Taxpayers for Mich. Constitutional Gov't v. State, 334663

• Decision Date: 29 October 2019
• Docket Number: No. 334663,334663
• Citation: 330 Mich.App. 295,948 N.W.2d 91
• Parties: TAXPAYERS FOR MICHIGAN CONSTITUTIONAL GOVERNMENT, Steve Duchane, Randall Blum, and Sara Kandel, Plaintiffs, v. STATE of Michigan, Department of Technology, Management and Budget and Office of Auditor General, Defendants.
• Court: Court of Appeal of Michigan — District of US

330 Mich.App. 295

948 N.W.2d 91

TAXPAYERS FOR MICHIGAN CONSTITUTIONAL GOVERNMENT, Steve Duchane, Randall Blum, and Sara Kandel, Plaintiffs,

v.STATE of Michigan, Department of Technology, Management and Budget and Office of Auditor General, Defendants.

No. 334663

Court of Appeals of Michigan.

Submitted August 21, 2019, at Lansing.

Decided October 29, 2019, 9:05 a.m.

ON RECONSIDERATION

Shapiro, J. Taxpayer-plaintiffs bring this original action against the state of Michigan; the Department of Technology, Management and Budget; and the Office of Auditor General to enforce § 30 of the Headlee Amendment,¹ which prohibits the state from reducing the total of state spending paid to all units of local government, taken as a whole, below that proportion in effect in fiscal year 1978-1979. Const. 1963, art. 9, § 30. The parties agree that the proportion of state spending to be paid to all units of local government taken collectively under § 30 is 48.97%. They disagree, however, with regard to what categories of state spending may be classified as "state spending paid to all units of Local Government" for purposes of § 30. Plaintiffs allege that accounting practices employed by the state have resulted in a persistent and growing underfunding of its § 30 revenue-sharing obligation. Count I of their complaint asserts that the state has violated § 30 by its practice of classifying as state spending paid to local government those monies paid to school districts pursuant to Proposal A, Const. 1963, art. 9, § 11. Count II makes the same assertion as to monies paid to public school academies (PSAs), colloquially known as charter schools, pursuant to Proposal A and MCL 380.501(1). Count IV seeks a determination that state funds directed to local governments for new state mandates may not be counted toward the proportion of state funds required by § 30. According to plaintiffs, the improper inclusion of these expenditures in its calculations has enabled the state to displace state payments to local governments previously made for existing programs and services and, as a consequence, to force local governments to choose between increasing taxes and fees to fund programs and services previously funded by revenue-sharing payments from the state and reducing the scope of or eliminating altogether those programs and services.²

For the reasons set forth in this opinion, we grant summary disposition in favor of defendants on Counts I and II and declare that the state did not violate § 30 by classifying Proposal A funding paid to school districts and PSA funding as state funds paid to local government. However, we grant summary disposition to plaintiffs on Count IV and declare that pursuant to § 29, funding for new or increased state mandates may not be counted for purposes of § 30. Finally, we grant mandamus relief and direct the state, and its officers and departments, to comply with the reporting and disclosure requirements of MCL 21.235(3) and MCL 21.241.

I. BURDENS OF PROOF

A. CAUSES OF ACTION

Plaintiffs seek declaratory, injunctive, and mandamus relief.³

It is a well-recognized proposition that the remedy required in an action to enforce a provision of the Headlee Amendment "comprises a resolution of the parties' prospective rights and obligations by declaratory judgment." Wayne Cnty. Chief Executive v. Governor , 230 Mich. App. 258, 266, 583 N.W.2d 512 (1998). See also Adair v. Michigan , 470 Mich. 105, 112, 680 N.W.2d 386 (2004) ; Durant v. Michigan , 456 Mich. 175, 204-206, 566 N.W.2d 272 (1997) ; Oakland Cnty. v. State of Michigan , 456 Mich. 144, 166, 566 N.W.2d 616 (1997). "[T]he plaintiff in a declaratory-judgment action bears ‘the burden of establishing the existence of an actual controversy, as well as the burden of showing that ... it has actually been injured or that the threat of imminent injury exists.’ " Adair v. Michigan (On Second Remand) , 279 Mich. App. 507, 514, 760 N.W.2d 544 (2008), aff'd in part and rev'd in part on other grounds 486 Mich. 468, 785 N.W.2d 119 (2010), quoting 22A Am. Jur. 2d, Declaratory Judgments, § 239, p. 788. See also Adair v. Michigan , 486 Mich. 468, 482-483, 785 N.W.2d 119 (2010) (stating that because the plaintiffs met their initial burden of demonstrating a violation of the "prohibition of unfunded mandates" clause of § 29 of the Headlee Amendment, they were entitled to a declaratory judgment unless the state demonstrated that the plaintiff school districts' costs were not increased as a result of the requirements or that the costs incurred were not necessary).

