On March 16 of this year, Governor Snyder signed into law the Local Government and
School District Accountability Act (hereafter referred to as Public Act no. 4). This law allows the governor to put local governments and schools under financial review.[2]
This article is posted by Terry Bankert a Genesee County , Flint Lawyer ,I m a a former City of Flint Ombudsman. This law is bad and must be overturned ad until then fought in the courts and politically on the streets. Labor Unions, liberals, libertarians, democrates and people that care about democracy must consider joining this fight. Interested contact terry@attorneybankert.com, http://www.attorneybankert.com/, 1-810-235-1970. But why reinvent the wheel I would like to join in the fight with those that are already there.
Following are notes to be followed up with a series of articals and recommenddations onhow this battle can be won.
NOTES....FULLY CITED BY COMMENTS ARE IN BLOCK CAPS OR cited [trb] I will cites date and time of drafts here 7:32 07/29/11
If the appointed financial reviewers determine that the local entity is in sufficient financial trouble, the local government or school board will be disbanded and governance will be assumed by appointed officials—the so-called Emergency Managers. [2]
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).[3]
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.[3]
L. Brooks Patterson said the legislation, though reviled by labor unions because it allows contracts to be set aside by the appointed managers, has “teeth” so that state-appointed managers can pull struggling districts and cities out of their financial holes.[5]
These managers will have the authority, without public input, to do what they deem necessary to get the municipality or school back in the black. This could presumably include deciding to sell off key assets, close schools, raise taxes [according to the FAQs about the act posted on Treasury's site, "An Emergency Manager cannot impose taxes, over and above those already authorized, without the approval at an election of a majority of the qualified electors voting on the question. However, an Emergency Manager is authorized to order one, or more, millage elections for the unit of local government."—Ed.], cut programs and commissions, and eliminate other expenses.[2]
there’s tremendous powers,” Patterson said in an interview with The Oakland Press.
“He can go in and say, ‘OK, fine, this contract’s too expensive, these legacy costs are too expensive, these contracts are all gone,’” Patterson said. “That’s where the collective bargainers scream, ‘Hey, you can’t undo our contracts.’
“The law now has been changed and that’s exactly what can happen,” he said.[5]
Pontiac, which is the county seat and the only Oakland County community with a state-appointed emergency financial manager, will now operate under the new law once it’s signed, Patterson said.[5]
The city’s police department dissolved its union once it was clear the legislation would pass. Pontiac’s emergency financial manager has advocated turning police protection over to the Oakland County Sheriff’s Office.[5]
Our friend Emily Votruba down in Elberta, just south of Frankfort, in Benzie County recently started a community newspaper called The Elberta Alert. The Alert, which just published its second print edition with a run of a thousand copies, is whimsical, topical, and generating the kind of community dialogue that small towns need to survive in this era of corporate and media consolidation.[1]
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.[3]
“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).[3]
The Alert placed a call to Terry Stanton, public information officer for the Michigan Department of Treasury, to find out the implications of our watch status.[2]
According to Stanton, the data for the fiscal indicator scores (our score being 8 ) was compiled from the U.S. Census, local government offices, local tax assessment officers, and the municipalities’ annual audit reports. (View our breakdown in the accompanying image and here.)
According to Stanton,[2]
“These fiscal indicator scores have no correlation to the statute [Public Act no. 4],” and are provided simply as information to local governments to help them assess where potential problems may lie.[2]
Rather than the fiscal indicator scores, Treasury will be watching for the occurrence of any one of the 18 “triggering events” listed in the Act (see here).[2]
A few examples of trigger events include: (a) The Village Council might actually request that it be preliminarily reviewed; (b) a creditor may write to the state claiming that a payment from the Village is six or more months past due; (c) the local government might fail to “timely file” an annual financial budget; (d) the Village may end a fiscal year in a deficit condition.[2]
Any one of these trigger events could, according to Stanton, prompt a preliminary review. And any one of these triggers could happen here.[2]
So far, according to Stanton, Elberta hasn’t hit any of the triggers in such a way as to elicit a preliminary review, and Treasury has no current plans to conduct a review of Elberta. For one thing, said Stanton, the data reflected in the fiscal indicator scores is about three years old at this point (based on the 2009 audit), and as Village Clerk Sharyn Bower pointed out in the Record-Patriot, “Our auditor said our 2010 audit was much better.” Further, the approved Village budget for 2011/12 entails significant cuts, including a total of $73,298 in cuts to the general fund, streets, sewer, and garbage funds; the elimination of one our DPW employee positions; and the elimination of spousal benefits for our Village employees.[2]
Stanton said the factors cited in the fiscal indicator scores “are not considered predictive” of whether Elberta will hit enough triggers to require intervention. Nevertheless, we should all be aware that our house does not seem to be in order. The 2009 audit revealed our revenues at $228,198 and our expenditures at $267,002. More startlingly, as of the 2009 audit we had a major fund deficit of $742,954, according to the Treasury Department breakdown.[2]
We’re excited about this budding endeavor and will help in any way we can.
