Detroit Edison Co. v. East China Township School Dist. No. 3

• Decision Date: 05 November 1965
• Docket Number: Civ. A. No. 25702.
• Citation: 247 F. Supp. 296
• Parties: The DETROIT EDISON COMPANY, Ralph Wertz, and Herbert Knack, Plaintiffs, v. EAST CHINA TOWNSHIP SCHOOL DISTRICT NO. 3, Donald MacDonald, Leland Sass, Mary Phillips, Milton J. Gearing, Edwin H. Lindow, Malcolm G. Simons, and William Hopson, individually and as members of the board of education of said school district, Defendants.
• Court: U.S. District Court — Western District of Michigan

247 F. Supp. 296

The DETROIT EDISON COMPANY, Ralph Wertz, and Herbert Knack, Plaintiffs, v. EAST CHINA TOWNSHIP SCHOOL DISTRICT NO. 3, Donald MacDonald, Leland Sass, Mary Phillips, Milton J. Gearing, Edwin H. Lindow, Malcolm G. Simons, and William Hopson, individually and as members of the board of education of said school district, Defendants.

Civ. A. No. 25702.

United States District Court E. D. Michigan, S. D.

November 5, 1965.

COPYRIGHT MATERIAL OMITTED

Richard Ford, Fischer, Sprague, Franklin & Ford, Detroit, Mich., for plaintiffs.

John H. Nunneley, Stratton S. Brown, Miller, Canfield, Paddock & Stone, Detroit, Mich., Kenneth J. Stommel, Walsh, O'Sullivan, Stommel & Sharp, Port Huron, Mich., for defendants.

LEVIN, Chief Judge.

Plaintiffs' suit is for a declaration under 28 U.S.C. § 2201 that the annexation of two school districts to the district in which their property is situated is in violation of the federal constitution. They seek a further declaration that the assumption of the large bonded indebtedness of the annexed school districts by the combined larger district is in violation of both the federal constitution and state law.

The court now has before it a motion for summary judgment by defendants on the ground that the federal court has no jurisdiction over the subject matter of the controversy as to any of the plaintiffs or, in the alternative, for judgment as a matter of law on the merits.

Plaintiffs now and for many years have owned land in the East China Township School District No. 3, the "original East China district," located in St. Clair County, Michigan. The district is relatively small in population and area, practically debt free, but has a high assessed valuation because plaintiff Detroit Edison's plant in that district is valued at over 82 million dollars. Adjacent to this district was the Marine City Community School District No. 7, "Marine City district," and the School District of the City of St. Clair, "St. Clair district." These two last named districts had a much larger area and population than the original East China district, a much lower assessed valuation, and were obligated to a large bonded indebtedness incurred through the financing of new high schools. The original East China district paid tuition for its high school students who attended these schools.

Early in 1961, the original East China district annexed the Marine City and St. Clair districts, making the "combined district." Since the annexations, the combined district has operated as an integrated unit, and operating expenses have been assessed uniformly on all property. Propositions that the combined district assume the bonded debt of the former Marine City and St. Clair districts were rejected on several occasions. In July 1964, however, the electors of the combined district voted to assume the high school bonded indebtedness totaling approximately 2.8 million dollars. The result of the assumption was to shift about sixty per cent of this liability to the electors of the original East China district, a considerable portion of which becomes the burden of the plaintiff taxpayer Detroit Edison.

The annexation proceedings were conducted pursuant to the Michigan School Code.¹ This statute provides for annexation by the approval of the following: (1) the State Superintendent of Public Instruction; (2) a majority vote of the board of education of the annexing district (the original East China district); and (3) a majority vote of the qualified electors of each of the annexed districts (the Marine City and St. Clair districts). The statute does not provide for an election by the electors of the annexing district.² In Detroit Edison Company v. East China Tp. School District, 366 Mich. 638, 115 N.W.2d 298 (1962), the Michigan Supreme Court held that these annexation proceedings were in accordance with the state law, but it was not presented with, nor considered, the issues in this case — whether the debt assumption conformed to state law and whether the annexation or debt assumption is constitutional.

The annexation is alleged to violate the due process and equal protection of the law provisions of the Fourteenth Amendment because the annexed districts approved it by a direct vote of the electors while the annexing district approved it by a vote of the board of education — an indirect or representative approval of the electors. The debt assumption after the annexation is also said to violate the equal protection and due process provisions of the Fourteenth Amendment because the votes of the numerous electors of the Marine City and St. Clair districts were not separated in the count from the votes of the original East China district and submerged the views of the voters of East China, whose interests were adverse. This, say the plaintiffs, is a destruction and debasement of voting rights.

