Bendix Safety Restraints Group, a Div. of Allied Signal, Inc. v. City of Troy

• Decision Date: 30 January 1996
• Docket Number: Docket No. 163811
• Citation: 215 Mich.App. 289,544 N.W.2d 481
• Parties: BENDIX SAFETY RESTRAINTS GROUP, ALLIED SIGNAL, INC., a Delaware corporation, Plaintiff-Appellant, Cross-Appellee, v. CITY OF TROY, a Michigan municipal corporation, Defendant-Appellee, Cross-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 481

544 N.W.2d 481

215 Mich.App. 289

BENDIX SAFETY RESTRAINTS GROUP, ALLIED SIGNAL, INC., a Delaware corporation, Plaintiff-Appellant, Cross-Appellee, v. CITY OF TROY, a Michigan municipal corporation Defendant-Appellee, Cross-Appellant.

Docket No. 163811.

Court of Appeals of Michigan.

Submitted Feb. 22, 1995, at Detroit.

Decided Jan. 30, 1996, at 9:10 a.m.

Released for Publication March 19, 1996.

Butzel Long by James C. Bruno and Daniel R.W. Rustmann, Detroit, for plaintiff.

City of Troy, Department of Law by Peter A. Letzmann and John J. Martin, III, Troy, and Petersen & Lefkofsky, P.C. by Donald K.S. Petersen, Bloomfield Hills, for the City of Troy.

Miller, Canfield, Paddock & Stone, P.L.C. by Joel L. Piell and Steven G. Cohen, Detroit, for the Michigan Municipal League.

Before GRIBBS, P.J., and GRIFFIN, NEFF, JANSEN, FITZGERALD, MARKEY and O'CONNELL, JJ.

PER CURIAM.

Pursuant to Administrative Order No. 1994-4, this special panel was convened to resolve the conflict between the prior, vacated opinion in this case, Bendix Safety Restraints Group, Allied Signal, Inc. v. City of Troy, 211 Mich.App. 801, 537 N.W.2d 459 (1995), and Marposs Corp. v. City of Troy, 204 Mich.App. 156, 514 N.W.2d 202 (1994). In accordance with Administrative Order No. 1994-4, the prior Bendix panel was required to follow the precedent of Marposs Corp., supra. Were it not for Administrative Order No. 1994-4, the previous panel would have reversed the decision of the lower court.

Following an en banc order ¹ invoking the conflict resolution procedure of Administrative Order No. 1994-4, this case was reheard by this special panel. After due consideration, we resolve the conflict in favor of the prior Bendix opinion. We are persuaded by the prior Bendix opinion and hereby adopt its reasoning and analysis. Marposs Corp. v. City of Troy, supra, is overruled.

Reversed and remanded for entry of judgment for defendant, City of Troy.

O'CONNELL, Judge (concurring ).

I concur in the majority opinion. However, I write separately to address a foundational issue developed during oral argument.

Plaintiffs in both Marposs Corp. v. City of Troy, 204 Mich.App. 156, 514 N.W.2d 202 (1994), and the initial case in this action, Bendix Safety Restraints Group, Allied Signal, Inc. v. City of Troy, 211 Mich.App. 801, 537 N.W.2d 459 (1995), assert that the statutory scheme in issue, M.C.L. § 207.551 et seq.; M.S.A. § 7.800(1) et seq., is an unconstitutional delegation of power by the Legislature to the City of Troy, a position that the majority today has properly refuted. In Marposs, however, this Court suggested that even if the delegation of power were constitutional, the City of Troy's actions were, nonetheless, either "arbitrary and capricious" or constituted an abuse of discretion. Plaintiff in the present case, taking its cue from Marposs, has also advanced this argument. While this contention is no more persuasive than the delegation challenge, it raises a significantly different issue, namely, that of separation of powers.

The statute in question, M.C.L. § 207.559(2)(f); M.S.A. § 7.800(9)(2)(f), precludes a municipality acquiring an eligible facility from granting a tax abatement without the consent of the municipality "losing" an earlier incarnation of that facility. If the "losing" municipality withholds its consent, "a copy of the resolution of denial showing reasons for the denial shall be filed within 20 days after adoption with the department of commerce."

While the statute requires that reasons be furnished in support of a denial of consent, it does not limit the basis on which such denial may be predicated. For example, the Legislature did not specify that the reasons must be related to some relevant criterion, such as the economic condition of either of the municipalities involved or of their respective regions. Thus, no mandate that the grounds for denial be "reasonable" can be judicially inferred. ¹

We, accordingly, have no occasion to examine the reasons proffered by the City of Troy for its denial of consent to the abatements at issue. We note in passing that the City of Troy has chosen to focus on whether the acquiring municipality is or is not "economically depressed." However, it would be temerarious for the judiciary to purport either to grant to or to withhold from such reasoning its imprimatur, except to note that the reasoning does not facially run afoul of any constitutional prohibition or concern.