Votruba, and Elberta, just stumbled upon an alarming and disturbing report. [1]
The tiny town could fall prey to Governor Rick Snyder and the GOP-controlled Michigan legislature’s controversial Local Government and School District Accountability Act. [1]
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).[3]
This means that debt-ridden and financially troubled Elberta could fall under government financial review and, hypothetically, the town could be disbanded and turned over to non-elected Emergency Managers. [1]
What would that mean? Selling off hereto preserved Lake Michigan frontage and Elberta’s pristine bluffs to developers in order to make Elberta solvent?[1]
Much of the alarm stems from a story in today’s Benzie Record-Patriot (the newspaper of record in Benzie County) with the headline, “Elberta ‘Working Diligently’ on Financial Woes Cited by State”.[1]
In her story, “Elberta Placed on State Government Fiscal Watch List,” Votruba cites, and provides links to a chart published in the Detroit Free Press on April 6 that details where statewide municipalities and counties rate in terms of fiscal solvency. [1]
According to a chart released on the Detroit Free Press website on April 6, Elberta has been placed on a state financial watch list and is “flagged for possible state intervention.” We scored an 8 out of 10 based on our fiscal 2009 audit. Frankfort, meanwhile, scored an impressive 2, placing it in the category “neutral—no action necessary” (view the breakdown for Benzie County here). Elberta did remarkably worse than any other Benzie County entity. Gilmore Township was also in the neutral clear as of 2009, with a score of 3.[2]
The Elberta Alert goes on to describe the town’s fiscal woes, including marina and condominium development that didn’t prove lucrative, expenses from the City of Milwaukee, lead and asbestos discovered at the waterfront park, and taxes that Native Americans no longer pay to Elberta.[1]
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.[3]
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.[3]
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.”[3]
“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.”[3]
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[3]
Patterson lauds financial manager legislation as a good step
Published: Friday, March 11, 2011
By CHARLES CRUMM
Of The Oakland Press
New legislation giving emergency financial managers of school districts and municipalities more authority and broader powers will be signed into law by the governor within a matter of days, Oakland County Executive L. Brooks Patterson predicted Friday.
Patterson said the legislation, though reviled by labor unions because it allows contracts to be set aside by the appointed managers, has “teeth” so that state-appointed managers can pull struggling districts and cities out of their financial holes.
“Under the new law that was just passed by the Legislature, and I’m sure it’ll be signed by the governor in the next couple of days, there’s tremendous powers,” Patterson said in an interview with The Oakland Press.
“He can go in and say, ‘OK, fine, this contract’s too expensive, these legacy costs are too expensive, these contracts are all gone,’” Patterson said. “That’s where the collective bargainers scream, ‘Hey, you can’t undo our contracts.’
“The law now has been changed and that’s exactly what can happen,” he said.
Pontiac, which is the county seat and the only Oakland County community with a state-appointed emergency financial manager, will now operate under the new law once it’s signed, Patterson said.
The city’s police department dissolved its union once it was clear the legislation would pass. Pontiac’s emergency financial manager has advocated turning police protection over to the Oakland County Sheriff’s Office.
The legislation was most recently passed by the state Senate this week and will go back to the House for a concurring vote next week, a House spokesman said, before being sent to the Gov. Rick Snyder for his signature.
Snyder’s office indicated Friday that the governor will have to see the final legislative product before deciding whether to sign it into law.
“He’s been very supportive of the concept but we’ll have to see what the final bill looks like,” spokesman Ken Silfven said.
“It’s a very, very strong law but it’s not that you can just march into Birmingham and take over,” he said. “You’ve got to miss bond payments, you’ve got to miss payroll, you’ve got miss paying venders. It doesn’t even happen then.
“Then a committee is brought together to look to see if a city’s really in dire financial straits,” Patterson said. “If the committee agrees, then the committee recommends to the governor the appointment of an emergency financial manager.
“So there is a process, and I call it due process, before someone walks in and takes control.”
---Copy of Complaint
STATE OF MICHIGAN
IN THE CIRCUIT COURT FOR THE COUNTY OF INGHAM
_____________________________________
Elizabeth Brown, Tameka Ramsey,
Emma Kinnard, Hon. Juanita Henry,
Barbara Ford, Edith Lee-Payne,
Evelyn Foreman, Jacqueline Steingold,
Leslie Little, Michelle Martinez,
Suzanne Sattler IHM, Barbara Davenport,
Irene Wright, Patrick O’Connor, Paul Jordan,
Michael Merriweather, Marcia Sikora,
Ahmina Maxey, Maryion Lee,
Lisa Oliver-King, Kimberly Spring,
Brenda Reeber, George Reeber,
David Frederick, John David Ivers,
Lori Christenson, Betsy Coffia
and James Clancey,
Plaintiffs,
Case No. __________
vs. Hon. _____________
RICHARD D. SNYDER, as Governor of the
STATE OF MICHIGAN, and ANDREW DILLON,
as the TREASURER OF THE STATE OF
MICHIGAN.
Defendants.
