Rayford v. City of Detroit, Docket No. 74531

• Citation: 132 Mich.App. 248,347 N.W.2d 210
• Decision Date: 28 March 1984
• Docket Number: Docket No. 74531
• Parties: Estella RAYFORD and Dorothy M. Woolfolk, Plaintiffs-Appellees, and Detroit Police Officers Association, a Voluntary Labor Organization, pursuant to the Laws of the State of Michigan, Intervening Plaintiff-Appellee, v. CITY OF DETROIT, a municipal corporation, Coleman A. Young, Mayor of the City of Detroit, the Police Department of the City of Detroit, and William L. Hart, Chief of Police of the City of Detroit, Jointly and Severally, Defendants-Appellants.
• Court: Court of Appeal of Michigan (US)

Page 210

347 N.W.2d 210

132 Mich.App. 248

Estella RAYFORD and Dorothy M. Woolfolk, Plaintiffs-Appellees and Detroit Police Officers Association, a Voluntary Labor Organization, pursuant to the Laws of the State of Michigan, Intervening Plaintiff-Appellee, v. CITY OF DETROIT, a municipal corporation, Coleman A. Young Mayor of the City of Detroit, the Police Department of the City of Detroit, and William L. Hart, Chief of Police of the City of Detroit, Jointly and Severally, Defendants-Appellants.

Docket No. 74531.

Court of Appeals of Michigan.

Submitted Dec. 6, 1983.

Decided Feb. 8, 1984.

Released for Publication March 16, 1984.

Rehearing Denied March 28, 1984.

Lawrence R. Green & Associates by Lawrence R. Green, Detroit, for plaintiffs-appellees; Paul Mahinske, Detroit, of counsel.

Walter S. Nussbaum, P.C. by Walter S. Nussbaum, Marcia S. Nussbaum, and Mara Kalnins-Ghafari, Detroit, for intervening plaintiff-appellee.

Donald Pailen, Corporation Counsel; and Honigman, Miller, Schwartz & Cohn by James K. Robinson, Richard S. Soble and Brian D. Figot, Detroit, special counsel to defendant-appellant, for defendants-appellants.

Before T.M. BURNS, P.J., and MacKENZIE and ROBINSON, ^* JJ.

PER CURIAM.

After adoption by the Detroit City Council of the city budget for the fiscal year ending June 30, 1984, the Honorable Coleman Young, Mayor of the City of Detroit faced with an excess of anticipated expenditures over anticipated revenues, and in order to avoid a budget deficit, implemented in late August of 1983 an austerity program which forced the layoff of personnel from various city departments, including 224 police officers. The individual plaintiffs herein are two of those officers. The Detroit Police Officers Association was permitted to intervene as a plaintiff.

The complaints allege that defendant, Mayor Young, implemented an amended budget without submitting such amended budget to the city council as required by law. Defendants characterize the mayor's action as a "savings plan", not a budget amendment.

Plaintiffs moved below for an order requiring the reinstatement of the laid-off officers, charging a violation of the Uniform Budgeting and Accounting Act, M.C.L. Sec. 141.421 et seq.; M.S.A. Sec. 5.3228(21) et seq. Defendants moved for accelerated judgment pursuant to GCR 1963, 116.1(2), (3), (4) and (5), and for summary judgment pursuant to GCR 1963, 117.2(1) and (3). The trial court denied defendants' motions and, treating plaintiffs' motion as one for summary judgment, granted it, on the ground that defendants had violated Section 17 of the Uniform Budgeting and Accounting Act, M.C.L. Sec. 141.437; M.S.A. Sec. 5.3228(37). Defendants' motion for a stay of the trial court's order was denied by this Court and granted by the Michigan Supreme Court on November 4, 1983.

Although the individual plaintiffs claim a different basis for relief than does the intervening plaintiff, both claims come to this Court within the context of the Uniform Budgeting and Accounting Act.

Although defendants' appeal raises a variety of issues, we address only one, as we believe it is dispositive of this suit.

Do plaintiffs have standing, either as city employees or as city taxpayers, to bring this suit?

