by Abdul-Hakim Shabazz, Esq.
There’s a scene in the film “A Civil Action” that anybody who has ever negotiated a case will appreciate. During the opening of a personal injury case that is going to be really bad for the corporate defendant when the jury gets it, the defense counsel writes a number on a Post-it note and holds it up. John Travolta looks at it and shakes his head. Another number goes up. Another shake of the head. Nobody makes a speech. The whole conversation is arithmetic, and it goes on until Travolta stops shaking his head.
Where he stops is the only honest measure of what the case was worth — not to the plaintiff, but to the defendant. It’s what the other side will pay to make the thing go away.
On Saturday afternoon, the State of Indiana stopped shaking its head at $625,000 of your money, five days before the hearing.
Andy Zay, whom Gov. Mike Braun removed from the Indiana Utility Regulatory Commission on Aug. 3, gets $185,000 in wages, $300,000 on a 1099 for everything that isn’t wages, and $140,000 for his lawyers at Betz + Blevins. The agreement says the $485,000 going to Zay personally is the reasonable net present value of the salary and benefits he’d have collected had he served out his term through March 31, 2030.
Read that again, because it’s the whole story. The state didn’t buy peace it bought out the rest of Zay’s contract.
One caveat before we go further: what the governor’s office sent me was the text of the agreement, not the executed copy, which they said Saturday they were still waiting on. The document gives Zay 21 days to consider it and seven days after signing to revoke. So this is done in the way a house is sold at the handshake — almost certainly, but not on paper yet.
Now recall where we were a week ago. On Aug. 17, the state’s outside counsel filed a response asserting Braun had cause to fire Zay: he’d allegedly used campaign funds to buy custom ties and scarves with his initials on them for IURC staff, at a cost of just over three thousand dollars; he’d improperly handed out payments to employees; he’d blown a financial disclosure deadline. The monogrammed neckwear got the headlines, as monogrammed neckwear will.
Two days later — August 19 — the state handed Zay a settlement agreement.
And here’s the part that makes that date interesting. The state was winning. Judge Christina Klineman had already denied Zay’s temporary restraining order, and on Aug. 18 she denied his motion to reconsider that denial. The very next day, the side that had just won two rulings in a row offered the man it had beaten the full value of his remaining term.
You are free to believe those two events are unrelated. But have you ever seen an employer accuse someone of fiddling the books on Monday and offer him the full value of his remaining term on Wednesday? That is not how vindication works. That is how a bill gets paid.
The agreement, to be fair, says nobody admits anything. Paragraph 7 states it isn’t an admission that any party violated any law, and that no party concedes any allegation or defense lacks merit. Which means the ties allegation now lives forever in an unresolved state — never proven, never withdrawn, permanently available to whoever wants to bring it up, and permanently unanswerable by the man it was aimed at. If you were Andy Zay, that would be the part that stung. Six hundred twenty-five thousand dollars is a lot of money. It is not a retraction.
So what was actually being purchased?
Look at the calendar. A two-day evidentiary hearing on Zay’s request to be put back on the commission was set for this coming Wednesday and Thursday in Marion Superior 1. Zay’s complaint alleged that on June 18 — the day after the commission he chaired approved a $71 million rate increase for AES Indiana, well under the $192.9 million the utility wanted — he was summoned to a meeting with the governor, Energy Secretary Suzanne Jaworowski, chief of staff Josh Kelley and Utility Consumer Counselor Abby Gray, where the administration made its displeasure known.
An evidentiary hearing is where allegations like that get tested by someone in a robe. And here’s the part that Indiana lawyers know and most everyone else doesn’t: the governor had no special protection from being put on the stand or in a deposition chair. Most states recognize some version of the “apex doctrine,” the rule that shields the people at the top of an organization from being dragged into depositions about matters they know nothing about. Indiana doesn’t. In National Collegiate Athletic Association v. Finnerty, 191 N.E.3d 211 (Ind. 2022), our Supreme Court expressly declined to adopt it, and instead put the burden on the side resisting the deposition to show, with particularized evidence, that the official lacks knowledge better than what’s available elsewhere, that the information can be had some easier way, and that the hardship outweighs the benefit. General and conclusory statements, the court said, won’t cut it.
Try running that test on this record. The witness signed the removal and sat in the room. There is no less-burdensome source for what the governor was thinking on Aug. 3.
And the questions were not hard to anticipate. Governor, were the ties the reason you fired him? If yes, when did your office learn about them, and where are the documents showing it? If no, then what was in the letter you sent on the third, and why did the ties only surface two weeks later?
And it wasn’t only the governor. Josh Kelley was in that June 18 meeting too, and a chief of staff has none of the arguments a governor has. He isn’t running the state; he’s a staffer who was in a room. Nobody has ever won a protective order on the theory that the chief of staff is too busy. Kelley is also the person who would know the sequence — when the decision to remove Zay was made, who raised it, what was said about the AES vote, and when anyone first mentioned a receipt for neckwear. A governor can say he doesn’t recall the details. The chief of staff is the details.
Then there’s the witness nobody in that building wanted anywhere near a microphone. The Utility Consumer Counselor is the lawyer for ratepayers. Abby Gray, under oath, describing a meeting with the governor’s office about a rate case that was still pending, is not a problem that stays inside one lawsuit. It walks straight into Cause 46258, where AES’s rate case sits on reconsideration right now. Every fee you pay that agency is premised on it being on your side of the table.
The rest of the paperwork is worth your attention too. There’s no confidentiality clause and no nondisparagement clause in the agreement. Zay can say whatever he wants, forever. The only speech obligation runs the other way: the state agreed to issue a statement in a form attached as an exhibit, which is why Saturday’s release reads the way it does. Braun thanking Zay for a decade of service is not gracious impulse, it’s a contract term.
Chief Deputy Attorney General Lori Torres approved the deal at 11:48 Saturday morning, in an email noting — carefully — that it was negotiated and prepared by outside counsel selected by the governor’s office. Under state law the attorney general has to sign off. Nothing in state law required her to specify who did the negotiating. The release went out at 1:42 p.m., on a Saturday, in August.
Two more things sit on that docket. On the day he filed, Zay also moved for leave to conduct expedited discovery. The state objected. Whatever else the parties disagreed about, they were fighting over how much anyone would be allowed to ask before Aug. 27.
And on Aug. 20 — Thursday — Judge Klineman granted a media request for cameras in the courtroom. Two days later, the case settled.
Now let me be clear about what this is. Nobody has told me the state settled to keep anyone off a witness stand. I have not seen a deposition notice, and I don’t know that one exists. This is a theory, built out of a calendar, a dollar figure, a discovery fight and a paragraph that says nobody admits anything. The governor’s office is entitled to say the theory is wrong, and if it is, I expect I’ll be hearing from them.
They’re also entitled to some credit. Say what? Yes, credit. When I asked for terms of the agreement, Deputy Chief of Staff Molly Craft sent it; the full text of the agreement within a few hours, unprompted, and threw in the attorney general’s approval email on top of it. That is more than most administrations do, and considerably more than this one had to.
So take them at their word that a resolution serves everybody. Andy Zay’s interests are served. The governor’s interests are served. Josh Bain keeps the seat, and the AES reconsideration proceeds without anyone testifying under oath about what was said on June 18.
The people who pay for both the settlement and the rate increase get a press release.
Abdul-Hakim Shabazz is the editor and publisher of IndyPolitics.org and an attorney licensed in Indiana and Illinois. He has never owned a monogrammed scarf and now understands why.
