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In the Supreme Court of the United StatesIn the Supreme Court of the United StatesIn the Supreme Court of the United StatesIn the Supreme Court of the United StatesIn the Supreme Court of the United States
RUSSELL BELLANT, et al.,Petitioners,
v.
RICHARD D. SNYDER, et al., Respondents.
On Petition for Writ of Certiorari to theUnited States Court of Appeals for the Sixth Circuit
PETITION FOR WRIT OF CERTIORARI
(Counsel continued on inside cover)
Samuel R. Bagenstos Counsel of Record625 S. State St.Ann Arbor, MI [email protected]
Counsel for Petitioners
Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
NO.
John C. PhiloSUGAR LAW CENTER FORECONOMIC & SOCIAL JUSTICE4605 Cass Ave., 2nd FloorDetroit, MI 48201313-993-4505
Herbert A. SandersTHE SANDERS LAW FIRM P.C.615 Griswold St., Suite 913Detroit, MI 48226313-962-0099
Mark P. FancherMichael J. Steinberg Kary L. MossAMERICAN CIVIL LIBERTIESUNION FUND OF MICHIGAN2966 Woodward Ave.Detroit, MI 48201313-578-6800
Julie H. HurwitzWilliam H. GoodmanNickolas H. KlausGOODMAN AND HURWITZ, P.C.,on behalf of the Michigan Chapterof the National Lawyers Guild1394 E. Jefferson Ave.Detroit, MI 48207313-567-6170
Cynthia HeenanHugh M. DavisCONSTITUTIONAL LITIGATIONASSOCIATES, P.C.450 W. Fort St., Suite 200Detroit, MI 48226313-961-2255
Darius CharneyGhita SchwarzBritney WilsonCENTER FORCONSTITUTIONAL RIGHTS666 Broadway, 7th FloorNew York, NY 10012212-614-6464
i
QUESTION PRESENTED
Whether a law that removes all governmentalauthority from locally-elected officials in municipalitiesthat have disproportionately large minoritypopulations, and thereby denies the residents of thosemunicipalities the ability to elect representatives oftheir choice to govern them, is subject to scrutiny underSection 2 of the Voting Rights Act, 52 U.S.C. § 10301.
ii
PARTIES TO THE PROCEEDING
Russell Bellant, Tawanna Simpson, LamarLemmons, Elena Herrada, Donald Watkins, KermitWilliams, Duane Seats, Juanita Henry, Mary AliceAdams, William Kincaid, Paul Jordan, BernadelJefferson, Dennis Knowles, Jim Holley, Charles E.Williams, Michael A. Owens, Lawrence Glass, DeedeeColeman, and Allyson Abrams, were plaintiffs-appellants in the proceedings below.
Richard D. Snyder, as Governor of the State ofMichigan, and Andrew Dillon, as Treasurer of the Stateof Michigan, were defendants-appellees in theproceedings below.
iii
TABLE OF CONTENTS
QUESTION PRESENTED . . . . . . . . . . . . . . . . . . . . i
PARTIES TO THE PROCEEDING . . . . . . . . . . . . . ii
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . v
OPINIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . . 1
JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RELEVANT STATUTORY PROVISIONS . . . . . . . . 1
STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . 2
REASONS FOR GRANTING THE PETITION . . . 11
A. The Sixth Circuit’s Ruling is Incorrect . . . . . . . 13
1. The Text . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2. The Legislative History . . . . . . . . . . . . . . . . . 15
3. This Court’s Precedent . . . . . . . . . . . . . . . . . 17
B. The Sixth Circuit’s Ruling Creates a CircuitConflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
APPENDIX
Appendix A Opinion in the United States Court ofAppeals for the Sixth Circuit(September 12, 2016) . . . . . . . . . . App. 1
iv
Appendix B Stipulation and Order to DismissCount IV in the United States DistrictCourt, Eastern District of Michigan,Southern Division(October 23, 2015) . . . . . . . . . . . App. 29
Appendix C Order Granting in Part and Denyingin Part Defendants’ Motion to Dismiss(Doc. #41) and Denying Defendants’Motion to Stay Proceedings (Doc. #47)in the United States District Court,Eastern District of Michigan,Southern Division (November 19, 2014) . . . . . . . . . App. 35
Appendix D Order Denying Petition for RehearingEn Banc in the United States Court ofAppeals for the Sixth Circuit(November 1, 2016) . . . . . . . . . . App. 77
Appendix E Local Financial Stability and ChoiceAct [Excerpts] . . . . . . . . . . . . . . . App. 79
v
TABLE OF AUTHORITIES
Cases:
African-American Citizens for Change v. St. Louis Bd. of Police Comm’r, 24 F.3d 1052 (8th Cir.1994) . . . . . . . . . . . . . 23, 25
Ashcroft v. Iqbal, 556 U.S. 662 (2009) . . . . . . . . . . . . . . . . . . . . . . . 3
Chisom v. Roemer, 501 U.S. 380 (1991) . . . . . . . . . . . . . . . . . . . . . . 17
Dep’t of Homeland Security v. MacLean, 135 S. Ct. 913 (2015) . . . . . . . . . . . . . . . . . . . . . 18
Dillard v. Crenshaw County, 831 F.2d 246 (11th Cir. 1987) . . 12, 23, 24, 25, 26
Georgia v. Ashcroft, 539 U.S. 461 (2003) . . . . . . . . . . . . . . . . . . . . . . 14
Holder v. Hall, 512 U.S. 874 (1994) . . . . . . . . . . . . . . . . . . . 19, 20
Irby v. Virginia State Bd. of Elections, 889 F.2d 1352 (4th Cir. 1989) . . . . . . . . . . . 23, 24
Johnson v. De Grandy, 512 U.S. 997 (1994) . . . . . . . . . . . . . . . . . . . . . . 16
League of United Latin Am. Citizens v. Perry, 548 U.S. 399 (2006) . . . . . . . . . . . . . . . . . . . . . . 15
Mixon v. Ohio, 193 F.3d 389 (6th Cir. 1999) . . . . . . . . . . . passim
Presley v. Etowah County Comm’n, 502 U.S. 491 (1992) . . . . . . . . . . . . . . . . . . passim
vi
Reno v. Bossier Parish Sch. Bd., 520 U.S. 471 (1997) . . . . . . . . . . . . . . . . . . . . . . 21
Russello v. United States, 464 U.S. 16 (1983) . . . . . . . . . . . . . . . . . . . . . . . 19
Searcy v. Williams, 656 F.2d 1003 (5th Cir.1981), aff’d, 455 U.S. 984 (1982) . . . . . . . . . . . . . . . . . . . 23, 24
Shelby County v. Holder, 133 S. Ct. 2612 (2013) . . . . . . . . . . . . . . . . . . . . 21
Thornburg v. Gingles, 478 U.S. 30 (1986) . . . . . . . . . . . . . . . . . . . . 15, 20
White v. Regester, 412 U.S. 755 (1973) . . . . . . . . . . . . . . . . . . . . . . 16
Constitutional, Statutory and Regulatory Provisions:
Republican Form of Government Clause, U.S. Const. Art. IV § 4 . . . . . . . . . . . . . . . . . . . . . 9
U.S. Const. amend. XIII . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Const. amend. XIV . . . . . . . . . . . . . . . . . . . 9, 24
28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Voting Rights Act . . . . . . . . . . . . . . . . . . . . . . passim
Section 2, 52 U.S.C. § 10301 . . . . . . . . . . . passim
Section 5, 52 U.S.C. § 10304 . . . . . . . . . . . passim
52 U.S.C. § 10310 . . . . . . . . . . . . . . . . . . . . . . . . 13
52 U.S.C. § 13104 . . . . . . . . . . . . . . . . . . . . . . . . 21
Mich. Const. Art. II § 9 . . . . . . . . . . . . . . . . . . . . . 5, 8
vii
Mich. Public Act 101 of 1988 . . . . . . . . . . . . . . . . . . 3
Mich. Public Act 72 of 1990 . . . . . . . . . . . . . . . 3, 5, 7
§ 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
§ 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Mich. Public Act 4 of 2011 . . . . . . . . . . . . 3, 4, 5, 6, 7
§ 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 7
§ 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Mich. Public Act 436 of 2012 . . . . . . . . . . . . . passim
Mich. Comp. L. § 141.1547 . . . . . . . . . . . . . . . . . 7
Mich. Comp. L. § 141.1549 . . . . . . . . . . 5, 6, 7, 11
Mich. Comp. L. § 141.1552 . . . . . . . . . . . . . . . . . 6
Mich. Comp. L. § 141.1563 . . . . . . . . . . . . . . . 7, 8
Mich. Comp. L. § 141.1574 . . . . . . . . . . . . . . . . . 8
Mich. Comp. L. § 141.1575 . . . . . . . . . . . . . . . . . 8
Other Authorities:
S. Rep. No. 97-417 (1982) . . . . . . . . . . . . . . . . . 15, 16
MICHIGAN CIVIL RIGHTS COMM’N, THE FLINT WATERCRISIS: SYSTEMIC RACISM THROUGH THE LENS OFFLINT (Feb. 17, 2017) . . . . . . . . . . . . . . . . . . . . . 13
Ron Fonger, Emergency Manager Calls CityCouncil’s Flint River Vote “Incomprehensible,” MLIVE, Mar. 24, 2015, http://www.mlive.com/news/flint/index.ssf/2015/03/flint_emergency_manager_calls.html . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1
OPINIONS BELOW
The opinion of the court of appeals is reported at836 F.3d 707 and is reprinted in the appendix (App.) at1-28. The opinion of the district court is reported at2014 WL 6474344. It is reprinted at App. 35-76.
JURISDICTION
The court of appeals entered judgment onSeptember 12, 2016, and denied rehearing en banc onNovember 1, 2016. App. 77. On January 23, 2017,Justice Kagan extended the time to file a petition forcertiorari to March 31, 2017. The petition is filed bythat date. This Court has jurisdiction pursuant to 28U.S.C. § 1254(1).
RELEVANT STATUTORY PROVISIONS
Section 2 of the Voting Rights Act of 1965, asamended in 1982, provides:
(a) No voting qualification or prerequisite tovoting or standard, practice, or procedure shallbe imposed or applied by any State or politicalsubdivision in a manner which results in adenial or abridgement of the right of any citizenof the United States to vote on account of race orcolor, or in contravention of the guarantees setforth in section 10303(f)(2) of this title, asprovided in subsection (b).
(b) A violation of subsection (a) is established if,based on the totality of circumstances, it isshown that the political processes leading tonomination or election in the State or politicalsubdivision are not equally open to participation
2
by members of a class of citizens protected bysubsection (a) in that its members have lessopportunity than other members of theelectorate to participate in the political processand to elect representatives of their choice. Theextent to which members of a protected classhave been elected to office in the State orpolitical subdivision is one circumstance whichmay be considered: Provided, That nothing inthis section establishes a right to have membersof a protected class elected in numbers equal totheir proportion in the population.
52 U.S.C. § 10301.
Relevant provisions of Michigan Public Act 436 of2012 appear in the Appendix.
STATEMENT OF THE CASE
In 2011, the Michigan legislature adopted anemergency manager law that deprived locally-electedofficials in some financially distressed municipalities ofall their governmental powers. In the general electionin November 2012, Michigan’s citizens voted to repealthat law. Nevertheless, in a lame-duck session thefollowing month, the legislature quickly passed—andthe governor quickly signed—a resurrected emergencymanager law. That resurrected law, Public Act 436,once again deprives locally elected officials of allgovernmental power in jurisdictions where thegovernor appoints an emergency manager, therebystripping the voters in those jurisdictions of theirability to elect representatives of their choice to governthem. Although the jurisdictions in which the governorhas invoked the emergency manager law have
3
disproportionately large minority populations whencompared to the rest of the state, the Sixth Circuit heldthat Public Act 436 was not even subject to reviewunder Section 2 of the Voting Rights Act, 52 U.S.C.§ 10301.1
1. Since the 1980s, Michigan has provided for thestate government to intervene in municipalities thatare experiencing financial distress. Under Public Act101 of 1988, and then its replacement Public Act 72 of1990, the state government could appoint an“emergency financial manager” (sometimes referred toas an “EFM”) for such municipalities. As reflected inthe name, “[t]he EFM’s powers extended to matters offinances,” but “local elected officials remained incontrol of administrative and policy matters.” App. 38. Under the 1990 emergency financial manager statute,“the state local financial emergency review boardappointed EFMs in the cities of Benton Harbor, Ecorse,Flint, Hamtramck, Highland Park and Pontiac, as wellas over the Detroit Public Schools.” Id. (As in manystates, public school systems in Michigan constituteseparate municipalities from the counties, cities, andtowns whose students attend their schools.)
After a shift in partisan control in the 2010elections, the Michigan legislature enacted Public Act4 of 2011. “PA 4 repealed PA 72 and converted allEFMs into Emergency Managers (‘EM’), greatlyexpanding the scope of their powers. EMs could act ‘forand in the place of’ the municipality’s elected governing
1 Because the lower courts dismissed this case on the pleadings, allfactual allegations in the complaint must be taken as true. SeeAshcroft v. Iqbal, 556 U.S. 662, 678 (2009).
4
body, including a general grant of legislative power.” App. 38. Under Public Act 4, an emergency manager’spower “extended not only to financial practices andfiscal policy” but to the full array of municipalauthority and governance. Amd. Cplt. ¶ 48. Public Act4 specifically provided that an emergency managerwould “act for and in the place and stead of thegoverning body and the office of chief administrativeofficer of the local government.” Mich. Pub. Act 4 of2011 § 15(4). And the statute specifically barred “thegoverning body and the chief administrative officer ofthe local government” from “exercis[ing] any of thepowers of those offices except as may be specificallyauthorized in writing by the emergency manager.” Id. Even if an emergency manager did authorize thelocally-elected officials to exercise any of their powersof government, the statute emphasized, thatauthorization would always be “subject to anyconditions required by the emergency manager.” Id.
The new law—with its expanded powers for thestate-appointed emergency manager—“was widely seenas a response to a court ruling finding that the DetroitPublic Schools’ School Board, and not the EFM,possessed the power under state law to determine whatcurriculum would be taught and which texts would beused in the city’s public schools. The decision provokedelements of the state legislature who then soughtgreater control over the content of the curriculumtaught in Detroit’s schools.” Amd. Cplt. ¶ 43.
Pursuant to Public Act 4, the governor convertedthe emergency financial managers in Benton Harbor,Ecorse and Pontiac, as well as in the Detroit PublicSchools, to full-fledged emergency managers. And he
5
appointed emergency managers to run the City of Flint,the Highland Park Public Schools, and the MuskegonPublic Schools. App. 38.
As the Sixth Circuit noted, “Michigan citizensdisapproved of PA 4.” App. 5. Following the procedurein Mich. Const. Art. II § 9, over 200,000 Michiganvoters “signed petitions to place a referendum on theballot in 2012 that would reject the law.” App. 5. Byoperation of Michigan law, Public Act 4 “was suspendedas soon as the petitions were certified and placed onthe ballot,” and the prior, more limited, emergencyfinancial manager law, Public Act 72, “thus sprangback into effect.” App. 5. To avoid any lapse incoverage, the state issued new “emergency financialmanager” appointments to all of the individuals whohad been appointed as emergency managers underPublic Act 4. Id.
In the November 2012 election, the voters rejectedPublic Act 4. Id. But the governor and the legislaturedid not back down. In the lame-duck session followingthe election, the legislature quickly passed, and thegovernor quickly signed, Public Act 436 of 2012. Likethe rejected Public Act 4, the new Public Act 436provides for the appointment of an “emergencymanager” rather than simply an emergency financialmanager. Mich. Comp. L. § 141.1549(1). Like therejected Public Act 4, the new Public Act 436 providesthat the emergency manager will “act for and in theplace and stead of the governing body and the office ofchief administrative officer of the local government”;that “the governing body and the chief administrativeofficer of the local government shall not exercise any ofthe powers of those offices except as may be specifically
6
authorized in writing by the emergency manager or asotherwise provided by this act”; and that any exerciseof governmental authority by locally-elected officialswill be “subject to any conditions required by theemergency manager.” Mich. Comp. L. § 141.1549(1).
Public Act 436 thus gives emergency managers allof the powers that had previously been exercised bylocally-elected officials. The statute explicitly providesthat the emergency manager “[e]xercises solely, for andon behalf of the local government, all other authorityand responsibilities of the chief administrative officerand governing body concerning the adoption,amendment, and enforcement of ordinances orresolutions of the local government.” Mich. Comp. L.§ 141.1552(1)(dd). And the statute authorizes theemergency manager to “[t]ake any other action orexercise any power or authority of any officer,employee, department, board, commission, or othersimilar entity of the local government, whether electedor appointed, relating to the operation of the localgovernment.” Mich. Comp. L. § 141.1552(1)(ee). PublicAct 436 emphasizes that “[t]he power of the emergencymanager shall be superior to and supersede the powerof any of the foregoing officers or entities.” Id.
Although Public Act 436 is identical to Public Act 4in the broad power it gives to emergencymanagers—and thus takes away from locally-electedofficials—the resurrected emergency manager lawdiffers from its predecessor in some respects. PublicAct 436 formalizes four options that with the approvalof the governor or state treasurer, a municipality mayrequest when a financial emergency is declared: acceptthe appointment of an emergency manager; negotiate
7
a consent agreement with the state treasurer to avoidappointment of an emergency manager; undergo a“neutral evaluation process” with its creditors; orrequest permission to file for bankruptcy underChapter 9 of the Bankruptcy Code with the governorappointing an individual to represent the municipalityin those proceedings. Mich. Comp. L. § 141.1547(1). Under Public Act 72 and Public Act 4, a municipalitycould negotiate a consent agreement with the statetreasurer to avoid the finding of a financial emergency. Mich. Pub. Act 4 of 2011 § 15 and Mich. Pub. Act 72 of1990 § 14. Under Public Act 72 and Public Act 4, amunicipality could enter Chapter 9 bankruptcy afterthe declaration of a financial emergency and with theconsent of the governor. Mich. Pub. Act 4 of 2011 § 23and Mich. Pub. Act 72 of 1990 § 22. Unlike itspredecessor, Public Act 436 allows the municipality’sgoverning body, by a two-thirds vote, to terminate thereceivership after 18 months. Mich. Comp. L.§ 141.1549(6)(c), (7). But if the governor determinesthat the “financial emergency continues to exist,” themunicipality must undergo the “neutral evaluation”process and, if unsuccessful, the municipality mustproceed with Chapter 9 bankruptcy and the governormay again appoint an individual to represent themunicipality. Mich. Comp. L. § 141.1549(7).
Public Act 436 also gives the governor new powersover local governments after an emergency manager’stenure has come to a close. The law authorizes thegovernor to “appoint a receivership transition advisoryboard to monitor the affairs of the local governmentuntil the receivership is terminated.” Mich. Comp. L.§ 141.1563(1). The transition advisory board(sometimes referred to as a TAB) has broad powers
8
over the financial affairs of the municipality, includingfinal authority to approve budgets, budgetamendments, and collective bargaining agreements. Mich. Comp. L. § 141.1563(5).
Most important, the new emergency manager law,unlike its predecessor, stripped the people of Michiganof the power to challenge it at a referendum. PublicAct 436 accomplished this result by including anappropriation of funds. Although its expressed purposewas to “administer the provisions of this act and to paythe salaries of emergency managers,” Mich. Comp. L.§ 141.1574, and to “provide technical andadministrative support for the department of treasuryto implement this act,” Mich. Comp. L.§ 141.1575(2)(a), the effect of the appropriation—whichthe legislature had found unnecessary in the priormanager law—was to insulate the resurrectedemergency manager law from a new referendum. SeeMich. Const. Art. II § 9 (providing that “[t]he power ofreferendum does not extend to acts makingappropriations for state institutions or to meetdeficiencies in state funds”).
“When PA 436 took effect, emergency managerswere in place in Allen Park, Benton Harbor, Ecorse,Flint, Pontiac, Detroit, the Detroit Public Schools,Highland Public Schools, and Muskegon Heights PublicSchools.” App. 7. At the time this suit was filed, “52%of the State’s African–American population [was] underthe governance of an EM, a consent agreement or aTAB, while only a tiny percentage of the State’sCaucasian population [was] under such governance.” App. 40.
9
2. Petitioners filed this lawsuit in the United StatesDistrict Court for the Eastern District of Michigan onMarch 27, 2013, the day before the resurrectedemergency manager law, PA 436, took effect. Petitioners include numerous voters and electedofficials from Detroit, Pontiac, Benton Harbor, andFlint—jurisdictions then run by state-appointedemergency managers. Amd. Cplt. ¶¶ 7-25. Petitionersalleged, among other claims, that Public Act 436resulted in a denial or abridgment of the right to voteon account of race in violation of Section 2 of the VotingRights Act, 52 U.S.C. § 10301. Amd. Cplt. ¶¶ 162-173. Petitioners alleged “that emergency managers havebeen appointed in a disproportionately high number ofareas with large African American populations, whilepredominantly white municipalities in similar financialdistress do not have an EM imposed by state action.” App. 64.2
The district court dismissed the claim. The courtnoted that Petitioners “do not take issue directly withthe voting system in which local officials are elected”but instead simply “take issue with the fact thatcitizens in municipalities under emergencymanagement have a vote that does not mean anythingsince the officials they elect have no decision-makingauthority.” App. 64. Although the court recognizedthat Public Act 436 made changes in the authority of
2 Petitioners also included claims under the First, Thirteenth, andFourteenth Amendments, as well as the Republican Form ofGovernment Clause of Article IV. The lower courts dismissedthese claims, App. 8-9—the Fourteenth Amendment racediscrimination claim without prejudice based on a stipulateddismissal, App. 29-34—and we do not pursue them here.
10
elected officials that were “dramatic and meaningful,”it concluded that those changes did not relate to “votingstandards, practices, or procedures” and thus were notsubject to any scrutiny under Voting Rights Act Section2. App. 68.
