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Sugar Law Center Files Lawsuit Against Anti-Democratic Michigan Law

Source:  Daily Labor Report: News Archive > 2011 > June > 06/23/2011 > News > State Laws: Michigan Residents' Complaint Targets Law Empowering Unelected Emergency Managers; 121 DLR A-12; State Laws

A recently enacted Michigan law permitting the state's governor to appoint emergency managers to replace the governments of municipalities in dire financial straits violates the Michigan Constitution, according to a lawsuit filed June 22 against Gov. Rick Snyder (R) and Treasurer Andrew Dillon (D) by a group of Michigan residents (Brown v. Snyder, Mich. Cir. Ct., No. 11-000685-CZ, complaint filed 6/22/11).
The 28 plaintiffs—including a city commissioner of Benton Harbor, Mich., over which an emergency manager has been appointed—submitted a complaint in the circuit court for Ingham County, Mich.

They challenge the Local Government and School District Fiscal Accountability Act, which states in part that the governor, upon determining the existence of a “local government financial emergency” without a satisfactory resolution in place, shall appoint emergency managers from the state's executive branch “to act for and in the place and stead of” the local government's governing body.

“On its face and in practice, the Act violates the rights of local voters by delegating law-making power and the power to adopt local acts to unelected emergency managers, by suspending the rights of local electors to establish charters and to elect local officials, and by imposing new costs and expenses upon local municipalities without providing new revenue,” the complaint says.  After the bill was passed by the state Senate on March 9 and the House on March 15, Snyder signed it into law on March 16, and it went into effect that day (51 DLR A-7, 3/16/11).

The Congressional Research Service reported on March 30 that the act could run afoul of the U.S. Constitution's contract clause (66 DLR A-6, 4/6/11). On April 18, two Detroit municipal pension funds filed a lawsuit challenging a portion of the Act that allegedly would unlawfully alter the Detroit City Charter and bargaining contracts (76 DLR A-8, 4/20/11).

Suit Claims Law Misallocates Lawmaking Powers

The act violates the Michigan Constitution's Article III, § 2, and Article IV, § 1, which confine legislative powers to the state legislature, the residents' complaint asserts. It says the act impermissibly gives emergency managers the “sole discretionary power” to repeal, amend, and enact local laws and provides for consent agreements allowing the state treasurer to grant local government executive officers such power to adopt local laws, all without “reasonably precise limiting standards.”

The complaint claims that these granted powers also are at odds with Article IV, § 29, which stipulates that a local law shall not take effect without the approval of both two-thirds of the members of each house of the state legislature and a majority of the electors in the affected municipality. A majority of each house of the state legislature is required to repeal a local law, the section adds.

The residents contend the act also breaches Article VII, § 22, which exclusively provides municipal electors with the power to frame, amend, and adopt municipal charters, as well as Article IX, § 29, which bars the state from imposing new activities or services on local government units without the disbursement of funds to cover any increased costs.

Additionally, the complaint asserts, the act violates Article I, § 17's due process clause; Michigan residents' “right to a republican form of local government and to choose the officials of local government by democratic elections throughout the time that corporate body of local government remains in existence,” as recognized by Article I, § 23; and residents' similar inherent rights to local government, established by Article VII, §§ 21, 22, and 34.

In addition to declaratory relief holding that the act is unconstitutional, the plaintiffs seek an injunction barring present and future emergency managers from using powers the act grants them, attorneys' fees and costs, and further equitable relief.

Law Alters Local Government Norms, Official Says

“The core problem with the law is that it removes from local citizens their right to local representative government,” Tova Perlmutter, executive director of the Detroit-based Sugar Law Center for Economic and Social Justice, an organization representing the residents, said June 23. “It's an affront against the values of democracy and local control that are enshrined in the Constitution and in our society.”

“Fundamentally, the law allows individuals with no accountability to the community they control to sell off community assets, destroy infrastructure and mechanisms for service delivery, and in fact even dissolve local communities entirely.”

But Sara Wurfel, Snyder's press secretary, said June 23 that attacks on the act have ignored one of its key goals—to provide “early warning indicators” to prevent local government financial emergencies in the first place—that both Democratic and Republican governors have appointed emergency managers in the past, and that the state is constitutionally obligated to protect its residents' welfare.  “Not only do we think [the Act is] constitutional, but we think it's vitally necessary to ensure the health of Michigan's communities,” she said. “The governor would be happy never to appoint an [emergency manager] if at all possible.”

By Elliott T. Dube
Text of the complaint may be accessed at http://op.bna.com/dlrcases.nsf/r?Open=edue-8j4qjt.