Wayne County Chief Executive v. Governor

• Citation: 230 Mich.App. 258,583 N.W.2d 512
• Decision Date: 09 June 1998
• Docket Number: Docket No. 199290
• Parties: WAYNE COUNTY CHIEF EXECUTIVE and Wayne County, Plaintiffs-Appellants/Cross-Appellees, v. GOVERNOR of the State of Michigan, State Treasurer, State Department of Treasury, Director of the State Department of Management and Budget, State Department of Management and Budget, and State of Michigan, Defendants-Appellees/Cross-Appellants.
• Court: Court of Appeal of Michigan (US)

Page 512

583 N.W.2d 512

230 Mich.App. 258

WAYNE COUNTY CHIEF EXECUTIVE and Wayne County, Plaintiffs-Appellants/Cross-Appellees, v. GOVERNOR of the State of Michigan, State Treasurer, State

Department of Treasury, Director of the State Department of

Management and Budget, State Department of Management and

Budget, and State of Michigan, Defendants-Appellees/Cross-Appellants.

Docket No. 199290.

Court of Appeals of Michigan.

Submitted March 17, 1998, at Lansing.

Decided June 9, 1998, at 9:05 a.m.

Released for Publication Sept. 10, 1998.

Fink Zausmer, P.C. (by David H. Fink, Amy M. Sitner, and Gary K. August), Detroit, for the plaintiffs-appellants/cross-appellees.

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, Thomas C. Nelson and Margaret A. Bartindale, Assistant Attorneys General, for the defendants-appellees/cross-appellants.

Before HOEKSTRA, P.J., and JANSEN and GAGE, JJ.

HOEKSTRA, Judge.

This appeal raises a number of significant issues involved in pursuing an action based on the Headlee Amendment of the Michigan Constitution, Const. 1963, art. 9, §§ 25-34. Resolution of these issues requires that we properly construe the second sentence of § 29 of the Headlee Amendment, which states:

A new activity or service or an increase in the level of any activity or service beyond that required by existing law shall not be required by the legislature or any state agency of units of Local Government, unless a state appropriation is made and disbursed to pay the unit of Local Government for any necessary increased costs.

In this regard, we decide the following three questions of law: first, whether money damages are an available remedy for a violation of the second sentence of § 29 of the Headlee Amendment; second, whether the Court of Claims has subject-matter jurisdiction to hear Headlee Amendment claims; and third, whether the one-year period of limitation set forth at M.C.L. § 600.308a(3); M.S.A. § 27A.308(1)(3) or the three-year period of limitation set forth at M.C.L. § 600.6452(1); M.S.A. § 27A.6452(1) is applicable to a suit brought pursuant to the second sentence of § 29 of the Headlee Amendment.

We hold that money damages are neither a necessary nor proper remedy in a suit in which a violation of the second sentence of § 29 of the Headlee Amendment is established. We further hold that the Court of Claims lacks subject-matter jurisdiction to hear Headlee Amendment claims, because money damages are, at best, an aberrant remedy for a violation of § 29 and the Court of Claims does not have subject-matter jurisdiction absent a claim for money damages. Finally, we hold that because money damages are not an available remedy in a suit brought pursuant to the second sentence of § 29 of the Headlee Amendment, neither the one-year period of limitation set forth atM.C.L. § 600.308a(3); M.S.A. § 27A.308(1)(3) nor the three-year period of limitation set forth at M.C.L. § 600.6452(1); M.S.A. § 27A.6452(1) is applicable to such a suit.

I. FACTS

Between 1988 and 1994, the Governor signed into law a series of bills passed by the Legislature affecting the probate court system. ¹ According to plaintiffs, the acts imposed new requirements on or allowed for new activities beyond those required by existing law. The Wayne County Probate Court apparently implemented the acts on their various effective dates. Plaintiffs alleged that the implementation of the acts caused the court to incur additional administrative and operating expenses, which, in turn, plaintiffs were required to provide because the Legislature had not appropriated or disbursed any funds to pay the necessary costs of the new activities and services.

Positing that the acts violated the second sentence of § 29 of the Headlee Amendment, plaintiffs filed suit in the Court of Claims in September 1995. Plaintiffs sought three remedies: a declaratory judgment defining the parties' respective responsibilities regarding the payment of the implementation costs in light of the Headlee Amendment, a mandatory injunction requiring defendants to provide for the appropriation and distribution of funding for the new activities and services, and money damages to compensate plaintiffs for the total costs incurred in implementing the acts beginning with the fiscal year 1991-92. The parties filed motions for summary disposition on various grounds, but the ultimate decision of the Court of Claims was to dismiss sua sponte plaintiffs' suit for a lack of subject-matter jurisdiction.

