MSC names new HR head

Troy A. Scott is the new Director of Human Resources for the Michigan Supreme Court, the Michigan Court of Appeals and the State Court Administrative Office.

He will also serve in an advisory role to the state’s trial courts regarding human resources issues.

Scott previously headed Dean Transportation’s HR department and served as the company’s general counsel since 2003.

In a press release issued earlier this week, State Court Administrator Chad Schmucker said, “Mr. Scott is both an experienced attorney and a human resources specialist, so he is well positioned to counsel the Supreme Court, Court of Appeals, and SCAO on employment matters.”

Scott is a University of Michigan graduate and earned his law degree from Thomas M. Cooley Law School.

Will Court amputate parts of health care law?

By Kimberly Atkins, Esq.

WASHINGTON– On the last of three days of oral arguments on the constitutionality of the federal health care reform law, the justices of the U.S. Supreme Court pondered whether they should act as virtual surgeons, taking a scalpel to the statute to excise constitutionally problematic portions while leaving the rest in place.

But the justices seemed stuck on a central issue during Wednesday’s arguments: whether the law can function without its heart, which is the individual minimum coverage mandate.

On that issue of severability, the justices – as on Tuesday when they considered the mandate’s constitutionality – seemed split.

“It’s a choice between a wrecking operation, which is what you are requesting, or a salvage job,” Justice Ruth Bader Ginsburg said to Paul Clement, a partner in theWashington office of Bancroft, who represents business groups seeking to strike down the law entirely. “And the more conservative approach would be salvage rather than throwing out everything.”

But Justice Anthony M. Kennedy, seen as a potentially crucial vote in the case, later asked Deputy Solicitor General Edwin S. Kneedler if severing parts of the law, thereby creating a statute different than the one passed by Congress, was not “an awesome exercise of judicial power” leaving the Court unsure of “what the consequences might be.”

 ‘A hollowed-out shell?’

Clement, urging the Court on the businesses’ behalf to rule that the entire law must fall if the individual mandate is ruled unconstitutional, focused on the complexity of the law, and the difficult task the Court would have trying to dissect it.

“The provisions that have constitutional difficulties [are] the very heart of this Act,” Clement. “And … they are textually interconnected to the exchanges, which are then connected to the tax credits, which are also connected to the employer mandates, which is also connected to some of the revenue offsets, which is also connected to Medicaid.”

But Chief Justice John G. Roberts, Jr., pointed out that several stand-alone provisions were also included in the measure.

“[The government] cited the Black Lung Benefits Act and [measures that] have nothing to do with any of the things we are talking about,” Roberts said.

Clement said that such measures could find another legislative vehicle, but keeping the law without the mandate would render it “a hollowed-out shell.”

 “But I’m still not sure what is the test,” Kennedy said. “I need to know what standard you are asking me to apply.”

“I’m a big believer in objective tests, Justice Kennedy,” Clement said.

“And that objective test is what?” Kennedy asked.

That test is “whether the statute can operate in the manner that Congress intended,” Clement replied.

 ‘Extreme exercise of judicial power?’

Kneedler walked a fine line in his argument for the government: He had to simultaneously urge the Court to uphold the mandate provision while also arguing that the rest of the law should stand in the event the mandate is struck down.

When Kennedy expressed concerns about the limits of the Court’s power, Justice Antonin Scalia jumped in, addressing Kneedler but really responding to Kennedy.

“Don’t you think it’s unrealistic to say, ‘Leave it to Congress [to] consider it dispassionately?” Scalia asked. “[There] is no way that this Court’s decision is not going to distort the congressional process. Whether we strike it all down or leave some of it in place, the congressional process will never be the same. One way or another, Congress is going to have to reconsider this, and why isn’t it better to have them reconsider” the whole thing?

“We think as a matter of judicial restraint,” Kneedler replied.

Several justices jumped in simultaneously to follow up on that comment. Kennedy won.

“We would be exercising the judicial power if one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended,” Kennedy said. “[W]e would have a new regime that Congress did not provide for, did not consider. That, it seems to me, can be argued at least to be a more extreme exercise of judicial power than to strike” the entire law.

H. Bartow Farr III, a partner in the Washington office of Farr & Taranto, was appointed by the Court to defend the 11th Circuit’s ruling that the individual mandate, which it found to be unconstitutional, could be severed from the rest of the law.

“Even though the system is not going to work precisely as Congress wanted [without the mandate] it would certainly serve central goals that Congress had of expanding coverage for people who were unable to get coverage or unable to get it at affordable prices,” Farr argued.

