Rohde v. Ann Arbor Public Schools

• Decision Date: 25 July 2007
• Docket Number: Calendar No. 4.,Docket No. 128768.
• Parties: Teri ROHDE, Brendon Quilter, Mary Quilter, Walter Mackey, Barbara Mackey, Gary Gibson, Ellen Gibson, Ted Jungkuntz, Loise Jungkuntz, David Sponseller, Mary Sponseller, Mike Gladieux, Martha Gladieux, Helen Rysse, Terry Trombley, John Williams, and Therese Williams, Plaintiffs-Appellants v. ANN ARBOR PUBLIC SCHOOLS a/k/a Public Schools of the City of Ann Arbor Board of Education for Ann Arbor Public Schools, President of the Board of Education for Ann Arbor Public Schools, and Treasurer of the Board of Education for Ann Arbor Public Schools, Defendants-Appellees. and Ann Arbor Education Association, MEA/NEA Intervening Defendant-Appellee.
• Court: Michigan Supreme Court

737 N.W.2d 158

479 Mich. 336

Teri ROHDE, Brendon Quilter, Mary Quilter, Walter Mackey, Barbara Mackey, Gary Gibson, Ellen Gibson, Ted Jungkuntz, Loise Jungkuntz, David Sponseller, Mary Sponseller, Mike Gladieux, Martha Gladieux, Helen Rysse, Terry Trombley, John Williams, and Therese Williams, Plaintiffs-Appellants v. ANN ARBOR PUBLIC SCHOOLS a/k/a Public Schools of the City of Ann Arbor Board of Education for Ann Arbor Public Schools, President of the Board of Education for Ann Arbor Public Schools, and Treasurer of the Board of Education for Ann Arbor Public Schools, Defendants-Appellees. and Ann Arbor Education Association, MEA/NEA Intervening Defendant-Appellee.

Docket No. 128768.

Calendar No. 4.

Supreme Court of Michigan.

Argued January 11, 2007.

Decided July 25, 2007.

Thomas More Law Center (by Patrick T. Gillen), Ann Arbor, for the plaintiffs.

Dykema Gossett P.L.L.C. (by James M. Cameron, Jr., Jill M. Wheaton, and Cara J. Edwards Heflin), Ann Arbor, for the defendants.

Arthur R. Przybylowicz and Theresa J. Alderman, East Lansing, for the intervening defendant.

TAYLOR, C.J.

The first issue in this case is whether a letter sent by a resident taxpayer to a public official that "request[s]" the official "investigate and halt" the use of public funds for illegal purposes is adequate to constitute a "demand" pursuant to MCL 129.61 so as to allow the taxpayer, should the public official not act, to undertake a legal challenge to the expenditure of the public funds. We conclude that a letter that conveys a call to act is sufficient to constitute a demand. Having concluded that the plaintiffs' letters did constitute a demand as contemplated by MCL 129.61, we are required to consider whether plaintiffs have constitutional standing to pursue the lawsuit authorized by the statute. We conclude that they do not and hold that MCL 129.61 is unconstitutional to the extent that it confers standing on taxpayers who do not meet the three-part test for determining whether a party has constitutional standing.

Although we disagree with that part of the Court of Appeals opinion that determined that plaintiffs' letters did not constitute a demand under MCL 129.61, on the basis that the plaintiffs lack constitutional standing to sue, we affirm the lower court judgments that held that plaintiffs could not proceed with their lawsuit.

I. FACTS AND PROCEDURAL HISTORY

Plaintiffs are Ann Arbor public school district taxpayers who brought suit to challenge the school district's expenditure of public funds to provide health insurance benefits to same-sex domestic partners of school employees. Their complaint alleged that the expenditure of public funds for that purpose violates MCL 551.1, which defines marriage to exclude same-sex unions.¹ Before filing their lawsuit, several of the plaintiffs sent identical letters to various school board members and other local and state officials, including the county prosecutor, the Attorney General, and the Governor. Each letter stated:

I[We] write to request that you investigate and halt the use of public funds to provide so-called "domestic partnership" benefits to employees of the Ann Arbor public schools. I[We] believe that the School District's extension of these benefits to its employees exceeds its authority and violates the state law governing marriage. I[We] ask that you halt this illegal use of public funds at your earliest possible convenience.

After the Ann Arbor Education Association, MEA/NEA, intervened as a defendant on behalf of its members, defendants moved for summary disposition pursuant to MCR 2.116(C)(5) (The party asserting the claim lacks the legal capacity to sue.). The trial court granted the motion, determining that plaintiffs failed to bring their suit on behalf of the school district treasurer. The trial court also ruled that plaintiffs' letters failed to comply with the statute in that they did not make a "demand."