The Sixth Circuit affirmed. The appellate courtheld that Section 2 did not apply to the resurrectedemergency manager law, for two reasons. First, itrelied on prior circuit precedent holding that Section 2does not constrain a state’s decision to change theprocess for filling an office from election toappointment. App. 24 (citing Mixon v. Ohio, 193 F.3d389 (6th Cir. 1999)). Although Public Act 436 does notreplace an elected position with an appointed one butinstead removes all governmental authority fromelected officials in a subset of jurisdictions, the courtfound it “difficult to see” how that distinction made “aVoting Rights Act difference.” Id. Second, the SixthCircuit relied on this Court’s decision in Presley v.Etowah County Commission, 502 U.S. 491 (1992), thatSection 5 of the Voting Rights Act does not reachchanges in the allocation of authority amonggovernment officials. App. 25-26. Without consideringany of the differences in text and structure betweenSection 2 and Section 5, the Court held that the Presleyholding should extend fully to Section 2 cases. Id.
The Sixth Circuit denied a petition for rehearing enbanc. App. 77-78.
11
REASONS FOR GRANTING THE PETITION
When a lame-duck Michigan Legislatureresurrected the emergency manager law after thevoters rejected it in 2012, the result was to depriveelected local officials of any meaningful governancepower in the municipalities in which 52% of the state’sAfrican Americans lived. Amd. Cplt. ¶ 86. By contrast,“only about 2% of Michigan’s white citizens live incommunities governed by an [emergency manager]. PA436 has been applied to multiple municipalities ofdifferent sizes and jurisdictions, and almost all of themare predominantly black.” App. 58. Although theresidents in the municipalities in which the resurrectedlaw was invoked could still go to the polls and castballots for mayors and city councilmembers, thoseelections were a sham. Regardless of the physical actof “electing” purported local representatives, Public Act436 gives all local government powers to an unelectedemergency manager appointed by the governor. SeeMich. Comp. L. § 141.1549(2).
The Flint Water Crisis, in which an emergencymanager had the unilateral power to decide, forfinancial reasons, that the city would use Flint Riverdrinking water rather than continuing to receive cleanLake Huron water, demonstrates the harms ofdepriving accountable local officials of their power. InMarch 2015, the elected members of the Flint CityCouncil, citing mounting evidence of health and safetyharms to city residents, voted to stop using Flint Riverwater and return to using Lake Huron water. But thecity’s appointed emergency manager used his powersunder Public Act 436 to unilaterally overrule that vote. Dismissing the safety concerns, he declared the City
12
Council’s vote “incomprehensible” and refused to stopusing Flint River water.3 As a result, the citycontinued to use Flint River water for nearly sevenmore months, with city residents experiencing leadpoisoning, Legionnaire’s Disease, and other significantharms.
By holding that the resurrected emergency managerlaw did not even implicate the Voting Rights Act, theSixth Circuit made a serious error on a question ofnational importance. Its ruling is at odds with the textand purpose of Section 2 of the Voting Rights Act andconflicts with another circuit court. Relying on its ownprior ruling that Section 2 of the Voting Rights Act didnot reach a state’s decision to fill an office byappointment rather than election, Mixon v. Ohio, 193F.3d 389, 407-08 (6th Cir. 1999), the court concludedthat Michigan’s decision to remove all governmentalpowers midstream from elected officials who remain inoffice in municipalities under emergency managementwas similarly exempt from Section 2 scrutiny. But thatconclusion disregarded the Eleventh Circuit’s holdingthat, even if the decision to fill a position byappointment lies outside of the statute’s ambit, Section2 applies “[o]nce a post is opened to the electorate.” Dillard v. Crenshaw County, 831 F.2d 246, 251 (11thCir. 1987). It also ignored the plain text and legislativehistory of Section 2. And the Sixth Circuit’s reliance onPresley v. Etowah County Commission, 502 U.S. 491,504 (1992), which held that Section 5 of the Voting
3 See Ron Fonger, Emergency Manager Calls City Council’s FlintRiver Vote “Incomprehensible,” M LIVE, Mar. 24, 2015,http://www.mlive.com/news/flint/index.ssf/2015/03/flint_emergency_manager_calls.html.
13
Rights Act generally does not reach reallocations ofauthority among officials, disregarded salientdifferences between Section 5 and Section 2.
The State of Michigan’s own Civil RightsCommission has concluded that “communities of colorhave been starkly overrepresented in jurisdictionsplaced under emergency management.” MICHIGANCIVIL RIGHTS COMM’N, THE FLINT WATER CRISIS:SYSTEMIC RACISM THROUGH THE LENS OF FLINT 109(Feb. 17, 2017).4 The Commission found that PublicAct 436 “exacerbates existing gaps between urban andsuburban communities, and erects additional barriersto narrowing the racial gap.” Id. As applied, theemergency manager law “far too often addresses theproblems of already financially stricken governmentsin second class communities, segregated based on race,wealth and opportunity, by appointing an emergencymanager whose toolbox is filled with short termsolutions that are contrary to the long term interests ofthe people living there.” Id. at 109-110. The SixthCircuit’s holding that this law is entirely exempt fromscrutiny under the Voting Rights Act demands thisCourt’s review.
A. The Sixth Circuit’s Ruling is Incorrect
The Sixth Circuit’s holding contravenes basicprinciples of Section 2 of the Voting Rights Act.
1. The Text—The Voting Rights Act defines “vote” asincluding “all action necessary to make a voteeffective.” 52 U.S.C. § 10310(c)(1). And it provides that
4 https://www.michigan.gov/documents/mdcr/MDCR_Flint_Water_Crisis_Report_552190_7.pdf.
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a violation of Section 2 will be established if, “based onthe totality of circumstances,” members of a racial orlinguistic minority group “have less opportunity thanother members of the electorate to participate in thepolitical process and to elect representatives of theirchoice.” 52 U.S.C. § 10301(b).
Based on the plain text of those provisions, theresurrected emergency manager law should have beensubject to Section 2. Although Public Act 436 leavesthe form of elections intact, “citizens in municipalitiesunder emergency management have a vote that doesnot mean anything,” because “the officials they electhave no decision-making authority.” App. 64. The lawthus “results in a denial or abridgment of the right * ** to vote” of residents of those municipalities, becauseit ensures that those residents “have less opportunitythan other members of the electorate to participate inthe political process and to elect representatives oftheir choice.” 52 U.S.C. § 10301(a), (b).
As this Court has emphasized, “in a representativedemocracy, the very purpose of voting is to delegate tochosen representatives the power to make and passlaws. The ability to exert more control over thatprocess is at the core of exercising political power.” Georgia v. Ashcroft, 539 U.S. 461, 483 (2003),superseded by statute on other grounds, 52 U.S.C.§ 10304(b), (d). And that is precisely the ability thatPublic Act 436 denies to citizens in municipalities withemergency managers. Petitioners should have had theopportunity to prove that this denial or abridgment,which Michigan has applied overwhelmingly to heavilyminority communities, was “on account of race or color”in violation of Section 2. 52 U.S.C. § 10301(a).
15
2. The Legislative History—Congress added the“totality of circumstances” and “participate in thepolitical process” language of Section 2(b) in 1982. Thelegislative history of that amendment demonstratesthat Congress intended for Section 2 to apply to a lawlike Public Act 436.
This Court has explained that the Senate Reportrepresents “the authoritative source for legislativeintent” on the 1982 amendments to Section 2. Thornburg v. Gingles, 478 U.S. 30, 43 n.7 (1986). Seealso League of United Latin Am. Citizens v. Perry, 548U.S. 399, 426 (2006) (looking to the Senate Report tointerpret the “totality of circumstances” language inamended Section 2). That report explained Congress’sview that practices that “operate, designedly orotherwise, to minimize or cancel out the votingstrength and political effectiveness of minority groups,are an impermissible denial of the right to have one’svote fully count, just as much as outright denial ofaccess to the ballot box.” S. Rep. No. 97-417 at 28(1982). The report explained that prior Voting RightsAct cases had “dealt with electoral system featuressuch as at-large elections, majority vote requirementsand districting plans.” Id. at 30. But the report madeclear that Congress intended amended Section 2 toextend more broadly to “practices, which, whileepisodic and not involving permanent structuralbarriers, result in the denial of equal access to anyphase of the electoral process for minority groupmembers.” Id. (emphasis added). The reportemphasized that the amended statute’s requirement ofpolitical processes “equally open to participation,” 52U.S.C. § 10301(b), “extends beyond formal or officialbars to registering and voting, or to maintaining a
16
candidacy.” S. Rep. No. 97-417 at 30. Rather, “thequestion whether the political processes are ‘equallyopen’ depends upon a searching practical evaluation ofthe ‘past and present reality.’” Id. (quoting White v.Regester, 412 U.S. 755, 766, 770 (1973)).
As this legislative history makes clear, the fact thatPublic Act 436 imposes no “formal or official bar[] toregistering and voting,” S. Rep. No. 97-417 at 30, doesnot exempt that statute from review under Section 2. Because the resurrected emergency manager lawremoves all governmental power from local electedofficials in disproportionately minority communities, it“minimize[s] or cancel[s] out the voting strength andpolitical effectiveness” of the voters in thosecommunities. Id. at 28. It is thus subject to Section 2“just as much as outright denial of access to the ballotbox.” Id.
Indeed, this Court, relying on the 1982 SenateReport, has warned against applying “inflexible rule[s]”and “simplification[s]” that would avoid the “totality ofcircumstances” inquiry the statute requires. Johnsonv. De Grandy, 512 U.S. 997, 1018-1019 (1994). As theCourt explained, “[t]he need for such ‘totality’ reviewsprings from the demonstrated ingenuity of state andlocal governments in hobbling minority voting power,a point recognized by Congress when it amended thestatute in 1982: ‘[S]ince the adoption ofthe Voting Rights Act, [some] jurisdictions havesubstantially moved from direct, over[t] impedimentsto the right to vote to more sophisticated devices thatdilute minority voting strength.’” Id. at 1018 (citationsomitted; quoting S. Rep. No. 97-417 at 10). Byexempting Public Act 436 from the Voting Rights Act
17
because that law still allows residents to vote formunicipal officials (at the same time as it takes allgovernmental power away from them), the SixthCircuit’s holding disregards this Court’s warning.
3. This Court’s Precedent—In its two-paragraphdiscussion of the Voting Rights Act claim, the SixthCircuit made no attempt to square its holding with thestatute’s definition of “vote,” with the “totality ofcircumstances” and “participate in the political process”language of Section 2(b), or with the legislative historyof amended Section 2. Instead, the court reliedexclusively on two precedents: the Sixth Circuit’s ownprior decision in Mixon, supra; and this Court’sdecision in Presley, supra. Neither case supports theSixth Circuit’s holding.
Mixon held that Section 2 does not apply to a state’sdecision to select an officer by appointment. 193 F.3dat 407-408. There, the Sixth Circuit relied on dictafrom this Court’s decision in Chisom v. Roemer, 501U.S. 380, 401 (1991), which stated that “Louisianacould, of course, exclude its judiciary from the coverageof the Voting Rights Act by changing to a system inwhich judges are appointed.” But there is afundamental difference between Mixon (and theappointed-judiciary hypothetical in Chisom) and thiscase: Here, Michigan has not chosen to selectmunicipal officers by appointment. Rather, the stateprovides that those officers shall be elected by theresidents of their municipalities—but in a subset ofthose municipalities in which a disproportionatenumber of minorities reside, the state has deprivedthose officers, in the midst of their elected terms ofoffice, of all of their governmental power. By retaining
18
the form of municipal elections, but ensuring that theelections “do[] not mean anything” in the heavilyminority jurisdictions in which the emergency managerlaw has been triggered, App. 64, the state has takenaction that is subject to review under the plain termsof Section 2.
This Court’s decision in Presley, 502 U.S. at 509-510, held that a change in “the allocation of poweramong governmental officials,” was not subject topreclearance under Section 5 of the Voting Rights Act,because it was not a change in a “voting qualification orprerequisite to voting, or standard, practice, orprocedure with respect to voting,” 52 U.S.C. § 10304(a). But Section 2—the portion of the Voting Rights Act atissue here—is very different than Section 5.
One difference between the two sections is textual. Section 5 applies to any “voting qualification orprerequisite to voting, or standard, practice, orprocedure with respect to voting,” 52 U.S.C. § 10304(a)(emphasis added), while Section 2 applies to any“voting qualification or prerequisite to voting orstandard, practice, or procedure,” full stop. 52 U.S.C.§ 10301(a). And Section 5 does not include the “totalityof circumstances” language that Congress added toSection 2 in 1982, 52 U.S.C. § 10301(b). That areallocation of authority is not a change “with respectto voting” under Section 5 does not at control whetherit is a “standard, practice, or procedure” that, in the“totality of circumstances,” denies minority voters anequal opportunity “to participate in the politicalprocess and to elect representatives of their choice” inviolation of Section 2. Id. See Dep’t of HomelandSecurity v. MacLean, 135 S. Ct. 913, 919 (2015)
19
(“[C]ongress generally acts intentionally when it usesparticular language in one section of a statute butomits it in another.”); Russello v. United States, 464U.S. 16, 23 (1983) (“[W]here Congress includesparticular language in one section of a statute butomits it in another section of the same Act, it isgenerally presumed that Congress acts intentionallyand purposely in the disparate inclusion or exclusion.”)(internal quotation marks omitted).
Relying on the plurality opinion in Holder v. Hall,512 U.S. 874, 883 (1994), the Sixth Circuit held thatthe coverage of “§ 5 if anything is broader than § 2.” App. 25. The Sixth Circuit misread Justice Kennedy’splurality opinion in Holder. That opinion explainedthat “the coverage of §§ 2 and 5 is presumed to be thesame (at least if differential coverage would beanomalous),” but that their coverage will sometimes bedifferent, because “the two sections differ in structure,purpose, and application.” Holder, 512 U.S. at 882, 883(plurality opinion).
Although the Court had previously held that achange in the size of an elected body was subject topreclearance under Section 5, the Holder pluralityconcluded that plaintiffs could not maintain achallenge to the existing size of an elected body underSection 2. See id. at 882-885. The difference instructure of the two sections was key to the plurality’sconclusion. Because Section 5 measured whether avoting change led to a retrogression from the status quoante, the statute provided a ready-made “baseline forcomparison”: When making a preclearancedetermination, the Attorney General or the court couldsimply ask whether the change in the size of the
20
elected body made things worse for minority votersthan before the change. Id. at 883-884. But Section 2measures vote dilution, not against a pre-existingpractice, but against a hypothetical benchmark thatmeasures “‘how hard it should be for minority voters toelect their preferred candidates under an acceptablesystem.’” Id. at 880 (quoting Gingles, 478 U.S. at 88(O’Connor, J., concurring in the judgment)). Andwhere plaintiffs challenge the size of a governmentbody under Section 2, “[t]here is no principled reasonwhy one size should be picked over another as thebenchmark for comparison.” Id. at 881.
But the difference in structure between Section 2and Section 5 cuts in exactly the opposite directionhere. The Presley Court refused to hold thatreallocations of authority among officials were changescovered by Section 5, because “[i]nnumerable state andlocal enactments having nothing to do with votingaffect the power of elected officials.” Presley, 502 U.S.at 504. These include “adopt[ing] a new governmentalprogram or modif[ying] an existing one,” “alter[ing] [anelected body’s] internal operating procedures, forexample by modifying its subcommittee assignmentsystem,” and “pass[ing] a budget that differed from theprevious year’s budget.” Id.
If every one of these acts counted as a voting changethat was subject to preclearance under Section 5, thenthe statute would subject “most” if not “all” of the“decisions of government in covered jurisdictions tofederal supervision.” Id. The consequences would besevere: A state or municipality covered by Section 5could not implement any of these sorts of routinechanges in policy and governance without first
21
obtaining preclearance from the Attorney General orthe District Court for the District of Columbia. See 52U.S.C. § 13104. And to obtain preclearance, thejurisdiction would be required to shoulder the burdenof proving that the change was not discriminatory inpurpose or effect. See id. A covered jurisdiction thuswould routinely be forced to expend time andeffort—which would often take “years,” Shelby Countyv. Holder, 133 S. Ct. 2612, 2624 (2013)—before it couldtake almost any action on almost any topic. ThePresley Court held that Congress did not intend toplace such a monumental burden on coveredjurisdictions: “Were the rule otherwise, neither statenor local governments could exercise power in aresponsible manner within a federal system.” Presley,502 U.S. at 507.
But Section 2 is very different. Unlike Section 5,Section 2 does not freeze in place prior rules pendingthe conclusion of proceedings; Section 2 allows a stateor local government to put new rules in place subject tochallenge under ordinary court procedures. And unlikeSection 5, Section 2 does not place the burden ofproving non-discrimination on the state or localgovernment; following the usual rules of civil litigation,Section 2 places on the plaintiff the burden of proof. See Reno v. Bossier Parish Sch. Bd., 520 U.S. 471, 477-480 (1997) (detailing these differences between Section2 and Section 5).
Because of these differences, applying Section 2 toreach reallocations of authority among governmentofficials will have none of the severe consequences thatwould have occurred if this Court had applied Section5 to those reallocations. Plaintiffs could not establish
22
a violation of Section 2—and thus could not stop ajurisdiction from reallocating authority—unless theycould show that, in the “totality of circumstances,” thechallenged action denies minority voters equalopportunity “to participate in the political process andto elect representatives of their choice.” 52 U.S.C.§ 10301(a). The “routine actions of state and localgovernments,” Presley, 502 U.S. at 494, will not, in thetotality of circumstances, lead to such a result. Accordingly, they will not be impaired by theapplication of Section 2. But when a change in theauthority of elected officials does lead to such aresult—as the complete removal of authority effectedby the emergency manager law does—the plain textand legislative history of the Voting Rights Act makesclear that the change violates Section 2.
The Sixth Circuit was wrong to conclude that theSection 5 Presley precedent controls in this Section 2case. Rather, the court should have applied the plainstatutory text and not pretermitted Petitioners’challenge to the resurrected emergency manager law. The Sixth Circuit’s error—with its seriousconsequences for the basic democratic rights andwelfare of the citizens who reside in municipalities inwhich Public Act 436 has been invoked—demands thisCourt’s review.
B. The Sixth Circuit’s Ruling Creates a Circuit Conflict
In holding that the resurrected emergency managerlaw is immune from scrutiny under Section 2 of theVoting Rights Act, the Sixth Circuit relied on itsprevious decision in Mixon, supra. There, the courtrejected a Section 2 challenge to an Ohio statute that
23
transformed the Cleveland School Board from apopularly-elected to a mayorally-appointed body. Id.,193 F.3d at 407-408. The court held that Section 2“does not apply to appointed offices.” Id. at 408. Insupport of that holding, the court relied on cases fromthe Fourth, Fifth, Eighth, and Eleventh Circuits, whichit read as having “determined that Section 2 onlyapplies to elective, not appointive, systems.” Id. at 407(citing African-American Citizens for Change v. St.Louis Bd. of Police Comm’r, 24 F.3d 1052, 1053 (8thCir.1994); Irby v. Virginia State Bd. of Elections, 889F.2d 1352, 1357 (4th Cir. 1989); Dillard v. CrenshawCounty, 831 F.2d 246, 251 (11th Cir.1987); Searcy v.Williams, 656 F.2d 1003, 1010 (5th Cir.1981), aff’d, 455U.S. 984 (1982)).
The Sixth Circuit was correct in its description ofthe Eighth Circuit’s holding in African-AmericanCitizens for Change: That case did indeed concludethat “§ 2 is limited to elected officials” and does notreach a state’s decision to select some officials (there, alocal police commission) by appointment rather thanelection. African-American Citizens for Change, 24F.3d at 1053-1054.
But neither the Fourth nor the Fifth Circuit so held. Although the Fourth Circuit found it “more probablethan not that Section 2 is not applicable to appointiveoffices,” the court expressly declined to decide thatquestion. Irby, 889 F.2d at 1357. Instead, the Irbycourt rejected the plaintiffs’ challenge to Virginia’sappointive system for school boards on the merits—itheld that the plaintiffs had “failed to prove that theappointive system” had “produced discriminatoryresults.” Id. at 1358. See Mixon, 193 F.3d at 407
24
(stating that Irby had “impl[ied], but not h[eld],that Section 2 does not apply to appointive offices”). The Fifth Circuit, too, addressed the issue only in dicta. In Searcy, 656 F.2d at 1009-1010, the court held thatthe plaintiffs had established that the method ofselecting school board members in Thomaston, Georgia,was intentionally discriminatory in violation of theFourteenth Amendment. Although the Fifth Circuitstated, in a single, conclusory sentence, that becausethe case “involved an appointive rather than an electivescheme,” the “district court was correct in holding thatvoting rights did not apply,” id. at 1010, the courtexpressly found it unnecessary to reach the Section 2question. See id. at 1010 (“Because we have held thatthe statute involved in this case has been applied in amanner that violates the Fourteenth Amendment it isunnecessary to consider the appellants’ argumentsbased on the Fifteenth Amendment and the VotingRights Act.”).
And the Eleventh Circuit’s decision in Dillard, farfrom supporting the Sixth Circuit’s holding here,actually conflicts with it. Dillard addressed thequestion whether a proposed county commission planwould comply with Section 2 when five commissionerswould be elected from districts and a sixth, withadditional responsibilities, would be elected at large. The court stated, in dicta, that the county could havechosen to assign those additional responsibilities to anunelected county administrator, who “would by naturebe subject to greater control by the Commission” thanthe single at-large commissioner, and that such aposition “would not be subject to the Voting RightsAct.” Dillard, 831 F.2d at 251 n.12. But, the EleventhCircuit emphasized, Section 2 applies “[o]nce a post is
25
opened to the electorate.” Id. at 251. Because ofracially polarized voting, the commissioner electedfrom one of the five districts would be the only slot forwhich African-American voters had an opportunity toelect the candidate of their choice. See id. at 247-248. By allocating a set of important responsibilities awayfrom the commissioners elected by districts and to theat-large commissioner—whom, because of the county’spersistently polarized voting, African-Americans wouldhave no opportunity to select—the county’s proposalwould, in the Eleventh Circuit’s view, violate Section 2. See id. at 251-253.