The Court also heard arguments on Wednesday in the states’ challenge to the Medicaid provision of the bill, which requires states to expand coverage in exchange for federal Medicaid funding.

Rulings on the application of the Anti-Injunction Act, the Medicaid requirement, the individual mandate’s constitutionality and, if necessary, the severability issue will be rendered before the Court’s term ends in June.

Kimberly Atkins is staff writer for Lawyers USA, which, like Michigan Lawyers Weekly, is a Dolan Company newspaper.


MSC will take up medical marijuana shop appeal

The Michigan Supreme Court has granted leave to appeal in a case that could put to rest the question once and for all: Are medical marijuana dispensaries permitted under Michigan law, or not?

Brandon McQueen, co-owner of Mount Pleasant-based Compassionate Apothecary LLC, also known as CA, is appealing the Michigan Court of Appeals Aug. 23, 2011, opinion in Michigan v. McQueen, et al. In that decision, the court said that CA was not operating in accordance with the Michigan Medical Marihuana Act when it allowed patient-to-patient transfers of marijuana.

CA operated as a private co-op type of club, and collected fees and a percentage of transactions between members. It did not grow or sell marijuana, but instead provided the space to store it and facilitated transactions between members.

McQueen said that’s allowed under section 4 of the Act, which doesn’t prohibit such transfers.

An Isabella County trial court agreed. But the Court of Appeals overturned that decision, stating that the Act is silent on patient-to-patient transfers and delivery. Even though the Act doesn’t define terms such as delivery or transfer, the panel said “These two words have been given or have acquired peculiar meanings in regard to controlled substances, and we construe them according to those meanings.”

Tomorrow, the House Judiciary Committee will take up a package of bills that would define some ambiguous parts of the Act, such as the definition of a doctor-patient relationship in the context of medical marijuana, and how the transport of medical marijuana is permitted by law.

Emergency manager for MCCA?

Rep. Phil Cavanagh, D-Redford, said he is frustrated that he can’t get the Michigan House Insurance Committee to take up bills that would require a higher level of public disclosure from the Michigan Catastrophic Claims Association (MCCA). This comes at a time when the MCCA has announced that it will impose a 21 percent increase in annual fees to ensure that the fund remains solvent.

Cavanagh said that today he’s going to introduce a house resolution to implore the state treasurer to start a financial review of MCCA, in order to explore the appointment of an emergency financial manager. So far, he’s garnered support from 25 representatives — all Democrats, though he is not ruling out some Republican support.

“They’ve got $14 billion in assets and claim they can’t pay” on future claims without a $30 per vehicle annual increase in fees, Cavanagh said in a phone interview with Michigan Lawyers Weekly.

Cavanagh introduced his “sunshine bills” last year because he was concerned about proposed reforms to no-fault insurance. He said he was particularly worried about the notion of capping lifetime benefits for people injured in car crashes, and with the proposal to allow drivers to purchase as little as $250,000 in personal protection insurance, or PIP benefits.

Without having enough information about individual claims — for example, how much is paid to care for someone with a brain injury or a back injury that requires chronic care — it’s impossible to know whether or not a cap on benefits would hurt injured people.

He said he’s just not buying the idea that the MCCA is in danger of becoming insolvent without such a cap on benefits, or the additional fee, or the idea that the MCCA can keep their claims data secret.

“The MCCA is funded by the public’s money and yet rates are set behind closed doors. They hire their own auditors whose conclusions are favorable to the MCCA at the expense of motorists,” Cavanagh said in a press release soon after the MCCA announced the fee increase. “We are forced to pay this charge. We need to shine a light and open up this agency now that they are about to charge their highest ever annual assessment. All drivers deserve to know where their hard earned money is going.”

He noted that MCCA has paid out $9 billion in total claims in its 33 years of existence. And according to the association’s annual reports, MCCA’s reserves are almost $14 billion. Cavanagh calls that a serious financial discrepancy that doesn’t jive with fee increases.

The sunshine bills would subject MCCA to the Open Meetings Act; would make claims data subject to Freedom of Information Act; and would require an independent annual audit of MCCA. Those bills are 4785 and 4786. Cavanagh expects to introduce the financial manager House resolution at 1:30 today.

No harm, no foul in Joe the Plumber’s First Amendment case

Samuel Joseph Wurzelbacher

Samuel Joseph "Joe the Plumber" Wurzelbacher

What’s Samuel Joseph Wurzelbacher — you know him better as “Joe the Plumber” — been up to lately?

