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.


MSC: Emergency school manager oath-of-office case moot

Robert Davis, the Highland Park school board’s secretary who last week pleaded not guilty to federal charges of converting school district funds, has one less thing to worry about, courtesy of the Michigan Supreme Court.

The Court yesterday threw out his suit, Davis v. Emergency Manager of the Detroit Public Schools, which challenged Roy Roberts’ authority to serve as the emergency manager of the Detroit Public Schools.

In May 2011, Gov. Rick Snyder appointed Roberts under MCL 141.1501 et seq., Michigan’s emergency manager law. Roberts went to work without taking an oath of office.

Davis, a vocal critic of the law who backs up his views with litigation, asked Attorney General Bill Schuette to initiate a quo warranto action, claiming that without the oath of office, Roberts had no authority to run the Detroit schools.

After Davis sought quo warranto relief, Roberts took the oath, and a few days later, Schuette declined Davis’s request.

Davis’s next stop was at the Court of Appeals, which also turned him down. In an order dated Oct, 6, 2011, the COA said Robert’s failure to immediately take the oath didn’t violate MCL 201.3(7), which meant the office of emergency manager “was not, and did not need to be, declared vacant.”

The COA also ruled that Roberts fixed the problem by taking the oath of office before Davis filed his COA action, and that before taking the oath, Roberts was functioning as a de facto officer.

The Michigan Supreme Court yesterday approved the result but not the reasoning.

[W]e VACATE that part of the of the Court of Appeals October 6, 2011 order providing the legal reasoning for the denial of the application.

In all other respects, the application for leave to appeal is DENIED as moot in light of the fact that Roy S. Roberts was reappointed to serve as Emergency Manager for the Detroit Public Schools, effective April 2, 2012, and he signed an Oath of Office on that date.

In a concurring statement, Chief Justice Robert Young Jr. questioned whether an emergency manager is even constitutionally required to take an oath of office. Young said the issue need not be decided because the case was moot.

Young’s concurrence prompted Justice Stephen Markman to respond:

Given that the responsibilities of the emergency manager are, during extraordinary economic circumstances, to carry out the duties of the mayor and the members of the city council of a municipality, all of whom themselves are required to take oaths of office, it would seem anomalous that an official serving in their stead would not also be required to make the same commitment to the laws and constitutions of the United States and Michigan.