The similarities with this case are notable. Unlikethe defendants in Mixon and African-American Citizensfor Change, the State of Michigan has not changed themethod of selecting officials in Petitioners’municipalities from election to appointment. To thecontrary, Michigan has continued to “open[]” selectionof municipal officers “to the electorate,” Dillard, 831F.2d at 251—but it has deprived those officers of anypower. That is, PA 436 allows the governor tounilaterally nullify the governance authority of allelected officials in a municipality, in the midst of theirelected terms of office, and to transfer all of that powerto an emergency manager selected by the governor,who is elected statewide. And unlike the hypotheticalcounty administrator the Eleventh Circuit discussed inDillard, 831 F.2d at 251 n.12, emergency managers inMichigan are not “subject to” any meaningful “control”by local elected officials. The control runs entirely inthe opposite direction. While an emergency managerholds the office, that official has the authority topreempt or override any decision local elected officialshave made in the past or will make during the
26
emergency manager’s reign. The Flint emergencymanager’s veto of a return to Lake Huron waterillustrates the point plainly. See pp. 11-12, supra.
The Sixth Circuit asserted that it was “difficult tosee” why the distinction between selecting officials byappointment and leaving an elected office intact“should make a Voting Rights Act difference.” App. 24. But that very distinction—between making an officeappointive and “open[ing]” it “to the electorate”—is theprecise distinction the Dillard court drew. 831 F.2d at251. The Sixth Circuit’s ruling thus conflicts with theEleventh Circuit’s ruling in Dillard. This Court shouldgrant certiorari to resolve the conflict.
CONCLUSION
The petition for a writ of certiorari should begranted.
27
Cynthia HeenanHugh M. DavisCONSTITUTIONALLITIGATION ASSOCIATES, P.C.450 W. Fort St.Suite 200Detroit, MI 48226313-961-2255
Darius CharneyGhita SchwarzBritney WilsonCENTER FORCONSTITUTIONALRIGHTS666 Broadway, 7th FloorNew York, NY 10012212-614-6464
Mark P. FancherMichael J. Steinberg Kary L. MossAMERICAN CIVILLIBERTIES UNIONFUND OF MICHIGAN2966 Woodward Ave.Detroit, MI 48201313-578-6800
Respectfully submitted.
Samuel R. Bagenstos Counsel of Record625 S. State St.Ann Arbor, MI [email protected]
John C. PhiloSUGAR LAW CENTERFOR ECONOMIC &SOCIAL JUSTICE4605 Cass Ave., 2nd FloorDetroit, MI 48201313-993-4505
Herbert A. SandersTHE SANDERS LAW FIRM P.C.615 Griswold St., Suite 913Detroit, MI 48226313-962-0099
Julie H. HurwitzWilliam H. GoodmanNickolas H. KlausGOODMAN ANDHURWITZ, P.C., on behalf of the Michigan Chapter of theNational Lawyers Guild1394 E. Jefferson Ave.Detroit, MI 48207313-557-6170
Counsel for Petitioners
APPENDIX
i
APPENDIX
TABLE OF CONTENTS
Appendix A Opinion in the United States Court ofAppeals for the Sixth Circuit(September 12, 2016) . . . . . . . . . . App. 1
Appendix B Stipulation and Order to DismissCount IV in the United States DistrictCourt, Eastern District of Michigan,Southern Division(October 23, 2015) . . . . . . . . . . . App. 29
Appendix C Order Granting in Part and Denyingin Part Defendants’ Motion to Dismiss(Doc. #41) and Denying Defendants’Motion to Stay Proceedings (Doc. #47)in the United States District Court,Eastern District of Michigan,Southern Division (November 19, 2014) . . . . . . . . . App. 35
Appendix D Order Denying Petition for RehearingEn Banc in the United States Court ofAppeals for the Sixth Circuit(November 1, 2016) . . . . . . . . . . App. 77
Appendix E Local Financial Stability and ChoiceAct [Excerpts] . . . . . . . . . . . . . . . App. 79
App. 1
APPENDIX A
RECOMMENDED FOR FULL-TEXT PUBLICATIONPursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 16a0228p.06
UNITED STATES COURT OF APPEALSFOR THE SIXTH CIRCUIT
No. 15-2394
[Filed September 12, 2016]_____________________________________________CATHERINE PHILLIPS, et al., )
Plaintiffs, ))
RUSSELL BELLANT; TAWANNA SIMPSON; LAMAR )LEMMONS; ELENA HERRADA; DONALD WATKINS; )KERMIT WILLIAMS; DUANE SEATS; JUANITA )HENRY; MARY ALICE ADAMS; WILLIAM KINCAID; )PAUL JORDAN; BERNADEL JEFFERSON; DENNIS )KNOWLES; JIM HOLLEY; CHARLES E WILLIAMS; )MICHAEL A OWENS; LAWRENCE GLASS; )DEEDEE COLEMAN; ALLYSON ABRAMS, )
Plaintiffs-Appellants, ))
v. ))
RICHARD D. SNYDER; ANDREW DILLON, )Defendants-Appellees. )
____________________________________________ )
App. 2
Appeal from the United States District Courtfor the Eastern District of Michigan at Detroit.
No. 2:13-cv-11370—George C. Steeh, District Judge.
Argued: August 4, 2016
Decided and Filed: September 12, 2016
Before: SUHRHEINRICH, ROGERS, and GRIFFIN,Circuit Judges.
COUNSEL
ARGUED: Herbert A. Sanders, THE SANDERS LAWFIRM, P.C., Detroit, Michigan, John C. Philo, SUGARLAW CENTER FOR ECONOMIC & SOCIALJUSTICE, Detroit, Michigan, Julie H. Hurwitz,GOODMAN AND HURWITZ, P.C., Detroit, Michigan,for Appellants. Ann M. Sherman, OFFICE OF THEMICHIGAN ATTORNEY GENERAL, Lansing,Michigan, for Appellees. ON BRIEF: Herbert A.Sanders, THE SANDERS LAW FIRM, P.C., Detroit,Michigan, John C. Philo, SUGAR LAW CENTER FORECONOMIC & SOCIAL JUSTICE, Detroit, Michigan,Julie H. Hurwitz, William H. Goodman, GOODMANAND HURWITZ, P.C., Detroit, Michigan, Mark P.Fancher, ACLU FUND OF MICHIGAN, Detroit,Michigan, Cynthia Heenan, CONSTITUTIONALLITIGATION ASSOCIATES, P.C., Detroit, Michigan,for Appellants. Ann M. Sherman, OFFICE OF THEMICHIGAN ATTORNEY GENERAL, Lansing,Michigan, for Appellees.
App. 3
_________________
OPINION_________________
ROGERS, Circuit Judge. When the finances of aMichigan municipality or public school system are injeopardy, a state law allows for the temporaryappointment of an emergency manager to right theship. An emergency manager’s powers in pursuing thisend are extensive and arguably displace all of those ofthe local governmental officials. Plaintiffs, voters inareas with emergency managers and local electedofficials in those areas, filed suit and argue that, byvesting elected officials’ powers in appointedindividuals, the law violates their substantive dueprocess right to elect local legislative officials. Usingsimilar reasoning, they argue that the law violates theConstitution’s guarantee, in Article IV, § 4, of arepublican form of government. They assert additionalclaims under the First and Thirteenth amendments aswell as a claim under the Voting Rights Act. Plaintiffsappeal the district court’s dismissal of their claims.Because the relevant constitutional and statutoryprovisions do not support relief for plaintiffs, thedistrict court’s dismissal of the claims was proper.
Michigan has a long history of municipal financialcrises following national and global economicdepressions and recessions. According to plaintiffs’amended complaint, Michigan had the fourth-highestnumber of defaulting municipalities among all statesduring the Great Depression.
In 1988, Michigan developed its own statutoryscheme to deal with municipal insolvency. Public Act
App. 4
101 of 1988 allowed the state to appoint emergencyfinancial managers (EFMs) over cities experiencing afinancial emergency. Two years later, the LocalGovernment Fiscal Responsibility Act, Public Act 72(PA 72), replaced Public Act 101. PA 72 provided for alocal financial emergency review board that wouldappoint an EFM for a local government only after thegovernor declared a financial emergency there.
Under PA 72, the local financial emergency reviewboard appointed several EFMs throughout the state.The board appointed EFMs in the municipalities ofHamtramck, Highland Park, Flint, Pontiac, Ecorse,Benton Harbor, and Village of Three Oaks. The boardalso appointed an EFM for the Detroit Public Schools.Furthermore, under a provision in PA 72 allowing forconsent agreements rather than the appointment of anEFM, the city of River Rouge entered into anagreement with the board.
Michigan repealed PA 72 in 2011 when it passed theLocal Government and School District FiscalAccountability Act, Public Act 4 (PA 4). PA 4 changedthe title of EFMs to “emergency managers” andexpanded the scope of their powers to cover all theconduct of local government. An emergency managerunder PA 4 was allowed to act “for and on behalf of” themunicipality’s elected governing body. See PA 4 § 19(2).After the passage of PA 4, what were PA 72 EFMs inBenton Harbor, Ecorse, Pontiac, and the Detroit PublicSchools were converted to emergency managers underPA 4 and vested with broad power under that statute.There were also new emergency managers appointedunder PA 4 in Flint, the Highland Park Public Schools,and the Muskegon Heights Public Schools.
App. 5
Michigan citizens disapproved of PA 4. Over200,000 citizens signed petitions to place a referendumon the ballot in 2012 that would reject the law. After aninitial challenge to the form of the petitions, thereferendum was placed on the ballot. Pursuant toMichigan law, PA 4 was suspended as soon as thepetitions were certified and placed on the ballot. PA 72thus sprang back into effect on August 8, 2012, the daythe Michigan Board of Canvassers certified thepetitions. State officials then reappointed all PA 4emergency managers as PA 72 EFMs. At the generalelection in November of 2012, Michigan citizensrejected PA 4.
After the referendum on PA 4, Michigan passed anew law, the Local Financial Stability and Choice Act,Public Act 436 (PA 436). PA 436, like PA 4, authorizesthe appointment of emergency managers. Mich. Comp.Laws § 141.1549. EFMs under PA 72 and emergencymanagers under PA 4 were automatically converted toemergency managers under PA 436 when that law tookeffect. § 141.1549(10). Emergency managers under PA436 exercise the power of the local government.§ 141.1549(2). PA 436 also allows the state treasurer tooversee the activities of emergency managers when thegovernor so chooses. § 141.1549(8).
There are eighteen scenarios contained in PA 436that act as triggers for the statute. § 141.1544(1)(a)–(r).If one of those scenarios occurs, the “state financialauthority” (the state treasurer for a municipality, orthe superintendent of public education for a schooldistrict, § 141.1542(u)(i)–(ii)) conducts a preliminaryreview to determine whether a given entity is under“probable financial stress.” § 141.1544(3). The financial
App. 6
authority then turns its final report over to a localemergency financial assistance loan board, which is astatutory entity established by § 141.932. This boardreviews the authority’s report and makes an officialfinding of either probable financial stress or nofinancial stress. § 141.1544(3). If the board reaches aconclusion of probable financial stress for an entity, thegovernor appoints a “review team.” § 141.1544(4), (5).Within sixty days of a review team’s appointment, itmust turn in a report to the governor that reaches aconclusion on whether a financial emergency existswithin the reviewed local government. § 141.1545(3),(4). Within ten days after receiving the review team’sreport, the governor determines whether a financialemergency exists or not. § 141.1546(1). A localgovernment is provided an opportunity to appeal thisdetermination to the Michigan court of claims.§ 141.1546(3).
A local government has four options whenconfronted with a finding of a financial emergency: thelocal government can (1) enter into a consentagreement with the state treasurer; (2) accept theappointment of an emergency manager; (3) undergo aneutral evaluation process, which is akin to arbitration,with its creditors; or (4) enter into Chapter 9bankruptcy. § 141.1547(1)(a)–(d). Giving localgovernments these options is one difference betweenPA 436 and PA 4.
There are other differences between the laws. PA436 contains provisions for removing an emergencymanager after eighteen months of service, and if a localgovernment wishes to have an emergency managerremoved before that emergency manager has served
App. 7
eighteen months, the law provides the localgovernment with a mechanism for petitioning thegovernor to do so. § 141.1549(11). Another newprovision in PA 436 allows the governor to appoint areceivership transition advisory board (TAB) once thefinancial emergency in a given locality has beenrectified. § 141.1563. TABs generally monitor theoperations of the local government and ensure that itis operating in a financially conscious and sound way.Id.
When PA 436 took effect, emergency managers werein place in Allen Park, Benton Harbor, Ecorse, Flint,Pontiac, Detroit, the Detroit Public Schools, HighlandPublic Schools, and Muskegon Heights Public Schools.The city of Hamtramck has since had an emergencymanager placed in control of it, and the emergencymanagers in Ecorse and Pontiac have been replaced byTABs. A TAB replaced Benton Harbor’s emergencymanager and subsequently voted to return the city tolocal control.
Plaintiffs, voters and elected officials from Detroit,Pontiac, Benton Harbor, Flint, and Redford, filed suit.They alleged that PA 436 violates their right to electlocal legislative officials under (1) the Due ProcessClause of the Fourteenth Amendment to the UnitedStates Constitution; (2) the Guarantee Clause of ArticleIV, § 4 of the United States Constitution; (3) theFourteenth Amendment’s Equal Protection Clause byburdening their right to vote and by discriminatingagainst African Americans, the poor, and those entitiesthat had emergency managers under the previous laws;(4) § 2 of the Voting Rights Act (VRA); (5) the FirstAmendment by engaging in viewpoint discrimination
App. 8
and infringing on plaintiffs’ freedom of speech, freedomof association, and right to petition their government;and (6) the Thirteenth Amendment.
The district court held that plaintiffs had Article IIIstanding, reasoning as follows:
Plaintiffs are residents of cities with [emergencymanagers], elected officials of cities or schooldistricts who have actually been displaced by[emergency managers], voters who intend to voteagain in the future, and people who are activelyengaged in the political process at the local levelof government. The harms alleged by plaintiffsare unique as compared to Michigan residentsliving in cities without an [emergency manager].The court notes that the sweeping powers underPA 436 appear much more expansive than thosegiven to receivers in Pennsylvania, wherestanding was not found. See Williams v.Governor of Pennsylvania, 552 Fed. Appx. 158(3rd Cir. 2014). Plaintiffs have already suffered,and continue to suffer, the alleged constitutionaldeprivations, while the residents of Michigancommunities without an [emergency manager]have suffered no such harms. In all instances,the alleged deprivations stem directly from theapplication of PA 436, and it is also true that thealleged injuries will be redressed by a decisionfavorable to plaintiffs.
Phillips v. Snyder, No. 2:13-cv-11370, 2014 WL6474344, at *4 (E.D. Mich. Nov. 19, 2014).
The district court proceeded to dismiss almost all ofplaintiffs’ claims. Id. First, the district court held that
App. 9
the Fourteenth Amendment’s Due Process Clause doesnot contain a fundamental right to elect locallegislators. Id. at *6. With regard to the GuaranteeClause claim, the court held that the Clause does notapply to local governments. Id. Reasoning that theEqual Protection Clause protects the right to vote on anequal footing in a particular jurisdiction, the courtdismissed plaintiffs’ first Equal Protection Clause claimbecause, so limited, the right was not violated. Id. at*8. The court likewise dismissed the Equal Protectionclaim based on wealth discrimination because,according to the court, PA 436 does not restrictplaintiffs’ ability to vote based on their wealth. Id. at*12. The court also held that the final Equal Protectionclaim could not succeed because PA 436 has a rationalbasis for its differential treatment. Id. at *13.
The court held that PA 436 imposed no impedimentto voting that was required to violate § 2 of the VRA,and the court therefore dismissed that claim. Id. at*14-16. The First Amendment Claims failed becausethere were no infringements on speech rights thatresulted from PA 436. Id. at *16-18. The court alsodismissed the Thirteenth Amendment claim, becauseplaintiffs still have available to them what the courtdeemed “every device in the political arsenal.” Id. at*19.
The only claim to survive dismissal was the EqualProtection claim based on discrimination againstAfrican-Americans. Id. at *10-12. In a move thatpermitted the instant appeal to go forward promptly,however, the parties stipulated to a dismissal of thisclaim without prejudice.
App. 10
Plaintiffs filed the present appeal, presenting manyof the same arguments rejected by the district court.The defendants argue that plaintiffs lack standing,that the case is moot, that the Guarantee Clause claimsare not justiciable, and that the district court’sdismissal was correct in all other respects. Althoughthe district court had jurisdiction under Article III,plaintiffs’ constitutional claims are without merit, andthe district court’s dismissal of the claims was proper.1
I.
Most of the plaintiffs have alleged that they, asresidents or elected officials of cities and schooldistricts that have been subjected to emergencymanagers, have already suffered and continue to sufferunique harms that stem directly from the proceduresset forth in PA 436. All but one of the plaintiffs is aresident or an elected official of Detroit, Pontiac,Benton Harbor, Flint, or the Detroit Public Schools.These cities and schools were under emergencymanagers when the plaintiffs filed their amendedcomplaint. These plaintiffs therefore, at least at thattime, allegedly suffered constitutional deprivations andother harms that residents and elected officials of citieswithout emergency managers did not suffer, as
1 Plaintiffs Catherine Phillips, Joseph Valenti, and MichiganAFSCME Council 25 were named in neither the amendedcomplaint in the district court, nor the notice of appeal. Thesethree plaintiffs—parties to the city of Detroit’s bankruptcyproceedings—were named in the original complaint in this case,and the district court did not remove their names from the docketafter the amended complaint was filed. Thus, although the threeplaintiffs were originally included in the official caption of thisappeal, this appears to have been a mistake.
App. 11
explained by the district court. Accordingly, plaintiffssuffered the “concrete and particularized” injuriesrequired for standing, Lujan v. Defenders of Wildlife,504 U.S. 555, 560 (1992), that affect them in personaland individualized ways. This removes plaintiffs’injuries from the realm of generalized grievances. Theinjury was ongoing and thus actual and imminent asopposed to conjectural or hypothetical, thereforesatisfying the second part of the injury inquiry outlinedin Lujan. Id. Further, these alleged deprivations stemdirectly from the application of PA 436 to plaintiffs’cities or schools and would be redressed by a decisionfavorable to plaintiffs. Most of the plaintiffs havetherefore established standing under Article III.2
It is true that the municipalities where plaintiffsreside or are elected officials are not currently governedby an emergency manager. However, the municipalitieswhere most of the plaintiffs reside are currentlygoverned by TABs that have final authority to governthose cities. Plaintiffs have challenged the
2 One plaintiff, however, failed to establish standing. PlaintiffGlass is from Redford and is on the Council of Baptist Pastors ofDetroit. Because he is a Redford resident, his votes for his localofficials have not been affected in any way by an emergencymanager. However, when one party has standing to bring a claim,the identical claims brought by other parties to the same lawsuitare justiciable. Department of Commerce v. U.S. House ofRepresentatives, 525 U.S. 316, 330 (1990); see also Village ofArlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 264 n.9(1977). To the extent that Glass’s arguments do not differ fromthose of the other plaintiffs, his lack of standing does not affect ourability to reach them. To the extent that any of Glass’s argumentsare Redford-specific, his lack of standing prevents us from reachingthem.
App. 12
constitutionality of PA 436 in its entirety, not only theprovisions that allow the Governor to appointemergency managers and that prescribe the authorityof emergency managers. This includes the provisionthat provides for TABs, § 141.1563. Thus, according totheir allegations, plaintiffs are continuing to sufferconstitutional deprivations and other harms as long asPA 436 limits the powers of their local elected officialsin any manner.3 The present case is thereforedistinguishable from Williams v. Corbett, 552 F. App’x158 (3d Cir. 2014), in which the Third Circuit held thatplaintiffs lacked standing because of the need for anumber of contingent events before a future injury, id.at 161–62.
The claims for equitable relief by the plaintiffs fromBenton Harbor and the Detroit Public Schools may bemoot. The defendants point to the fact that the TAB inBenton Harbor has voted to return the city to localcontrol and was dissolved on July 1, 2016. Thedefendants also point out that the Detroit PublicSchools will be dissolved pursuant to recently passedMichigan legislation, and operate under a transitionmanager as of July 1, 2016, until the school board forthe new community district takes office in January2017. However, in line with our resolution of thestanding inquiry, whether the claims of these partiesare moot is itself a moot issue, as their claims are notdistinguishable from those of nonmoot parties whoseclaims we reject today.
3 This also proves that the case presented by these plaintiffs is alive controversy and not moot as the defendants attempt to argue.
App. 13
II.
Plaintiffs’ substantive due process claim, based ontheir asserted right to vote for the individual(s)exercising legislative power at the local level, iscontrary to the Supreme Court’s venerable holding thatstates have “absolute discretion” in allocating powersto their political subdivisions (and therefore to theofficers running those subdivisions), which are“convenient agencies” created by the states. City ofPawhuska v. Pawhuska Oil & Gas Co., 250 U.S. 394,397 (1919); see also Nixon v. Mo. Mun. League, 541 U.S.125, 140 (2004); Tennessee v. FCC, No. 15-3291, 2016WL 4205905, at *10 (6th Cir. Aug. 10, 2016). Moreparticularly, states may allocate the powers ofsubsidiary bodies among elected and non-electedleaders and policy-makers. This power is squarelysupported by Sailors v. Board of Education, 387 U.S.105 (1967). In that case Michigan had established asystem for selecting members of a county school boardthat was “basically appointive rather than elective.”387 U.S. at 109. The Court stated:
Viable local governments may need innovations,numerous combinations of old and new devices,great flexibility in municipal arrangements tomeet changing urban conditions. We see nothingin the Constitution to prevent experimentation.At least as respects nonlegislative officers, aState can appoint local officials or elect them orcombine the elective and appointive systems aswas done here.