Plaintiffs contend further that assuming the procedures are constitutionally unassailable, the burden created by the debt assumption is so disproportionate to the benefits that it violates the due process provision of the Fourteenth Amendment.

The parties have discussed in their briefs and oral arguments three aspects of federal jurisdiction: first, whether plaintiffs present a "federal question" and satisfy the jurisdictional amount requirement under 28 U.S.C. § 1331(a), the so-called Federal Question jurisdiction; second, whether the subject matter is within 28 U.S.C. § 1343, the so-called Civil Rights jurisdiction; and third, whether the abstention doctrine applies.

Any alteration of municipal boundaries is a matter within the complete discretion of the state and not confined by any rights secured by the federal constitution. Hunter v. City of Pittsburgh, 207 U.S. 161, 28 S.Ct. 40, 52 L.Ed. 151 (1907). There, the City of Pittsburgh was about to incur a large indebtedness. The City of Allegheny was annexed to Pittsburgh pursuant to a state statute requiring the approval of a majority of all voters, although a majority of the Allegheny voters opposed it. The Supreme Court upheld the annexation and affirmed the general principle as follows:

Municipal corporations are political subdivisions of the state, created as convenient agencies for exercising such of the governmental powers of the state as may be intrusted to them. * * * The number, nature, and duration of the powers conferred upon these corporations and the territory over which they shall be exercised rests in the absolute discretion of the state. * * * The state, therefore, at its pleasure, may modify or withdraw all such powers, may take without compensation such property, hold it itself, or vest it in other agencies, expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the charter and destroy the corporation. All this may be done, conditionally or unconditionally, with or without the consent of the citizens, or even against their protest. In all these respects the state is supreme, and its legislative body, conforming its action to the state Constitution, may do as it will, unrestrained by any provision of the constitution of the United States. 207 U.S. 161, 178-179, 28 S.Ct. 40, 46.

Recently, the Supreme Court had an occasion to limit this broad language to the specific provisions considered in Hunter — the impairment of contracts and due process. In Gomillion v. Lightfoot, 364 U.S. 339, 81 S.Ct. 125, 5 L.Ed.2d 110 (1960), the Court held that a complaint stated a cause of action when it alleged alterations in the boundaries of Tuskegee, Alabama, disenfranchised Negroes in violation of the Fifteenth Amendment. The Hunter rule is not an absolute, the Court said, and must yield to the specific limitation of the Fifteenth Amendment.

Gomillion does not diminish the authority of Hunter in annexation procedure cases. The Court specifically characterized the problem as the municipal disenfranchisement of Negroes. In fact, the Court rejected the plaintiff's contention based on the equal protection provision. Both the Fifth and Tenth Circuits have subsequently held that Hunter forecloses a challenge to an annexation procedure based on the equal protection provision. Hammonds v. City of Corpus Christi, Texas, 343 F.2d 162 (5th Cir. 1965), cert. den., 86 S.Ct. 85 (Oct. 11, 1965), affirming 226 F.Supp. 456 (S.D. Tex.1964); International Harvester Company v. Kansas City, 308 F.2d 35 (10th Cir. 1962). State courts have reached a similar conclusion. In School Dist. of City of Lansing v. State Board of Education, 367 Mich. 591, 116 N.W.2d 866 (1962), the Michigan Supreme Court rejected an argument almost identical to that of the plaintiffs here in connection with another provision of the Michigan School Code.

Plaintiffs' main argument is that Hunter v. City of Pittsburgh "is no longer law insofar as it is inconsistent in theory with the reapportionment cases." They claim Hunter is the product of an era in which "the constitution was so construed as to exclude from the courts' consideration so-called political questions of electoral district and tax district boundaries." Since Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691, 7 L.Ed. 2d 663 (1962), a dilution in voting rights is justiciable under the equal protection clause. Plaintiffs would have the principles established in the reapportionment cases apply to the original East China district annexations.

Much uncertainty surrounds the effect of the reapportionment decisions on local government. A threshold question is whether the equal protection clause applies to any municipal problems, even reapportionment of representative legislative bodies.

The Supreme Court has not specifically extended the application of the equal protection clause beyond the composition of state legislatures and justiciability may well be limited to the state. Some lower courts have held that the equal protection clause does not extend to local units of government, e. g., Johnson v. Genesee County,...