_____________________________________________________________________________/
John C. Philo (P52721)
Anthony D. Paris (P71525)
SUGAR LAW CENTER
FOR ECONOMIC & SOCIAL JUSTICE
4605 Cass Avenue, Second Floor
Detroit, Michigan 48201
(313) 993-4505/Fax: (313) 887-8470
Co-Counsel - Attorneys for Plaintiffs
Herbert A. Sanders (P43031)
THE SANDERS LAW FIRM PC
615 Griswold St Ste 913
Detroit, MI 48226
(313) 962-0099/Fax: (313) 962-0044
Co-Counsel - Attorneys for Plaintiffs
Richard G. Mack, Jr. (P58657)
Keith D. Flynn (P74192)
Robert D. Fetter (P68816)
MILLER COHEN PLC
600 W Lafayette Blvd Fl 4
Detroit, MI 48226
Julie H. Hurwitz (P34720)
William H. Goodman (P14173)
Brandon M. Stump (P74418)
GOODMAN & HURWITZ PC on behalf of
the DETROIT & MICHIGAN NATIONAL
LAWYERS GUILD
1394 E Jefferson Ave
2
(313) 964-4454/Fax: (313) 964-4490
Co-Counsel - Attorneys for Plaintiffs
Detroit, MI 48207
(313) 567-6170/Fax: (313) 567-4827
Co-Counsel - Attorneys for Plaintiffs
Darius Charney
CENTER FOR CONSTITUTIONAL RIGHTS
666 Broadway 7th floor
New York, NY 10012
Co-Counsel - Attorneys for Plaintiffs
_____________________________________________________________________________/
COMPLAINT
FOR DECLARATORY & INJUNCTIVE RELIEF
NOW COME Plaintiffs, Elizabeth Brown, Tameka Ramsey, Emma Kinnard, Hon.
Juanita Henry, Barbara Ford, Edith Lee-Payne, Evelyn Foreman, Jacqueline Steingold, Leslie
Little, Michelle Martinez, Suzanne Sattler IHM, Barbara Davenport, Irene Wright, Patrick
O’Connor, Paul Jordan, Michael Merriweather, Marcia Sikora, Ahmina Maxey, Maryion Lee,
Lisa Oliver-King, Kimberly Spring, Brenda Reeber, George Reeber, David Frederick, John
David Ivers, Lori Christenson, Betsy Coffia, and James Clancey and by and through their
attorneys and for their Complaint, do hereby allege as follows.
NATURE OF PLAINTIFFS’ CLAIMS
1. This lawsuit arises from violations of Plaintiffs’ constitutional rights under the
Constitution of the State of Michigan of 1963.
2. The Local Government and School District Fiscal Accountability Act, Act No. 4,
Public Acts of 2011, MCL §§ 141.1501 et. seq. (the Act) effectively establishes a new form of
local government within the State of Michigan. The new form of government allows Michigan
cities, villages, townships, and other forms of municipal corporations to be ruled by one
3
unelected official and that this official’s orders, appointments, expenditures, and other decisions
are not reviewable by local elected officials or local voters.
3. 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 substantial new costs and expenses upon local municipalities without providing new
revenue.
4. The Act thereby violates Art. I, § 17, Art. I, § 23, Art. III, § 2, Art. IV, §§ 1 & 29,
Art. VII, §§ 21, 22, & 34, and Art. IX, § 29 of the Michigan Constitution.
JURISDICTION AND VENUE
5. Jurisdiction is conferred by MCL § 600.601 and § 600.605 and by MCR, Rule
2.605.
6. Venue is proper pursuant to MCL §600.1615, since the offices of the Governor
and State Treasurer exercise governmental authority within this county and judicial circuit.
PARTIES
7. Plaintiff Elizabeth Brown is a citizen of the United States and a resident of the
City of Jackson, County of Jackson, and State of Michigan.
8. Plaintiff Tameka Ramsey is a citizen of the United States and a resident of the
City of Pontiac, County of Oakland, and State of Michigan.
9. Plaintiff Emma Kinnard is a citizen of the United States and a resident of the City
of Benton Harbor, County of Berrien, and State of Michigan.
10. Plaintiff Hon. Juanita Henry is a current City Commissioner of the City of Benton
Harbor and is a citizen of the United States and a resident of the City of Benton Harbor, County
4
of Berrien, and State of Michigan.
11. Plaintiff Barbara Ford is a citizen of the United States and a resident of the City of
Detroit, County of Wayne, and State of Michigan.
12. Plaintiff Edith Lee-Payne is a citizen of the United States and a resident of the
City of Detroit, County of Wayne, and State of Michigan.
13. Plaintiff Evelyn Foreman is a citizen of the United States and a resident of the
City of Detroit, County of Wayne, and State of Michigan.
14. Plaintiff Jacqueline Steingold is a citizen of the United States and a resident of the
City of Detroit, County of Wayne, and State of Michigan.
15. Plaintiff Leslie Little is a citizen of the United States and a resident of the City of
Detroit, County of Wayne, and State of Michigan.
16. Plaintiff Michelle Martinez is a citizen of the United States and a resident of the
City of Detroit, County of Wayne, and State of Michigan.
17. Plaintiff Suzanne Sattler IHM is a citizen of the United States and a resident of
the City of Detroit, County of Wayne, and State of Michigan.
18. Plaintiff Barbara Davenport is a citizen of the United States and a resident of the
City of Pontiac, County of Oakland, and State of Michigan.
19. Plaintiff Irene Wright is a citizen of the United States and a resident of the City of
Pontiac, County of Oakland, and State of Michigan.
20. Plaintiff Patrick O’Connor is a citizen of the United States and a resident of the
City of Pontiac, County of Oakland, and State of Michigan.
