State wins challenge to emergency financial manager law in COA

The Michigan Court of Appeals reversed an Ingham judge’s decision that governmental bodies meeting with an emergency financial manager violates the Open Meetings Act.

Writing for the court, Judge William Whitbeck said the only issue is whether the State Treasurer and Detroit Financial Review Team are “public bodies” under the Emergency Financial Manager Act (EFMA). If they are, plaintiff, local muckraker and alleged embezzler Robert Davis argued, meetings among them would be subject to the Open Meetings Act.

The issue ultimately hinged on whether the DFRT “governs”:

We therefore conclude that the authority and functions of a financial review team under § 13 of the Emergency Financial Manager Act do not empower a financial review team to independently “govern” through decision-making that effectuates or formulates public policy. A financial review team cannot act “upon” its recommendations; it can only make such recommendations. As a consequence, we conclude that the Detroit Financial Review Team is not a “governing body” and, therefore, not a “public body” within the meaning of the Open Meetings Act.

The fact that a financial review team can hire outside experts, has the power, under certain circumstances, to issue subpoenas and administer oaths to certain enumerated individuals and entities, and can, under certain circumstances, file an action in a circuit court to compel testimony and the furnishing of records and documents does not change our conclusion. These functions are ancillary to the investigative function that we have analyzed above. Again, such functions are not “governing” by independent decision making that effectuates or formulates public policy.

In light of our conclusion that a financial review team is not itself a public body, we conclude that the Supreme Court’s holding in Booth Newspapers is inapplicable here. That is, since the Detroit Financial Review Team is not itself a “public body,” then the State Treasurer could not himself, even if acting as a “one-man” committee, be a “public body” exercising governmental authority.

The panel found that the lower court abused its discretion in it issue injunctive relief. But it also remanded the case back to the lower court for proceedings on Davis’s motion for civil contempt. stating that Davis may be entitled to attorney’s fees and/or other costs.

Judge Peter O’Connell wrote a partial concurrence/dissent in which he said he’d toss the entire action:

I also write separately to remind all public servants that our governmental system turns on a respectful balance of power among the three branches of government. As Thomas Jefferson aptly explained, “the constitution, in keeping three departments distinct and independent, restrains the authority of the judges to judiciary organs, as it does the executive and legislative to executive and legislative organs.” Letter from Thomas Jefferson to William Charles Jarvis (Sept. 28, 1820) in The Writings of Thomas Jefferson, 1816-1826, at 161 (Paul L. Ford, ed., vol X, 1899). The judicial branch’s responsibility is to interpret the law impartially, free from the political process reserved for the other two branches of government. In my view, these tenets preclude any remand in this case. I would vacate and reverse all of the trial court’s rulings.

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