House Speaker v. State Administrative Bd.

• Decision Date: 09 July 1991
• Docket Number: Docket No. 140914
• Citation: 190 Mich.App. 260,475 N.W.2d 440
• Parties: HOUSE SPEAKER, Lewis N. Dodak, Michigan House of Representatives, Dominic J. Jacobetti, Chair, Appropriations Committee, Michigan House of Representatives, Arthur Miller, Minority Leader, Michigan Senate, and David S. Holmes, Jr., Vice-Chair, Appropriations Committee, Michigan Senate, Plaintiffs-Appellants, v. STATE ADMINISTRATIVE BOARD, John M. Engler, Governor, Douglas Roberts, State Treasurer, Patricia Woodworth, Director, Department of Management and Budget, and State Budget Director, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 440

475 N.W.2d 440

190 Mich.App. 260

HOUSE SPEAKER, Lewis N. Dodak, Michigan House of

Representatives, Dominic J. Jacobetti, Chair, Appropriations

Committee, Michigan House of Representatives, Arthur Miller, Minority Leader, Michigan Senate, and David S. Holmes, Jr., Vice-Chair, Appropriations Committee, Michigan Senate, Plaintiffs-Appellants, v. STATE ADMINISTRATIVE BOARD, John M. Engler, Governor, Douglas Roberts, State Treasurer, Patricia Woodworth,

Director, Department of Management and Budget, and State

Budget Director, Defendants-Appellees.

Docket No. 140914.

Court of Appeals of Michigan.

Submitted June 20, 1991, at Detroit.

Decided July 9, 1991, at 9:25 a.m.

Released for Publication Oct. 28, 1991.

A. Michael Leffler, Jeremy M. Firestone, Mark Matus, Robert P. Reichel, and Sally J. Churchill, Asst. Attys. Gen., for plaintiffs.

Frank J. Kelley, Atty. Gen., Gay Secor Hardy, Sol. Gen., Thomas L. Casey, Asst. Sol. Gen., and Thomas C. Nelson and Deborah Anne Devine, Asst. Attys. Gen., for defendants.

Judy H. Hughes, Senate Majority Counsel, Lansing, for amici curiae, Dick Posthumus, Philip Arthurhultz, and Harry Gast.

Goodman, Eden, Millender, Bedrosian by William H. Goodman, Detroit, Legal Services of Southeastern Michigan by Deborah A. Johnson and Robert F. Gillett, and University of Michigan Clinical Law Program by Paul D. Reingold, Nicholas J. Rine, Julie Kunce Field, and Mark D. Mitshkun, Ann Arbor, for amici curiae, League of Women Voters of Michigan, Michigan Trial Lawyers Ass'n, Michigan League for Human Services, Women Lawyers Ass'n of Michigan, and Sandra Grimm.

Before HOOD, P.J., and SULLIVAN and REILLY, JJ.

PER CURIAM.

Plaintiffs appeal as of right from a May 23, 1991, order of the Ingham Circuit Court, which granted defendants' motion for summary disposition and dismissed the complaint, finding that plaintiffs do not have standing to sue and that their statutory and constitutional claims are without merit. We reverse the circuit court's rulings regarding plaintiffs' standing and their statutory arguments, but express no opinion regarding plaintiffs' constitutional claims.

I

The State Administrative Board, which consists of the Governor, the Lieutenant Governor, the Secretary of State, the Attorney General, the Superintendent of Public Instruction, and the State Treasurer, held a special meeting on May 9, 1991. At that meeting, the board adopted eleven resolutions authorizing intertransfers of funds, i.e., transfers of funds within various departments of state government from one purpose or program to another. The resolutions directed that such funds be spent for purposes other than those for which they were originally appropriated by the Legislature. The board approved transfers totalling $212,300 in the Department of Natural Resources, $210,000 in the Department of State Police, $892,800 in the Department of Treasury, $75,000 in the Department of Licensing and Regulation, $19,105,200 in the Department of Mental Health, $15,717,000 in the Department of Corrections, $280,000 in the Department of Education, $1,199,400 in many departments in connection with unclassified positions, $9,668,700 in the Department of Social Services to cover projected deficits in line items by means of projected surpluses in other line items, $94,208,300 in the Department of Social Services to cover projected deficits in Aid to Families with Dependent Children (AFDC), Supplemental Security Income (SSI), and Medicaid with surpluses in other line items, and $63,300,000 in the Department of Social Services by eliminating General Assistance and transferring the funds to Medicaid and SSI.

On May 10, 1991, plaintiffs filed a complaint in the Ingham Circuit Court, challenging the May 9 actions of the State Administrative Board on the grounds that they exceeded the board's statutory authority and violated the state constitution. The complaint sought injunctive relief restraining implementation of the allegedly illegal transfers and a declaratory judgment that the board lacked legal authority to make such transfers. On the same day, counsel for the parties stipulated to the entry of a preliminary injunction restraining implementation of the transfers until May 30, 1991. The circuit court granted an injunction, which by its terms expired on May 24, 1991.