21. Plaintiff Paul Jordan is a citizen of the United States and a resident of the City of
Flint, County of Genesee, and State of Michigan.
5
22. Plaintiff Michael Merriweather is a citizen of the United States and a resident of
the City of Ann Arbor, County of Washtenaw, and State of Michigan.
23. Plaintiff Marcia Sikora is a citizen of the United States and a resident of the City
of Farmington Hills, County of Oakland, and State of Michigan.
24. Plaintiff Ahmina Maxey is a citizen of the United States and a resident of the City
of Ferndale, County of Oakland, and State of Michigan.
25. Plaintiff Maryion Lee is a citizen of the United States and a resident of the City of
Flushing, County of Genesee, and State of Michigan.
26. Plaintiff Lisa Oliver-King is a citizen of the United States and a resident of the
City of Grand Rapids, County of Kent, and State of Michigan.
27. Plaintiff Kimberly Spring is a citizen of the United States and a resident of the
City of Grand Rapids, County of Kent, and State of Michigan.
28. Plaintiff Brenda Reeber is a citizen of the United States and a resident of the City
of Ludington, County of Mason, and State of Michigan.
29. Plaintiff George Reeber is a citizen of the United States and a resident of the City
of Ludington, County of Mason, and State of Michigan.
30. Plaintiff David Frederick is a citizen of the United States and a resident of the
City of Montague, County of Muskegon, and the State of Michigan.
31. Plaintiff John David Ivers is a citizen of the United States and a resident of the
City of St. Clair Shores, County of Macomb, and State of Michigan.
32. Plaintiff Lori Christenson is a citizen of the United States and a resident of the
City of Southfield, County of Oakland, and State of Michigan.
6
33. Plaintiff Betsy Coffia is a citizen of the United States and a resident of Traverse
City, County of Grand Traverse, and State of Michigan.
34. Plaintiff James Clancey is a citizen of the United States and a resident of the City
of Negaunee, County of Marquette, and State of Michigan.
35. Defendant Richard D. Snyder is the Governor of the State of Michigan. Governor
Snyder maintains his principal office at the Office of the Governor, 111 S. Capitol Avenue,
George W. Romney Building in the City of Lansing, County of Ingham, and State of Michigan.
36. Defendant Andrew Dillon is the Treasurer of the State of Michigan. Treasurer
Dillon maintains his principal office at the Department of Treasury, 430 W. Allegan Street in the
City of Lansing, County of Ingham, and State of Michigan.
COMMON FACTS
37. Through its provisions, the Local Government and School District Fiscal
Accountability Act, Act No. 4, Public Acts of 2011, MCL §§ 141.1501 et. seq. (the Act)
establishes a new form of local government, previously unknown within the United States or the
State of Michigan, where the people within local municipalities may be governed by an
unelected official who establishes local law by decree.
38. On its face and in practice, the Act flagrantly violates the Constitution of the State
of Michigan by:
a) Delegating legislative powers without limiting standards to emergency managers;
b) Granting unelected emergency managers the power to enact local law without the
constitutional restraints placed on state and local governments;
c) Usurping the vested rights of local electors to adopt and amend local charters
which govern cities and villages within Michigan;
7
d) Suspending the rights of local electors to a republican form of government and to
elect the officials of local government through democratic elections; and
e) Imposing substantial new costs upon local municipal corporations without
providing offsets or additional revenue streams to affected communities.
39. Prior to 1988, local government was placed into receivership by the courts, not
the state legislature or executive branch. Compensation for court-appointed receivers was
derived from property that the courts placed within the care of the receiver. Fisk v Fisk, 333
Mich 513 (1952).
40. In 1990, the legislature passed the Local Government Fiscal Responsibility Act,
Act No. 72, Public Acts of 1990 (the former Act). This statute authorized state officials to
intervene when local governments were facing a financial emergency. Pursuant to the former
Act, when a financial emergency was found to exist and there existed no satisfactory plan to
resolve the emergency, an emergency financial manager could be appointed by a state board.
41. In February of 2011, the bill for the Local Government and School District Fiscal
Accountability Act (the Act) was enrolled and fast-tracked through the Michigan legislature.
42. The Local Government and School District Fiscal Accountability Act bill was
presented to the Governor for signature approximately one month after its introduction before the
legislature.
43. Governor Richard D. Snyder signed the Local Government and School District
Fiscal Accountability Act into law on March 16, 2011.
44. The Local Government and School District Fiscal Accountability Act (the Act)
replaced the Local Government Fiscal Responsibility Act (the former Act) and radically revised
state law.
8
45. The Act grants the Governor broad discretionary powers to declare that a local
government is in a financial emergency and to determine whether the local government has a
satisfactory plan to resolve the emergency. MCL §141.1515 (1).
46. The Act grants a state financial review team power to enter into a consent
agreement with local government to address local financial problems and purport to provide
financial stability to the local government without a finding that a financial emergency exists.
47. The Act further states that the consent agreement may grant the state treasurer
power to vest a local chief administrative officer, the chief financial officer, or other officers of
the local government with the powers and authority of an emergency manager under the Act.
MCL §141.1514a (9).
