Wheeler v. Shelby Twp
| Decision Date | 26 May 2005 |
| Docket Number | Docket No. 249116. |
| Citation | 697 N.W.2d 180,265 Mich. App. 657 |
| Parties | Gerald WHEELER, individually and as the representative of a class of persons similarly situated, Plaintiff-Appellant-Cross-Appellee, v. CHARTER TOWNSHIP OF SHELBY and Board of Trustees of Shelby Township, Defendants-Appellees-Cross-Appellants. |
| Court | Court of Appeal of Michigan — District of US |
Ferriby, Houston & Belanger (by Robert L. Ferriby, Jr. and Randall A. Juip), Southfield, for the plaintiff.
Seibert and Dloski, PLLC (by Robert J. Seibert), Mount Clemens, for the defendants.
Before: DONOFRIO, P.J., and MURPHY and BORRELLO, JJ.
Representative plaintiff, a resident of defendant township, commenced this action challenging the constitutionality of the township's Ordinance 211. That ordinance requires single-family residences within the township to use a single waste hauler approved by the township for the disposal of household solid waste and to pay a fee to the hauler for the services. Plaintiff asserted in the circuit court that the fees authorized by the ordinance constituted a tax enacted without voter approval in violation of Const 1963, art 9, § 31, popularly known as the Headlee Amendment, and that defendants' subsequent renewal of its contract with the waste hauler without opening the process to competitive bidding constituted a violation of the Commerce Clause of the United States Constitution, U.S. Const, art I, § 8, cl 3, under the dormant Commerce Clause doctrine. The trial court granted summary disposition in favor of plaintiff with regard to subsections e and f of § 9.126 of the ordinance, finding that these provisions created a tax in violation of the Headlee Amendment. In all other regards, the court upheld the constitutionality of the ordinance and granted summary disposition in favor of defendants. Plaintiff appeals and defendants cross-appeal as of right.
Because the waste hauler fees were fees for services rather than taxes, the imposition of user fees did not offend Const 1963, art 9, § 31. Further, a review of the record reveals that the process defendants employed for selecting a waste hauler regulates commerce evenhandedly and only incidentally and permissibly affects interstate commerce so as to be in accord with U.S. Const, art I, § 8, cl 3. For these reasons, we affirm in part and reverse in part.
On June 3, 1997, defendant township board amended Chapter 9 of its revised code of ordinances by adopting its Ordinance 210 for the purposes of establishing and implementing a program of solid waste collection and disposal by a single designated waste hauler. Section 9.121 of Ordinance 210 directed the township to select the waste hauler and award it an exclusive waste collection and disposal contract with the township by employing a sealed competitive bidding process. This ordinance applied only to single-family residences and duplexes. Defendants advertised for bids for the single hauler waste collection and disposal program. Although six bid packets were picked up by six separate waste haulers, defendants received only four bids. Defendants awarded the contract to the low bidder, Laidlaw Waste Systems of Southfield, Michigan, now known as Great Lakes Waste Services.
On June 11, 1997, defendants entered into a waste collection and disposal contract with Great Lakes. Paragraph 3 of the contract stated that the contract would be in effect for three years and was subject to extension for an additional three-year period at the township's option. Under the terms of the contract, Great Lakes bills each residential customer quarterly for the trash pickup service and the residential customer pays Great Lakes directly. The amount of the collection and disposal fee is set forth in the contract.
On July 1, 1997, the board amended Ordinance 210 by enacting Ordinance 211. Among other changes made to Ordinance 210, the amendment added §§ 9.126 and 9.127 to the Ordinance. Sections 9.126(a) and (b) require the waste hauler to charge fees for the collection and disposal of solid waste, as set forth in the waste collection and disposal contract, and to bill the single family waste "generation sites" on a quarterly basis. Section 9.126(e) authorizes the township to assess, collect, and retain a penalty of three dollars or ten percent of the amount due whenever an invoice mailed by the waste hauler is not paid within five days after the due date. Section 9.126(f) authorizes the township to collect delinquent collection and disposal charges by adding them to the tax bills and by imposing liens against the property of the delinquent residents in the amounts owed. Section 9.127 makes it a misdemeanor to violate any provision of the ordinance and authorizes the imposition of a $500 fine, imprisonment not to exceed ninety days, or both, upon conviction.
