disposed of in
Avant. We therefore assume that Lafayette Jeff adopts the reasoning of Avant as a basis for
its argument. In Avant, the appellee argued that the Restitution Rule is against the public
policy of this state by punishing schools and students for complying with the court order.
Avant, 650 N.E.2d at 1171. The Avant court found this argument persuasive and wrote, "It
would be illogical and manifestly unreasonable to exact penalties upon individuals and
schools as punishment or retribution for their actions in compliance with a court order." Id.
The Avant court analogized the situation of the application of the Restitution Rule to that
situation in which a court finds a statute to be unconstitutional:
'The theory that a law held unconstitutional is no law at all and void ab initio for all
purposes, including retroactive invalidity, runs counter to the hard facts of life. The
actual existence of a statute prior to a determination of invalidity is an operative fact.
Because of such de facto existence and reliance upon its validity, it has practical
consequences which cannot be justly ignored. The past cannot always be erased by
a simple judicial decree.' [United REMC v. Indiana Michigan Power Company, 648
N.E.2d 1194 (Ind. Ct. App. 1995)] citing Martin v. Ben Davis Conservancy District
(1958), 238 Ind. 502, 510, 153 N.E.2d 125.See footnote
Avant, 650 N.E.2d at 1171. The Court of Appeals in Avant concluded that "[t]he same rationale applies and renders the IHSAA's restitution rule manifestly unreasonable." Id.
Thus the Avant court points to REMC and Martin as support for the proposition that an
order issued under color of law bars enforcement of the IHSAA's Restitution Rule as against
the high school.
We disagree with this conclusion and doubt the applicability of the cited Martin
rationale to the Restitution Rule. In order to explain, we review this Court's opinion in
Martin. In relevant part, this Court was forced to determine whether a statute declared
unconstitutional is void for all purposes or whether an exception existed to save a final
judgment based upon the statute and rendered prior to its being declared unconstitutional.
Martin v. Ben Davis Conservancy District, 238 Ind. 502, 509, 153 N.E.2d 125, 128 (1958).
This Court wrote, "The general rule is said to be that a statute declared unconstitutional is
void ab initio. However, this is subject to the exception that the finality of a judgment
cannot be affected thereby." Id., 238 Ind. at 510, 153 N.E.2d at 129. In short, Martin states
that although generally action based upon an unconstitutional statute cannot stand, a final
judgment handed down pursuant to that statute prior to the declaration of unconstitutionality
The paragraph in Martin upon which the Avant court relies merely explains the rationale behind the "final judgment" exception to the "void ab initio" general rule. Martin does not provide a proper analogy with which to assess the validity and enforceability of the Restitution Rule where the trial court's injunction is not a final judgment. The Avant court
effectively equated the trial court's appealable injunction with Martin's unappealable final
judgment. But it is precisely the interest in finality that justifies the Martin "final judgment"
exception to the "void ab initio" general rule. Where the judgment at issue is not final _
as a trial court's injunction will be in Restitution Rule litigation _ the Martin exception is
Much of the argument in this case turns on the parties' respective views of the
standard by which Indiana courts should review decisions of the IHSAA. The IHSAA
argues that we should review the Restitution Rule as we would any challenge to the internal
affairs of voluntary membership associations. While not disputing that the IHSAA is a
voluntary membership association, Lafayette Jeff contends that Indiana courts have histori
cally given heightened scrutiny to IHSAA decisions. Our response to these arguments starts
with the same principles set forth in our Carlberg opinion today and then elaborates.
The rule in Indiana is that courts exercise limited interference with the internal affairs
and rules of a voluntary membership association:
A voluntary association may, without direction or interference by the courts, for its
government, adopt a constitution, by-laws, rules and regulations which will control
as to all questions of discipline, or internal policy and management, and its right to
interpret and administer the same is as sacred as the right to make them.
State ex rel. Givens v. Super. Ct. of Marion County, 233 Ind. 235, 238, 117 N.E.2d 553, 555 (1954) (citations omitted). Therefore, "[a]s a general rule courts will not interfere to control the administration of the constitution and by-laws of such association, or to enforce rights springing therefrom." Id. (citations omitted). In this regard, the "articles of incorporation and bylaws of a not-for-profit corporation are generally considered to be a contract between the corporation and its members and among the members themselves." Lozanoski v. Sarafin, 485 N.E.2d 669, 671 (Ind. Ct. App. 1985) (citing Orchard Ridge Country Club, Inc. v. Schrey, 470 N.E.2d 780 (Ind. Ct. App. 1984)).