Id. at 110–11. Sailors therefore indicates that, giventhe need for states to structure their politicalsubdivisions in innovative ways, there is no
App. 14
fundamental right to have local officials elected.Plaintiffs in the present case assert that Sailors’slimited holding applies to only “nonlegislative” officers,and they argue that Sailors is thereforedistinguishable. But just a few years after Sailors, theCourt indicated in Hadley v. Junior College District ofMetropolitical Kansas City, 397 U.S. 50 (1970), that theSailors holding would also apply to legislative officers,by recognizing the untenability of a line betweenadministrative and legislative officers for the purposesof assessing the constitutionality of a state statutedetermining which persons are to be selected bypopular election to perform governmental functions. Id.at 55–56. Although Hadley was an Equal Protectioncase, the Court rejected the administrative-legislativedistinction and instead characterized the correctconstitutional inquiry as whether an individualengages in “governmental activities.” Id. The Courtfurther stated that the right to vote on an equal basiswith other voters applies “whenever a state or localgovernment decides to select persons by popularelection to perform governmental functions,” id. at 56(emphasis added), which suggests that a state has thepower to decide not to select local officials by election.Together, the cases of Sailors and Hadley lead to theconclusion that there is no fundamental right to havelocal officers exercising governmental functionsselected by popular vote.
Plaintiffs’ main argument supporting its dueprocess claim misinterprets Reynolds v. Sims, 377 U.S.533 (1964). Reynolds stated that “each and everycitizen has an inalienable right to full and effectiveparticipation in the political processes of his State’slegislative bodies.” 377 U.S. at 565. Plaintiffs argue
App. 15
that because their local officials derive their powerfrom the state of Michigan, the local officials composea “state legislative body,” and Reynolds thus stands forthe proposition that there is a fundamental right tovote for local legislative officials. With respect, theargument is meritless. American governments,whether state or federal, have subsidiary agencies thatare led by appointed officials, and which make ordersand regulations that may carry the force of law. See,e.g., United States v. Mead Corp., 533 U.S. 218, 226-27(2001). No federal constitutional provision requires theadministrators or boards that run these agencies to beelected. Suggesting as much would be revolutionary toour way of government, even assuming that agovernment under such a constraint could evenfunction. Further, Reynolds dealt with the election ofthe state legislature of Alabama. The comment inReynolds about “state legislative bodies” obviouslyapplies to state legislatures. Moreover, the issue inReynolds was the principle of one person, one voteunder the Equal Protection Clause. Any asserted rightin Reynolds was in the context of that Clause. Reynoldsthus stands for a right to vote for state legislators onan equal footing with other voters in the state ratherthan a stand-alone right to vote for legislators.4 Equalaccess to the ballot for an elected official simply doesnot imply that certain officials must be elected.
4 Plaintiffs also cite Williams v. Rhodes, 393 U.S. 23 (1968), butthat case dealt with the entirely different issue of theconstitutionality of hurdles facing new parties seeking access to astate gubernatorial ballot. Language plucked from that decisionabout the right to vote can be relevant to this case only in the mostgeneral and abstract sense.
App. 16
Although this court has expressed, in a caseinvolving the voiding of absentee ballots, that “[t]heDue Process [C]lause is implicated . . . in theexceptional case where a state’s voting system isfundamentally unfair,” Warf v. Board of Elections ofGreen County, 619 F.3d 553, 559 (6th Cir. 2010), wehave never held that the Due Process Clause isimplicated when a state decides to appoint localofficials instead of having them be elected. Further, theSixth Circuit cases that plaintiffs cite in this context alladdress whether states’ entire election processesimpaired citizens’ abilities to participate in stateelections on an equal basis with other qualified voters.See Ne. Ohio Coal. for Homeless v. Husted, 696 F.3d580 (6th Cir. 2012); Warf, 619 F.3d 553; League ofWomen Voters of Ohio v. Brunner, 548 F.3d 463 (6thCir. 2008). These cases therefore do not imply, muchless recognize, a fundamental right to have locallegislative officers be elected.
III.
Moreover, the Constitution’s guarantee of arepublican form of government in Article IV does notprovide plaintiffs with a basis for invalidating PA 436.Traditionally, the Supreme Court “has held that claimsbrought under the Guarantee Clause are nonjusticiablepolitical questions.” Padavan v. United States, 82 F.3d23, 28 (2d Cir. 1996) (citations omitted). The doctrinegoes back to Luther v. Borden, 48 U.S. 1 (1849), andwas restated in unqualified fashion in Colegrove v.Green, 328 U.S. 549, 556 (1946), and City of Rome v.United States, 446 U.S. 156, 182 n.17 (1980). In PacificStates Telephone & Telegraph Co. v. Oregon, 223 U.S.118, 141–48 (1912), the Court held not justiciable a
App. 17
Guarantee Clause challenge to a state constitutionalprovision permitting the bypassing of the statelegislature by a voter initiative procedure. In short, itis up to the political branches of the federalgovernment to determine whether a state has met itsfederal constitutional obligation to maintain arepublican form of government. Id. at 147. Thisconclusion disposes of plaintiffs’ Guarantee Clauseclaim.
The Supreme Court more recently—in a challengeto a federal statute—has expressed doubt that allGuarantee Clause challenges are not justiciable, but indoing so did not resolve the issue. New York v. UnitedStates, 505 U.S. 144, 185 (1992). Even assuming that achallenge based on the Guarantee Clause may bejusticiable in some circumstances, we are aware of nocase invalidating the structure of political subdivisionsof states under the Clause. This is not surprising inlight of the Supreme Court’s repeated indication thatstates, not federal courts, should determine thestructure of political subdivisions within a state. TheCourt has recognized that “[h]ow power shall bedistributed by a state among its governmental organs,is commonly, if not always, a question for the stateitself.” Highland Farms Dairy v. Agnew, 300 U.S. 608,612 (1937).
Plaintiffs cite two cases for the contention that theGuarantee Clause applies to allocation of powersamong political subdivisions, but even if these pre-Pacific States cases can be loosely read to contemplatejusticiability, they strongly support the conclusion thatthere is no Guarantee Clause violation here. InAttorney General of Michigan ex rel. Kies v. Lowrey, a
App. 18
Michigan statute allocating property between old andnew school districts was challenged under theContracts Clause, the Due Process Clause, and theGuarantee Clause. 199 U.S. 233, 240 (1905). TheSupreme Court stated flatly:
[T]he grounds all depend ultimately upon thesame arguments. If the legislature of the Statehas the power to create and alter schooldistricts, and divide and apportion the propertyof such district[s], no contract can arise, noproperty of a district can be said to be taken, andthe action of the legislature is compatible with arepublican form of government even if it beadmitted that [Article IV, § 4] of theConstitution . . . applies to the creation of, or [to]the powers or rights of property of, thesubordinate municipalities of a State. We mayomit, therefore, that [S]ection and [A]rticle fromfurther consideration.
Id. at 239 (emphasis added). Forsyth v. City ofHammond, 166 U.S. 506 (1897), an even earlier case,concerned an Indiana statute authorizing theannexation of contiguous territory to the limits of a cityby a court rather than the state legislature. Althoughthe case involved a city’s territory, the GuaranteeClause argument was one of separation of powersbetween the judiciary and the legislature of the stategovernment. Id. at 519. The case says nothing aboutthe republican form of the city. Moreover, with respectto the state separation-of-powers issue, the Courtreasoned that “there is nothing in the federalConstitution to prevent the people of a state fromgiving, if they see fit, full jurisdiction over such matters
App. 19
to the courts and taking it entirely away from thelegislature.” Id. These cases provide no support foreither the justiciability or the validity of a GuaranteeClause challenge to the form of government of apolitical subdivision of a state.
IV.
With regard to the plaintiffs’ claims under theEqual Protection Clause, PA 436 passes rational basisreview. The financial conditions of plaintiffs’ localitiesare the reasons for the appointments of the emergencymanagers. An entity in a distressed financial state cancause harm to its citizenry and the state in general.Improving the financial situation of a distressedlocality undoubtedly is a legitimate legislative purpose,and PA 436, while perhaps not the perfect remedy, isone that is rationally related to that purpose. Theemergency manager’s powers may be vast, but so arethe problems in financially distressed localities, andthe elected officials of those localities are most oftenthe ones who—through the exercise of their powers—led the localities into their difficult situations. Arational relationship to a legitimate governmentalpurpose is all that is required for a law to pass this lowform of scrutiny. See, e.g., Armour v. City ofIndianapolis, 132 S. Ct. 2073, 2080 (2012). PA 436therefore does not violate the Equal Protection Clause.
Plaintiffs also claim that PA 436 violates the EqualProtection Clause by discriminating against entitiesalready having EFMs from PA 72, but this claim lacksmerit. Under § 141.1549(6)(c), an EFM appointedunder PA 72 who was still serving in that capacity atthe time of the Act’s taking effect was deemed to be anemergency manager under PA 436. That individual
App. 20
would then be subject to the eighteen-month provisionin PA 436 and would effectively remain in place longerthan an emergency manager who was appointed for thefirst time under the new law. Id. Plaintiffs argue thatthis treats them in a discriminatory manner. Thisdifferent treatment, however, is justified for thereasons stated by the district court: the eighteen-monthlimitation on removal is rational, because themanagers in place before PA 436 took effect had muchless power under PA 72 than they did under PA 436.Giving these individuals time to adjust to the new,broad powers is a legitimate interest, and giving themthe same eighteen months as other emergencymanagers to work with these powers is rationallyrelated to that interest. Although plaintiffs argue thatthe emergency managers appointed under PA 4—whobecame EFMs when PA 72 sprang back into effect—didnot change any of their practices after the referendum,this fact if accurate does not affect the rationality of adistinction based on their power to change theirpractices. Whether those managers violated PA 72 byoverstepping their statutory powers is also not relevantto the rationality of the distinction. The district court’sdismissal of this claim was therefore correct.
There is, moreover, no basis for applying scrutinystricter than rational basis review. The plaintiffs arguefor stricter scrutiny on the theory that PA 436 violatesthe Equal Protection Clause by denying their right tovote and by conditioning their vote on wealth.However, neither of these theories requires that PA436 be subjected to higher scrutiny.
Right to Vote. PA 436 does not impair plaintiffs’right to vote under the Equal Protection Clause.
App. 21
Plaintiffs are still provided a vote. PA 436 does notremove local elected officials; it simply vests the powersof the local government in an emergency manager.Plaintiffs argue, however, that as a practical matterthey are unable to elect the people exercising locallegislative power while individuals in areas withoutemergency managers have the ability to do so. ButEqual Protection close scrutiny has not been appliedbeyond the right to vote on an equal footing with othercitizens in a given jurisdiction, in cases such as Dunnv. Blumstein, 405 U.S. 330, 336 (1972), which involvedresidency duration requirements for voting. Inparticular, in cases where the issue is whether anelection is required in the first place, the Court hasdeclined to apply close scrutiny. For instance, inRodriguez v. Popular Democratic Party, 457 U.S. 1, 10(1982), the Court rejected a challenge to a procedurewhereby vacancies in the Puerto Rico legislature couldbe filled on an interim basis by political parties. TheCourt reasoned that “[t]he right to vote, per se, is not aconstitutionally protected right,” and that theConstitution does not “compel[] a fixed method ofchoosing state or local officers or representatives.” Id.at 9 (citation and internal quotation marks omitted).The Court further explained:
To be sure, when a state or the Commonwealthof Puerto Rico has provided that itsrepresentatives be elected, “a citizen has aconstitutionally protected right to participate inelections on an equal basis with other citizens inthe jurisdiction.” Dunn v. Blumstein, 405 U.S.330, 336 (1972). See Kramer v. Union FreeSchool District, 395 U.S. 621, 626–629 (1969);Gray v. Sanders, 372 U.S. 368, 379–380 (1963).
App. 22
However, the Puerto Rico statute at issue heredoes not restrict access to the electoral processor afford unequal treatment to different classesof voters or political parties. All qualified votershave an equal opportunity to select a districtrepresentative in the general election; and theinterim appointment provision applies uniformlyto all legislative vacancies, whenever they arise.
Id. at 10. A similar distinction applies here. Plaintiffshave not shown that they have been denied the right tovote on equal footing within their respectivejurisdictions. Individuals in jurisdictions withoutemergency managers are not relevant to the protectedright. In short, geographical or other distinctionsregarding the allocation of responsibilities amongelected and appointed bodies must have a rationalbasis, but if they do, there is no basis for stricterscrutiny if there is equal access to the ballot withrespect to voting for the elected bodies.
Wealth. Plaintiffs claim that the distinctionsbetween communities with and without emergencymanagers are based on race, but plaintiffs havevoluntarily dismissed that claim. They instead arguefor stricter scrutiny based on wealth discrimination.Such a claim, however, does not require scrutiny anycloser than rational basis scrutiny. Plaintiffs arguethat the financial condition of a local government—thebasis for an emergency manager appointment—is thesame as the wealth of the people who reside in thatgovernment’s area. This is factually and logicallyincorrect. The solvency of a local government is theresult of the management of the finances of thatgovernment. Although solvency may correlate with the
App. 23
wealth of a locality’s residents, solvency and wealth areseparate concepts. Indeed, it is possible for a localitywith wealthy residents to become insolvent and subjectto PA 436.
In any event, a legal distinction among politicalsubdivisions that ultimately affects people differentlybased on wealth does not—without the involvement ofsome other fundamental right or suspect category—implicate closer scrutiny than rational basis review.This conclusion is clearly required by the SupremeCourt’s holding in San Antonio Independent SchoolDistrict v. Rodriguez, 411 U.S. 1 (1973). The SupremeCourt in that case rejected the application of strictscrutiny to Texas’s system of local-property-basedfinancing of public education, and in particular a claimbased on “district wealth discrimination,” reasoning inpart:
[I]t is clear that appellees’ suit asks this Court toextend its most exacting scrutiny to review asystem that allegedly discriminates against alarge, diverse, and amorphous class, unified onlyby the common factor of residence in districtsthat happen to have less taxable wealth thanother districts. The system of allegeddiscrimination and the class it defines have noneof the traditional indicia of suspectness: theclass is not saddled with such disabilities, orsubjected to such a history of purposeful unequaltreatment, or relegated to such a position ofpolitical powerlessness as to commandextraordinary protection from the majoritarianpolitical process.
App. 24
Id. at 28 (footnote omitted). This reasoning disposes ofany wealth-based discrimination argument for strictscrutiny in this case.
V.
PA 436 also does not violate § 2 of the Voting RightsAct (VRA). In making their VRA claim, plaintiffsattempt to fit a square peg into a round hole. Section 2states that “[n]o voting qualification or prerequisite tovoting or standard, practice, or procedure shall beimposed or applied . . . which results in a denial orabridgement of the right of any citizen . . . to vote onaccount of race or color.” 52 U.S.C. § 10301(a).Plaintiffs argue that the emergency manager provisiondenies their right to vote. Mixon v. Ohio, however, heldthat § 2 of the VRA does not cover appointive systems.193 F.3d 389, 407–08 (6th Cir. 1999). Mixon involvedthe Cleveland School District’s changing the selectionof the Cleveland School Board from an elective systemto an appointive one. Id. at 394. The Court stated thatallowing § 2 challenges to states’ choices betweenelective and appointive systems would be aninterpretation that would “reach[] too far.” Id. at 408.Mixon is analogous to the present case. In enacting PA436, Michigan made a choice between allocating certainpowers to appointed individuals rather than electedones. Thus, § 2 does not provide plaintiffs an avenue forrecovery, and the district court correctly dismissed thisclaim. Plaintiffs argue that Mixon is distinguishablebecause, in that case, a statute changed the process forselecting school board members, while the electiveoffice in the present case remains intact. It is difficultto see why this distinction should make a Voting RightsAct difference.
App. 25
Presley v. Etowah County Commission, 502 U.S.491, 504 (1992), also supports dismissing plaintiffs’claim under VRA § 2. In Presley, the Court employed a“direct relation to voting” test to determine when achange in a standard, practice, or procedure falls underVRA § 5. Id. at 506. “Changes which affect only thedistribution of power among officials” and “delegat[e]. . . authority to an appointed official” fail this test, andthe VRA therefore does not cover them. Id. at 506, 507.Plaintiffs correctly note that there is a difference inscope between § 5 and § 2. See Holder v. Hall, 512 U.S.874, 882 (1994) (plurality opinion). Although Presleydealt with a § 5 claim, its reasoning applies a fortiori tothe § 2 claim here. First, the § 5 language that theSupreme Court focused upon in Presley was “votingqualification or prerequisite to voting, or standard,practice, or procedure with respect to voting,” languageindistinguishable from that of § 2 (“voting qualificationor prerequisite to voting, or standard, practice, orprocedure . . . [resulting] in a denial or abridgement ofthe right . . . to vote . . .”). The Holder Court, indistinguishing § 2 and § 5, held that “we do not thinkthat the fact that a change in a voting practice must beprecleared under § 5 necessarily means that the votingpractice is subject to challenge in a dilution suit under§ 2.” Id. at 883. In other words, for purposes ofinterpreting these words, § 5 if anything is broaderthan § 2.5 And while Presley did contemplate that a “defacto replacement of an elective office with anappointive one” was not within its holding, id. at 508,
5 We recognize, of course, that in other respects § 5 is narrowerthan § 2. See Reno v. Bossier Parish School Bd., 520 U.S. 471,478–79 (1997).
App. 26
plaintiffs agree that there was no replacement of anelective office with an appointive one in this case. Theirelected officials still retain some (although limited)powers under PA 436. Presley thus supports theapplicability of our Mixon holding in this case: VRA § 2does not apply, because this is not a case involving avoting qualification or prerequisite to voting orstandard, practice, or procedure resulting in the denialof a right to vote.
VI.
Turning to the First Amendment claims, theenactment of PA 436 was not an instance of viewpointdiscrimination against plaintiffs. Plaintiffs, along witha significant number of Michigan voters, indeed votedto repeal PA 4. The legislature then enacted PA 436, alaw that plaintiffs admit is different from PA 4.Because plaintiffs admit that PA 436 is different, theanalysis need not go any further. Furthermore,Michigan would have been allowed to pass PA 436 evenif it were identical to PA 4. See Michigan Farm Bureauv. Hare, 151 N.W.2d 797, 802 (Mich. 1967). In anyevent, the fact that a legislature passes new legislationsimilar in import to legislation previously vetoed byreferendum does not restrict the expression of one’sviewpoint. The legislature either had the power torepass similar legislation or it did not. No one’s abilityto express views was infringed.
Nothing in PA 436 abridges plaintiffs’ rights tofreedom of speech and to freedom of association. Aremoval or modification of government power canhardly be equated to a restriction on speech. If it were,all reallocations of the legislative powers of politicalsubdivisions would be subject to heightened scrutiny
App. 27
under the First Amendment—an entirelyunprecedented and anomalous result.
This reasoning would apply regardless of whetherthe plaintiff elected officials were left with nogovernmental power, but that is not even the case.Local officials under PA 436 may, by a two-thirds vote,petition for removal of an emergency manager beforethe emergency manager has served for eighteenmonths. Mich. Comp. Laws § 141.1549(11).Furthermore, after the emergency manager has servedfor eighteen months, the same two-thirds vote of thelocal government removes the emergency manager.§ 141.1549(6)(c). PA 436 also presents local governmentofficials in a financial emergency with four options, andonly one of those options is the appointment of anemergency manager. This suggests that local officialsare generally still empowered to act under PA 436.Citizens are still able to advocate for the removal of theemergency manager, and the decision to appoint anemergency manager can be appealed under PA 436.Citizens are also able to vote out their local officialswho got them into the financial emergency, the statelegislators who enacted PA 436, and the governor whoappointed an emergency manager.
PA 436 therefore does not abridge plaintiffs’ FirstAmendment rights.
VII.
Plaintiffs’ final claim, resting on the ThirteenthAmendment, though eloquently presented at oralargument, is without merit. PA 436’s focus on financialemergencies makes this case similar to City ofMemphis v. Greene, 451 U.S. 100 (1981). That case
App. 28
involved the closure of a street in Memphis thatallegedly had the effect of segregating races within thecity. Id. at 102. However, the Court decided that thisaction did not violate the Thirteenth Amendment as a“badge or incident of slavery,” because “a regulation’sadverse impact on a particular neighborhood will oftenhave a disparate effect on an identifiable ethnic orracial group” due to urban neighborhoods’ being often“characterized by a common ethnic or racial heritage.”Id. at 128. Similarly here, PA 436 looks to the financialhealth (or lack thereof) of municipalities. Plaintiffs donot challenge the label of “financial emergency” beingattached to their localities. There is no sufficientlydirect connection to race in PA 436 that could amountto something, in the words of the Supreme Court inGreene, “comparable to the odious practice theThirteenth Amendment was designed to eradicate.” Id.Plaintiffs cite no case law that brings their factsanywhere near the prohibitions of the ThirteenthAmendment. The state’s remedy for financiallyendangered communities—passed by state-electedbodies for which African-Americans have aconstitutionally protected equal right to vote, andfacially entirely neutral with respect to race—are farremoved from being a “badge” of the extraordinary evilof slavery.
VIII.
The district court’s dismissal of plaintiffs’ claims isaccordingly affirmed.
