Associated Builders & Contractors v. City of Lansing

• Decision Date: 27 May 2014
• Docket Number: Docket No. 313684.
• Citation: 305 Mich.App. 395,853 N.W.2d 433
• Parties: ASSOCIATED BUILDERS AND CONTRACTORS v. CITY OF LANSING.
• Court: Court of Appeal of Michigan — District of US

305 Mich.App. 395

853 N.W.2d 433

ASSOCIATED BUILDERS AND CONTRACTORS

v.CITY OF LANSING.

Docket No. 313684.

Court of Appeals of Michigan.

Submitted Jan. 15, 2014, at Lansing.

Decided May 27, 2014, at 9:10 a.m.

Masud Labor Law Group, Saginaw (by Kraig M. Schutter ), for plaintiff.

Plunkett Cooney, Kalamazoo (by Michael S. Bogren ), for defendant.

McKnight, McClow, Canzano, Smith & Radtke, PC, Southfield (by John R. Canzano and Patrick J. Rorai ), for the Michigan Building and Construction Trades Council.

Before: SAWYER, P.J., and BECKERING and SHAPIRO, JJ.

Opinion

BECKERING, J.

Defendant, city of Lansing, appeals as of right the trial court's order granting summary disposition in favor of plaintiff, Associated Builders and Contractors, under MCR 2.116(C)(10). We reverse and remand.

I. PERTINENT FACTS AND PROCEDURAL HISTORY

Defendant enacted a prevailing wage ordinance and plaintiff challenged the ordinance as an unconstitutional and ultra vires act. The ordinance at issue provides as follows:

(a) No contract, agreement or other arrangement for construction on behalf of the City and involving mechanics and laborers, including truck drivers of the contractor and/or subcontractors, employed directly upon the site of the work, shall be approved or executed by the City unless the contractor and his or her subcontractors furnish proof and agree that such mechanics and laborers so employed shall receive at least the prevailing wages and fringe benefits for corresponding classes of mechanics and laborers, as determined by statistics compiled by the United States Department of Labor and related to the Greater Lansing area by such Department.

(b) Any person, firm, corporation or business entity, upon being notified that it is in violation of this section and that an amount is due to his, her or its employees, shall have 30 days from the date of the notice to pay the deficiency by paying such employee or employees, whichever is appropriate, the amounts due. If the person, firm, corporation or business entity fails to pay within the 30–day period, he, she or it shall be subject to the penalty provided in Section 206.99.

(c) The provisions of this section shall be inserted in all bid documents requiring the payment of prevailing wages.

(d) The enforcement agency for this section shall be as determined by the Mayor. [Lansing Code of Ordinances, § 206.18.]

In deciding whether the ordinance was valid, the trial court cited Attorney General, ex rel. Lennane v. Detroit, 225 Mich. 631, 196 N.W. 391 (1923), and determined that defendant did not have the authority to enact the ordinance. The trial court reasoned that it was bound by Lennane despite defendant's “compelling arguments,” and granted summary disposition to plaintiff.¹

II. MUNICIPAL POWERS AND A CITY'S POLICE POWER

We review de novo a trial court's decision on a motion for summary disposition. Innovative Adult Foster Care, Inc. v. Ragin, 285 Mich.App. 466, 475, 776 N.W.2d 398 (2009). Summary disposition pursuant to MCR 2.116(C)(10) is appropriate when the moving party is able to demonstrate that there are no genuine issues of material fact. Coblentz v. City of Novi, 475 Mich. 558, 568, 719 N.W.2d 73 (2006).

A. LENNANE

In Lennane, 225 Mich. at 633–634, 196 N.W. 391, our Supreme Court considered whether the city of Detroit could, consistent with the Constitution of 1908 and the home rule act,² enact a minimum prevailing wage ordinance similar to the ordinance in the case at bar. The ordinance at issue in Lennane provided as follows:

“Sec. 1. The service day for all employees of the city of Detroit during which they shall be required to work shall consist of eight consecutive hours in any one day of twenty-four hours. No employee shall be required or permitted to work for more than this eight-hour service day, except in case of any emergency which would result in serious loss, damage, or impairment of the city's service, unless the same employee or employees were required to remain continuously at work for a longer period, in which case, during the continuance of the emergency, the provision requiring the eight-hour service day may be suspended by the department head or proper subordinate in whose department the emergency shall have arisen.