We think not. The pertinent provisions of the Uniform Budgeting and Accounting Act state:

"Sec. 17. Except as otherwise provided in section 19, a deviation from the original general appropriations act shall not be made without amending the general appropriations act. The legislative body of the local unit shall amend the general appropriations act as soon as it becomes apparent that a deviation from the original general appropriations act is necessary and the amount of the deviation can be determined. An amendment shall indicate each intended alteration in the purpose of each appropriation item affected by the amendment. The legislative body may require that the chief administrative officer or fiscal officer provide it with periodic reports on the financial condition of the local unit. If, during a fiscal year, it appears to the chief administrative officer, or the fiscal officer in local units which have not elected or designated a chief administrative officer, or to the legislative body that the actual and probable revenues from taxes and other sources in a fund are less than the estimated revenues, including an available surplus upon which appropriations from the fund were based and the proceeds from bonds or other obligations issued under the fiscal stabilization act or the balance of the principal of these bonds or other obligations, the chief administrative officer or fiscal officer shall present to the legislative body recommendations which, if adopted, would prevent expenditures from exceeding available revenues for that current fiscal year. The recommendations shall include proposals for reducing appropriations from the fund for budgetary centers in a manner that would cause the total of appropriations to not be greater than the total of revised estimated revenues of the fund, or proposals for measures necessary to provide revenues sufficient to meet expenditures of the fund, or both. The recommendations shall recognize the requirements of state law and the provisions of collective bargaining agreements." M.C.L. Sec. 141.437; M.S.A. Sec. 5.3228(37).

"Sec. 20. A violation of sections 17 to 19 by the chief administrative officer, the fiscal officer, an administrative officer, employee, or member of the legislative body of the local unit disclosed in an audit of the financial records and accounts of the local unit in the absence of reasonable procedures in use by the local unit to detect such violations shall be filed with the state treasurer and reported by the state treasurer to the attorney general. For local and intermediate school districts, the report of a violation shall be filed with the state superintendent of public instruction instead of the state treasurer. The attorney general shall review the report and initiate appropriate action against the chief administrative officer, fiscal officer, administrative officer, employee, or member of the legislative body. For the use and benefit of the local unit, the attorney general or prosecuting attorney may institute a civil action in a court of competent jurisdiction for the recovery of funds of a local unit, disclosed by an examination to have been illegally expended or collected as a result of malfeasance and not accounted for as provided in sections 17 to 19, and for the recovery of public property disclosed to have been converted or misappropriated." M.C.L. Sec. 141.440; M.S.A. Sec. 5.3228(40).

It is assumed, for purposes of this opinion, that the mayor's "savings plan" is in reality an attempt by him to amend the Detroit city budget without council approval.

The substantive purposes of the Uniform Budgeting and Accounting Act, as expressed in its title, are " * * * to provide a uniform budgeting system for local units; and to prohibit deficit spending by a local unit of government".

The mere fact that a statute designates a public official or body as its enforcer does not deprive an individual of a private right of action seeking its enforcement. Pompey v. General Motors Corp., 385 Mich. 537, 557-559, 189 N.W.2d 243 (1971). The test as applied by both the federal and Michigan courts is whether the statute is designed to protect the public or the private sector. If the latter, then generally a private right of action exists. As early as 1916, the federal courts applied the test to find a private right under the Federal Safety Appliance Acts for an injured railroad employee. The purpose of the act, expressed in its title, was "to Promote the Safety of Employees and Travelers".

"A disregard of the command of the statute is a wrongful act, and where it results in damage to one of the class for whose especial benefit the statute was enacted, the right to recover damages from the party in default is implied * * *." Texas & Pacific R Co v. Rigsby, 241 U.S. 33, 39, 36 S.Ct. 482, 484, 60 L.Ed. 874 (1916).

The federal courts have continued to apply the "especial benefit" test in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), where the Court found no private right in a stockholder suing under a criminal statute prohibiting corporations from making expenditures in connection with federal elections; and in Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979), where the Court found an implied private right of action under a federal law prohibiting sex discrimination.

The Cannon Court, as did its predecessors, implied the creation of the private right by looking to the language of the statute which provided "[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program". 441 U.S. 681-682, 99 S.Ct. 1949-1950. (Emphasis added). The Cannon Court further recognized the special benefit test as the threshold factor to be considered among the four factors delineated in Cort, supra. The following comment sheds further light on the Court's reasoning:

"There would be far less reason to infer a private remedy in favor of individual persons if Congress, instead of drafting Title IX with an unmistakable focus on the benefitted class, had written it simply as a ban on discriminatory conduct by recipients of federal funds or as a prohibition against the disbursement of public funds to educational institutions engaged in discriminatory practices." Cannon, supra, pp. 690-693, 99 S.Ct. pp. 1954-1955.

Contrary to the opinion of the learned trial judge, the federal courts have not abandoned the "especial benefit" test as the threshold factor to be considered, in favor of the legislative intent test (the second factor established in Cort, supra ). An examination of the cases relied on by him, i.e., ...