App. 29
APPENDIX B
UNITED STATES DISTRICT COURTEASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
No. 2:13-cv-11370
[Filed October 23, 2015]_____________________________________________Russ Bellant, Detroit Library Commissioner; )Tawanna Simpson, Lamar Lemmons, Elena )Herrada, Detroit Public Schools Board )Members; Donald Watkins, and Kermit )Williams, Pontiac City Council Members; )Duane Seats, Dennis Knowles, Juanita Henry, )and Mary Alice Adams, Benton Harbor )Commissioners; William “Scott” Kincaid, )Flint City Council President; Bishop Bernadel )Jefferson; Paul Jordan; Rev. Jim Holley, )National Board Members, Rainbow Push )Coalition; Rev. Charles E. Williams II, )Michigan Chairman, National Action )Network; Rev. Dr. Michael A. Owens, Rev. )Lawrence Glass, Rev. Dr. Deedee Coleman, )Bishop Allyson Abrams, Executive Board, )Council of Baptist Pastors of Detroit )and Vicinity, )
Plaintiffs, ))
v ))
RICHARD D. SNYDER, as Governor of the )State of Michigan, and ANDREW DILLON, )
App. 30
as the Treasurer of the State of Michigan, )acting in their individual and/or official )capacities, )
Defendants. )____________________________________________ )
HON. GEORGE CARAM STEEH
MAGISTRATE JUDGE R. STEVEN WHALEN
Herbert A. Sanders (P43031) The Sanders Law Firm PC Attorney for Plaintiffs 615 Griswold St., Ste. 913 Detroit, Michigan 48226 313.962.0099 [email protected]
Julie H. Hurwitz (P34720) William H. Goodman (P14173) Goodman & Hurwitz PC Attorneys for Plaintiffs 1394 East Jefferson Ave. Detroit, Michigan 48207 313.567.6170 [email protected]@goodmanhurwitz.com
Darius Charney Ghita Schwarz Center for Constitutional Rights Attorneys for Plaintiffs 666 Broadway, 7th Floor New York, New York 10012212.614.6464 [email protected]
App. 31
Betram L. Marks (P47829) Litigation Associates PLLC Attorney for Plaintiffs 30300 Northwestern Hwy., Ste. 240 Farmington Hills, Michigan 48334 248.737.4444 [email protected]
Mark P. Fancher (P56223) ACLU Fund of Michigan Attorney for Plaintiffs 2966 Woodward Ave. Detroit, Michigan 48201 313.578.6822
John C. Philo (P52721) Anthony D. Paris (P71525) Sugar Law Center Attorneys for Plaintiffs 4605 Cass Ave., 2nd Floor Detroit, Michigan 48201 313.993.4505
Richard G. Mack, Jr. (P58657) Keith D. Flynn (P74192) Miller Cohen PLC Attorneys for Plaintiffs 600 West Lafayette Blvd., 4th Floor Detroit, Michigan 48226 313.964.4454 [email protected]
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Cynthia Heenan (P53664) Hugh M. Davis, Jr. (P12555) Constitutional Litigation Associates Attorneys for Plaintiffs 450 West Fort St., Ste. 200 Detroit, Michigan 48226 313.961.2255 [email protected]
Denise C. Barton (P41535) Michael F. Murphy (P29213) Assistant Attorneys General Attorneys for Defendants P.O. Box 30736 Lansing, Michigan 48909 517.373.6434
STIPULATION ANDORDER TO DISMISS COUNT IV
The parties, through their counsel, STIPULATEand AGREE as follows:
1. To dismiss Count IV of the First AmendedComplaint filed February 12, 2014, without prejudice.
2. Plaintiffs may appeal the claims dismissedunder Fed. R. Civ. P. 12b(6), set forth in the Court’sopinion dated November 19, 2014 (Doc. 49). If anappeal is not timely filed in the 6th Circuit Court ofAppeals, the tolling agreement in Paragraph 3 expiresand the statute of limitations on the dismissed claim(Count IV) continues to run upon expiration of theappeal period.
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3. The statute of limitations on the dismissed claim(Count IV) will be tolled during the pendency of theappeal.
4. If a timely appeal is filed with the 6th CircuitCourt of Appeals, the tolling agreement in Paragraph3 will expire 60 days after entry of a final order oropinion resolving that appeal. If a timely Petition forWrit of Certiorari is filed, the tolling agreement inParagraph 3 will expire 60 days after either of thefollowing occur: 1) entry of an order denying thePetition or; 2) if the Petition is granted, after entry ofthe opinion resolving that appeal.
5. All evidence regarding the pending claim will bepreserved and our litigation holds will remain in effectuntil the resolution of the appeal and possible re-filingof the dismissed claim (Count IV).
6. Discovery will immediately cease andDefendants will withdraw their Motion for ProtectiveOrder currently pending with the Court. Plaintiffsagree to maintain the discovery materials alreadyproduced and will not seek the same materials againshould the claim/case be re-filed or remanded.
This agreement disposes of the remaining claim inthe captioned matter.
s/Herbert A. Sanders (w/consent)Herbert A. Sanders (P43031) The Sanders Law Firm PCAttorney for Plaintiffs 615 Griswold Street, Suite 913 Detroit, Michigan 48226 [email protected]
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Dated: October 23, 2015
s/Denise C. Barton Denise C. Barton (P41535) Assistant Attorney General Attorney for Defendants P.O. Box 30736 Lansing, Michigan 48909 517.373.6434 [email protected]
Dated: October 23, 2015
ORDER
This matter having come before the court upon theStipulation of the parties;
IT IS SO ORDERED.
s/George Caram Steeh Hon. George Caram Steeh United States District Judge
Dated: October 23, 2015
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APPENDIX C
UNITED STATES DISTRICT COURTEASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Case No. 2:13-CV-11370
[Filed November 19, 2014]______________________________CATHERINE PHILLIPS, et al., )
Plaintiffs, ))
v. ))
RICHARD D. SNYDER et al., )Defendants. )
_____________________________ )
HON. GEORGE CARAM STEEH
ORDER GRANTING IN PART AND DENYINGIN PART DEFENDANTS’ MOTION TO DISMISS
(DOC. #41) AND DENYING DEFENDANTS’MOTION TO STAY PROCEEDINGS (DOC. #47)
This action challenging the constitutionality ofMichigan’s Emergency Manager Law, the LocalFinancial Stability and Choice Act, Act No. 436, PublicActs of 2012, Mich. Comp. Laws Ann. §§ 141.1451 etseq. (West 2013) (“PA 436”), was commenced byplaintiffs who include local elected officials, unelectedcitizens, and members of the governing boards ofvarious religious and civil rights organizations.Defendants, the Governor and Treasurer of the State of
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Michigan, have moved to dismiss all nine countsalleged by plaintiffs in their First Amended Complaint.For the reasons stated below, defendants’ motion todismiss is GRANTED in part and DENIED in part, anddefendants’ motion to stay proceedings is DENIED.
PROCEDURAL MOTION
Defendants move the court to stay thedetermination of this case pending completion of theCity of Detroit bankruptcy. Defendants argue that afinding that PA 436 is unconstitutional would halt theDetroit bankruptcy and require the unwinding of allthe acts of Detroit’s Emergency Manager. However, theBankruptcy Court and this court have alreadyconsidered defendants’ stay arguments and havedetermined that on balance, the pending challenge tothe constitutionality of PA 436, which is actively beingimplemented throughout the state, should go forward.Defendants have not raised any new arguments intheir most recent motion.
First, plaintiffs’ claims in this case are not directlyrelated to the City of Detroit, and any impact on theCity’s bankruptcy is speculative at best. Judge Rhodesopined that a successful challenge to PA 436 will notautomatically or necessarily result in the removal ofDetroit’s emergency manager or the nullification ofanything that has already occurred in the bankruptcyproceedings. Order Denying Motion forReconsideration, In re City of Detroit, Dkt. # 2256. Forthis reason, defendants are not able to establish thatthey will suffer irreparable harm absent the grantingof a stay. On the other hand, issuing a stay will causesubstantial harm to plaintiffs by denying their right toproceed with a constitutional challenge that is only
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tangentially related to the City of Detroit or thebankruptcy. Finally, the public has a strong interest inavoiding unnecessary delay in resolving civil rightsclaims, like those raised in this case.
It is this courts’ determination that this lawsuitshould go forward and defendants’ motion to stay shallbe denied.
FACTS
Plaintiffs bring this action under 42 U.S.C. § 1983,challenging the constitutionality of PA 436, which wasenacted to address problems presented by fiscalinstability among the State’s local governments.Specifically, plaintiffs allege that PA 436 violatesFourteenth Amendment guarantees of Due Process andEqual Protection; Article IV, Section 4 of theConstitution, which provides for a Republican Form ofGovernment; the Voting Rights Act; the FirstAmendment rights of free speech and to petitiongovernment; and the Thirteenth Amendment.
Prior to 1988, municipalities in Michigan that wereexperiencing financial difficulties could be placed intoreceivership by the courts. Court-appointed receiverswere compensated from the property that the courtsplaced within the care of the receiver. In 1988, theState of Michigan enacted PA 101, which allowed theState to appoint an emergency financial manager overcities experiencing a financial emergency. In 1990, thelegislature replaced PA 101 with the Local GovernmentFiscal Responsibility Act, PA 72, which authorizedMichigan’s local financial emergency review board toappoint an emergency financial manager (“EFM”) onlyafter the Governor declared the local government to be
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in a financial emergency. The EFM’s powers extendedto matters of finances, including the authority torenegotiate contracts, while local elected officialsremained in control of administrative and policymatters. Under PA 72, the state local financialemergency review board appointed EFMs in the citiesof Benton Harbor, Ecorse, Flint, Hamtramck, HighlandPark and Pontiac, as well as over the Detroit PublicSchools.
In 2011, possibly in response to a court rulingfinding that the Detroit Public Schools’ Board, and notthe EFM, possessed the power to determine whatcurriculum would be taught in the public schools, thegovernor signed the Local Government and SchoolDistrict Fiscal Accountability Act, PA 4 into law. PA 4repealed PA 72 and converted all EFMs intoEmergency Managers (“EM”), greatly expanding thescope of their powers. EMs could act “for and in theplace of” the municipality’s elected governing body,including a general grant of legislative power. EFMs inBenton Harbor, Ecorse and Pontiac, as well as theDetroit Public Schools, were converted to EMs. EMswere newly appointed in Flint, Highland Park PublicSchools and Muskegan Public Schools.
Citizens gathered signatures to place a referendumon the ballot to reject PA 4. The petitions were certifiedAugust 8, 2012, and by operation of law PA 4 wassuspended and PA 72 went back into effect. All PA 4EMs were reappointed as PA 72 EFMs. At the generalelection on November 6, 2012, Michigan voters voted toreject PA 4.
During the lame-duck session that followed therepeal of PA 4, the state legislature passed, and the
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Governor signed, the Local Financial Stability andChoice Act, PA 436. PA 436 changed the title of EFMsto EMs and expanded the scope of their powers to coverall the conduct of local government - both finance andgovernance. PA 436 contains some new provisions forlocal government not present in previous laws,including expanded local government options toaddress the financial emergency and a procedure toremove the EM after he or she has served 18 months.The EMs appointed under PA 4 and EFMs appointedunder PA 72 all became EMs under PA 436. When PA436 took effect on March 28, 2013, EMs were in placein the cities of Allen Park, Benton Harbor, Detroit,Ecorse, Flint, Inkster, Pontiac and River Rouge, as wellas the public school districts of Detroit, Highland Parkand Muskegon Heights. Since that time, the City ofHamtramck had an EM placed in control of the city’sgovernance, the City of Highland Park was deemed tobe in a financial emergency, Inkster, River Rouge,Royal Oak Township and the Pontiac Public Schoolshave entered into consent agreements, and the HazelPark and East Detroit School Districts were found notto be in financial distress. The EMs of Allen Park,Benton Harbor, Ecorse and Pontiac were replaced by“transition advisory boards” (“TAB”) with governingauthority returned to elected officials. The TAB’s dutiesand responsibilities are restricted to consulting,reviewing and approving certain financial and budgettransactions. In July of this year, an EM was appointedto run the City of Lincoln Park.
As noted, this case involves plaintiffs’ claims thatthe sweeping powers given to Emergency Managersunder PA 436 in supplanting local elected officialsoffend the constitution and laws of the United States.
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Not implicated in this case are the multitude of statelaw based claims that might have been raised.
Plaintiffs assert that 52% of the State’s African-American population is under the governance of anEM, a consent agreement or a TAB, while only a tinypercentage of the State’s Caucasian population is undersuch governance. In addition, the percentage of personsliving below the poverty line in Michigan as a whole is15.7%. All but one of the cities with an EM have apoverty level at least double the state average.Plaintiffs allege that as a result of PA 436, adisproportionate number of African Americans andthose in poverty are under the governance of an EMinstead of the local officials who were voted into office.Finally, plaintiffs allege that citizens in communitieswith EMs have effectively lost their right to vote orhave had that right diluted to the point that it has nomeaning.
LEGAL STANDARD
A motion to dismiss under Fed. R. Civ. P. 12(b)(6)tests the sufficiency of the complaint. Viewing the factsin a light most favorable to the plaintiff, the courtassumes that the plaintiff’s factual allegations are truein determining whether the complaint states a validclaim for relief. See Bower v. Fed. Express Corp., 96F.3d 200, 203 (6th Cir. 1996). “To survive a motion todismiss, a complaint must contain sufficient factualmatter, accepted as true, to ‘state a claim to relief thatis plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662,678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550U.S. 544, 570 (2007)). “A claim has facial plausibilitywhen the plaintiff pleads factual content that allowsthe court to draw the reasonable inference that the
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defendant is liable for the misconduct alleged.” Id. at678 (citing Twombly, 550 U.S. at 556).
ANALYSIS
I. Standing
Federal courts “have only the power that isauthorized by Article III of the Constitution and thestatutes enacted by Congress pursuant thereto,”therefore a plaintiff must possess both constitutionaland statutory standing in order for a federal court tohave jurisdiction over a matter. Bender v. WilliamsportArea Sch. Dist., 475 U.S. 534, 541 (1986).
Defendants challenge whether plaintiffs are properparties to seek an adjudication of the issues raised inthe amended complaint. This is a question of ArticleIII, or Constitutional, standing and goes to the issue ofthe court’s subject matter jurisdiction. To survive thischallenge, plaintiffs must show (1) they have sufferedan injury in fact that is (a) concrete and particularizedand (b) actual or imminent, not conjectural orhypothetical; (2) the injury is fairly traceable to thechallenged action of the defendants; and (3) it is likelythat the injury will be redressed by a favorabledecision.” Lujan v. Defenders of Wildlife, 504 U.S. 555,560 (1992). It is a threshold requirement that plaintiffsallege they have sustained, or are in immediate dangerof sustaining, some direct injury as a result of PA 436.It is not enough that plaintiff suffer an indefinite injuryin common with people in general. Miyazawa v. City ofCincinnati, 45 F.3d 126, 127 (6th Cir. 1995) (citationomitted). “The injury . . . must be both ‘real andimmediate,’ not ‘conjectural’ or ‘hypothetical.’” O’Sheav Littleton, 414 U.S. 488, 494 (1974) (citation omitted).
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Because declaratory relief is sought, plaintiffs alsohave the heightened burden of showing a substantiallikelihood they will be injured in the future. City of LosAngeles v. Lyons, 461 U.S. 95, 105 (1983).
Plaintiffs are residents of cities with EMs, electedofficials of cities or school districts who have actuallybeen displaced by EMs, voters who intend to vote againin the future, and people who are actively engaged inthe political process at the local level of government.The harms alleged by plaintiffs are unique as comparedto Michigan residents living in cities without an EM.The court notes that the sweeping powers under PA436 appear much more expansive than those given toreceivers in Pennsylvania, where standing was notfound. See Williams v. Governor of Pennsylvania, 552Fed. Appx. 158 (3rd Cir. 2014). Plaintiffs have alreadysuffered, and continue to suffer, the allegedconstitutional deprivations, while the residents ofMichigan communities without an EM have suffered nosuch harms. In all instances, the alleged deprivationsstem directly from the application of PA 436, and it isalso true that the alleged injuries will be redressed bya decision favorable to plaintiffs.
As for meeting the heightened burden ofdemonstrating that they are likely to be injured in thefuture, each day that the elected officials who havebeen replaced by an EM are not able to exercise theirlegislative authority, the plaintiffs continue to sufferthe constitutional harms alleged. Plaintiffs havetherefore established Article III standing to bring thiscase.
Statutory standing requires that the statuteplaintiffs invoke gives them certain rights they may
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enforce. Plaintiffs do not have to demonstrate actualharm in order to show statutory standing. Most of theplaintiffs are unelected individuals who are residentsof localities with EMs appointed under PA 436. Theseindividuals allege their right to vote has been impaired.Congress amended the Voting Rights Act in 1975 toconfer standing upon all “aggrieved persons.” Forpurposes of deciding a Rule 12(b)(6) motion, it isunnecessary to determine whether plaintiffs’allegations of impairment of their voting rights are truein order to hold they have standing to seek relief. Thiscourt ultimately finds that plaintiffs’ allegations ofimpairment of their voting rights, under the VotingRights Act, fail as further described below.Nevertheless, whether or not plaintiffs have stated aviable claim is properly analyzed in assessing thesufficiency of the allegations, not as a question ofstanding. The Supreme Court has held that qualifiedvoters who have alleged they have been personallydisadvantaged by a state statute can demonstratestanding to challenge the statute’s constitutionality.Baker v. Carr, 369 U.S. 186, 204-08 (1962) (plaintiffsare asserting “a plain, direct and adequate interest inmaintaining the effectiveness of their votes,” notmerely a claim of “the right possessed by every citizen‘to require that the government be administeredaccording to law . . .’” (citations omitted)). In anothercase, the Court reiterated that “any person whose rightto vote is impaired has standing to sue.” Gray v.Sanders, 372 U.S. 368, 375 (1963). Plaintiffs areminorities who allege their right to vote has beenabridged by PA 436 because they can now only vote forlocal officials who are rendered impotent in that theAct takes away their elected officials’ power tolegislate.
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The remaining plaintiffs are elected individuals whohave been displaced by EMs and PA 436 TransitionalAdvisory Boards. They allege equal protectionarguments based on their inability to remove EMs after18 months because they were already displaced by EMswhen PA 436 took effect. These plaintiffs argue theyare suffering alleged constitutional deprivations, whileresidents of other Michigan communities without anEM suffer no such harms.
At the motion to dismiss stage, plaintiffsdemonstrate statutory standing by alleging the type ofharm protected by the statute under which their caseis brought. Plaintiffs in this case have shown they havestatutory standing to bring their claims.
II. Substantive Due Process (Count I)
The Fourteenth Amendment protects againstviolations of citizens’ liberty interests, which have beendescribed by the Supreme Court as follows:
[T]he Due Process Clause specifically protectsthose fundamental rights and liberties whichare, objectively, “deeply rooted in this Nation’shistory and tradition,” . . . and “implicit in theconcept of ordered liberty,” such that “neitherliberty nor justice would exist if they weresacrificed.”
Washington v. Glucksberg, 521 U.S. 702, 720-21 (1997)(citations omitted). When substantive due processapplies, the government must show a compellingreason that demonstrates an adequate justification fortaking away life, liberty or property. The SupremeCourt has invoked the concept of substantive dueprocess for the protection of unenumerated
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constitutional rights including the right to work, theright to marry, the right to custody of one’s children,the right to an abortion, and the right for an adult torefuse medical care. Each recognized right is in thenature of a privacy right. The Supreme Court, however,has repeatedly warned against adding fundamentalliberties to the substantive due process doctrine. See id.at 720.
Plaintiffs allege that they have a fundamental rightto vote, including the right to elect officials who possesslegislative power, which has been violated by PA 436.According to plaintiffs, PA 436 has the effect of creatinga voting system where citizens in communities with anEM vote for officials who have no governing authority,while citizens of other communities vote for those whoactually govern and act as the elector’s representativesin office. Claiming that PA 436 has resulted in “aradical departure from prior forms of local governmentknown in . . . the United States,” plaintiffs point to thestatute’s uniqueness as an indication of a violation of afundamental right. P.A. 436 results in unprecedenteddisenfranchisement and vote dilution, they argue,which implicates the Due Process Clause. See Warf v.Bd. of Elections, 619 F.3d 553, 559 (6th Cir. 2010).
The right to vote “is a fundamental matter in a freeand democratic society.” Reynolds v. Sims, 377 U.S.533, 561-62 (1964). “Especially since the right toexercise the franchise in a free and unimpaired manneris preservative of other basic civil and political rights,any alleged infringement of the right of citizens to votemust be carefully and meticulously scrutinized.” Id. at562. In Reynolds, which struck down Alabama’sapportionment plan under the Equal Protection Clause
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because it was not based on current population, theSupreme Court recognized a right to vote in state andfederal elections, protected by the Constitution. TheSupreme Court, in a case challenging a public schoolfinancing scheme under the Equal Protection Clause,stated in a footnote that “the right to vote, per se, is nota constitutionally protected right, . . . [but we recognizea] protected right, implicit in our constitutional system,to participate in state elections on an equal basis withother qualified voters whenever the State has adoptedan elective process for determining who will representany segment of the State’s population. ” San AntonioIndep. Sch. Dist. v. Rodriguez, 411 U.S. 1, 35 n.78(1973). Indeed, going back to 1886, the Supreme Courtcompared the concept of the abhorrence of slavery tothe protection of the political franchise, holding thatboth ideas are “self-evident in the light of our system ofjurisprudence. . . . The case of the political franchise ofvoting . . . [t]hough not regarded strictly as a naturalright, but as a privilege merely conceded by society,according to its will, under certain conditions,nevertheless it is regarded as a fundamental politicalright, because preservative of all rights.” Yick Wo v.Hopkins, 118 U.S. 356, 370 (1886).
