Regents of University of Michigan v. State

• Decision Date: 14 March 1988
• Docket Number: No. 87345,87345
• Citation: 166 Mich.App. 314,45 Ed. Law Rep. 247,419 N.W.2d 773
• Parties: The REGENTS OF the UNIVERSITY OF MICHIGAN, Plaintiff-Appellant and Cross- Appellee, v. The STATE of Michigan, Defendant-Appellee and Cross-Appellant. 166 Mich.App. 314, 419 N.W.2d 773, 45 Ed. Law Rep. 247
• Court: Court of Appeal of Michigan — District of US

Page 773

419 N.W.2d 773

The REGENTS OF the UNIVERSITY OF MICHIGAN Plaintiff-Appellant and Cross- Appellee, v. The STATE of Michigan, Defendant-Appellee and Cross-Appellant.

No. 87345.

166 Mich.App. 314, 419 N.W.2d 773, 45 Ed. Law Rep. 247

Court of Appeals of Michigan.

Submitted June 4, 1987.

Decided Feb. 2, 1988.

Released for Publication March 14, 1988.

[166 MICHAPP 315] Roderick K. Daane, Ann Arbor, for plaintiff-appellant and cross-appellee.

Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., and Gerald F. Young, James E. Riley, and Frank J. Monticello, Asst. Attys. Gen., for defendant-appellee and cross-appellant.

W. Perry Bullard and Virgil Smith, Jr., Lansing, amicus curiae.

[166 MICHAPP 316] Before WALSH, P.J., and CYNAR and TAHVONEN, ^* JJ.

WALSH, Presiding Judge.

Plaintiff, the body corporate known as the Regents of the University of Michigan, appeals from a circuit court order denying its motion for summary judgment under GCR 1963, 117.2(3), now MCR 2.116(C)(10), and granting summary judgment under GCR 1963, 117.2(1), now MCR 2.116(C)(8), to defendant, the State of Michigan. Defendant cross-appeals from a circuit court order denying defendant's motion for partial accelerated judgment. At issue on appeal is the constitutionality of 1982 P.A. 512, which amended the Civil Rights Act (CRA), M.C.L. Sec. 37.2101 et seq.; M.S.A. Sec. 3.548(101) et seq. On cross-appeal, defendant challenges plaintiff's standing to raise certain constitutional challenges to Act 512.

Appearing as amici curiae before this Court are the Board of Governors of Wayne State University; State Representatives Perry Bullard and Virgil Smith, Jr., principal sponsors of Act 512; the Black Student Union of the University of Michigan; the Peace Education Center; the Institute for Global Education; the National Conference of Black Lawyers; the International Union of the United Auto Workers; the National Lawyers Guild; and the American Committee on Africa.

The CRA prohibits discriminatory practices, policies and customs in the exercise of rights based on religion, race, color, national origin, age, sex, height, weight and marital status. Article 4 of CRA addresses the issue of discrimination by educational institutions. M.C.L. Sec. 37.2401 et seq.; M.S.A. Sec. 3.548(401) et seq. Act 512 amended Sec. 402 of Article 4 by adding the requirement that educational [166 MICHAPP 317] institutions, which include public universities, M.C.L. Sec. 37.2401; M.S.A. Sec. 3.548(401), shall not

"(f) Encourage or condone legally required discrimination against an individual on the basis of race or color by knowingly making or maintaining after April 1, 1984, an investment in an organization operating in the republic of South Africa. This subdivision shall not apply to a private educational institution.

"(g) Encourage or condone religious discrimination or ethnic discrimination by knowingly making or maintaining after February 1, 1983, an investment in an organization operating in the Union of Soviet Socialist Republics." M.C.L. Sec. 37.2402; M.S.A. Sec. 3.548(402)." ¹

Plaintiff is the constitutional body corporate known as the Regents of the University of Michigan. Const.1963, art. 8, Sec. 5. The Constitution confers on plaintiff, as it does on the controlling boards of the other institutions of higher education established by Michigan law and authorized to [166 MICHAPP 318] grant baccalaureate degrees, the "general supervision of its institution and the control and direction of all expenditures from the institution's funds." Const.1963, art. 8, Secs. 5 and 6. Candidates for membership on the eight-member Board of Regents are nominated at the state convention of each political party. The regents, whose eight-year terms are staggered, are elected at the state general election. They are subject to recall and to removal by impeachment. Const.1963, art. 8, Sec. 5, M.C.L. Sec. 168.281 et seq.; M.S.A. Sec. 6.1281 et seq.