In the 2008 presidential campaign, John McCain, Sarah Palin and the media made Wurzelbacher the icon for Republican opposition to then-Senator and candidate Barack Obama’s economic policies.

Obama was campaigning in Wurzelbacher’s neighborhood. Wurzelbacher asked Obama about the potential tax consequences of opening a plumbing business. Obama’s reply included a statement that he wanted to “spread the wealth.”

The exchange was caught on video and soon after, McCain, during a presidential debate, dubbed Wurzelbacher as “Joe the Plumber.”

Wurzelbacher became a media darling, dispensing criticism of Democratic policies in general and Obama’s in particular.

He’s capitalized on that by running for Congress in Ohio’s 9th District. Earlier this month, he won the Republican primary and will face incumbent Democrat Rep. Marcy Kaptur in the November general election.

He’s also been watching a federal First Amendment and privacy rights lawsuit that he filed swirl right down the drain.

Wurzelbacher’s exchange with Obama drew more than just media attention.

According Wurzelbacher’s suit, several days after his Oct. 12, 2008, encounter with Obama, three high-ranking officials in the Ohio Department of Job and Family Services, all Obama supporters, huddled together. They decided to authorize searches related to Wurzelbacher on child-support enforcement, welfare and unemployment databases, which were at their disposal.

Did they uncover any dirt? We’ll never know because the search results were never made public. But what became known, after the Office of the Ohio Inspector General made inquiries, was that the searches took place.

Wurzelbacher’s suit alleged that all three officials were suspended, and when the dust settled, two had resigned and the third was fired.

He alleged First Amendment and privacy right violations, claiming his exchange with Obama motivated the searches.

The federal district court granted defendant officials judgment on the pleadings.

In the Sixth Circuit, Judge Richard Griffin noted:

In order to adequately plead a First Amendment retaliation claim, a plaintiff must allege:
(1) the plaintiff engaged in constitutionally protected conduct;
(2) an adverse action was taken against the plaintiff that would deter a person of ordinary firmness from continuing to engage in that conduct; and
(3) the adverse action was motivated at least in part by the plaintiff’s protected conduct.

Griffin, joined by Judges Julia Gibbons and Bernice Donald, agreed with the federal district court that Wurzelbacher came up short on pleading an “adverse action.”

He asserts that defendants, without his knowledge, performed several improper database searches under his name. However, the complaint contains no information regarding what, if any, information was discovered. Moreover, if any information was obtained, it was never publicly disclosed. …

Wurzelbacher did not suffer a threat to his economic livelihood … was not defamed … did not endure a search or seizure of property … and did not experience the public disclosure of intimate or embarrassing information … .

In addition, Wurzelbacher was not threatened with a continuing governmental investigation, and he does not allege that defendants’ actions in fact caused a “chill” of his First Amendment rights.

As to that last point, it’s tough to imagine how he could have possibly done so.

The appeals panel also ruled that informational privacy rights are violated when released information may lead to bodily harm or concerns matters of a sexual, personal or humiliating nature.

Wurzelbacher pleaded none of this.

No harm, no foul.

The case is Wurzelbacher v. Jones-Kelley, et al.

Supreme Court takes up health care challenge

By Kimberly Atkins, Esq.

WASHINGTON – The U.S. Supreme Court began its historic three-day examination of the challenge to the federal health care law by taking up an issue that could stop the case in its tracks: whether the Anti-Injunction Act bars courts from considering challenges to the law before it is fully implemented in 2015.

There are two questions: Is the penalty for not obtaining health care coverage a tax? And if so, is the AIA a jurisdictional bar preventing courts from hearing challenges at all, or merely a defense that the government can raise?

 Government switches sides

There was already an odd twist to this part of the case before arguments began. The administration raised the AIA issue early in the litigation, but it has since abandoned that argument and is now urging the Court to find that the insurance penalty is not a tax and allow the challenge go forward instead of waiting until 2015.

“Congress has authority under the taxing power to enact a measure not labeled as a tax, and it did so when it put [the individual mandate] into the Internal Revenue Code,” Solicitor General Donald Verrilli, Jr., argued to the justices on Monday.

But Justice Samuel A. Alito, Jr., asked whether that stance could backfire on the government once the Court takes up the constitutionality of the individual mandate on Tuesday. On that issue, the government’s chief argument is that Congress had the power to pass such a measure under its taxing powers.