Clearly, the right to vote, once given, is to bescrupulously protected to make sure all voters are ableto participate on an equal basis with other voters.However, the Supreme Court has never recognized theright to vote as a right qualifying for substantive dueprocess protection. Given that plaintiffs’ theory is notthat they were unable to vote, but that themeaningfulness of their vote is unequal to those inlocalities without an EM, the proper route for plaintiffs’challenge is the Equal Protection Clause. Defendants’
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motion to dismiss plaintiffs’ substantive due processclaim in Count 1 is granted.
III. Guarantee Clause (Count 2)
The Guarantee Clause states “[t]he United Statesshall guarantee to every State in this Union aRepublican Form of Government . . . .” U.S. Const., art.IV, § 4. Plaintiffs allege that defendants violated thisconstitutional guarantee by appointing unelectedemergency managers to their respective localities, aposition not directly accountable to local voters. Thisargument requires a logical step in order to prevail,because plaintiffs must show that the term “state” alsorefers to local governments.
The Guarantee Clause is a “guarantee to the states,as such . . . [and] does not extend to systems of localgovernments for municipalities.” Johnson v. Genesee,232 F. Supp. 567, 570 (E.D. Mich. 1964) (citationsomitted). Since local governments are considered“convenient agencies” whose powers depend on thediscretion of the state, Reynolds, 377 U.S. at 575,maintenance of republican form at the state level issufficient to satisfy the Guarantee Clause. Plaintiffs’brief cites authority which defines the term“republican” and attempts to demonstrate thejusticiability of the question, but cites no authority thatactually applies the Guarantee Clause to localgovernments. Plaintiffs have thus failed to state a validclaim as to the violation of the Guarantee Clause,because they make no claim that the political form ofthe state is anything but republican. Defendants’motion to dismiss Count 2 is granted.
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IV. Equal Protection Clause
The Fourteenth Amendment of the United StatesConstitution provides in relevant part that “No stateshall make or enforce any law which shall . . . deny toany person within its jurisdiction the equal protectionof the laws.” The Supreme Court has stated that thislanguage “embodies the general rule that States musttreat like cases alike but may treat unlike casesaccordingly.” Vacco v. Quill, 521 U.S. 793, 799 (1997).Equal protection prevents states from makingdistinctions that burden a fundamental right, target asuspect class, or intentionally treat one individualdifferently from others similarly situated without anyrational basis. Radvansky v. City of Olmstead Falls,395 F.3d 291, 312 (6th Cir. 2005). To state an equalprotection claim, a plaintiff must “adequately pleadthat the government treated the plaintiff ‘disparatelyas compared to similarly situated persons and thatsuch disparate treatment either burdens afundamental right, targets a suspect class, or has norational basis.’” Ctr. for Bio-Ethical Reform, Inc. v.Napolitano, 648 F.3d 365, 379 (6th Cir. 2011) (citationsomitted). Plaintiffs make four equal protection claims:PA 436 (1) unduly burdens their fundamental right tovote, (2) has a discriminatory impact on AfricanAmerican populations, (3) has a discriminatory impacton lower-income communities, and (4) discriminatesbased on the status of previously having an appointedemergency manager under PA 72 or PA 4.
A. Burden on the Right to Vote (Count 3)
Plaintiffs argue that their fundamental right to votehas been denied, abridged, and/or diluted by PA 436because governing authority is stripped from local
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elected officials and transferred to one unelected EMwith no accountability to local citizens. First AmendedComplaint ¶ 123. Furthermore, since local decisions insuch communities are now made by a direct appointeeof the State, plaintiffs argue, voters across the entirestate wield voting power over them, but the reverse isnot true: “the entire state electorate participates in theselection of the local government in the affectedmunicipalities and school districts, while in all otherlocalities across the state, local residents alone directlyvote for their local elected officials.” First AmendedComplaint ¶ 125. Finally, plaintiffs maintain that PA436 is not narrowly tailored to address the assertedgovernment interest of achieving financial stability forlocal governmental units.
There is a constitutionally protected right forcitizens “to participate in state elections on an equalbasis with other qualified voters whenever the Statehas adopted an elective process for determining whowill represent any segment of the State’s population.”Rodriguez, 411 U.S. at 35 n.78. The right to voteunderlies our republican form of government. “As longas ours is a representative form of government, and ourlegislatures are those instruments of governmentelected directly by and directly representative of thepeople, the right to elect legislators in a free andunimpaired fashion is a bedrock of our politicalsystem.” Reynolds, 377 U.S. at 562. “Any unjustifieddiscrimination in determining who may participate inpolitical affairs or in the selection of public officialsundermines the legitimacy of representativegovernment.” Kramer v. Union Free Sch. Dist., 395 U.S.621, 626 (1969).
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This case does not present a traditional burden onthe right to vote because all qualified voters areactually able to vote in their local elections. Rather, thecomplaint made by plaintiffs is that the officials theyelect do not have the powers attendant to their officebecause essentially all such legislative and executivepowers are vested in an appointed individual.
The Constitution does not compel a particularmethod of choosing state or local officers orrepresentatives. Rodriguez v. Popular DemocraticParty, 457 U.S. 1, 9 (1982). The Supreme Court hasaddressed the issue of whether the members of acounty board of education could be appointed ratherthan elected. Sailors v. Board of Education, 387 U.S.105 (1967). The Court’s analysis started with the factthat political subdivisions of states “have beentraditionally regarded as subordinate governmentalinstrumentalities created by the State to assist in thecarrying out of state governmental function.” Id. at107-08 (citing Reynolds, 377 U.S. 533). These localgovernmental units are “‘created as convenientagencies for exercising such of the governmentalpowers of the state, as may be entrusted to them,’ andthe ‘number, nature and duration of the powersconferred upon (them) * * * and the territory overwhich they shall be exercised rests in the absolutediscretion of the state.’” Id. The Court concluded that,as such, “state or local officers of the nonlegislativecharacter” do not have to be elected. Rather they maybe appointed by the governor, the state legislature, orby some other means rather than by election. Id. at108. The Sailors Court found that the county schoolboard members perform “essentially administrativefunctions,” and expressly reserved the issue “whether
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a State may constitute a local legislative body throughthe appointive rather than the elective process.” Id. at109-110. A few years later, the Supreme Courtconsidered a challenge to the constitutionality of astatutory method for the election of trustees of a juniorcollege apportioned among school districts throughoutthe state based on the number of students living ineach district. The Court rejected the notion ofdistinguishing between elections for legislative officialsand administrative officials, in favor of the moregeneral category of officials who perform“governmental functions.”
Such a suggestion would leave courts with anequally unmanageable principle sincegovernmental activities ‘cannot easily beclassified in the neat categories favored by civicstexts,’ [citation omitted] and it must be rejected.We therefore hold today that as a general rule,whenever a state or local government decides toselect persons by popular election to performgovernmental functions, the Equal ProtectionClause of the Fourteenth Amendment requiresthat each qualified voter must be given an equalopportunity to participate in that election . . . .
Hadley v. Junior College Distr. Of Metropolitan KansasCity, MO, 397 U.S. 50, 55-56 (1970). The Court thusblurred the lines between administrative andlegislative officers, requiring compliance with Reynolds’“one man, one vote” where officials who performgovernmental functions are selected by election.
Pursuant to PA 436, EMs are given the power to“act for and in the place and stead of the governingbody and the office of chief administrative officer of the
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local government.” Mich. Comp. Laws Ann.§ 141.1549(2) (West 2013). Once an EM is appointed,“the governing body and the chief administrative officerof the local government shall not exercise any of thepowers of those offices except as may be specificallyauthorized in writing by the emergency manager . . .and are subject to any conditions required by theemergency manager.” Id. Thus, contrary to defendants’characterization, the EM is granted expansivelegislative powers in addition to executive powersunder PA 436. Mich. Comp. Laws Ann. § 141.1552(West 2013). In essence, PA 436 authorizes the State ofMichigan to replace locally elected officials performinggovernmental functions with an appointed EM.
The right to vote at the local level arguably has evenmore impact on the lives of citizens than it does at thestate or federal level. Mayors and city councils enactthe laws most immediately affecting citizens. Votersare still likely to know their local representatives, whoare their neighbors, who hold town hall meetings, andwho have a unique understanding of the views of theirconstituents. Where local communities do not havegovernment officials who are answerable to the voters,there are serious shortcomings and likewise seriousconcerns. This case implicates the rights of citizens toelect the local officials who will in fact carry out theduties of elected office.
The court must reconcile the fact that the plaintiffsin this case were actually able to vote for the legislativerepresentatives in their districts, with their claim thatby appointing an EM, PA 436 rendered elected officialsvirtually powerless. On the one hand, PA 436 does notsuspend local elections, does not alter the local election
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process, and does not affect voter registrationrequirements. Plaintiffs do not, and cannot, claim adenial or impairment of their right to vote for electedofficials. On the other hand, if the right to vote is tomean anything, certainly it must provide that theelected official wields the powers attendant to theiroffice.
The Supreme Court has only gone so far as to holdthat there is a constitutionally protected right toparticipate in elections on an equal basis with otherqualified voters in the jurisdiction. See Rodriguez, 457U.S. 1 (1982); Dunn v. Blumstein, 405 U.S. 330, 336(1972). The Supreme Court has had multipleopportunities to find a fundamental right to vote, andhas passed each time. There are plenty of compellingarguments that the right to vote should be afundamental right, but it is not this court’s place toextend the law. The ability to vote on equal footingwhen the franchise is extended is what is protected,and the weight of the vote must be equal to that ofother voters. No cases go beyond this protection of theright to vote. The voters in jurisdictions with EMs havethe same voting opportunity as all other voters in thatjurisdiction, and it is not appropriate to compare thevoters in jurisdictions with appointed EMs to those injurisdictions without EMs.
Public Act 436 seeks to put local governments onbetter financial footing. It does this by appointing anEM in jurisdictions where the Governor and StateTreasurer have determined that the local governmentwas experiencing a financial emergency. The Act doesnot take away a fundamental right to vote, becausesuch a right has never been recognized by the courts.
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Plaintiffs’ challenge to PA 436 as it relates to givingappointed EMs the governmental functionstraditionally belonging to elected officials is subject torational basis review. The statute is given “a strongpresumption of validity” and the state mustdemonstrate a “reasonably conceivable state of factsthat could provide a rational basis” for the law. Hellerv. Doe, 509 U.S. 312, 319-20 (1993). This standard ishighly deferential. Doe v. Michigan Dept. of StatePolice, 490 F.3d 491, 501 (6th Cir. 2007). Justice Powellwas cognizant of the court’s reserved role in relation tothe state legislature’s role with regard to reformlegislation:
Of course, every reform that benefits some morethan others may be criticized for what it fails toaccomplish. But we think it plain that, insubstance, the thrust of the Texas system [ofpublic school financing] is affirmative andreformatory and, therefore, should bescrutinized under judicial principles sensitive tothe nature of the State’s efforts and to the rightsreserved to the States under the Constitution.”
San Antonio v. Rodriguez, 411 U.S. at 39.
PA 436 is based on the legislative finding that theauthority and powers conferred by the Act constitute anecessary program and serve a valid public purpose -the fiscal integrity of the State’s local governments andthe health, safety and welfare of its citizens. Mich.Comp. Laws Ann. § 141.1543(a) (West 2013). On itsface, PA 436 applies equally to all jurisdictions in thestate, and is invoked when certain indicators offinancial stress are present. Defendants’ equal
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protection challenge to PA 436 in Count 3 is thereforesubject to rational basis scrutiny.
To survive rational basis scrutiny, PA 436 need onlybe “rationally related to legitimate governmentinterests[,]” Doe v. Mich. Dep’t of State Police, 490 F.3d491, 501 (6th Cir. 2007), and “must be upheld againstequal protection challenge if there is any reasonablyconceivable state of facts that could provide a rationalbasis for the classification.” FCC v. Beach Comm’ns,Inc., 508 U.S. 307, 313 (1993). “When social oreconomic legislation is at issue, the Equal ProtectionClause allows the States wide latitude, and theConstitution presumes that even improvident decisionswill eventually be rectified by the democraticprocesses.” City of Cleburne v. Cleburne Living Center,Inc., 473 U.S. 432, 440 (1985); Sailors, 387 U.S. at 109(“Save and unless the state, county, or municipalgovernment runs afoul of a federally protected right, ithas vast leeway in the management of its internalaffairs.”)
This court recognizes Michigan’s legitimategovernment interest in preventing or rectifying theinsolvency of its political subdivisions. Mich. Comp.Laws Ann. §141.1543 (West 2013) (finding it necessaryto protect the credit of the state and the fiscal stabilityof the local governments in order to protect the health,safety, and welfare of the citizens of the state). Thecourt thus finds that PA 436 survives rational basisreview. Defendants’ motion to dismiss Count 3 isgranted.
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B. Discrimination Based on Race (Count 4)
Plaintiffs assert that the disproportionate impactthe appointment of emergency managers has had onAfrican Americans establishes an equal protectionclaim. By plaintiffs’ calculations, over 52% ofMichigan’s African Americans are under emergencymanager authority pursuant to the enactment of PA436, compared to two percent of Michigan’s Caucasiancitizens. Plaintiffs argue that as applied, PA 436invidiously discriminates between similarly situatedgroups in the exercise of their fundamental rights, andshould thus be subject to strict scrutiny. Defendants,on the other hand, argue that rational basis is theappropriate standard because the law is faciallyneutral, and plaintiffs have not alleged facts raising aplausible inference of discriminatory intent. They alsoargue that PA 436 and its application pass rationalbasis scrutiny, so plaintiffs have failed to state anequal protection claim for racial discrimination.
The Constitution’s equal protection requirementdoes not invalidate a facially-neutral law “simplybecause it may affect a greater proportion of one racethan of another.” Washington v. Davis, 426 U.S. 229,242 (1976). Disparate impact “is not irrelevant, but itis not the sole touchstone of an invidious racialdiscrimination.” Village of Arlington Heights v. Metro.Hous. Dev. Corp., 429 U.S. 252, 264-65 (1977).However, a facially neutral law with a legitimatepurpose can still violate the Equal Protection Clause ifthat law “had a discriminatory effect . . . and wasmotivated by discriminatory purpose.” Farm LaborOrg. Comm. v. Ohio State Highway Patrol, 308 F.3d
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523, 533-34 (6th Cir. 2002) (citing Wayte v. UnitedStates, 470 U.S. 598, 608 (1985)).
Invidious discriminatory intent is an impermissiblejustification for state action, which triggers strictscrutiny. See Arlington Heights, 429 U.S. at 265-66(“When there is a proof that a discriminatory purposehas been a motivating factor in the decision, [judicial]deference is no longer justified.”); Yick Wo, 118 U.S. at373 (“Though the law itself be fair on its face . . . if it isapplied and administered by public authority . . . so aspractically to make unjust and illegal discriminationsbetween persons in similar circumstances . . . thedenial of equal justice is still within the prohibition ofthe Constitution.”). A plaintiff need not demonstrateracial discrimination was dominant in the reasoningfor state action to trigger strict scrutiny, but only thatit was a motivating factor. United States v. City ofBirmingham, 727 F.2d 560, 565 (1984).
Since it is inherently difficult to provediscriminatory intent, as legislators rarely admit to it,claimants may use a number of objective factors todetermine the existence of such intent. Id. (citingArlington Heights, 429 U.S. at 266-68). For example,proof of discriminatory impact may demonstrateunconstitutionality in “circumstances [in which] thediscrimination is very difficult to explain on nonracialgrounds.” Batson v. Kentucky, 476 U.S. 79, 93 (1986).The legislative or factual history may also be relevant,as well as any procedural or substantive departuresfrom the state’s usual course of action. ArlingtonHeights, 429 U.S. at 266-68. Additionally, and mostimportant to this case, claimants may also usestatistics to demonstrate the absence of a rational,
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nonracial purpose for a certain policy. Farm Labor Org.Comm., 308 F.3d at 534 (citations omitted).
At the motion to dismiss stage, plaintiffs need onlystate a plausible claim for relief. Iqbal, 556 U.S. at 678.Since statistical evidence can be used to demonstrateunconstitutional discriminatory action, plaintiffs atthis stage must plead some facts that demonstrate theplausibility that emergency managers have beenappointed in an intentionally discriminatory manner.The First Amended Complaint states that 52% ofMichigan’s African American population resides incities with an EM, a consent agreement, or a transitionadvisory board. At the same time, only about 2% ofMichigan’s white citizens live in communities governedby an EM. PA 436 has been applied to multiplemunicipalities of different sizes and jurisdictions, andalmost all of them are predominantly black.
Additionally, the Michigan Department of Treasurymaintains a scoring system to determine the financialhealth of the state’s cities and townships. The latestinformation available from the state is for fiscal year2009. Fiscal indicator scores between 5 and 7 place amunicipality on a fiscal watch list, while scoresbetween 8 and 10 result in the community receivingconsideration for review. However, six out of sevencommunities (85%) with a majority population of racialand ethnic minorities received EMs when they hadscores of 7. At the same time, none of the twelvecommunities (0%) with a majority white populationreceived an EM despite having scores of 7 or higher.Defendants argue that these statistics are old and of noapplication to PA 436, but the history of stateintervention makes it reasonable to assume that
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similar statistics are available in discovery to supportplaintiffs’ claims regarding the pattern of decisionmaking.
There are twelve factors that may be considered bystate authorities in assessing whether a localgovernment is eligible for appointment of an EM, yetonly one factor is necessary to serve as the basis forstate intervention. This confers enormous discretion tostate decision makers and creates a significantpotential for discriminatory decisions. This court issatisfied that at this juncture plaintiffs have pleaded aplausible equal protection claim based on the racialimpact of PA 436’s implementation. Defendants’ motionto dismiss Count 4 is denied.
C. Discrimination Based on Wealth (Count 5)
Plaintiffs’ third equal protection claim relates toalleged wealth discrimination. Plaintiffs claim that theimplementation of PA 436 has yieldeddisproportionately more emergency managerappointments in lower-income communities. Plaintiffsmaintain that PA 436 therefore conditions a citizen’sright to vote in local elections on the wealth of theircommunity. Defendants argue that the general wealthof a community does not determine whether anemergency manager is appointed, but rather thefinancial situation that they currently exhibit. SeeMich. Comp. Laws Ann. § 141.1544 (West 2013).Defendants contend that regardless, wealth-basedclassifications do not discriminate against a suspectclass, and therefore rational basis scrutiny isappropriate.
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Whenever a state “makes the affluence of the voter. . . an electoral standard,” it violates the EqualProtection Clause. Harper v. Va. State Bd. of Elections,383 U.S. 663, 666 (1966) (finding poll taxunconstitutional under Equal Protection Clause). TheSupreme Court explained that an individual’s votingability and qualifications have “no relation” to his orher wealth, and “to introduce wealth . . . as a measureof a voter’s qualifications is to introduce a capricious orirrelevant factor.” Id. at 668. “The degree of thediscrimination is irrelevant.” Id. In fact, the SupremeCourt has explicitly confirmed that all voters have anequal right to vote, “whatever their income.” Gray, 372U.S. at 380. Therefore, strict scrutiny will apply whenthe ability to vote is restricted by wealth. Harper, 383U.S. at 669.
In this case there is no restriction on the plaintiffs’ability to vote based on their wealth. Plaintiffs do notcontend that they are required to pay a poll tax or anyother fee, or that they must demonstrate their wealthin some other way, before they are permitted to vote inlocal elections.
Furthermore, PA 436 does not use the wealth ofindividual citizens, or even the community as a whole,to determine whether an EM is appointed. Rather, it isthe overall financial condition and prognosis of a localunit of government that will subject it to review andthe possible appointment of an emergency manager.Any community whose financial books are not in orderis subject to review under PA 436, regardless of therelative wealth of that community. How a community’sresources are managed will be reviewed in making the
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determination whether to appoint an EM. Mich. Comp.Laws Ann. § 141.1547(1) (West 2013).
Plaintiffs have not alleged a valid, plausible claimof wealth discrimination. Defendants’ motion to dismissCount 5 is granted.
D. Discrimination Against Localities withEmergency Manager Appointed UnderPrevious Laws (Count 9)
Under PA 436, after a particular EM has been inoffice for 18 months, he or she can be removed upon theapproval of the chief executive and 2/3 vote of citycouncil or the school board. If this occurs, the localgovernment may negotiate a consent agreement withthe state treasurer. If a consent agreement is notagreed upon within 10 days, the local government shallproceed with the neutral evaluation process set out atMich. Comp. Laws Ann. § 141.1565 (West 2013). Theneutral evaluator’s job is to facilitate a settlement orplan of readjustment between the local government and“interested parties.” The neutral evaluation process canlast for a maximum of 90 days following the date theneutral evaluator is selected. The process ends witheither a settlement of all pending disputes, or aresolution of the local government recommending thatthe local government proceed under Chapter 9.
Plaintiffs’ fourth and final equal protection claimconcerns localities that were under emergency managerauthority before the effective date of PA 436. Plaintiffsin those localities assert unequal treatment because,despite their time under emergency manager authoritypursuant to PA 72 and/or PA 4, they must wait anadditional 18 months after the enactment of PA 436 to
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engage in the removal process. Mich. Comp. Laws Ann.§ 141.1549(6)(c) (West 2013). Plaintiffs argue that thisimposes more than an 18-month wait period for certainlocalities, in comparison to a locality that was notpreviously under emergency manager authority, whichmust only wait 18 months. The equal protection rightsviolation identified by plaintiffs is that they are treateddifferently than similarly situated persons in localitiesplaced under EM governance after the effective date ofPA 436, and that such disparate treatment burdens thefundamental right to vote.
Plaintiffs identify the similarly situated groups aslocalities governed by EMs originally appointed prior toPA 436’s effective date and those governed by EMsappointed after PA 436’s effective date. The court,however, does not conclude that the two groups aresimilarly situated for purposes of equal protectionanalysis.
