A little-noticed lawsuit has been filed in the state Court of Claims challenging the constitutionality of the $617 million financial rescue and restructuring plan for Detroit’s beleaguered public schools, and the plaintiffs appear to have a strong chance to be successful.
Amazingly, those plaintiffs include the elected Detroit school board members, the Keep the Vote/No Takeover Coalition, and Black Lives Matter, who evidently don’t realize that if their litigation is successful, they will have shot off their own toes.
The Legislature’s six-bill plan was signed into law by Gov. Rick Snyder June 21. The measures would retire or refinance the district’s debt and transfer assets from the old Detroit Public Schools (DPS) to a new Detroit Public Schools Community District. Critics have denounced it as a racist scheme that gives DPS far less money than it deserves and allows too much state control. If the critics win their law suit because the plan is ruled unconstitutional, Snyder and the Legislature would be asked to come up with another plan.
They won’t, at least before the Nov. 8 general election. In other words, the plan approved by Lansing lawmakers last month is the best that the critics are ever likely to get. The only other options appear to be a declaration of bankruptcy and/or dissolution of the DPS.
Thomas Bleakley, a St. Clair Shores attorney working pro bono for the critics, filed a lawsuit with the Michigan Court of Claims on July 5 testing whether the entire bailout package (PAs 192, 193, 194, 195, 196 and 197 of 2016) are LOCAL ACTS since the statutes affect only the DPS and none of the other 549 K-12 school districts in the state. The Constitution requires a local act to receive 2/3 majority approval in each house of the Legislature (all of the measures in the six-bill package got only simple majorities, not 2/3). In addition, one section of the Constitution requires that a local act must also receive a majority vote of electors in the local area affected.
This case — Helen Moore et al. v Rick Snyder — drew Chief Judge Michael Talbot of the Michigan Court of Appeals to hear the case. Talbot is one of four Court of Appeals judges who sit as trial judges on the Court of Claims. A single judge hears cases before the Court of Claims with no jury. Appeals are taken to a three-judge panel of the appellate court. The Court of Claims judge who tries the case (in this case, Talbot) cannot serve on a later panel of the Court of Appeals. Helen Moore, the lead plaintiff, is a longtime Detroit activist who is co-chair of the Keep the Vote/No Takeover Coalition.
Bleakley, acting on behalf of Moore & Co., is seeking an order from Talbot to render PAs 192-97 null and void. In one obvious error by the plaintiffs, they include PA 194 among the six new laws even though it would clearly fall outside of their argument on local acts. PA 194 (HB 5387) amends the Public Employee Relations Act (PERA) and has statewide application to all teacher strikes, not just those in the DPS. Talbot could well separate PA 194 from the other five statutes in making his decision.
The plaintiffs in the current lawsuit focus particularly on PA 192 (HB 5384), which they say contains most of the unconstitutional provisions in the package. That act includes language that defines a “qualifying school district” as a district that WAS previously organized and operated as a first class school district. The DPS is the ONLY school district in the state that WAS or has ever been a first class district. In their brief, the plaintiffs contend that there is no possibility that any other school district in the state could possibly meet this definition, given the effective date of the act as July 1, 2016. The plaintiffs say specific use of the language “was previously organized and operated” can mean ONLY events that have already occurred in the past. “Was” is the past tense of “is” and must be recognized for its plain and unambiguous meaning.
The Michigan Supreme Court in Dearborn v. Board of Supervisors, 275 Mich 151 (1936) established a two-part test for determining whether an Act is local or general:
— “First, the limiting criteria of the Act must be reasonably related to the overall purpose of the statute.
— “Second, the Act must be sufficiently open-ended so that localities may be brought within the scope of its provisions as such localities over time meet the required criteria.”
As recently as 2012, the Michigan Supreme Court — in Houston et al. v Governor — applied this two-part test for determining whether an Act is local or general. In the Houston case, the high bench ruled that a state law allowing the Oakland Co. Board of Commissioners to reapportion its districts was not a local act because the legislation had transitional provisions ensuring that Oakland County would not be the only county affected in the future.
Who appoints the judges on the state Court of Claims, anyway? The Supreme Court, which names a quartet of appellate judges, many with previous trial court experience. Besides Talbot, the current panel includes appellate judges Cynthia Stephens, Mark Boonstra and Steve Borrello.
As far back as the middle of the 19th Century, acts of the Legislature appropriating public money for a local or private purpose have required a 2/3 vote of the members elected in each chamber of the Legislature (1850 Michigan Constitution, Article IV, Section 45).
That 1850 requirement was retained in the 1908 Constitution in Article V, Section 24. Also in the 1908 Constitution, a new section was added — Article V, Section 30, which said: “The Legislature shall pass no local or special act in any case where a general act can be made applicable, and whether a general act can be made applicable shall be a judicial question. No local or special act shall take effect until approved by a majority of the electors voting thereon in the district to be affected.”
At the 1961-62 Constitutional Convention, both sections were retained with several relatively minor following changes. In the Address to the People, the convention delegates said the purpose of Article IV, Section 29 (previously Article V, Section 30 of the 1908 Constitution) was to protect localities against arbitrary action by requiring local and special acts to receive a 2/3 majority vote by the members of the legislature elected to and serving in each chamber, and a majority vote of electors in the area affected. Repeal of a local or special Act requires only a majority vote (not 2/3) by state legislators in both chambers, and there is NO voter approval required for repeal in the affected area. Article IV, Section 30 (previously Article V, Section 24, of the 1908 Constitution) had only a minor change clarifying that a 2/3 majority vote had to be obtained from legislators in both chambers not only elected to but SERVING if an appropriation of public money or a local or private purpose was involved.
In sum, the DPS agitator-plaintiffs may well secure the most pyrrhic of victories in court — they will blow up the Legislature’s plan while producing a final result that will be far worse for everybody, including themselves and their own school system.
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