Associated Builders & Contractors v. City of Lansing, Docket No. 149622.

• Citation: 880 N.W.2d 765,499 Mich. 177
• Decision Date: 17 May 2016
• Docket Number: Docket No. 149622.,Calendar No. 8.
• Parties: ASSOCIATED BUILDERS AND CONTRACTORS v. CITY OF LANSING.
• Court: Michigan Supreme Court

499 Mich. 177

880 N.W.2d 765

ASSOCIATED BUILDERS AND CONTRACTORS

v.CITY OF LANSING.

Docket No. 149622.

Calendar No. 8.

Supreme Court of Michigan.

Argued Oct. 15, 2015.

Decided May 17, 2016.

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

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

Lipson, Neilson, Cole, Seltzer & Garin, PC (by C. Thomas Ludden, Bloomfield Hills and Samantha K. Heraud ), for the National Federation of Independent Business Small Business Legal Center.

Miller, Canfield, Paddock & Stone PLC (by Clifford W. Taylor, Lansing, Paul D. Hudson and James D. Boufides, Kalamazoo) for the Michigan Municipal League.

Bauckham, Sparks, Lohrstorfer, Thall & Seeber, PC, Kalamazoo (by Robert E. Thall ), for the Michigan Townships Association.

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

Sachs Waldman, PC, Madison Heights (by Andrew Nickelhoff ) for the Michigan State AFL–CIO.

YOUNG

, C.J.

Plaintiff appeals by leave the Court of Appeals' opinion in Associated Builders & Contractors v. City of Lansing.¹ Plaintiff claims that the city of Lansing's Ordinance 206.18(a) is unconstitutional under this Court's 1923 decision Attorney General ex rel. Lennane v. Detroit,² and is an unlawful usurpation of state power. The Court of Appeals majority disagreed, and ruled that subsequent changes to state law had caused Lennane to be “superseded.” The Court of Appeals erred by exceeding its powers for refusing to follow a decision from this Court that both applied and had not been overruled. Even so, we now take this opportunity to overrule Lennane because subsequent constitutional changes³ have undercut its viability. We therefore vacate the Court of Appeals' decision but affirm the result for the reasons stated below.

FACTS AND PROCEDURAL HISTORY

Defendant city of Lansing enacted an ordinance requiring contractors working on city construction contracts to pay employees a prevailing wage. The ordinance states in relevant part:

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 and 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.^{[4 ]}

Plaintiff, a trade association, filed suit against Lansing, arguing that the ordinance is unconstitutional because municipalities do not have the authority to adopt laws regulating the wages paid by third parties, even where the relevant work is done on municipal contracts paid for with municipal funds. Plaintiff relies primarily on this Court's 1923 Lennane decision, which held that, under this state's 1908 Constitution, the city of Detroit could not enact an essentially analogous ordinance and related city charter provision.⁵ In response, defendant argued that the legal landscape, particularly the ratification of a new constitution in 1963, had changed so radically that Lennane was no longer relevant in determining the question at hand. The trial court granted summary disposition to plaintiff, ruling that Lennane made it clear that the regulation of wages was a matter of state, not municipal, concern, under the Michigan Constitution⁶ and the Home Rule Act,⁷ though it did take note of Lennane's “archaic nature.”

The Court of Appeals panel reversed the lower court in a published, split decision.⁸ Although the panel majority stated that its opinion “neither overrule[s] Lennane nor deviate[s] from the rule of stare decisis,”⁹ the majority nevertheless ruled that changes in the legal landscape had, in fact, rendered Lennane obsolete and inapplicable. The panel stated that “the foundation upon which Lennane stood has been rejected by our Supreme Court.”¹⁰ One judge dissented, arguing that the majority was unlawfully striking down a decision by this Court because Lennane had never been overruled—either implicitly or explicitly—or rendered inapplicable. The dissenting opinion stated:

[T]he Court's conclusion in Lennane that this is a matter of state concern has never been overruled. Therefore ... defendant's powers ... do not extend to this ordinance until and unless the Supreme Court revisits its conclusion in Lennane, or the Legislature explicitly grants cities the power to adopt prevailing wage ordinances.^{[11 ]}

This appeal followed.