However, plaintiff vehemently argues that it is this Court's responsibility to review the City of Troy's reasons for refusing to consent to the tax abatement. Plaintiff's argument is in three parts. First, plaintiff contends that the Legislature's sole intent in enacting the consent provision of M.C.L. § 207.559(2)(f); M.S.A. § 7.800(9)(2)(f) was to permit a city to discourage proposed moves that the city determined would adversely affect its local economy. Second, a city's reasons for withholding its consent "must," in accordance with the Legislature's intent, be founded upon the detrimental economic effect that the city would likely suffer should it consent to the abatement. Third, because the City of Troy's reasons for refusing to consent to the tax abatement do not address the economic effect on the City of Troy itself, the City of Troy is claimed to have abused its discretion or, in the alternative, to have predicated its abatement decision on grounds that are "arbitrary and capricious."

Const. 1963, art. 3, § 2 establishes as an explicit principle of state constitutional government the separation of powers doctrine. This principle, which lies at the heart of republican government, is only implicit in the federal constitution, although as effectually important as if expressly delineated. Prize Cases, 67 U.S. (2 Black) 635, 17 L.Ed. 459 (1863); Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 115 S.Ct. 1447, 131 L.Ed.2d 328 (1995).

A corollary to the separation of powers principle is the political question doctrine, which requires analysis of three inquiries: (1) Does the issue involve resolution of questions committed by the text of the constitution to the legislative or executive branches of government? (2) Would resolution of the question demand that the court move beyond areas of judicial expertise? (3) Do considerations for maintaining comity between the coordinate branches of government counsel against judicial intervention? House Speaker v. Governor, 443 Mich. 560, 574, 506 N.W.2d 190 (1993).

With respect to the first inquiry, questions of tax policy are committed by the text of the Michigan Constitution to the Legislature. First, Const. 1963, art. 4, § 1 vests the legislative power of the State of Michigan in a Senate and a House of Representatives. Const. 1963, art. 4, § 32 specifies the manner in which the Legislature shall enact laws imposing, continuing, or reviving taxes. Const. 1963, art. 9, § 2 bars the Legislature from surrendering, suspending, or contracting away the power of taxation. The judiciary is nowhere mentioned in these constitutional provisions, nor does Const. 1963, art. 6, the judicial article, confer on the judicial branch any power in the sphere of taxation. Accordingly, the mechanisms by which tax exemptions or abatements shall be granted or withheld are plainly committed by the text of the constitution to legislative resolution.

Concerning the second phase of the inquiry, the judiciary certainly possesses no special expertise in matters of tax policy. While the judiciary is frequently called upon to construe tax legislation or to determine the scope and effect of various provisions of Const. 1963, art. 9, such judicial involvement is purely adjudicative.

In this case, however, Bendix asks the Court to consider the wisdom of the action of the City of Troy's withholding of its consent to allow the City of Sterling Heights to provide an incentive to Bendix to relocate its facilities by extending a tax abatement. Even the purely economic aspects of the issues thus raised are outside the expertise of the judiciary, while the weighing of the noneconomic aspects--the relative bargaining power of each of the parties, their stomach for a fight, their tenacity should impasse erupt into disagreement, the ability of the negotiators to perceive both the actual strengths and weaknesses of the other side's position and to evaluate the correlative perceptions by the other side, and the possibility of economically irrational behavior in pursuit of both economic and noneconomic principles--are matters far beyond the arena of judicial expertise.

Finally, prudential considerations militate most strongly against judicial intervention. We are not called upon to construe a statute or a constitutional provision, but, instead, to grant judicial oversight of legislative action on the basis of a standard of review--"arbitrary and capricious"-- that fairly invites disrespect for the political, and thus nonjusticiable, choices made by the local legislative body.

In effect, Bendix is suing to reverse the outcome of a political battle that it lost. See House Speaker v. State Administrative Bd., 441 Mich. 547, 561, 495 N.W.2d 539 (1993). Political battles, however, are fought, won, and lost in the political arena, and the judiciary has no right under the constitution to reposition the competitors, change the rules, or alter the outcome after the fact.

Less than two decades ago, the Michigan judiciary experimented with treating the actions of municipal legislative bodies as something other than legislative action. Creating a fiction that in some respects local legislative bodies, because they make an effort to find facts and apply legal standards, seem to be acting like quasi-judicial administrative bodies, the judiciary extended its reach and began reviewing such action without consideration of separation of powers principles. This brief experiment was a total failure, and the courts soon...