There are some exceptions to this general rule. One, recognized in State ex rel. Givens, is where the decision of the voluntary membership association infringes upon a personal liberty or property right. At issue in State ex rel. Givens was the jurisdiction of a trial court to compel the holding of an election of officers of a union. This Court held that courts of equity could not interfere with the internal affairs of voluntary membership associations and that the trial court was "without jurisdiction to grant the relief sought." State ex rel. Givens, 233 Ind. at 238, 117 N.E.2d at 556. But we did acknowledge that the trial court would have had jurisdiction to consider the plaintiff's complaint had it been based upon and sought the protection of some civil or property right having its origin elsewhere.
Id. Accord, Brenner v. Powers, 584 N.E.2d 569 (Ind. Ct. App. 1992), trans. denied;
Lozanoski, 485 N.E.2d at 671; Orchard Ridge Country Club, 470 N.E.2d at 782; Plummer
v. American Inst. of Certified Pub. Accts., 97 F.3d 220, 228 (7th Cir. 1996).
A second exception has been recognized in certain opinions of the Court of Appeals
for situations where the decision of the voluntary membership association constitutes fraud
or other illegality. See, e.g., Randolph v. Leeman, 129 Ind. App. 134, 145-46, 146 N.E.2d
267, 272 (1957).
There has been language in certain opinions of the Court of Appeals that has sug
gested additional exceptions to the noninterference rule. United States Auto Club v.
Woodward, 460 N.E.2d 1255 (Ind. Ct. App. 1984), suggests an exception for voluntary
membership association rules applied in an arbitrary, discriminatory, or malicious manner.
Id. at 1261. Cf. Plummer, 97 F.3d 220, 227 (7th Cir. 1996) (criticizing Woodward). Terrell
v. Palomino Horse Breeders of America, 414 N.E.2d 332, 335 (Ind. Ct. App. 1980), sug
gests an exception for association rules requiring due process. Cf. Crane v. Ind. High Sch.
Athletic Ass'n, 975 F.2d 1315, 1329 (7th Cir. 1992) (Posner, J., dissenting) (calling
Terrell's holding "dubious in light of [State ex rel.] Givens").
We reject additional exceptions to the rule. Absent fraud, other illegality, or abuse of civil or property rights having their origin elsewhere, Indiana courts will not interfere in
the internal affairs of voluntary membership association. This means, inter alia, that Indiana
courts will neither enforce an association's internal rules, State ex rel. Givens, 233 Ind. at
239, 117 N.E.2d at 555, nor second guess an association's interpretation or application of
its rules, see Crane, 975 F.2d at 1329 (Posner, J., dissenting).
Do the principles just enunciated apply to judicial review of IHSAA decisions? While this Court had held nearly forty years ago that the courts would not interfere with the enforcement or administration of the constitution or by-laws of the IHSAA, State ex rel. Ind. High Sch. Ass'n v. Lawrence Cir. Ct., 240 Ind. 114, 162 N.E.2d 250 (1959), we overruled this holding in Haas v. South Bend Community School Corp., "in so far as it holds that the actions of the IHSAA are not judicially reviewable." Haas v. South Bend Community Sch. Corp., 259 Ind. 515, 519, 289 N.E.2d 495, 497 (1972).See footnote 6 Since that time, the appellate courts of this state often have applied an "arbitrary and capricious" standard in reviewing the decisions of the IHSAA. Sturrup v. Mahan, 261 Ind. 463, 470, 305 N.E.2d 877, 882 (1974). See Avant, 650 N.E.2d at 1171 (holding the IHSAA did not act arbitrarily or capriciously in
granting student limited eligibility); Kriss v. Brown, 180 Ind. App. 594, 609, 390 N.E.2d
193, 202 (1979) (reviewing whether decision of IHSAA was arbitrary and capricious);
Crane, 975 F.2d at 1325 ("when the IHSAA acts arbitrarily, . . . Indiana law tells us we
Unlike most IHSAA cases, here we are not faced with a student athlete's challenge
to an IHSAA decision. Rather, it is Lafayette Jeff that challenges the Restitution Rule.
Although we hold in Carlberg that we will continue to review for arbitrariness and capri
ciousness IHSAA decisions affecting students, we see little justification for it when it comes
to the IHSAA's member schools. As to its member schools, the IHSAA is a voluntary
membership association. Judicial review of its decisions with respect to those schools
should be limited to those circumstances under which courts review the decisions of volun
tary membership associations _ fraud, other illegality, or abuse of civil or property rights
having their origin elsewhere.