48. The Act further provides that once the Governor has unilaterally declared a
financial emergency and found that no satisfactory plan exists to resolve the emergency, the
Governor shall appoint an emergency manager to act for, and in place of, the governing body of
the local government. MCL §141.1515 (4).
49. The emergency manager is an appointed official of the executive branch of state
government. Alternatively, the emergency manager is a private contractor working as an agent
of the executive branch of state government.
50. The Act seeks to grossly expand the powers of emergency managers over all
operations of local government. The emergency manager’s powers extend not only to financial
policy and decision-making, but also to all other areas of local government. The Act seeks to
accomplish this expansion of powers without dissolving the corporate body of local government
and without first removing or suspending the offices of local elected officials.
9
51. The provisions of the Local Government and School District Fiscal
Accountability Act establish a form of local government that is repugnant to the constitutional
liberties of Americans under settled law, as well as the rule of law itself. Under this new form of
government, the people become subject to a form of governance where an unelected local
official wields absolute power over all aspects of local government and whose decisions are
without review by either local elected officials or local voters.
52. Without limiting standards, the Act delegates the state legislature’s general
legislative powers to emergency managers. The Act delegates such powers through provisions
that vest emergency managers with sole discretionary power and authority to:
a. Contravene, and thereby implicitly repeal, local laws such as city and
village charters and ordinances; and
b. Explicitly repeal, amend, and enact local laws such as city and village
ordinances.
53. The Michigan Constitution of 1963, Art. III, § 2, prohibits executive branch
officials from exercising general legislative power granted to the state legislature by Art. IV, § 1.
54. The Michigan Constitution of 1963, Art. IV, § 1, vests the state senate and house
of representatives with general legislative power.
55. The Act grants emergency managers greater power than the state legislature
possesses regarding the adoption and repeal of local acts. The Act grants such power through
provisions that seek to vest emergency managers with sole discretionary power and authority to:
a. Contravene, and thereby implicitly repeal, local laws such as city and
village charters and ordinances; and
10
b. Explicitly repeal, amend, and enact local laws such as city and village
ordinances.
56. The Michigan Constitution of 1963, Art. IV, § 29, prohibits the state legislature
from adopting local acts without the approval of two-thirds of the members serving in the state
legislature and without the approval of a majority of the electors voting in the affected locality.
Furthermore, Article IV, § 29 only permits the repeal of local acts by a majority vote of the state
legislature.
57. The Act violates the exclusive constitutionally mandated rights of local electors to
adopt and amend local charters. The Act violates such rights through provisions that seek to vest
emergency managers with sole discretionary power to contravene local charter provisions.
58. The Michigan Constitution of 1963, Art. VII, § 22, vests the sole right to frame,
amend, and adopt charter provisions in the electors of cities and villages. So long as the
corporate body of local government remains in existence, the charter exists as local law to be
followed by all persons within the local jurisdiction.
59. The Act usurps the constitutionally mandated rights of local electors to a
republican form of government and to choose the officials of local government by democratic
elections. The Act usurps such rights through provisions that seek to vest emergency managers
with sole discretionary power and exclusive authority to act for, and in the place of, local
government.
60. The Michigan Constitution of 1963, Art. I, § 17, grants due process rights to all
persons in the state. Due process rights include a right to procedural due process during the
repeal of local charter provisions and during the repeal, amendment, and adoption of local
ordinances. Due process rights further include, a substantive right to a republican form of local
11
government and to choose the officials of local government by democratic elections throughout
the time that corporate body of local government remains in existence.
61. Under the Michigan Constitution of 1963, Art. VII, §§ 21, 22, and 34, local
electors possess an inherent 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.
62. Under the Michigan Constitution of 1963, Art. I, § 23, local electors possess a
retained 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.
63. The Act requires local governments to increase activities and incur necessary
expenses by requiring local governments to fund emergency managers, their staffs, auditors,
financial review teams, technical advisors, consultants, firms, and other expenses incurred when
complying with the mandated activities of the Act.
64. In 1978, the Michigan Constitution was amended to include Art. IX, § 29, which
prohibits the state from mandating new activities or services upon units of local government
without making a state appropriation of funds to be disbursed to local government to pay for any
increased costs.
65. At the time of filing, emergency managers have been appointed over the cities of
Benton Harbor, Ecorse, and Pontiac and over the Detroit Public Schools. As such, these
emergency managers are currently exercising powers unconstitutionally granted by the Local
Government and School District Fiscal Accountability Act.
12
COUNT I – Constitutional Violation
1963 Const. Art III, § 2 and Art. IV, § 1
Nondelegation Doctrine
66. Plaintiff incorporates by reference paragraphs 1 through 65 above as though fully
stated herein.
67. Article III, § 2 of the Michigan Constitution of 1963 states: “No person exercising
powers of one branch shall exercise powers properly belonging to another branch except as
expressly provided in this constitution.” Article IV, § 1 of the Michigan Constitution of 1963
vests the state senate and house of representatives with legislative power.
68. Pursuant to Article III, § 2 and Article IV, § 1, the Michigan legislature is
prohibited from delegating legislative powers, not only to executive branch agencies and
officials, but also to private contractors.
69. When delegating rule-making authority to executive branch agencies and
officials, the state legislature must articulate reasonably precise limiting standards to avoid the
constitutional prohibition against the delegation of legislative powers.