Mandamus is an extraordinary remedy. Univ. Med. Affiliates, P.C. v. Wayne Co. Executive , 142 Mich. App. 135, 142, 369 N.W.2d 277 (1985). Thus, the issuance of a writ of mandamus is only proper when (1) the party seeking the writ has a clear legal right to performance of the specific duty sought, (2) the defendant has a clear legal duty to perform the act requested, (3) the act is ministerial, and (4) no other remedy exists, legal or equitable, that might achieve the same result. Rental Props. Owners Ass'n of Kent Cnty. v. Kent Cnty. Treasurer , 308 Mich. App. 498, 518, 866 N.W.2d 817 (2014). "Within the meaning of the rule of mandamus, a ‘clear, legal right’ is one ‘clearly founded in, or granted by, law; a right which is inferable as a matter of law from uncontroverted facts regardless of the difficulty of the legal question to be decided.’ " Univ. Med. Affiliates , 142 Mich. App. at 143, 369 N.W.2d 277 (citation omitted); see also Rental Props. Owners Ass'n of Kent Cnty. , 308 Mich. App. at 518-519, 866 N.W.2d 817. "A ministerial act is one in which the law prescribes and defines the duty to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment." Hillsdale Cnty. Senior Servs., Inc. v. Hillsdale Cnty. , 494 Mich. 46, 58 n. 11, 832 N.W.2d 728 (2013) (quotation marks and citation omitted); see also Berry v. Garrett , 316 Mich. App. 37, 42, 890 N.W.2d 882 (2016). "The burden of showing entitlement to the extraordinary remedy of a writ of mandamus is on the plaintiff." White-Bey v. Dep't of Corrections , 239 Mich. App. 221, 223, 608 N.W.2d 833 (1999).

The moving party bears the burden of proving an entitlement to injunctive relief. Detroit Fire Fighters Ass'n v. Detroit , 482 Mich. 18, 34, 753 N.W.2d 579 (2008). The moving party carries this burden by proving that the four traditional elements favor the issuance of a preliminary injunction by a preponderance of the evidence. Id. ; Dutch Cookie Machine Co. v. Vande Vrede , 289 Mich. 272, 280, 286 N.W. 612 (1939). In determining whether to issue a preliminary injunction, a trial judge must consider those four elements, which are:

(1) harm to the public interest if the injunction issues; (2) whether harm to the applicant in the absence of temporary relief outweighs the harm to the opposing party if relief is granted; (3) the likelihood that the applicant will prevail on the merits; and (4) a demonstration that the applicant will suffer irreparable injury if the relief is not granted. [ Thermatool Corp. v. Borzym , 227 Mich. App. 366, 376, 575 N.W.2d 334 (1998) ; see also Detroit Fire Fighters Ass'n , 482 Mich. at 34, 753 N.W.2d 579.]

B. SUMMARY DISPOSITION

At the direction of the Court, the parties have filed cross-motions for summary disposition.⁴ Both plaintiffs and defendants seek summary disposition pursuant to MCR 2.116(C)(10). Summary disposition is appropriate under MCR 2.116(C)(10)

when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. The court considers the pleadings, affidavits, depositions, admissions, and other documentary evidence in the light most favorable to the nonmoving party. The moving party must specifically identify the undisputed factual issues and has the initial burden of supporting its position with documentary evidence. The responding party must then present legally admissible evidence to demonstrate that a genuine issue of material fact remains for trial. [ E. R. Zeiler Excavating, Inc. v. Valenti Trobec Chandler Inc. , 270 Mich. App. 639, 644, 717 N.W.2d 370 (2006) (citations omitted).]

Plaintiffs also seek summary disposition pursuant to MCR 2.116(C)(9). Summary disposition may be granted under MCR 2.116(C)(9) when "[t]he opposing party has failed to state a valid defense to the claim asserted against him or her." A motion under this subrule tests the sufficiency of a defendant's pleadings by accepting all well-pleaded allegations as true. Lepp v. Cheboygan Area Sch. , 190 Mich. App. 726, 730, 476 N.W.2d 506 (1991). If the "defenses are ‘so clearly untenable as a matter of law that no factual development could possibly deny plaintiff's right to recovery,’ " then summary disposition under this subrule is proper. Id. (citation omitted).

II. STANDING

Before we can reach the merits of the substantive questions in this case, we must revisit the issue of standing. Defendants challenged plaintiffs' standing to commence this Headlee enforcement action in their answer to plaintiffs' original complaint. We summarily dismissed the standing challenge as it pertained to individual plaintiffs Steve Duchane, Randall Blum, and Sara Kandel, but we reserved our ruling as it pertained to lead plaintiff Taxpayers for Michigan Constitutional Government (TMCG). We explained:

[T]he Court dismisses defendants' standing challenge, but only as to the individual taxpayer plaintiffs, i.e., Duchane, Blum, and Kandel. Under § 32, "[a]ny taxpayer of the state has standing to bring suit to enforce the provisions of the Headlee Amendment." Mahaffey v. Attorney General , 222 Mich. App. 325, 340 [564 N.W.2d 104] (1997). Because all of plaintiffs' claims and requested forms of relief are part of an action seeking to enforce Headlee, the individual taxpayer plaintiffs have § 32 standing.

However, vis-à-vis the lead plaintiff, Taxpayers for Michigan Constitutional Government (TMCG), the

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