“Sec. 2. No employee shall be required to work for more than six service days in any consecutive seven days of twenty-four hours each, except in case of any emergency which would result in serious loss, damage, or impairment of the city's service, unless the same employee or employees were required to remain at work in excess of the six-day service week, in which case during the continuance of the emergency the provision requiring a six-day service week may be suspended by the departmental head or proper subordinate in whose department the emergency shall have arisen.

“Sec. 3. The common council shall by ordinance provide for the proper re-adjustment of service time and for the proper excess of the regular service day or the regular service week [which] shall have been required in the case of any emergency as herein provided. But the common council shall provide for a rate of compensation for excess service which shall be for Sundays and other holidays not less than twice the regular rate of compensation, and for other days not less than one and one-half times the regular rate of compensation.

“Sec. 4. No employee doing common labor shall receive compensation in a sum less than two dollars and twenty-five cents per diem for an eight-hour service day. No employee doing work of a skilled mechanic shall receive compensation in a sum less than the highest prevailing wage in that particular grade of work. Whenever practicable the per diem plan of employing common labor shall be in force. All wages and all salaries shall be paid weekly. Any employee who shall receive compensation for service rendered at a rate less than the minimum fixed herein may by an action for debt recover from the city the balance due him hereunder with costs.

“Sec. 5. No contract for any public work shall be let which shall not, as a part of the specification on which contractors shall make their bids, require contractor or subcontractor to pay all persons in his employ doing common labor and engaged in the public work contracted for not less than two dollars and twenty-five cents per diem, to pay all persons in his employ doing the work of a skilled mechanic and engaged on the public work the highest prevailing wage in that particular grade of work, and to require of such employees the same service day and service week required herein of all city employees. Any contractor who shall have entered into such contract with the city and shall have violated any provision of this section as made a part of his contract shall be debarred from any further contracts for public work, and any contract let to him contrary to this provision shall be void. Whenever it shall appear that any employee of any contractor for public work engaged thereon shall have received less than the compensation herein provided, the common council may cause to be paid to him such deficit as shall be due him and shall cause the amount so paid to be deducted from the balance due to the contractor from the city.” [Id. at 633–635, 196 N.W. 391.]

In ruling that the ordinance at issue was invalid, the Lennane Court examined the authority granted to cities at that time and considered whether the ordinance exceeded that authority. Id. at 636–641, 196 N.W. 391. In interpreting the authority granted to cities under the Michigan Constitution, the Court, id. at 637–638, 196 N.W. 391, relied on §§ 20 and 21 of Article 8 of the Constitution of 1908, which provided:

Sec. 20. The legislature shall provide by a general law for the incorporation of cities, and by a general law for the incorporation of villages; such general laws shall limit their rate of taxation for municipal purposes, and restrict their powers of borrowing money and contracting debts.

Sec. 21. Under such general laws, the electors of each city and village shall have power and authority to frame, adopt and amend its charter, and to amend an existing charter of the city or village heretofore granted or passed by the legislature for the government of the city or village and, through its regularly constituted authority, to pass all laws and ordinances relating to its municipal concerns, subject to the Constitution and general laws of this state.

The Court concluded that neither the Constitution nor the home rule act granted cities the general exercise of police power. Rather, the Court concluded that “[t]he police power rests in the State.” Lennane, 225 Mich. at 638, 196 N.W. 391. The Court explained that “[u]nless delegated in some effective way the police power remains in the State.” Id. The Court also noted “a popular misunderstanding” about home rule cities and “a widely spread notion that lately, in some way, cities have become possessed of greatly enlarged powers, the right to exercise which may come from mere assertion of their existence and the purpose to exercise them.” Id. at 639, 196 N.W. 391 (quotation marks and citation omitted). The Court reasoned that cities possessed a very narrow scope of inherent police power, but beyond that narrow scope, “the police power, like any other power conferred on a municipality, must be expressly delegated by the Constitution or legislature of the State.” Id. at 639–640, 196 N.W. 391 (quotation marks and citation omitted).

Nevertheless, despite characterizing the notion that cities possessed broad authority as a “popular misunderstanding,” the Court assumed, without deciding, that a city “may fix a public policy applicable to its matters of local and municipal concern....” Id. at 636, 196 N.W. 391 (emphasis added). See also id. at 641, 196 N.W. 391. The Court then framed the issue in the case as whether “the power of the city to declare a public policy appli[es] to matters of State concern. ” Id. at 636, 196 N.W. 391 (emphasis added)....