On September 19, 2000, defendants renewed the single waste hauler collection and disposal contract with Great Lakes and extended the contract until June 30, 2003.1 Plaintiff subsequently commenced this action. Plaintiff alleged that the various fees authorized by § 9.126 constituted taxes because those fees served a revenue generating purpose and were disproportionate to the value of the benefit provided, and because participation in the trash collection and disposal program and payment of the fees billed were both enforceable through an exercise of the township's police powers. Plaintiff further alleged that the tax imposed by § 9.126 of the ordinance was not approved by a majority of the township electors as mandated by the Headlee Amendment and, therefore, was enacted in violation of the Headlee Amendment, rendering Ordinance 211 unconstitutional. Finally, plaintiff asserted that defendants' act of renewing the contract with Great Lakes without first securing new competitive bids violated the Commerce Clause.
On cross-motions for summary disposition, the trial court concluded that the collection and disposal fee charged by Great Lakes bore a direct and proportional relationship to the benefits provided each residence served and generated no revenue for the township. Therefore, the court found that the fee constituted a permissible user fee not subject to the constraints of the Headlee Amendment. The court found that the lack of any element of volition in the ordinance did not render the fee an impermissible tax where the other criteria otherwise dispositively indicated that the fee was a user fee.
The court did find, however, that the delinquency charges authorized by subsection e of § 9.126 of the ordinance constituted a tax for the purposes of the Headlee Amendment because the township could retain the fees collected and, thereby, raise revenue for the township's general fund. The court then struck down that subsection as unconstitutional because the new tax authorized by the subsection was levied without being subjected to approval of a majority of the township's voting residents. The trial court similarly struck down subsection f of § 9.126 as unconstitutional under the Headlee Amendment.
Finally, the court rejected plaintiff's Commerce Clause claim. The court found that the ordinance neither discriminated against out-of-state waste haulers nor impaired interstate commerce where nothing in the language of the ordinance restricted the awarding of the single waste hauler contract to a Michigan waste hauler and where the contract was awarded on the basis of an open and competitive bidding process. The court further found that plaintiff had failed to provide any authority for the proposition that the renewal of a valid contract violated the Commerce Clause.
Plaintiff moved for summary disposition pursuant to MCR 2.116(C)(9) and (10), while defendants moved for summary disposition pursuant to MCR 2.116(C)(10) only. A motion for summary disposition brought pursuant to MCR 2.116(C)(9) tests the sufficiency of the defendant's pleadings by accepting all well-pleaded allegations as true. Summary disposition under this rule is proper if the defendant fails to raise a valid defense to a claim. "If the defenses asserted are so clearly untenable as a matter of law that no factual development could possible deny the plaintiff's right to recovery," then summary disposition under this rule is proper. Dimondale v. Grable, 240 Mich.App. 553, 564, 618 N.W.2d 23 (2000) (citations deleted).
A motion brought under MCR 2.116(C)(10) requires this Court to review the pleadings, affidavits, and other documentary evidence submitted, make all reasonable inferences therefrom, and determine whether a genuine issue of material fact exists, giving the nonmoving party the benefit of reasonable doubt. Bertrand v. Alan Ford, Inc., 449 Mich. 606, 617-618, 537 N.W.2d 185 (1995); Dimondale, 240 Mich.App. at 566, 618 N.W.2d 23.
This Court reviews de novo decisions to grant summary disposition. Dimondale, 240 Mich.App. at 563, 618 N.W.2d 23. Likewise, this Court reviews de novo constitutional questions, including whether legislative acts violate the Commerce Clause, Wayne Co. v. Hathcock, 471 Mich. 445, 455, 684 N.W.2d 765 (2004); Westlake Transportation, Inc. v. Pub. Service Comm., 255 Mich.App. 589, 619, 662 N.W.2d 784 (2003); Jefferson Smurfit Corp. v. Dep't of Treasury, 248 Mich.App. 271, 277, 639 N.W.2d 269 (2001), as it does questions involving the interpretation of ordinances, Soupal v. Shady View, Inc., 469 Mich. 458, 462, 672 N.W.2d 171 (2003).
Ordinance 211 does not violate § 31 of the Headlee Amendment. Const 1963, art 9, § 31 provides in relevant part:
Units of Local Government are hereby prohibited from levying any tax not authorized by law or charter when this section is ratified ... without the approval of a...
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