70. On its face, the Local Government and School District Fiscal Accountability Act,
Act No. 4, Public Acts of 2011 violates the prohibitions of Article III, § 2. The Act violates the
nondelegation doctrine through provisions providing for consent agreements that, without a
finding of a financial emergency and without reasonably precise limiting standards, permit the
state treasurer to delegate sole discretionary legislative power to a local government’s chief
administrative officer, the chief financial officer, or other executive officers of the local
government. See MCL §141.1514a (9).
71. On its face, the Local Government and School District Fiscal Accountability Act,
Act No. 4, Public Acts of 2011 violates the prohibitions of Article III, § 2 and the nondelegation
13
doctrine through provisions of the statute that, without reasonably precise limiting standards,
delegate to emergency managers sole discretionary legislative power and authority to:
a. Act for and in the place and stead of the local governing body of cities and
villages over matters unrelated to the financial emergency and unrelated to
the fiscal policies, practices, and circumstances of the local government.
See provisions including but not limited to MCL §141.1515(4);
§141.1517(1), §141.1519(1) (dd), (ee), and (ff) and §141.1519(2);
b. Contravene, and thereby implicitly repeal, local laws such as city and
village charters and ordinances; See provisions including but not limited to
MCL §141.1517(1), §141.1519(1) (dd), (ee), and (ff) and §141.1519(2);
and
c. Explicitly repeal, amend, and enact local laws such as city and village
ordinances. See provisions including but not limited to MCL §141.1519
(1) (dd).
WHEREFORE, Plaintiffs request that this Court order declaratory relief and declare that
the Local Government and School District Fiscal Accountability Act, Act No. 4, Public Acts of
2011, MCL § 141.1501 et seq., unconstitutionally delegates legislative power to the emergency
manager, and that this Court provide injunctive relief restraining present and future emergency
managers appointed under the Act from implementing or exercising authority and powers
purportedly conveyed by §141.1514a (9), §141.1515(4), §141.1517(1), §141.1519(1) (dd), (ee),
and (ff) and §141.1519(2).
14
COUNT II – Constitutional Violation
1963 Const. Art. IV, § 29
Local Acts
72. Plaintiff incorporates by reference paragraphs 1 through 71 above as though fully
stated herein.
73. Article IV, §29, the Michigan Constitution of 1963 prohibits the state from
enacting local acts “until approved by two-thirds of the members elected to and serving” in the
state legislature and until approved “by a majority of the electors voting” in the affected district.
The article further requires approval of a “majority of the members elected to and serving in each
house” of the state legislature before a local act can be repealed.
74. City and village charters, adopted by local electors, and ordinances, adopted by
local legislative bodies, are local laws – equivalent to local acts adopted by the state legislature.
75. On its face, the Local Government and School District Fiscal Accountability Act,
Act No. 4, Public Acts of 2011 violates the prohibitions of Article IV, § 29. The Act violates
the local acts clause through provisions providing for consent agreements, without a finding of a
local financial emergency, that permit the state treasurer to delegate sole discretionary power to
adopt local acts to a local government’s chief administrative officer, the chief financial officer, or
other executive officers of the local government. See MCL §141.1514a (9).
76. On its face, the Local Government and School District Fiscal Accountability Act,
Act No. 4, Public Acts of 2011 violates the prohibitions of Article IV, §29. The Act violates the
local acts clause by delegating more power than the legislature possesses. The Act violates the
clause by granting emergency managers sole discretionary power and authority to:
a. Contravene, and thereby implicitly repeal, local laws such as city and
village charters and ordinances; See provisions including but not limited to
15
MCL §141.1517(1), §141.1519(1) (dd), (ee), and (ff) and §141.1519(2);
and
b. Explicitly repeal, amend, and enact local laws such as city and village
ordinances. See provisions including but not limited to MCL
§141.1519(1)(dd).
WHEREFORE, Plaintiffs request that this Court order declaratory relief and declare that
the Local Government and School District Fiscal Accountability Act, Act No. 4, Public Acts of
2011, MCL § 141.1501 et seq., violates Article IV, §29 of the Michigan Constitution, and that
this Court provide injunctive relief restraining present and future emergency managers appointed
under the Act from implementing or exercising authority and powers purportedly conveyed by
§141.1514a (9), §141.1517(1), §141.1519(1) (dd), (ee), and (ff) and §141.1519(2).
COUNT III – Constitutional Violation
1963 Const. Art. VII, § 22
Electors’ Right to Form Charter
77. Plaintiff incorporates by reference paragraphs 1 through 76 above as though fully
stated herein.
78. The Michigan Constitution of 1963 at Article VII, §22 vests city and village
electors with exclusive power to “frame, adopt and amend its charter, and to amend an existing
charter of the city or village heretofore granted or enacted by the legislature for the government
of the city or village.”
79. Once a city or village is incorporated and so long as it continues to exist, its
charter constitutes local law that is required to be followed by all public officials, the local
governing body, and all persons within the local government’s jurisdiction.
16
80. On its face, the Local Government and School District Fiscal Accountability Act ,
Act No. 4, Public Acts of 2011 violates the prohibitions of Article VII, § 22. The Act violates
the rights of local electors through provisions providing for consent agreements that, without a
finding of a local financial emergency, permit the state treasurer to delegate sole discretionary
power to a local government’s chief administrative officer, the chief financial officer, or other
executive officers of the local government to contravene, and thereby effectively suspend and/or
implicitly repeal, the provisions of city and village charters. See MCL §141.1514a (9).