There is a clear difference between the powers of anemergency financial manager under PA 72 and anemergency manager under PA 436. Thus, a new 18-month limitation on removal is a rational means to thelegitimate end of allowing such an emergency managertime to oversee the enactment of policies in the newareas of authority. The court does acknowledge thatemergency managers under PA 4 enjoyed essentiallythe same authority as they do under PA 436. However,the revival of PA 72 during the referendumsignificantly diminished emergency manager authority,which was again expanded upon the enactment of PA436. Given this period of flux in the scope of emergencymanagers’ authority, it is rational for the statelegislature to restart the clock on the removal wait
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period. Even if the two groups compared by plaintiffswere similarly situated, PA 436’s 18-month provisionpasses rational basis scrutiny.
Plaintiffs have therefore failed to state a valid equalprotection claim on behalf of localities with emergencymanager authority originally appointed under PA 72 orPA 4. Defendants’ motion to dismiss Count 9 isgranted.
V. Voting Rights Act (Count 6)
Section 2 of the Voting Rights Act prohibits anyjurisdiction from using racially discriminatory votingpract ices and procedures result ing indisenfranchisement of minority voters.
(a) No voting qualification or prerequisite tovoting or standard, practice, or procedure shallbe imposed or applied by any State or politicalsubdivision in a manner which results in adenial or abridgment of the right of any citizenof the United States to vote on account of race orcolor . . .
(b) A violation of [this prohibition] is establishedif, based on the totality of circumstances, it isshown that the political processes leading tonomination or election in the State or politicalsubdivision are not equally open to participationby members of a [race] in that its members haveless opportunity than other members of theelectorate to participate in the political processand to elect representatives of their choice.
42 U.S.C. § 1973.
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Plaintiffs allege that by providing for theappointment of emergency managers in a way thatdiminishes African American voting power, PA 436 isa “standard, practice, or procedure” that violatesSection 2 of the Voting Rights Act. Specifically,plaintiffs allege that PA 436 abridges their right to votein local elections where EMs have been appointedbecause the elected officials’ governing authority inthose locales is “substantially removed, circumscribed,and conditional.” Plaintiffs cite the same statistics citedin their race equal protection claim, asserting thatemergency managers have been appointed in adisproportionately high number of areas with largeAfrican American populations, while predominantlywhite municipalities in similar financial distress do nothave an EM imposed by state action.
The fundamental problem with plaintiffs’ argumentis that PA 436 is not a “standard, practice or procedure. . . which results in a denial or abridgment of the rightof any citizen of the United States to vote on account ofrace . . . .” Plaintiffs do not take issue directly with thevoting system in which local officials are elected. Theyare not alleging that there was an impediment to theirability to vote, such as an identification requirement, afelon disenfranchisement provision, or a problem withpolling locations or hours. Rather, plaintiffs take issuewith the fact that citizens in municipalities underemergency management have a vote that does notmean anything since the officials they elect have nodecision-making authority.
The Supreme Court distinguishes between changesin a standard, practice or procedure directly affectingvoting by the electorate and “changes in the routine
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organization and functioning of government.” Presley v.Etowah County Commission, 502 U.S. 491, 504 (1992).While the latter may indirectly affect voting, suchorganizational changes are not within the scope ofSection 2 of the Voting Rights Act. Although Presleyactually addressed the scope of Section 5 of the VotingRights Act, its analysis applies to Section 2 because theCourt defined terms that are embodied in both sections:“voting qualification or prerequisite to voting, orstandard, practice, or procedure” with respect to voting.See Holder v. Hall, 512 U.S. 874, 882 (1994) (Kennedy,J.) (“[T]he coverage of §§ 2 and 5 is presumed to be thesame.”)
In Presley, the Supreme Court held that the VotingRights Act applies only to a change in a standard,practice, or procedure that has a “direct relation to, orimpact on, voting.” Id. at 506. The Court observed thatit recognizes four types of changes that meet the “directrelation” test: those that (1) “involve[] the manner ofvoting”; (2) “involve candidacy requirements andqualifications”; (3) “concern[] changes in thecomposition of the electorate that may vote forcandidates for a given office” or (4) “affect the creationor abolition of an elective office.” Id. at 502–03(citations omitted). “The first three categories involvechanges in election procedures, while all the exampleswithin the fourth category might be termed substantivechanges as to which offices are elective.” Id. at 503.
The Presley plaintiffs were newly elected blackcommissioners who argued that a transfer of dutiesamong and away from elected officials pertaining torepairs and discretionary spending for roadmaintenance within two Alabama county commissions
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constituted “changes” that had a direct relation tovoting, and, thus, required preclearance under Section5 of the Act. The first alleged change took away thecommissioners’ discretion to allocate funds as neededin their districts and instead put all funds in a commonaccount to be doled out based upon needs of the countyas a whole. The second alleged change transferredauthority concerning road and bridge operations fromthe elected county commissioners to an appointedcounty engineer who answered to the commission.
The Court held that these changes did not fit withinany of the four categories recognized as having a directrelation to voting. The first alleged change “concern[ed]the internal operations of an elected body.” Id. at 503.“Changes which affect only the distribution of poweramong officials are not subject to § 5 because suchchanges have no direct relation to, or impact on,voting.” Id. at 506. Perhaps more on point to the casepending before this court, the second alleged changewas also found not to be a voting practice or procedurebecause even if “the delegation of authority to anappointed official is similar to the replacement of anelected official with an appointed one”, it did not“change[ ] an elective office to an appointive one.” Id. at506–07. Both before and after the change, the countyvoters could elect their county commissioners. Thesame holds true in this case. Before and after theenactment of PA 436, the electorate can elect their citycouncil members and mayors.
In 1994, the Supreme Court addressed a Section 2Voting Rights Act challenge to the size of the BleckleyCounty, Georgia Commission. Holder, 512 U.S. 874.Bleckley County always had a single-commission form
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of government, but the state legislature authorized thecounty to adopt by referendum a multimembercommission consisting of five members elected fromsingle-member districts and a chair elected at-large.Voters defeated the proposal to adopt a multimemberdistrict, which prompted a challenge by black voterswho wanted a chance to elect a commissioner torepresent their allegedly cohesive district. A majorityof the Supreme Court held that the size of a governingbody is not subject to a vote dilution challenge underSection 2 of the Voting Rights Act. The pluralityopinion explained that in order to find liability in aSection 2 case, a court must find a reasonablealternative practice as a benchmark against which tomeasure whether the existing voting practice results invote dilution. Id. at 880. They Court opined that thiswas problematic for plaintiffs because “[t]here is noprincipled reason why one size should be picked overanother as the benchmark for comparison.” Id. at 881.The plurality concluded that “a plaintiff cannotmaintain a § 2 challenge to the size of a governmentbody . . . .” Id. at 885. Justices Thomas and Scaliaconcurred with this holding, but emphasized that“[o]nly a ‘voting qualification or prerequisite to voting,or standard, practice, or procedure’ can be challengedunder § 2” and concluded that the size of a governingbody is not a “standard, practice, or procedure” withinthe terms of section 2. Id. at 892.
This court has considered the state of local electionsin the challenged jurisdictions before and after PA 436became effective. In replacing elected officials with anappointed Emergency Manager, PA 436 changes thedecision-making authority of elected officials. PA 436concerns both the internal operations of an elected body
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and the distribution of power among officials. Suchchanges, though dramatic and meaningful, are notchanges in voting standards, practices, or procedures torender PA 436 subject to Section 2 of the Voting RightsAct. The court does not take plaintiffs’ challengelightly, and is cognizant that the Voting Rights Act isto be given “‘the broadest possible scope,’” and that theAct “‘was aimed at the subtle, as well as the obvious,state regulations which have the effect of denyingcitizens their right to vote because of their race.’” Id. at895 (quoting Allen v. State Bd. Of Elections, 393 U.S.544, 565, 567 (1969)).
Plaintiffs in this case challenge a temporaryreorganization of government, not a voting standard orprocedure. The residents of affected communities inthis State retain their voting rights and can againrepeal the enactment as they did its predecessor; orthey can simply replace the state officers who ignoredvoter sentiment in enacting Act 436. This politicalprocess remains the correct means for redress ratherthan attempting to restructure government under theauspices of the Voting Rights Act. The problem is onethat must be addressed through the political process asopposed to bringing a challenge under the VotingRights Act. Defendants’ motion to dismiss Count 6 isgranted.
VI. First Amendment Claims (Count 7)
A. Viewpoint Discrimination
Plaintiffs assert that defendants engaged inviewpoint discrimination by enacting PA 436, whichsuppressed the viewpoint expressed by the citizens’referendum on PA 4. According to plaintiffs, the
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government has violated the First Amendment byregulating speech based on its substantive content, andsuppressing particular views, on the subject of how toremedy financial exigencies of local governments.Defendants argue that no viewpoint discrimination hasoccurred because the state government engaged in theproper governmental process of enacting a law.
Viewpoint discrimination violates the FirstAmendment when it regulates speech based onsubstantive content. Rosenberger v. Rector & Visitors ofUniv. of Va., 515 U.S. 819, 828 (1995). However,legislative action supportive of a given policy choicedoes not necessarily constitute viewpointdiscrimination, otherwise all governmental actionwould be unconstitutional. Instead, viewpointdiscrimination reaches unconstitutionality when it“favors one speaker over another.” Id. When the Stateenacted PA 436, it did not abridge the speech rights ofany group based on their message. This logic isexplained in Michigan Farm Bureau v. Hare:
[W]hen an act of the legislature is referred, thatparticular act is suspended in its operation, butthat such [s]uspension does not deprive the[l]egislature of the right thereafter to pass . . .[or] deal with exactly the same subject as thereferred act, and in the same manner, butsubject, of course, to the same right of referenceas was the original act.
379 Mich. 387, 398 (1967). Michigan residents whovoted to reject PA 4 have no less ability to express theiropinions or petition the state government to overturnPA 436. As noted in the last section, those individualsretain their opportunity to reject PA 436 through
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referendum in the next election. Enacting a law thathas been previously referred is brow-raising because itis politically dubious, not because it is unconstitutional.Plaintiffs have made no valid claim to unconstitutionalviewpoint discrimination.
B. Freedom of Speech
Plaintiffs claim that their speech rights wereviolated when defendants appointed an emergencymanager to their local government, effectivelyremoving their previously elected local officials.Defendants argue that no abridgement of the freedomof speech has occurred because PA 436 provides both“voice and choice.” Citizens have “voice” because theycan advocate for the removal of the emergency manageror appeal the decision under PA 436 to appoint anemergency manager. They also have “choice” becauseonce a locality is declared financially unstable, PA 436provides the local government with a choice between anemergency manager, a consent agreement, a neutralevaluation process, and bankruptcy.
“Congress shall make no law . . . abridging thefreedom of speech . . . .” U.S. Const., amend. I. The“first amendment protects . . . the right of citizens toband together in promoting among the electoratecandidates who espouse their political views.” Cal.Democratic Party v. Jones, 530 U.S. 567, 574 (2000)(emphasis added). Freedom of speech doctrine isimplicated when issues of advocacy and expression areraised. An invalid abridgement of this right entails agovernmental action that prevents an individual fromdemonstrating or promoting an idea, whether symbolicor expressive. See, e.g., Stromberg v. Cal., 283 U.S. 359(1931) (invalidating a law prohibiting the flying of a red
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flag as an abridgment of symbolic speech). Nothing inplaintiffs’ pleadings suggests that plaintiffs are anyless able to freely and openly advocate for a certainstate or local policy. Thus, plaintiffs have not met thethreshold of a valid speech abridgement claim.
Plaintiffs cite to an Eighth Circuit case, Peeper v.Callaway Cnty. Ambulance Dist., 122 F.3d 619 (8th Cir.1997), for the proposition that limiting a localofficeholders’ power amounts to a limitation of speechrights for the officeholders’ constituents. However, inPeeper, the court used rational-basis review to find thatthe removal of the single board member was irrationaland therefore invalid. Id. at 623. Here, the removal oflocal governments’ decision-making authority pursuantto PA 436 is rationally related to the legitimategovernmental interest of solving financial crises.Therefore, plaintiffs have not shown that defendants’actions amount to an invalid abridgment of theirfreedom of speech.
C. Right to Petition Government
Plaintiffs’ final First Amendment claim relates totheir ability to petition their own local government.Plaintiffs argue that appointing an emergency managerwho is not directly accountable to local citizensprevents those citizens from petitioning their localgovernment. Defendants argue that no violation hasoccurred because plaintiffs’ petition rights do notextend to local government, plaintiffs can still petitionlocal officials to remove the emergency manager, andplaintiffs can petition their state government to amendPA 436 or any related legislation.
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States are free to make decisions regarding thepolitical control of localities as long as the state citizensare free to “urge proposals” to the state. Holt Civic Clubv. City of Tuscaloosa, 439 U.S. 60, 73-74 (1978). This isbecause states have final authority over local matters:“Municipal corporations are political subdivisions of thestate, created as convenient agencies for exercisingsuch of the governmental powers of the state as may beinstructed to them.” Hunter v. City of Pittsburgh, 207U.S. 161, 178 (1907). “[U]ltimate control of every state-created entity resides with the State . . . [and] politicalsubdivisions exist solely at the whim of their state.”Hess v. Port Authority Trans-Hudson Corp., 513 U.S.30, 47 (1994) (citations omitted). The limitations onthis power exist at the borders of constitutional limits:for example, the state may not intentionallydiscriminate among localities in a manner that violatesthe Equal Protection Clause. Additionally, the PetitionClause does not require that the state actually respondto citizen petitions; it only requires that the state allowits citizens to make the government aware of its views.Confora v. Olds, 562 F.2d 363, 364 (6th Cir. 1977)(“[N]either in the First Amendment nor elsewhere inthe Constitution is there a provision guaranteeing thatall petitions for the redress of grievances will meet withsuccess.”).
Plaintiffs have not alleged that defendantsprevented them from petitioning the state government.Despite their claim that the emergency manager ispolitically unaccountable, plaintiffs have the power topetition their locally elected officials to remove theemergency manager. Other options are available aswell: they can petition the state government to alterstate law, can promote and elect state representative
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candidates who promise to repeal or amend PA 436,and can bring a referendum petition to invalidate PA436. Plaintiffs have failed to state a valid claim thatdefendants violated their constitutional right topetition their government.
VII. Thirteenth Amendment Claim (Count 8)
Plaintiffs’ final claim is that defendants’ actionsamount to a vestige of slavery in violation of theThirteenth Amendment. Plaintiffs argue that theallegedly discriminatory implementation of PA 436amounts to the disenfranchisement of AfricanAmericans in Michigan, which is an unconstitutionalincident or badge of slavery. Section One of theThirteenth Amendment states: “Neither slavery notinvoluntary servitude . . . shall exist within the UnitedStates, or any place subject to their jurisdiction.” U.S.Const. amend. XIII. Section Two states: “Congress shallhave power to enforce this article by appropriatelegislation.” Id. Plaintiffs bring this count under 42U.S.C. § 1983, meaning they claim that defendants’actions amount to a direct violation of the first sectionof the Thirteenth Amendment, and not any federalstatute enabled by Section Two. Thus, in order to statea claim for relief, plaintiffs must demonstrate thatdefendants’ actions have imposed a badge of slavery orinvoluntary servitude upon African American residentsof Michigan.
In Jones v. Alfred H. Mayer Co., 392 U.S. 409(1968), the Supreme Court ruled that the ThirteenthAmendment enables Congress to prohibit “badges andincidents of slavery” when they include “restraintsupon ‘those fundamental rights which are the essenceof civil freedom . . .’” Id. at 441 (citations omitted). The
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question of whether the Thirteenth Amendment itselfcould be found to prohibit such vestiges of slavery wasnot determined. In City of Memphis v. Greene, 451 U.S.100 (1981), the Court revisited the question whethercourts may strike down state action pursuant toSection One of the Thirteenth Amendment when theaction amounts to an incident or badge of slavery. TheCourt acknowledged it may be an “open questionwhether § 1 of the [Thirteenth Amendment] by its ownterms did anything more than abolish slavery.” Id. at125-26. However, the Greene Court found itunnecessary to make a determination on that questionbecause the state action at issue, closing down a streetin Memphis in a way that effectively segregated raceswithin the city, could not be “fairly characterized as abadge or incident of slavery.” Id. at 125-26. The Courtstarted with the proposition that the city council hadwide discretion in making policy decisions regardingtraffic flow and safety. Any inconvenience to motoristswas a function of where they lived and drove, not oftheir race. The Court recognized that closing streetswill always impact one area more than another, andbecause neighborhoods are often characterized by acommon ethnic or racial heritage, “a regulation’sadverse impact on a particular neighborhood will oftenhave a disparate effect on an identifiable ethnic orracial group.” Id. at 128. The Court concluded that theimpact of closing the street “is a routine burden ofcitizenship; it does not reflect a violation of theThirteenth Amendment.” Id. at 129.
The alleged infringement in Greene was that thestreet closing deprived African Americans of access totheir property equal to the access enjoyed by whitecitizens. In this case, the right allegedly infringed by
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the state action is the right to vote. As discussedthroughout this opinion, plaintiffs have not lost theirright to vote. Not only is there no restraint onplaintiffs’ ability to vote in local elections, the power ofthe entire political process is available to them toattempt to effectuate any changes to the restructuringof government imposed upon them by PA 436.Plaintiffs remain free to voice their dissatisfaction withPA 436 at town hall meetings, or through protests andletter writing campaigns to newspapers and theirrepresentatives. They can initiate new legislationthrough a petition process, or use the referendumprocedure to reject PA 436, as was successfully donewith the previous version of the emergency managerlaw, PA 4. Finally, voters can force a recall election toremove legislators who are unresponsive to their views.With every device in the political arsenal remainingavailable to plaintiffs, a law directed at temporarilyreorganizing local government for the purpose ofaddressing a serious fiscal concern cannot becharacterized as a vestige of slavery.
Plaintiffs have failed to state a plausible cause ofaction for a violation of the Thirteenth Amendment.Defendants’ motion to dismiss Count 8 is granted.
CONCLUSION
Plaintiffs have failed to state a claim for relief on allcounts except for their allegations that PA 436 violatesthe Equal Protection Clause by treating similarlysituated persons differently in a manner that has adisproportionate impact on a suspect class, that beingAfrican American citizens. Therefore, defendants’motion to dismiss is GRANTED as to Counts 1, 2, 3, 5,6, 7, 8, and 9, and DENIED as to Count 4 of plaintiffs’
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First Amended Complaint. In addition, defendants’motion to stay proceedings is DENIED.
Dated: November 19, 2014
s/George Caram Steeh GEORGE CARAM STEEH UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys ofrecord on November 19, 2014, by electronic and/or
ordinary mail.
s/Marcia Beauchemin Deputy Clerk
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APPENDIX D
UNITED STATES COURT OF APPEALSFOR THE SIXTH CIRCUIT
No. 15-2394
[Filed November 1, 2016]_________________________________CATHERINE PHILLIPS, ET AL., )
Plaintiffs, ))
RUSSELL BELLANT, ET AL. )Plaintiffs-Appellants, )
)v. )
)RICHARD D. SNYDER; )ANDREW DILLON, )
Defendants-Appellees. )________________________________ )
O R D E R
BEFORE: SUHRHEINRICH, ROGERS, andGRIFFIN, Circuit Judges.
The court received a petition for rehearing en banc.The original panel has reviewed the petition forrehearing and concludes that the issues raised in thepetition were fully considered upon the originalsubmission and decision of the case. The petition thenwas circulated to the full court. No judge has requesteda vote on the suggestion for rehearing en banc.
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Therefore, the petition is denied.
ENTERED BY ORDER OF THE COURT /s/ Deborah S. HuntDeborah S. Hunt, Clerk
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APPENDIX E
LOCAL FINANCIAL STABILITY AND CHOICE ACT [Excerpts]
Act 436 of 2012
AN ACT to safeguard and assure the financialaccountability of local units of government and schooldistricts; to preserve the capacity of local units ofgovernment and school districts to provide or cause tobe provided necessary services essential to the publichealth, safety, and welfare; to provide for review,management, planning, and control of the financialoperation of local units of government and schooldistricts and the provision of services by local units ofgovernment and school districts; to provide criteria tobe used in determining the financial condition of localunits of government and school districts; to authorizea declaration of the existence of a financial emergencywithin a local unit of government or school district; toprescribe remedial measures to address a financialemergency within a local unit of government or schooldistrict; to provide for a review and appeal process; toprovide for the appointment and to prescribe thepowers and duties of an emergency manager for a localunit of government or school district; to provide for themodification or termination of contracts under certaincircumstances; to provide for the termination of afinancial emergency within a local unit of governmentor school district; to provide a process by which a localunit of government or school district may file forbankruptcy; to prescribe the powers and duties of
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certain state agencies and officials and officials withinlocal units of government and school districts; toprovide for appropriations; and to repeal acts and partsof acts.
* * *
141.1547 Local government options; approval ofresolution by mayor or school board; failure oflocal governing body to pass resolution;limitation.
Sec. 7. (1) Notwithstanding section 6(3), upon theconfirmation of a finding of a financial emergencyunder section 6, the governing body of the localgovernment shall, by resolution within 7 days after theconfirmation of a finding of a financial emergency,select 1 of the following local government options toaddress the financial emergency:
(a) The consent agreement option pursuant to section 8.
(b) The emergency manager option pursuant tosection 9.
(c) The neutral evaluation process option pursuant tosection 25.
(d) The chapter 9 bankruptcy option pursuant tosection 26.
(2) Subject to subsection (3), if the local governmenthas a strong mayor, the resolution under subsection (1)requires strong mayor approval. If the localgovernment is a school district, the resolution shall beapproved by the school board. The resolution shall befiled with the state treasurer, with a copy to the
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superintendent of public instruction if the localgovernment is a school district.
(3) If the governing body of the local government doesnot pass a resolution as required under subsection (1),the local government shall proceed under the neutralevaluation process pursuant to section 25.
(4) Subject to section 9(6)(c) and (11), unless authorizedby the governor, a local government shall not utilize 1of the local options listed in subsection (1)(a) to (d)more than 1 time.