Because Lafayette Jeff's challenge to the Restitution Rule does not allege fraud, other
illegality, or abuse of civil or property rights having their origin elsewhere, we will not
interfere in this school's dispute with a voluntary association of which it is a member.
We understand Lafayette Jeff to argue that the Restitution Rule shows disrespect for
the institution of the judiciary in this state. In its brief submitted to this Court, Lafayette Jeff
writes, "The Second District Court of Appeals is now telling all high school administrators
that their proper course of action in these types of cases is to defy Trial Court orders . . . ."
Br. of Appellee at 7. We do not agree.
Contracts frequently allocate risks of unfavorable litigation results. For example,
contracting parties agree that should a judgment, order or settlement prohibit a party from
enjoying the benefits of the agreement, that party shall have no further obligations with
respect to the contract. Doctors and attorneys purchase insurance so as to protect them
selves from the consequences of lawsuits. Couples may sign prenuptial agreements dictat
ing what is to occur should a trial judge determine that the prenuptial agreement is unen
forceable. Such agreements show no disrespect to the courts.
We presume the judgments of our trial courts are correct and valid _ but sometimes they are wrong. If a school wants to enjoy the benefits of membership in the IHSAA, the school agrees to be subject to rule that permits the IHSAA to require the school to forfeit victories, trophies, titles and earnings if a trial court improperly grants an injunction or restraining order prohibiting enforcement of IHSAA eligibility rules. Such an agreement
shows no disrespect to the institution of the judiciary.
Member schools voluntarily contract to abide by the rules of the organization in
exchange for membership in the association. One of those rules is the Restitution Rule.
Undeniably, the Restitution Rule imposes hardship on a school that, in compliance with an
order of a court which is later vacated, fields an ineligible player. On the other hand, use of
an ineligible player imposes a hardship on other teams that must compete against the teams
fielding ineligible players. While schools will contend that it is unfair when they have to
forfeit victories earned with an ineligible player on the field because they complied with a
court order, competing schools will reply that it is unfair when they have to compete against
a team with an ineligible student athlete because a local trial judge prohibited the school or
the IHSAA from following the eligibility rules. The Restitution Rule represents the agree
ment of IHSAA members on how to balance those two competing interests. The Restitution
Rule may not be the best method to deal with such situations. However, it is the method
which the member schools have adopted. And in any event, its enforcement by the IHSAA
does not impinge upon the judiciary's function.
High School Athletic Ass'n v. Avant, 650 N.E.2d 1164 (Ind. Ct. App. 1995), to the extent
that it holds that the Restitution Rule is invalid.
SELBY and BOEHM, JJ., concur.
SHEPARD, C.J., concurs with separate opinion.
DICKSON, J., dissents with separate opinion.
Robert M. Baker, III E. Kent Moore
Johnson Smith Pence Densborn Laszynski & Moore
Indianapolis, Indiana Lafayette, Indiana
SUPREME COURT OF INDIANA
INDIANA HIGH SCHOOL ATHLETIC )
ASSOCIATION, INC. and ROBERT B. )
GARDNER, in his capacity as ) 79S02-9605-CV-361
Commissioner of the Indiana High ) in the Supreme Court
Athletic Association, Inc., )
Appellants (Defendants below),) in the Court of Appeals
FREDDY REYES, LAFAYETTE JEFFERSON )
HIGH SCHOOL and DENNIS C. BLIND, )
in his capacity as Principal of )
Lafayette Jefferson High School, )
Appellees (Plaintiffs below). )
SHEPARD, Chief Justice, concurring.
The IHSAA has argued in these appeals that it is not subject to the jurisdiction of the courts. This contention has been re jected by state and federal courts on prior occasions too munerous
to mention. I see no reason why parties engaged in litigation with
the IHSAA should have to pay their lawyers to respond to this
contention. Thus, if we had been asked to do so, I would vote to
order payment of attorney fees on this issue.
DICKSON, J., dissenting.
I dissent in accordance with the views expressed in my dissenting opinion in IHSAA v. Carlberg, also handed down today.
ment series in which the ineligible individual has participated, require the school forfeit its share of net receipts from such competition, and if said receipts have not been distributed, authorize the withholding of such receipts by the Association.
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