81. On its face, the Local Government and School District Fiscal Accountability Act,
Act No. 4, Public Acts of 2011 violates local electors’ rights as vested by Article VII, §22. The
Act violates the local electors’ charter clause by granting emergency managers sole discretionary
power and authority to:
a. Contravene, and thereby effectively suspend and/or implicitly repeal, the
provisions of city and village charters. See provisions including but not
limited to MCL §141.1515(4), §141.1517(1), §141.1519(1) (dd), (ee), and
(ff) and §141.1519(2).
WHEREFORE, Plaintiffs request that this Court order declaratory relief and declare that
the Local Government and School District Fiscal Accountability Act, Act No. 4, Public Acts of
2011, MCL § 141.1501 et seq., violates Article VII, §22 of the Michigan Constitution and that
this Court provide injunctive relief restraining present and future emergency managers appointed
under the Act from implementing or exercising authority and powers purportedly conveyed by
§141.1514a (9), §141.1515(4), §141.1517(1), §141.1519(1) (dd), (ee), and (ff) and §141.1519(2).
17
COUNT IV – Constitutional Violation
1963 Const. Art. I, §§ 17 & 23 and Art. VII, §§ 21, 22 & 34
Electors Rights to Republican Form of Local Government and
to Elect Local Government Officials
82. Plaintiff incorporates by reference paragraphs 1 through 81 above as though fully
stated herein.
83. The Michigan Constitution of 1963 at Article I, § 17 provides that no person shall
be deprived of liberty or property without due process of law. The Constitution’s due process
clause protects the rights of persons to both procedural and substantive due process.
84. Michigan’s due process clause requires that local governments observe procedural
due process during the repeal of local charter provisions and during the repeal, amendment, and
adoption of local ordinances.
85. Michigan’s due process clause protects local citizens’ substantive due process
rights 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.
86. The Michigan Constitution of 1963 at Article I, § 23 recognizes and protects
rights retained by the people of the state of Michigan. The retained rights of the people include a
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.
87. The Michigan Constitution of 1963 at Article VII, §§ 21, 22 & 34 establishes the
rights of the people of the state of Michigan to local government. Michigan citizens’ right to
local government inherently vests citizens with a right to a republican form of local government
18
and a right to choose the officials of local government by democratic elections throughout the
time that corporate body of local government remains in existence.
88. On its face, the Local Government and School District Fiscal Accountability Act,
Act No. 4, Public Acts of 2011 violates Article I, §§ 17 & 23 and Article VII, §§ 21, 22 & 34 of
the Michigan Constitution of 1963. The Act violates the due process clause, the retained rights
clause, and the inherent rights of the people by granting:
a. The State Treasurer power, without the finding of a financial emergency,
to delegate the sole discretionary powers and authorities of an emergency
manager to a local government’s chief administrative officer, the chief
financial officer, or other executive officers of the local government;
MCL §141.1514a (9);
b. Emergency managers sole discretionary power and authority to act for and
in the place and stead of the local governing body of cities and villages
over matters unrelated to the financial emergency and unrelated to the
fiscal policies, practices, and circumstances of the local government. See
MCL §141.1515(4), §141.1517(1), §141.1519(1) (dd), (ee), and (ff) and
§141.1519(2);
c. Emergency managers sole discretionary power and authority to rule by
decree over cities and villages on matters unrelated to the financial
emergency and unrelated to the fiscal policies, practices, and
circumstances of the local government through powers that permit the
emergency manager to contravene, and thereby implicitly repeal, local
laws such as city and village charters and ordinances and to explicitly
19
repeal, amend, and enact local laws such as city and village ordinances.
See provisions including but not limited to MCL §141.1515(4);
§141.1517(1), §141.1519(1) (dd), (ee), and (ff) and §141.1519(2); and
d. Emergency managers sole discretionary power and authority to overrule
and supersede and assume all the powers and authority of the local
governing body and of all local elected officials over matters unrelated to
the financial emergency and unrelated to the fiscal policies, practices, and
circumstances of the local government. See provisions including but not
limited to MCL §141.1515(4); §141.1517(1), §141.1519(1) (dd), (ee), and
(ff) and §141.1519(2).
WHEREFORE, Plaintiffs request that this Court order declaratory relief and declare that
the Local Government and School District Fiscal Accountability Act, Act No. 4, Public Acts of
2011, MCL § 141.1501 et seq., violates Article I, § 17 of the Michigan Constitution, and that this
Court provide injunctive relief restraining present and future emergency managers appointed
under the Act from implementing or exercising authority and powers purportedly conveyed by
MCL §141.1514a (9), §141.1515(4), §141.1517(1), §141.1519(1) (dd), (ee), and (ff) and
§141.1519(2).
COUNT V – Constitutional Violation
1963 Const. Art. IX, § 29
Headlee Amendment
89. Plaintiff incorporates by reference paragraphs 1 through 88 above as though fully
stated herein.