“Today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax,” Alito said. “Has the Court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?”

Verrilli said that the nature of the inquiry in each case was different.

“Tomorrow the question is whether Congress has the authority under the taxing power to enact it and the form of words doesn’t have a dispositive effect on that analysis,” Verrilli said. “Today we are construing statutory text where the precise choice of words does have a dispositive effect on the analysis.”

Gregory G. Katsas, a partner in theWashingtonoffice of Jones Day who represented the states challenging the law, argued that the health care law isn’t about imposing monetary fees.

“The purpose of this lawsuit is to challenge a federal requirement to buy health insurance,” Katsas said. “That requirement itself is not a tax. And for that reason alone, we think the Anti-Injunction Act doesn’t apply.”

Chief Justice John G. Roberts, Jr., wasn’t so sure.

“The whole point of the suit [is] to prevent the collection of taxes,” Roberts said. “The idea that the mandate is something separate … just doesn’t seem to make much sense.”

 Lawyer appointed for orphaned issue

Both the federal government and the states challenging the law are largely on the same side of the AIA issue. As a result, the Supreme Court had to appoint an attorney to defend a 4th Circuit ruling holding that the Act barred courts from hearing challenges by plaintiffs until they had incurred the penalty for non-compliance, since that penalty is a tax. In its certiorari petition the federal government requested that the Court consider the Anti-Injunction Act issue in the current 11th Circuit case.

Robert A. Long, a partner in theWashingtonoffice of Covington & Burling who was appointed to argue the case, said that Congress intentionally set a high jurisdictional bar for appealing tax matters in court.

“First … you have to pay the tax or the penalty first and then litigate later,” Long said. Second, you have to exhaust administrative remedies, even after you pay the tax you can’t immediately go to court. [Third,] even in the very carefully defined situations in which Congress has permitted a challenge to a tax or a penalty before it’s paid, the Secretary [of the Treasury] has to make the first move [by sending] a notice of deficiency to start the process.”

Justice Stephen Breyer said that wasn’t the tough issue.

“I’m probably leaning in your favor on jurisdiction,” Breyer said. “But where I see the problem is in the second part, because the [AIA] says ‘restraining the assessment or collection of any tax.’ Now [in the health care law] Congress has nowhere used the word ‘tax.’ What it says is penalty.”

“You don’t have to determine that this is a tax in order to find that the Anti-Injunction Act applies, because Congress very specifically said that it shall be assessed and collected in the same manner as a tax, even if it’s a tax penalty and not a tax,” Long said.

The balance of the issues in this case, HHS v. Florida, as well as the other cases challenging the law, will be considered by the Court Tuesday and Wednesday.

A ruling is expected before the Court’s term ends in June.

Kimberly Atkins is a staff writer for Lawyers USA which, like Michigan Lawyers Weekly is a Dolan Company newspaper

Gov. appoints to fill Justice Kelly’s vacant Wayne County seat

Gov. Rick Snyder has appointed Margaret Van Houten, of Dearborn Heights, to the Wayne County Circuit Court in Detroit.

According to a March 26 statement from the governor’s office, Van Houten has been in private practice since 2000. She previously worked as an associate attorney for Evans & Luptak PLC and as a law clerk for now Michigan Supreme Court Justice Brian Zahra. Van Houten is a city councilwoman in her fourth term for Dearborn Heights. She works with professional organizations, including the State Bar of Michigan, Federalist Society – Michigan Lawyers Chapter, Oakland County Bar Association, Wayne County Probate Bar Association, Dearborn Bar Association, American Bar Association, Italian American Bar Association, and the Catholic Lawyers Society.

Van Houten’s appointment fills the vacancy created by the resignation of Mary Beth Kelly, who was elected to the Michigan Supreme Court. She will serve a term that ends Jan. 1, 2013, and will have to seek election in 2012.

MSC upholds county apportioning law

A divided Michigan Supreme Court has upheld 2011 PA 280, which limits county commissions to 21 members in counties with 50,000 or more residents.

In addition, in counties with more than 1 million residents, the act reassigns apportionment duties from county reapportionment commissions to the board of commissioners.

Counties not in compliance with the act have 30 days to adopt a conforming apportionment plan.

What’s the practical effect of all of this? It’s an enormous gift to Oakland County Republicans, according to the legislation’s critics.

As the act is written, Oakland County is the only county that will have to redraw its election maps right now. And because the county has more than 1 million residents, Oakland’s reapportionment commission, where Democrats have a 3-2 edge, gets cut out of the picture, and the Republican-controlled county commission is now in the driver’s seat.