The parties filed cross motions for summary disposition, which were heard by the circuit court on May 20. On May 23, the circuit court granted defendants' motion for summary disposition, finding that plaintiffs, as individual legislators, lacked standing to bring this action, and that their statutory and constitutional challenges to the authority of the board were without merit.

Plaintiffs filed a claim of appeal on May 23, and at the same time filed motions for a stay of proceedings and immediate consideration, arguing that the circuit court had erred on the merits, and that they and the public interest would be irreparably harmed if the resolutions were allowed to take effect. After reviewing defendants' answer, this Court on May 24 issued an order granting the motion for immediate consideration and enjoining the transfer of funds pursuant to the board resolutions until further order. This Court also ordered plaintiffs to file a copy of the transcript of the oral arguments in circuit court and a brief on the merits within seven days, and ordered defendants to respond seven days thereafter.

Defendants filed an emergency application for leave to appeal in the Supreme Court. On May 30, 1991, in lieu of granting leave to appeal, the Supreme Court directed this Court to expedite its consideration of this case and to enter no later than June 6, 1991, a further order on the question whether a stay of proceedings or other injunctive relief is appropriate. Accordingly, on June 6, this Court found that plaintiffs had standing as legislators to bring this action, and that they were entitled to preliminary injunctive relief under the test set out in Michigan State Employees Ass'n v. Dep't of Mental Health, 421 Mich. 152, 157-158, 365 N.W.2d 93 (1984).

Upon further consideration of the parties' briefs ¹ and after hearing oral argument on June 20, this Court reiterates that plaintiffs have standing and holds that the State Administrative Board is without authority to intertransfer funds within departments of state government.

II

The requirement of standing ensures that only those who have a substantial interest in a dispute will be allowed to come into court to complain. Highland Recreation Defense Foundation v. Natural Resources Comm., 180 Mich.App. 324, 328, 446 N.W.2d 895 (1989). Plaintiffs must also show that they will be detrimentally affected by the subject matter of the litigation in a manner different than the citizenry at large. Muskegon Building & Construction Trades v. Muskegon Area Intermediate School Dist., 130 Mich.App. 420, 423-424, 343 N.W.2d 579 (1983).

Plaintiffs argue that the State Administrative Board's former power to intertransfer funds was impliedly repealed by a provision of the Management and Budget Act, M.C.L. Sec. 18.1101 et seq.; M.S.A. Sec. 3.516(101) et seq., under which such intertransfers may only be accomplished by action of the State Budget Director subject to review by the House and Senate Appropriations Committees (see part III below). Plaintiffs Jacobetti and Holmes are the Chairman of the House Appropriations Committee and Vice-Chairman of the Senate Appropriations Committee, respectively. Plaintiffs Dodak and Miller, as the Speaker of the House and the Minority Leader of the Senate, respectively, are instrumental in selecting at least some of the members of the two appropriations committees. Plaintiffs clearly appear to have a substantial interest in the resolution of this issue different than that of the average citizen.

Plaintiffs argue in the alternative that if the State Administrative Board does possess the power to unilaterally intertransfer funds between line-item appropriations within a department of state government, then the statute authorizing such action is unconstitutional because it delegates legislative power to the executive branch without any standards circumscribing that power, and because it conflicts with the Legislature's prerogatives under the 1963 constitution to pass line-item budgets and to override the Governor's line-item vetos. Once again, plaintiffs have clearly asserted substantial interests as legislators different in kind from that of the citizenry at large.

For these reasons, we conclude that plaintiffs have standing to bring the instant action.

Defendants argue that the opposite conclusion is mandated by the decision in Killeen v. Wayne Co. Rd. Comm., 137 Mich.App. 178, 357 N.W.2d 851 (1984). In Killeen, an action was brought by members of the Wayne County Board of Commissioners and the Wayne County Charter Commission, as well as by Senator Hertel in his capacity as a taxpayer residing in Wayne County. The complaint recited that on November 3, 1981, Wayne County voters adopted a new home rule charter, effective January 1, 1983, which created a road commission department to exercise all powers and duties provided by law. On January 7, 1982, the then-existing Board of County Road Commissioners approved a six-year agreement with the Association of Road Commission Administrators, a newly formed labor organization consisting principally of executive, managerial, and supervisory personnel of the Wayne County Road Commission. The plaintiffs sought superintending control and a judgment declaring the agreement null and void as contrary to law and public policy, arguing that recognition of the bargaining unit was a flagrant attempt to circumvent the newly established charter and to insulate certain personnel from action by the newly elected Wayne County Executive. After the circuit court dismissed the complaint on the ground that the plaintiffs lacked standing to sue either as taxpayers or as...