II. MONEY DAMAGES

We first address whether a plaintiff in a suit brought pursuant to the second sentence of § 29 of the Headlee Amendment may recover money damages. This case is properly analyzed as a case brought pursuant to the second sentence of § 29 because plaintiffs alleged in their complaint that the acts required the Wayne County Probate Court to implement new activities or services or increase its level of existing activities or services. We address the money damages issue before the subject-matter jurisdiction issue because whether money damages are an available remedy is an inquiry necessarily preceding a determination of whether the Court of Claims has subject-matter jurisdiction.

We review de novo constitutional issues and construction. Kuhn v. Secretary of State, 228 Mich.App. 319, 324, 579 N.W.2d 101 (1998). As our Supreme Court has stated, in order to properly interpret the meaning of the Headlee Amendment, "we must ascertain the intent of the voters who passed [it]." Durant v. State Bd. of Ed., 424 Mich. 364, 378, 381 N.W.2d 662 (1985). The starting point for that inquiry is "the language of the constitution itself." Id. However, the Headlee Amendment does not expressly provide for damages as a remedy. The sole reference in the Headlee Amendment to the remedy contemplated by the Legislature and adopted by the voters is found in § 32, the standing provision of the amendment. Const. 1963, art. 9, § 32. This section states that any taxpayer of the state shall have standing "to enforce" the provisions of the amendment, although the section does not elaborate on the type of enforcement intended.

" 'While intent must be inferred from the language used, it is not the meaning of the particular words only in the abstract or their strictly grammatical construction alone that governs.' " Livingston Co. v. Dep't of Management & Budget, 430 Mich. 635, 643, 425 N.W.2d 65 (1988) (quoting White v. Ann Arbor, 406 Mich. 554, 562, 281 N.W.2d 283 [1979] ). Rather, " '[t]he words are to be applied to the subject matter and to the general scope of the provision, and they are to be considered in light of the general purpose sought to be accomplished or the evil sought to be remedied by the constitution.' " Id. In general, the subject matter of § 29 reflects an effort on the part of the voters to forestall any attempt by the Legislature to shift fiscal responsibility for services to the local government, once state revenues were limited by the Headlee Amendment, in order to save the money the state would have had to appropriate to provide the services itself. Durant, supra at 379, 381 N.W.2d 662. The scope of the section reveals that it was specifically intended to encompass two different injuries. As the great mass of people surely understood from the language of the section, claims brought pursuant to § 29 arise from situations involving one of two harms: either the withdrawal of state financial support where such support of state-mandated local activities was already being provided or the introduction of new local obligations without accompanying and offsetting state appropriations. Livingston, supra at 644, 425 N.W.2d 65.

The bifurcated nature of the Headlee Amendment is derived from its express language. The first sentence of § 29 states that "[t]he state is hereby prohibited from reducing the state financed proportion of the necessary costs of any existing activity or service required of units of Local Government by state law." The second sentence of § 29 states:

A new activity or service or an increase in the level of any activity or service beyond that required by existing law shall not be required by the legislature or any state agency of units of Local Government, unless a state appropriation is made and disbursed to pay the unit of Local Government for any necessary increased costs.

Thus, as a threshold matter, we are persuaded from the subject matter and scope of § 29 that courts should construe the phrase "to enforce" in § 32 differently depending on which sentence of § 29 a claimant invokes.

With regard to the type of enforcement mechanism, we next examine the purpose sought to be accomplished by the second sentence of § 29. In general, the purpose of this sentence of § 29 was to ensure that the state would fund any new activity or service or an increase in the level of any activity or service required by the state. Livingston, supra at 648, 425 N.W.2d 65. The drafters' notes to the amendment state that " '[n]o mandated activity or service should be legally binding on any local unit until the appropriations for such mandated activity or service is made and disbursed to the applicable local units,' " as quoted in Schmidt v. Dep't of Ed., 441 Mich. 236, 257, n. 24, 490 N.W.2d 584 (1992). For this reason, our Supreme Court, albeit in dicta, noted that any perceived "Hobson's choice" between raising taxes or cutting programs is illusory because the local unit of government retains control of its resources and has a "real choice" in whether to offer an unfunded "mandated" program. Id. at 260, n. 28, 490 N.W.2d 584.

Simply put, cases brought pursuant to the second sentence of § 29 address future services or activities. Durant, supra at 379, 381 N.W.2d 662. A plaintiff who brings suit pursuant to the second sentence of § 29 is seeking funding for the future implementation of the newly mandated service or activity. The alleged injury to be remedied is not ...