On July 15, 1983, plaintiff commenced this action seeking a declaratory judgment that Act 512 is unconstitutional. Plaintiff's principal challenge was that Act 512 contravenes Const.1963, art. 8, Sec. 5 in attempting to restrict plaintiff's authority to control and direct expenditures of the university's funds. Attached to plaintiff's complaint was a copy of an April 15, 1983, resolution of the regents whereby, subject to limited exceptions, the chief financial officer of the university was directed to divest the university of its interest in investments in shares of corporate stock and other equities of organizations operating in the Republic of South Africa. ² Also attached to plaintiff's complaint were [166 MICHAPP 319] lists of university investments in companies doing business in the Union of Soviet Socialist Republics and the Republic of South Africa. The market values of such investments as of June 30, 1983, were $17,756,507.90 and $51,636,241.54, respectively. Each of the listed companies doing business in the U.S.S.R. also did business in South Africa. ³ The parties both moved for summary judgment. The circuit court rejected each of plaintiff's challenges to Act 512 and granted summary judgment to defendant. We reverse.

In the Constitution of 1850, provision was first made for the election of regents of the University of Michigan. Const.1850, art. 13, Sec. 6. In addition, in language largely echoed in the 1908 ⁴ and present constitutions, the Constitution of 1850 conferred on the regents "the general supervision of the University, and the direction and control of all expenditures from the university interest fund." Const.1850, art. 13, Sec. 8. The significance of these developments and of the consequent independent nature of the university has been the subject of considerable comment:

"Under the Constitution of 1835, the legislature had the entire control and management of the University and the University fund. They could [166 MICHAPP 320] appoint regents and professors, and establish departments. The University was not a success under this supervision by the legislature, and, as some of the members of the constitutional convention of 1850 said in their debates, 'some of the denominational colleges had more students than did the University.' Such was the condition of affairs when that convention met. It is apparent to any reader of the debates in this convention in regard to the constitutional provision for the University that they had in mind the idea of permanency of location, to place it beyond mere political influence, and to intrust it to those who should be directly responsible and amenable to the people.

* * *

"The result has proved their wisdom, for the University, which was before practically a failure, under the guidance of this constitutional body, known as the 'Board of Regents,' has grown to be one of the most successful, the most complete, and the best-known institutions of learning in the world.

* * *

"Obviously, it was not the intention of the framers of the Constitution to take away from the people the government of this institution. On the contrary, they designed to, and did, provide for its management and control by a body of eight men elected by the people at large. They recognized the necessity that it should be in charge of men elected for long terms, and whose sole official duty it should be to look after its interests, and who should have the opportunity to investigate its needs, and carefully deliberate and determine what things would best promote its usefulness for the benefit of the people. Some of the members of the convention of 1850 referred in the debates to two colleges (one in Virginia and the other in Massachusetts) which had been failures under the management by the State. It is obvious to every intelligent and reflecting mind that such an institution would be safer and more certain of permanent[166 MICHAPP 321] success in the control of such a body than in that of the legislature, composed of 132 members, elected every two years, many of whom would, of necessity, know but little of its needs, and would have little or no time to intelligently investigate and determine the policy essential for the success of a great university." Sterling v. Regents of the University of Michigan, 110 Mich. 369, 374, 377, 379-380, 68 N.W. 253 (1896).

"The respondents are constitutional officers, to whom are confided by the constitution (art. xiii, Sec. 8) 'the general supervision of the university, and the direction and control of all expenditures from the university interest fund.' They are elected by the people. They come at short intervals fresh from the body of the people, and cannot be supposed to be influenced by sentiments not common to those they represent. To their judgment and discretion as a body is committed the supervision of the financial and all other interests of an institution in which all the people of this state have a very great interest." People ex rel. Drake v. Regents of the University of Michigan, 4 Mich. 98, 104 (1856).

"Under the Constitution, the State cannot control the action of the Regents. It cannot add to or take away from its property without the consent of the Regents.

* * *

"Property aggregating in value nearly or quite half a million of dollars has been donated to the University by private individuals. Such property is the property of the University. It is not under the control of the State when it acts through its executive or legislative departments, but of the Regents, who are directly responsible to the people for the execution of their trust. So, when the State appropriates money to the University it passes to the Regents, and becomes the property of the University, to be expended under the exclusive direction [166 MICHAPP 322] of the Regents, and passes beyond the control of the State through its legislative department.

* * *

"The University is the property of the people of the State, and in this sense is State property, so as to be exempt from...