Breighner v. MICH. HIGH SCHOOL ATHLETIC ASS'N, INC.

• Decision Date: 29 July 2004
• Docket Number: Docket No. 123529. Calendar No. 11.
• Citation: 683 N.W.2d 639,471 Mich. 217
• Parties: Martin B. BREIGHNER III and Kathryn Breighner, Plaintiffs-Appellants, v. MICHIGAN HIGH SCHOOL ATHLETIC ASSOCIATION, INC., Defendant-Appellee.
• Court: Michigan Supreme Court

683 N.W.2d 639

471 Mich. 217

Martin B. BREIGHNER III and Kathryn Breighner, Plaintiffs-Appellants, v. MICHIGAN HIGH SCHOOL ATHLETIC ASSOCIATION, INC., Defendant-Appellee.

Docket No. 123529. Calendar No. 11.

Supreme Court of Michigan.

Argued March 11, 2004.

Decided July 29, 2004.

Wayne Richard Smith, Harbor Springs, MI, for the plaintiffs.

Edmund J. Sikorski, Jr., Ann Arbor, MI, for the defendant.

Butzel Long (by Dawn Phillips Hertz), Ann Arbor, MI, for the Michigan Press Association.

Varnum Riddering Schmidt & Howlett LLP (by Kevin C. O'Malley and Beverly Holaday), Grand Rapids, MI, for the Michigan Society of Association Executives.

Opinion

YOUNG, J.

At issue in this case is whether defendant Michigan High School Athletic Association, Inc. (MHSAA), a private, nonprofit entity that organizes and supervises interscholastic athletic events for its voluntary members, is a "public body" as that term is defined at MCL 15.232(d) of the Freedom of Information Act (FOIA), MCL 15.231 et seq. Plaintiffs contend that the MHSAA is a public body within the meaning of the FOIA because (1) it is "primarily funded by or through state or local authority," MCL 15.232(d)(iv); (2) it is "created by state or local authority," MCL 15.232(d)(iv); and (3) it is an "agency" of a school district, MCL 15.232(d)(iii).

The trial court held that the MHSAA was "primarily funded by or through state or local authority" and that it was therefore subject to the FOIA as a public body under § 232(d)(iv). The Court of Appeals reversed, concluding that neither § 232(d)(iv) nor § 232(d)(iii) applied to the MHSAA. Because we agree that the MHSAA does not qualify as a public body under § 232(d)(iii) or (iv), we affirm.

I. FACTS AND PROCEDURAL HISTORY

A. THE MHSAA

The MHSAA was originally founded in 1924 to exercise control over the interscholastic athletic activities of all public schools in the state through agreement with the State Superintendent of Public Instruction. The MHSAA was housed within the Michigan Department of Education, and its handbook, rules, and regulations were part of the Administrative Code of the state of Michigan.

In 1972, the MHSAA became an incorporated, nonprofit membership organization. In that year, the Legislature transferred control of interscholastic athletics from the State Board of Education to the individual school boards, but retained the status of the MHSAA as the official association of the state. See MCL 340.379 (repealed by 1976 PA 451, § 1851); MCL 380.1289 (before its amendment by 1995 PA 289, § 1); MCL 380.1521 (repealed by 1995 PA 289, § 2).¹ In 1995, the Legislature adopted the Revised School Code, MCL 380.1 et seq., which repealed and amended several statutes. Through the Revised School Code, the MHSAA was removed as the "official" organization overseeing interscholastic sports. Under MCL 380.11a(4), a school district's membership in any athletic organization remains entirely voluntary (school districts "may ... join organizations as part of performing the functions of the school district" [emphasis supplied]).

The MHSAA is governed by a representative council made up of nineteen voting members, including fourteen members elected by member schools, four members appointed by the council, and one representative of the state superintendent of education. The council has control of interscholastic athletic policies, and a five-member executive committee makes rules necessary for the control and government of interschool activities.

The MHSAA regulates interscholastic athletic competition between member schools and sets standards for school membership and eligibility of students to participate in interscholastic athletics. Apparently, the vast majority of high schools in Michigan are members of the MHSAA. Approximately seven hundred Michigan high schools are members of the MHSAA and more than eighty percent of those schools are public. Member schools pay no membership dues and no tournament entry fees. The only funds collected from schools are (1) payments for the cost of publications provided to a school in excess of the quantity already provided to members and (2) meeting expenses (for example, the cost of lunch).

The majority — approximately ninety percent — of the MHSAA'S revenues are gate receipts at post-season athletic tournaments for football and basketball. The gate receipt revenues come directly from the sale of the MHSAA'S tickets to members of the public who attend MHSAA-sponsored events. In some cases, the MHSAA itself does not sell the tickets, but member schools remit to the MHSAA gate receipts collected from tickets sold by the schools for the MHSAA-sponsored events.