90. In 1978, the Headlee Amendment to the Michigan Constitution of 1963 at Article
IX, § 29 was enacted to prohibit the state from:
20
a. Requiring a new activity or service by local government, unless a state
appropriation is made and disbursed to pay for any necessary increased
costs; and
b. Enacting an increase in the level of any activity or service by units of local
government beyond that required by existing law, unless a state
appropriation is made and disbursed to pay for any necessary increased
costs.
91. At the time that the Amendment was adopted in 1978, the state did not intervene
in local financial emergencies, emergency managers were not appointed by the state, and local
governments were not required to pay costs and fees related the appointment of emergency
managers.
92. The Local Government and School District Fiscal Accountability Act, Act No. 4,
Public Acts of 2011 violates Article IX, § 29 of the Michigan Constitution of 1963 by imposing
new and increased activities upon local government without making an appropriation and
disbursement to pay for necessary increased costs to local government.
93. New and increased activities imposed upon local government by the Act include,
but are not limited to:
a. Requiring the local government to pay the compensation, salary, benefits,
and expenses of the Governor’s appointed emergency manager. See MCL
§141.1515(5)(e);
b. Requiring the local government to pay the compensation, salary, benefits,
and expenses of any employee, agent, appointee, or contractor of the
emergency manager including inspectors, auditors, and technical
21
personnel hired at the discretion of the emergency manager; See
MCL§141.1515(6) and §141.1519(1)(o) and (p);
c. Requiring the local government to pay the costs and expenses of the
attorney general to defend in civil lawsuits brought against the emergency
manager; See MCL §141.1525(3);
d. Requiring local government to pay general liability insurance, professional
liability insurance, workers compensation insurance, automobile
insurance, and other insurance for the benefit of the emergency manager
and any employee, agent, appointee, or contractor of the emergency
manager; See MCL §141.1525(4); and
e. Requiring local government to pay for attorney fees and all costs of civil
litigation brought against the emergency manager and any employee,
agent, appointee, or contractor of the emergency manager if such expenses
are not covered by applicable insurance policies; See MCL §141.1525(5);
WHEREFORE, Plaintiffs request that this Court order declaratory relief and declare that
the Local Government and School District Fiscal Accountability Act, Act No. 4, Public Acts of
2011, MCL § 141.1501 et seq., violates IX, § 29 of the Michigan Constitution, and that this
Court provide injunctive relief restraining present and future emergency managers appointed
under the Act from implementing or exercising authority and powers purportedly conveyed by
MCL §141.1515(5)(e) and (6), §141.1519(1)(o) and (p), and §141.1525(3), (4) and (5).
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs Elizabeth Brown, Tameka Ramsey, Emma Kinnard, Hon.
Juanita Henry, Barbara Ford, Edith Lee-Payne, Evelyn Forman, Jacqueline Steingold, Leslie
22
Little, Michelle Martinez, Suzanne Sattler IHM, Barbara Davenport, Irene Wright, Patrick
O’Connor, Paul Jordan, Michael Merriweather, Marcia Sikora, Ahmina Maxey, Maryion Lee,
Lisa Oliver-King, Kimberly Spring, Brenda Reeber, George Reeber, David Frederick, John
David Ivers, Lori Christenson, Betsy Coffia, and James Clancey pray this Honorable court enter
Judgment against Defendants providing:
a. For declaratory relief holding that the Local Government and School District Fiscal
Accountability Act, Act No. 4, Public Acts of 2011 violates the Michigan
Constitution of 1963;
b. For injunctive relief restraining present and future emergency managers appointed
under the Act from implementing or exercising authority and powers purportedly
conveyed by the Local Government and School District Fiscal Accountability Act,
Act No. 4, Public Acts of 2011;
c. For attorneys’ fees and costs; and
d. For such further relief as is just and equitable.
_________________________________
John C. Philo (P52721)
Anthony D. Paris (P71525)
SUGAR LAW CENTER
FOR ECONOMIC & SOCIAL JUSTICE
4605 Cass Avenue, Second Floor
Detroit, Michigan 48201
(313) 993-4505/Fax: (313) 887-8470
Co-Counsel - Attorneys for Plaintiffs
Herbert A. Sanders (P43031)
THE SANDERS LAW FIRM PC
615 Griswold St Ste 913
Detroit, MI 48226
(313) 962-0099/Fax: (313) 962-0044
Co-Counsel - Attorneys for Plaintiffs
23
Richard G. Mack, Jr. (P58657)
Keith D. Flynn (P74192)
Robert D. Fetter (P68816)
MILLER COHEN PLC
600 W Lafayette Blvd Fl 4
Detroit, MI 48226
(313) 964-4454/Fax: (313) 964-4490
Co-Counsel - Attorneys for Plaintiffs
Julie H. Hurwitz (P34720)
William H. Goodman (P14173)
Brandon M. Stump (P74418)
GOODMAN & HURWITZ PC on behalf of the
DETROIT & MICHIGAN NATIONAL
LAWYERS GUILD
1394 E Jefferson Ave
Detroit, MI 48207
(313) 567-6170/Fax: (313) 567-4827
Co-Counsel - Attorneys for Plaintiffs
Darius Charney
CENTER FOR CONSTITUTIONAL RIGHTS
666 Broadway 7th floor
New York, NY 10012
Co-Counsel - Attorneys for Plaintiffs
Date: June 22, 2011
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