Plaintiffs appealed, and the Court of Appeals affirmed in a published opinion.² Although the panel disagreed with the trial court that the plaintiffs had failed to bring suit on behalf of the treasurer, the Court nevertheless affirmed the dismissal of the plaintiffs' lawsuit because it agreed that plaintiffs' requests to the board of education and other governmental officials that they halt the "illegal use of public funds" were insufficient to satisfy the statute's specific-demand requirement.

Plaintiffs filed an application for leave to appeal in this Court. We first ordered oral argument on whether to grant the application or take other peremptory action pursuant MCR 7.302(G)(1), asking the parties to address only the issue of what constitutes an effective demand under MCL 129.61.³ Thereafter, we granted leave to appeal, asking the parties to brief whether plaintiffs had standing.⁴

II. STANDARDS OF REVIEW

We review de novo a grant or denial of summary disposition. Nastal v Henderson & Assoc. Investigations, Inc., 471 Mich. 712, 720, 691 N.W.2d 1 (2005). Whether plaintiffs' letters constituted a "demand" under MCL 129.61 is a matter of statutory interpretation. We review questions of statutory interpretation de novo. Miller v. Miller, 474 Mich. 27, 30, 707 N.W.2d 341 (2005).

III. ANALYSIS OF MCL 129.61

As relevant to the question whether plaintiffs' letters constituted a demand under MCL 129.61,⁵ the statute provides, in relevant part, "Before such suit is instituted a demand shall be made on the public officer, board or commission whose duty it may be to maintain such suit followed by a neglect or refusal to take action in relation thereto."

The Court of Appeals noted that the term "demand" is defined in the Random House Webster's College Dictionary (1997) as "to ask for with proper authority; claim as a right,"⁶ and that the statutory phrase "maintain such suit" indicates that "the purpose of the demand requirement is to inform the appropriate party that legal action is forthcoming." 265 Mich.App. at 710, 698 N.W.2d 402. It then concluded that plaintiffs' letters did not constitute a "demand" because they were "merely a request that the alleged misappropriation stop; they are not a demand for legal action." Id.

We disagree with the Court of Appeals analysis and conclude that plaintiffs' "request" was sufficient to satisfy the statute's "demand" requirement. Indeed, a request that the Attorney General halt something asserted to be illegal can only be reasonably understood, in the context of a demand to the state's top legal officer, as a demand that he or she take steps to stop such actions up to and including bringing a lawsuit. While plaintiffs did not use the word "demand" in their letters, their "request" is properly considered a "demand." Plaintiffs were not required to use the word "demand."⁷ All that is required is a communication that would reasonably be understood as a demand. We agree with plaintiffs that utilization of the more civil, polite term "request" is more likely to secure the desired result of halting an unlawful expenditure than a more provocative "demand." After all, the apparent object of the statute is to halt unlawful expenditures, not to engender litigation.

We reject defendants' claim that the letters were insufficient because they failed to cite the statute. MCL 129.61 includes no requirement that the demand refer to the statute. Defendants also argue that plaintiffs' letters were insufficient to meet the demand requirement because the letters did not request either an accounting or the recovery of the funds expended. MCL 129.61 provides that a taxpayer may file a lawsuit "for an accounting and/or the recovery of funds or moneys misappropriated or unlawfully expended . . . ." The statute, however, does not provide that the taxpayer's preliminary demand must specifically be for an accounting or the recovery of funds.

Defendants further argue that plaintiffs' letters were insufficient to meet the demand requirement because they did not contain a sense of urgency, and plaintiffs did not act upon them by filing a lawsuit until almost three years later. But MCL 129.61 does not require that the demand be made with a "sense of urgency." Plaintiffs requested a halt to the expenditure of public funds "at your earliest possible convenience." This phrase is a request that action be taken as soon as possible. It is sufficient especially because there is no requirement in the statute that the demand convey a sense of urgency.

We also disagree with the Court of Appeals suggestion that MCL 129.61 requires a demand for litigation. The statute provides that before a taxpayer may institute a lawsuit, a demand must be made "on the public officer, board or commission whose duty it may be to maintain such suit" for recovery of unlawfully expended funds. The statute does not expressly require that the demand be for a lawsuit. Further, just because the public body has the ultimate duty to bring a lawsuit if it is needed does not mean that the demand must be for a lawsuit. The taxpayer demand, at a minimum, calls on a conscientious public body to reevaluate whether it is carrying out its duties properly and, in fact, this may result in the public body's acting in compliance with the demand. It may do this by any number of means, only one of which is to enter into litigation. In fact, when the statute uses the phrase "whose duty it may be to maintain such suit" (emphasis added), it recognizes this. Moreover, the statute provides that after a demand, before the taxpayer may bring a suit, a precondition is that the public body must neglect or refuse "to take action in relation thereto." This implies that the public body need not necessarily file suit, only that it needs to take some kind of action relating to the matter.⁸

We therefore conclude that the demand made in this matter was sufficient to satisfy MCL 129.61.

IV. CONSTITUTIONAL STANDING

Having determined that plaintiffs' letters satisfied the requirements of MCL 129.6...