Because no revenues are derived either during the regular season or from most of the tournaments sponsored by the MHSAA, the positive cash flow from the football and basketball tournaments is used to fund these other activities. Services provided by the MHSAA to its members include the provision of medical insurance for student-athletes; dissemination of play rule books; organization of meetings for coaches and officials; provision of several school and officials publications; provision of trophies and medals; training; direction and management of tournaments; and the services of the MHSAA staff.

B. PLAINTIFFS' FOIA PROCEEDINGS

Plaintiffs are the parents of a high school student who was prohibited from participating in a ski meet sponsored by the MHSAA because he had previously participated in an unsanctioned event in violation of MHSAA rules. Plaintiffs filed a request under the FOIA seeking information related to that decision. The MHSAA refused to comply with the request, asserting that it was not a public body and was therefore not subject to the FOIA.

The trial court granted summary disposition to plaintiffs, holding that the MHSAA is "primarily funded by or through state or local authority" within the meaning of § 232(d)(iv) because the vast majority of its funding comes from gate receipts at the athletic events it sponsors. The trial court held that the gate receipts that comprised the majority of the MHSAA'S revenue were received "through" the schools because the MHSAA essentially "`enjoys the schools' moneymaking capacity as its own,'" quoting Brentwood Academy v. Tennessee Secondary School Athletic Ass'n, 531 U.S. 288, 121 S.Ct. 924, 148 L.Ed.2d 807 (2001).

The Court of Appeals reversed, holding that the MHSAA was not a public body under either § 232(d)(iv) or § 232(d)(iii). 255 Mich.App. 567, 581-582, 583, 662 N.W.2d 413 (2003). The majority first addressed plaintiffs' argument that the MHSAA was "created by state or local authority" under § 232(d)(iv). The majority held that, although it was originally created under such authority, the modern incarnation of the MHSAA was a unique, private entity that had ceased being the official athletic association for the state. This unique entity was not "created" by state or local authority.

The majority further rejected the trial court's conclusion that the MHSAA is primarily funded by or through state or local authority. The panel noted that the state provides no financial resources to fund the MHSAA'S activities, and that the MHSAA actually paid fees for the use of host facilities. Member schools pay no fees or dues to the MHSAA. The MHSAA is a private, nonprofit organization that hires and trains its own officials and pays its own employees; furthermore, its revenues are derived from the sale of its own tickets for its own events. The majority further noted that schools are not forced to join the MHSAA and that member schools voluntarily chose to engage the MHSAA'S services. The individual schools have authority over their own interscholastic events and have no independent authority over the MHSAA.

Finally, the majority rejected plaintiffs' argument that the MHSAA is an "agent" of the state and therefore subject to the FOIA under § 232(d)(iii). The majority looked to Black's Law Dictionary (7th ed.), where "agency" was defined as "[a] fiduciary relationship created by express or implied contract or by law, in which one party (the agent) may act on behalf of another party (the principal) and bind that other party by words or actions." The majority further noted that, pursuant to St. Clair Intermediate School Dist. v. Intermediate Ed. Ass'n, 458 Mich. 540, 558 n. 18, 581 N.W.2d 707 (1998), "an agency relationship arises only where the principal `has the right to control the conduct of the agent with respect to matters entrusted to him.'" (citations omitted). The majority held that the MHSAA was governed by its board of directors, not the individual schools who voluntarily became its members. No one school or district could control the MHSAA, because it was controlled by its own board. Therefore, the majority held, the MHSAA was not an "agent" of its member schools.

Judge Jansen dissented, opining that the public policy behind the FOIA favored disclosure and that the MHSAA was primarily funded by or through state or local authority because its gate receipts came to it only through or by means of the schools' authority to regulate sporting events. Judge Jansen opined that the majority's holding was contrary to two cases, State Defender Union Employees v. Legal Aid & Defender Ass'n of Detroit, 230 Mich.App. 426, 432, 584 N.W.2d 359 (1998), and Kubick v. Child & Family Services, 171 Mich.App. 304, 429 N.W.2d 881 (1988), in which the Court of Appeals had held, respectively, that (1) "funded" for purposes of the FOIA definition of "public body" meant the receipt of a governmental grant or subsidy and (2) funding that amounted to less than half the total funding of a corporation did not amount to primary funding. Judge Jansen opined that the gate receipts remitted to the MHSAA were the functional equivalent of a grant or subsidy and that virtually the entire budget of the MHSAA came from gate receipts. Finally, Judge Jansen opined that the majority's...