STANDARD OF REVIEW

This Court reviews de novo both questions of constitutional law and a trial court's decision on a motion for summary disposition.¹²

ANALYSIS

We take this opportunity to overrule Lennane. Lennane's conception of municipal power may or may not have been well-grounded in Michigan's 1908 Constitution and the legal landscape of the time, but it is certainly incongruent with the state of our law as reflected in our current Constitution. We therefore conclude that Lennane has no continuing viability in light of the adoption of our 1963 Constitution.

The 1908 Constitution read in relevant part:

Under such general laws, the electors of each city and village shall have power to frame, adopt, and amend its charter, ... 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.^{[13 ]}

Interpreting this constitutional provision, the Lennane Court held that the regulation of wages paid to third-party employees working on municipal construction contracts was exclusively a matter of “state,” not “municipal,” concern.¹⁴ Quoting liberally from a 1919 case, Kalamazoo v. Titus,¹⁵ the Lennane Court stated:

“The charter provision, the ordinance, the argument made for the city, indeed, the suit itself, reflect a popular interest in, and, we conceive, a popular misunderstanding about, the subject of home rule, so-called, in cities. There is apparent 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. Whether these powers are really inherent in the community, but their exercise formerly was restrained, or are derived from a new grant of power by the State, or may be properly ascribed to both inherent right and to a new grant, are questions which do not seem to bother very much the advocates of the doctrine that they in any event exist. On the other hand, there is expression of grave doubt whether, in the view of the law, there has been any enlargement or extension of the subjects of municipal legislation and control or of the powers of cities except as those subjects and powers are specifically enumerated and designated in the Constitution itself and in the home rule act .” ^{[16 ]}

By quoting Titus at such length, the Lennane Court appears to have been posing itself a question: under the 1908 Constitution, what, exactly, are the default powers of municipalities? Do municipalities have all powers relating to local concerns that are not expressly denied, or can they wield only those powers expressly and explicitly granted? In concluding that a municipality's powers did not include the power to enact laws regulating the wages paid to third-party employees working on municipal construction contracts, the Lennane Court appears to have chosen the latter answer.

This conclusion finds no support in the 1963 Constitution. Article 7, § 22

of the 1963 Constitution provides:

Under general laws the electors of each city and village shall have the power and authority to frame, adopt and amend its charter, and to amend an existing charter of the city or village heretofore granted or enacted by the legislature for the government of the city or village. Each such city and village shall have power to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law. No enumeration of powers granted to cities and villages in this constitution shall limit or restrict the general grant of authority conferred by this section.^{[17 ]}

Explaining these highlighted changes, the Address to the People states:

This is a revision of Sec. 21, Article VIII, of the present [1908] constitution and reflects Michigan's successful experience with home rule. The new language is a more positive statement of municipal powers, giving home rule cities and villages full power over their own property and government, subject to this constitution and law.^{[18 ]}

The 1963 Constitution also contained a new provision, Article 7, § 34

:

The provisions of this constitution and law concerning counties, townships, cities and villages shall be liberally construed in their favor. Powers granted to counties and townships by this constitution and by law shall include those fairly implied and not prohibited by this constitution.^{[19 ]}

If it was ever the case, we conclude that, given the newly added language that expresses the people's will to give municipalities even greater latitude to conduct their business, there is simply no way to read our current constitutional provisions and reach the conclusion that “there is ... grave doubt whether ... there has been any enlargement or extension of the subjects of municipal legislation and control or of the powers of cities except as those subjects and powers are specifically enumerated and designated in the Constitution itself and in the home rule act.”²⁰ Under our current Constitution, there is simply no room for doubt about the expanded scope of authority of Michigan's cities and villages: “No enumeration of...