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141.1549 Emergency manager; appointment bygovernor; powers; qualifications; compensation;private funds; additional staff and assistance;quarterly reports; service; removal of localgovernment from receivership; delegation ofduties from governor to state treasurer;applicable state laws; appointment under formeract; removal.
Sec. 9. (1) The governor may appoint an emergencymanager to address a financial emergency within thatlocal government as provided for in this act.
(2) Upon appointment, an emergency manager shall actfor and in the place and stead of the governing bodyand the office of chief administrative officer of the localgovernment. The emergency manager shall have broadpowers in receivership to rectify the financialemergency and to assure the fiscal accountability of thelocal government and the local government’s capacityto provide or cause to be provided necessarygovernmental services essential to the public health,
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safety, and welfare. Following appointment of anemergency manager and during the pendency ofreceivership, the governing body and the chiefadministrative officer of the local government shall notexercise any of the powers of those offices except asmay be specifically authorized in writing by theemergency manager or as otherwise provided by thisact and are subject to any conditions required by theemergency manager.
(3) All of the following apply to an emergency manager:
(a) The emergency manager shall have a minimum of5 years’ experience and demonstrable expertise inbusiness, financial, or local or state budgetary matters.
(b) The emergency manager may, but need not, be aresident of the local government.
(c) The emergency manager shall be an individual.
(d) Except as otherwise provided in this subdivision,the emergency manager shall serve at the pleasure ofthe governor. An emergency manager is subject toimpeachment and conviction by the legislature as if heor she were a civil officer under section 7 of article XIof the state constitution of 1963. A vacancy in the officeof emergency manager shall be filled in the samemanner as the original appointment.
(e) The emergency manager’s compensation shall bepaid by this state and shall be set forth in a contractapproved by the state treasurer. The contract shall beposted on the department of treasury’s website within7 days after the contract is approved by the statetreasurer.
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(f) In addition to the salary provided to an emergencymanager in a contract approved by the state treasurerunder subdivision (e), this state may receive anddistribute private funds to an emergency manager. Asused in this subdivision, “private funds” means anymoney the state receives for the purpose of allocatingadditional salary to an emergency manager. Privatefunds distributed under this subdivision are subject tosection 1 of 1901 PA 145, MCL 21.161, and section 17of article IX of the state constitution of 1963.
(4) In addition to staff otherwise authorized by law, anemergency manager shall appoint additional staff andsecure professional assistance as the emergencymanager considers necessary to fulfill his or herappointment.
(5) The emergency manager shall submit quarterlyreports to the state treasurer with respect to thefinancial condition of the local government inreceivership, with a copy to the superintendent ofpublic instruction if the local government is a schooldistrict and a copy to each state senator and staterepresentative who represents that local government.In addition, each quarterly report shall be posted onthe local government’s website within 7 days after thereport is submitted to the state treasurer.
(6) The emergency manager shall continue in thecapacity of an emergency manager as follows:
(a) Until removed by the governor or the legislature asprovided in subsection (3)(d). If an emergency manageris removed, the governor shall within 30 days of theremoval appoint a new emergency manager.
(b) Until the financial emergency is rectified.
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(c) If the emergency manager has served for at least 18months after his or her appointment under this act, theemergency manager may, by resolution, be removed bya 2/3 vote of the governing body of the localgovernment. If the local government has a strongmayor, the resolution requires strong mayor approvalbefore the emergency manager may be removed.Notwithstanding section 7(4), if the emergencymanager is removed under this subsection and the localgovernment has not previously breached a consentagreement under this act, the local government maywithin 10 days negotiate a consent agreement with thestate treasurer. If a consent agreement is not agreedupon within 10 days, the local government shallproceed with the neutral evaluation process pursuantto section 25.
(7) A local government shall be removed fromreceivership when the financial conditions arecorrected in a sustainable fashion as provided in thisact. In addition, the local government may be removedfrom receivership if an emergency manager is removedunder subsection (6)(c) and the governing body of thelocal government by 2/3 vote approves a resolution forthe local government to be removed from receivership.If the local government has a strong mayor, theresolution requires strong mayor approval before thelocal government is removed from receivership. A localgovernment that is removed from receivership while afinancial emergency continues to exist as determinedby the governor shall proceed under the neutralevaluation process pursuant to section 25.
(8) The governor may delegate his or her duties underthis section to the state treasurer.
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(9) Notwithstanding section 3(1) of 1968 PA 317, MCL15.323, an emergency manager is subject to all of thefollowing:
(a) 1968 PA 317, MCL 15.321 to 15.330, as a publicservant.
(b) 1973 PA 196, MCL 15.341 to 15.348, as a publicofficer.
(c) 1968 PA 318, MCL 15.301 to 15.310, as if he or shewere a state officer.
(10) An emergency financial manager appointed underformer 1988 PA 101 or former 1990 PA 72, and servingimmediately prior to the effective date of this act, shallbe considered an emergency manager under this actand shall continue under this act to fulfill his or herpowers and duties. Notwithstanding any otherprovision of this act, the governor may appoint a personwho was appointed as an emergency manager underformer 2011 PA 4 or an emergency financial managerunder former 1988 PA 101 or former 1990 PA 72 toserve as an emergency manager under this act.
(11) Notwithstanding section 7(4) and subject to therequirements of this section, if an emergency managerhas served for less than 18 months after his or herappointment under this act, the governing body of thelocal government may pass a resolution petitioning thegovernor to remove the emergency manager asprovided in this section and allow the local governmentto proceed under the neutral evaluation process asprovided in section 25. If the local government has astrong mayor, the resolution requires strong mayorapproval. If the governor accepts the resolution,notwithstanding section 7(4), the local government
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shall proceed under the neutral evaluation process asprovided in section 25.
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141.1552 Additional actions by emergencymanager; suspension of power of administrativeofficer and governing body; contracts subject tocompetitive bidding; sale or transfer of publicutility; limitation.
Sec. 12. (1) An emergency manager may take 1 or moreof the following additional actions with respect to alocal government that is in receivership,notwithstanding any charter provision to the contrary:
(a) Analyze factors and circumstances contributing tothe financial emergency of the local government andinitiate steps to correct the condition.
(b) Amend, revise, approve, or disapprove the budget ofthe local government, and limit the total amountappropriated or expended.
(c) Receive and disburse on behalf of the localgovernment all federal, state, and local fundsearmarked for the local government. These funds mayinclude, but are not limited to, funds for specificprograms and the retirement of debt.
(d) Require and approve or disapprove, or amend orrevise, a plan for paying all outstanding obligations ofthe local government.
(e) Require and prescribe the form of special reports tobe made by the finance officer of the local governmentto its governing body, the creditors of the localgovernment, the emergency manager, or the public.
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(f) Examine all records and books of account, andrequire under the procedures of the uniform budgetingand accounting act, 1968 PA 2, MCL 141.421 to141.440a, or 1919 PA 71, MCL 21.41 to 21.55, or both,the attendance of witnesses and the production ofbooks, papers, contracts, and other documents relevantto an analysis of the financial condition of the localgovernment.
(g) Make, approve, or disapprove any appropriation,contract, expenditure, or loan, the creation of any newposition, or the filling of any vacancy in a position byany appointing authority.
(h) Review payrolls or other claims against the localgovernment before payment.
(i) Notwithstanding any minimum staffing levelrequirement established by charter or contract,establish and implement staffing levels for the localgovernment.
(j) Reject, modify, or terminate 1 or more terms andconditions of an existing contract.
(k) Subject to section 19, after meeting and conferringwith the appropriate bargaining representative and, ifin the emergency manager’s sole discretion andjudgment, a prompt and satisfactory resolution isunlikely to be obtained, reject, modify, or terminate 1or more terms and conditions of an existing collectivebargaining agreement. The rejection, modification, ortermination of 1 or more terms and conditions of anexisting collective bargaining agreement under thissubdivision is a legitimate exercise of the state’ssovereign powers if the emergency manager and state
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treasurer determine that all of the following conditionsare satisfied:
(i) The financial emergency in the local governmenthas created a circumstance in which it is reasonableand necessary for the state to intercede to serve asignificant and legitimate public purpose.
(ii) Any plan involving the rejection, modification, ortermination of 1 or more terms and conditions of anexisting collective bargaining agreement isreasonable and necessary to deal with a broad,generalized economic problem.
(iii) Any plan involving the rejection, modification,or termination of 1 or more terms and conditions ofan existing collective bargaining agreement isdirectly related to and designed to address thefinancial emergency for the benefit of the public asa whole.
(iv) Any plan involving the rejection, modification,or termination of 1 or more terms and conditions ofan existing collective bargaining agreement istemporary and does not target specific classes ofemployees.
(l) Act as sole agent of the local government incollective bargaining with employees or representativesand approve any contract or agreement.
(m) If a municipal government’s pension fund is notactuarially funded at a level of 80% or more, accordingto the most recent governmental accounting standardsboard’s applicable standards, at the time the mostrecent comprehensive annual financial report for themunicipal government or its pension fund was due, the
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emergency manager may remove 1 or more of theserving trustees of the local pension board or, if thestate treasurer appoints the emergency manager as thesole trustee of the local pension board, replace all theserving trustees of the local pension board. For thepurpose of determining the pension fund level underthis subdivision, the valuation shall exclude the netvalue of pension bonds or evidence of indebtedness. Theannual actuarial valuation for the municipalgovernment’s pension fund shall use the actuarialaccrued liabilities and the actuarial value of assets. Ifa pension fund uses the aggregate actuarial costmethod or a method involving a frozen accruedliability, the retirement system actuary shall use theentry age normal actuarial cost method. If theemergency manager serves as sole trustee of the localpension board, all of the following apply:
(i) The emergency manager shall assume andexercise the authority and fiduciary responsibilitiesof the local pension board including, to the extentapplicable, setting and approval of all actuarialassumptions for pension obligations of a municipalgovernment to the local pension fund.
(ii) The emergency manager shall fully comply withthe public employee retirement system investmentact, 1965 PA 314, MCL 38.1132 to 38.1140m, andsection 24 of article IX of the state constitution of1963, and any actions taken shall be consistent withthe pension fund’s qualified plan status under thefederal internal revenue code.
(iii) The emergency manager shall not makechanges to a local pension fund without identifyingthe changes and the costs and benefits associated
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with the changes and receiving the state treasurer’sapproval for the changes. If a change includes thetransfer of funds from 1 pension fund to anotherpension fund, the valuation of the pension fundreceiving the transfer must be actuarially funded ata level of 80% or more, according to the most recentgovernmental accounting standards board’sapplicable standards, at the time the most recentcomprehensive annual financial report for themunicipal government was due.
(iv) The emergency manager’s assumption andexercise of the authority and fiduciaryresponsibilities of the local pension board shall endnot later than the termination of the receivership ofthe municipal government as provided in this act.
(n) Consolidate or eliminate departments of the localgovernment or transfer functions from 1 department toanother and appoint, supervise, and, at his or herdiscretion, remove administrators, including heads ofdepartments other than elected officials.
(o) Employ or contract for, at the expense of the localgovernment and with the approval of the statefinancial authority, auditors and other technicalpersonnel considered necessary to implement this act.
(p) Retain 1 or more persons or firms, which may be anindividual or firm selected from a list approved by thestate treasurer, to perform the duties of a localinspector or a local auditor as described in thissubdivision. The duties of a local inspector are toassure integrity, economy, efficiency, and effectivenessin the operations of the local government by conductingmeaningful and accurate investigations and forensic
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audits, and to detect and deter waste, fraud, and abuse.At least annually, a report of the local inspector shallbe submitted to the emergency manager, the statetreasurer, the superintendent of public instruction ifthe local government is a school district, and each statesenator and state representative who represents thatlocal government. The annual report of the localinspector shall be posted on the local government’swebsite within 7 days after the report is submitted.The duties of a local auditor are to assure that internalcontrols over local government operations are designedand operating effectively to mitigate risks that hamperthe achievement of the emergency manager’s financialplan, assure that local government operations areeffective and efficient, assure that financial informationis accurate, reliable, and timely, comply with policies,regulations, and applicable laws, and assure assets areproperly managed. At least annually, a report of thelocal auditor shall be submitted to the emergencymanager, the state treasurer, the superintendent ofpublic instruction if the local government is a schooldistrict, and each state senator and staterepresentative who represents that local government.The annual report of the local auditor shall be postedon the local government’s website within 7 days afterthe report is submitted.
(q) An emergency manager may initiate courtproceedings in the Michigan court of claims or in thecircuit court of the county in which the localgovernment is located in the name of the localgovernment to enforce compliance with any of his orher orders or any constitutional or legislativemandates, or to restrain violations of any constitutionalor legislative power or his or her orders.
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(r) Subject to section 19, if provided in the financial andoperating plan, or otherwise with the prior writtenapproval of the governor or his or her designee, sell,lease, convey, assign, or otherwise use or transfer theassets, liabilities, functions, or responsibilities of thelocal government, provided the use or transfer ofassets, liabilities, functions, or responsibilities for thispurpose does not endanger the health, safety, orwelfare of residents of the local government orunconstitutionally impair a bond, note, security, oruncontested legal obligation of the local government.
(s) Apply for a loan from the state on behalf of the localgovernment, subject to the conditions of the emergencymunicipal loan act, 1980 PA 243, MCL 141.931 to141.942.
(t) Order, as necessary, 1 or more millage elections forthe local government consistent with the Michiganelection law, 1954 PA 116, MCL 168.1 to 168.992,sections 6 and 25 through 34 of article IX of the stateconstitution of 1963, and any other applicable statelaw.
(u) Subject to section 19, authorize the borrowing ofmoney by the local government as provided by law.
(v) Approve or disapprove of the issuance of obligationsof the local government on behalf of the localgovernment under this subdivision. An election toapprove or disapprove of the issuance of obligations ofthe local government pursuant to this subdivision shallonly be held at the general November election.
(w) Enter into agreements with creditors or otherpersons or entities for the payment of existing debts,including the settlement of claims by the creditors.
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(x) Enter into agreements with creditors or otherpersons or entities to restructure debt on terms, atrates of interest, and with security as shall be agreedamong the parties, subject to approval by the statetreasurer.
(y) Enter into agreements with other localgovernments, public bodies, or entities for the provisionof services, the joint exercise of powers, or the transferof functions and responsibilities.
(z) For municipal governments, enter into agreementswith other units of municipal government to transferproperty of the municipal government under 1984 PA425, MCL 124.21 to 124.30, or as otherwise provided bylaw, subject to approval by the state treasurer.
(aa) Enter into agreements with 1 or more other localgovernments or public bodies for the consolidation ofservices.
(bb) For a city, village, or township, the emergencymanager may recommend to the state boundarycommission that the municipal government consolidatewith 1 or more other municipal governments, if theemergency manager determines that consolidationwould materially alleviate the financial emergency ofthe municipal government and would not materiallyand adversely affect the financial situation of thegovernment or governments with which the municipalgovernment in receivership is consolidated.Consolidation under this subdivision shall proceed asprovided by law.
(cc) For municipal governments, with approval of thegovernor, disincorporate or dissolve the municipalgovernment and assign its assets, debts, and liabilities
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as provided by law. The disincorporation or dissolutionof the local government is subject to a vote of theelectors of that local government if required by law.
(dd) Exercise solely, for and on behalf of the localgovernment, all other authority and responsibilities ofthe chief administrative officer and governing bodyconcerning the adoption, amendment, and enforcementof ordinances or resolutions of the local government asprovided in the following acts:
(i) The home rule city act, 1909 PA 279, MCL 117.1to 117.38.
(ii) The fourth class city act, 1895 PA 215, MCL 81.1to 113.20.
(iii) The charter township act, 1947 PA 359, MCL42.1 to 42.34.
(iv) 1851 PA 156, MCL 46.1 to 46.32.
(v) 1966 PA 293, MCL 45.501 to 45.521.
(vi) The general law village act, 1895 PA 3, MCL61.1 to 74.25.
(vii) The home rule village act, 1909 PA 278, MCL78.1 to 78.28.
(viii) The revised school code, 1976 PA 451, MCL380.1 to 380.1852.
(ix) The state school aid act of 1979, 1979 PA 94,MCL 388.1601 to 388.1896.
(ee) Take any other action or exercise any power orauthority of any officer, employee, department, board,commission, or other similar entity of the local
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government, whether elected or appointed, relating tothe operation of the local government. The power of theemergency manager shall be superior to and supersedethe power of any of the foregoing officers or entities.
(ff) Remove, replace, appoint, or confirm theappointments to any office, board, commission,authority, or other entity which is within or is acomponent unit of the local government.
(2) Except as otherwise provided in this act, during thependency of the receivership, the authority of the chiefadministrative officer and governing body to exercisepower for and on behalf of the local government underlaw, charter, and ordinance shall be suspended andvested in the emergency manager.
(3) Except as otherwise provided in this subsection, anycontract involving a cumulative value of $50,000.00 ormore is subject to competitive bidding by an emergencymanager. However, if a potential contract involves acumulative value of $50,000.00 or more, the emergencymanager may submit the potential contract to the statetreasurer for review and the state treasurer mayauthorize that the potential contract is not subject tocompetitive bidding.
(4) An emergency manager appointed for a city orvillage shall not sell or transfer a public utilityfurnishing light, heat, or power without the approval ofa majority of the electors of the city or village votingthereon, or a greater number if the city or villagecharter provides, as required by section 25 of articleVII of the state constitution of 1963. In addition, anemergency manager appointed for a city or village shallnot utilize the assets of a public utility furnishing heat,
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light, or power, the finances of which are separatelymaintained and accounted for by the city or village, tosatisfy the general obligations of the city or village.
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141.1563 Receivership transition advisory board.
Sec. 23. (1) Before removing a local government fromreceivership, the governor may appoint a receivershiptransition advisory board to monitor the affairs of thelocal government until the receivership is terminated.
(2) A receivership transition advisory board shallconsist of the state treasurer or his or her designee, thedirector of the department of technology, management,and budget or his or her designee, and, if the localgovernment is a school district, the superintendent ofpublic instruction or his or her designee. The governoralso may appoint to a receivership transition advisoryboard 1 or more other individuals with relevantprofessional experience, including 1 or more residentsof the local government.
(3) A receivership transition advisory board serves atthe pleasure of the governor.
(4) At its first meeting, a receivership transitionadvisory board shall adopt rules of procedure to governits conduct, meetings, and periodic reporting to thegovernor. Procedural rules required by this section arenot subject to the administrative procedures act of1969, 1969 PA 306, MCL 24.201 to 24.328.
(5) A receivership transition advisory board may do allof the following:
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(a) Require the local government to annually convenea consensus revenue estimating conference for thepurpose of arriving at a consensus estimate of revenuesto be available for the ensuing fiscal year of the localgovernment.
(b) Require the local government to provide monthlycash flow projections and a comparison of budgetedrevenues and expenditures to actual revenues andexpenditures.
(c) Review proposed and amended budgets of the localgovernment. A proposed budget or budget amendmentshall not take effect unless approved by thereceivership transition advisory board.
(d) Review requests by the local government to issuedebt under the revised municipal finance act, 2001 PA34, MCL 141.2101 to 141.2821, or any other lawgoverning the issuance of bonds or notes.
(e) Review proposed collective bargaining agreementsnegotiated under section 15(1) of 1947 PA 336, MCL423.215. A proposed collective bargaining agreementshall not take effect unless approved by thereceivership transition advisory board.
(f) Review compliance by the local government with adeficit elimination plan submitted under section 21 ofthe Glenn Steil state revenue sharing act of 1971, 1971PA 140, MCL 141.921.
(g) Review proposed judgment levies before submissionto a court under section 6093 or 6094 of the revisedjudicature act of 1961, 1961 PA 236, MCL 600.6093 and600.6094.
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(h) Perform any other duties assigned by the governorat the time the receivership transition advisory boardis appointed.
(6) A receivership transition advisory board is a publicbody as that term is defined in section 2 of the openmeetings act, 1976 PA 267, MCL 15.262, and meetingsof a receivership transition advisory board are subjectto the open meetings act, 1976 PA 267, MCL 15.261 to15.275. A receivership transition advisory board is alsoa public body as that term is defined in section 2 of thefreedom of information act, 1976 PA 442, MCL 15.232,and a public record in the possession of a receivershiptransition advisory board is subject to the freedom ofinformation act, 1976 PA 442, MCL 15.231 to 15.246.
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141.1574 Appropriation.
Sec. 34. For the fiscal year ending September 30, 2013,$780,000.00 is appropriated from the general fund tothe department of treasury to administer theprovisions of this act and to pay the salaries ofemergency managers. The appropriation made and theexpenditures authorized to be made by the departmentof treasury are subject to the management and budgetact, 1984 PA 431, MCL 18.1101 to 18.1594.
141.1575 Appropriation.
Sec. 35. (1) For the fiscal year ending September 30,2013, $5,000,000.00 is appropriated from the generalfund to the department of treasury to administer theprovisions of this act, to secure the services of financialconsultants, lawyers, work-out experts, and otherprofessionals to assist in the implementation of this
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act, and to assist local governments in proceedingunder chapter 9.
(2) The appropriation authorized in this section is awork project appropriation, and any unencumbered orunallotted funds are carried forward into the followingfiscal year. The following is in compliance with section451a(1) of the management and budget act, 1984 PA431, MCL 18.1451a:
(a) The purpose of the project is to provide technicaland administrative support for the department oftreasury to implement this act. Costs related to thisproject include, but are not limited to, all of thefollowing:
(i) Staffing-related costs.
(ii) Costs to promote public awareness.
(iii) Any other costs related to implementation anddissolution of the program, including the resolutionof accounts.
(b) The work project will be accomplished through theuse of interagency agreements, grants, stateemployees, and contracts.
(c) The total estimated completion cost of the project is$5,000,000.00.
(d) The expected completion date is September 30,2016.
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