Earlier this month, the Michigan Court of Appeals sided with the plaintiffs in Houston, et al. v. Governor, et al. (majority opinion) (concurring/dissenting opinion), and ruled that the act was unconstitutional.

The COA majority reasoned that because the act affected Oakland County only, it was a local act that required a two-thirds vote by the Legislature. The act is invalid because didn’t muster the required number of votes under the state constitution, the COA majority ruled.

Defendants, Gov. Rick Snyder and the Oakland County Board of Commissioners asked the MSC to grant leave to appeal. The MSC heard oral arguments on an expedited basis. Plaintiffs, in defending the COA’s ruling, hammered on two points: first, the act’s effects resulted from an exercise of raw political power, and second, the COA got it right — the act is a local act because it affects Oakland County only.

Late yesterday, in a 4-3 order, the MSC majority responded “so what” to the first point and “reversed” to the second point.

The majority, Chief Judge Robert Young, and Justices Stephen Markman, Mary Beth Kelly and Brian Zahra, acknowledged the case was a political hot potato but said that simply doesn’t matter:

Plaintiffs make much of the alleged political motivations behind the Act, calling it a “political favor” to the Oakland County Executive and citing numerous supportive editorial comments.

As with any redistricting of political maps, the parties here vie to create maps that benefit their own interests, and a dispute with partisan implications has not surprisingly arisen. Notwithstanding this reality, “[t]he validity of legislation can never be made to depend on the motives which have secured its adoption, whether these be public or personal, honest or corrupt.” Cooley, Constitutional Law, p 154.

In a case like this, someone’s ox was bound to be gored:

In reaching our decision, this Court, as it is always, is engaged in applying the equal rule of law to the best of its ability. That there may be some partisan advantage to one side or another in this decision is simply a function of the fact that there is no conceivable decision that could have been reached in which one side or the other could not have asserted that partisan advantage accrued to the other. We believe that a fair review of the decisions of this Court in which some partisan advantage was at issue would make clear that our decisions have been marked by a commitment to a faithful reading of the law.

As to the merits, the majority looked to the two-part test in Dearborn v. Board of Supervisors, 275 Mich. 151 (1936), 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. …

2011 PA 280 satisfies the Dearborn test. First, the limiting criteria are reasonably related to the overall purpose of the Act. Here, the overall purpose is to limit the number of districts a county may apportion, and the population criteria set forth in the Act seem a reasonable means of achieving that purpose.

Second, the Act is open-ended. It provides various population ranges and places corresponding limits on the number of districts for every county within those ranges. As a county’s population increases above or below a given range, the number of districts that may be apportioned by that county will increase or decrease respectively.

That the transitional provision, requiring compliance with the Act within 30 days by counties whose apportionment does not currently satisfy the requirements of 2011 PA 280, practically applies only to Oakland County frustrates neither of the elements of Dearborn. …

Absent a transitional period during which some counties must necessarily be treated differently from others, it would be impossible for the Legislature to make general, uniform changes to public policy pertaining to local government.

That is, to bring counties that are out of compliance with the Legislature’s preferred public policy into compliance, and to establish uniform policy, those counties out of compliance must be treated differently during the transition or else uniformity can never be achieved.

The transitional provision here accomplishes just such a purpose by ensuring that Oakland County will not be the only county that operates outside of the apportionment limits of the Act until the next census.

Justice Marilyn Kelly, joined by Justice Michael Kelly, dissented. Justice Diane Hathaway, in a separate dissent, agreed with Kelly’s dissent.

The act’s effective date is March 28.

The political cartographers in Oakland County are sharpening their pencils in anticipation.

That’s a terrible color on — errr, for — you

“Knock knock.”

“Who’s there?”


“Orange who?”

“Orange you glad you don’t work THERE?”

The Sun Sentinel in Florida reported this week about a Deerfield Beach law firm that fired 14 workers for wearing orange.

According to the story, some of the orange-clad workers said that they and their coworkers have been wearing orange on pay days because that’s become a customary day for them to head out for happy hour after work. They thought it would be a hoot if they dressed like a group.

But someone at the law firm thought the workers were wearing orange as some kind of protest. [Note to employers: If your employees are engaging in some kind of protest every pay day, it might be time for some modest raises.]

They were rounded up and herded into a conference room, where they were canned with no severance, said the Sun Sentinel.