U.S. District Court Eastern District of Michigan (Detroit) CIVIL DOCKET FOR CASE #: 2:17−cv−13887−GCS−MKM

CLOSED

Bellant et al v. SNYDER et al Assigned to: District Judge George Caram Steeh Referred to: Magistrate Judge Mona K. Majzoub Cause: 28:1983 Civil Rights
Plaintiff

Date Filed: 12/01/2017 Date Terminated: 12/11/2018 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: Federal Question

Russ Bellant

represented by Herbert A. Sanders The Sanders Law Firm, PC 615 Griswold St. Suite 913 Detroit, MI 48226 313−962−0099 Fax: 313−962−0044 Email: haslawpc@gmail.com ATTORNEY TO BE NOTICED

Huwaida Arraf Goodman & Hurwitz, P.C. 1394 E. Jefferson Ave. Detroit, MI 48207 917−588−3482 Email: harraf@goodmanhurwitz.com ATTORNEY TO BE NOTICED

John C. Philo Sugar Law Center 4605 Cass Avenue Detroit, MI 48201 313−993−4505 Fax: 313−887−8470 Email: johnphilo1@comcast.net ATTORNEY TO BE NOTICED

Julie H. Hurwitz Goodman and Hurwitz, P.C. 1394 E. Jefferson Avenue Detroit, MI 48207 313−567−6170 Fax: 313−567−4827 Email: jhurwitz@goodmanhurwitz.com ATTORNEY TO BE NOTICED

William H. Goodman Goodman and Hurwitz 1394 E. Jefferson Avenue Detroit, MI 48207 313−567−6170 Fax: 313−567−4827 Email: bgoodman@goodmanhurwitz.com ATTORNEY TO BE NOTICED

Cynthia Heenan Constitutional Litigation Associates 220 Bagley St. Suite 740 Detroit, MI 48226 313−961−2255

Plaintiff Tawanna Simpson
Plaintiff Lamar Lemmons
Plaintiff Elena Herrada

Fax: 313−922−5130 Email: Info@ConLitPC.com ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED

Plaintiff Kermit Williams
Plaintiff Donald Watkins

John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address)

Plaintiff Duane Seats
Plaintiff Juanita Henry
Plaintiff Mary Alice Adams

ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address)

Plaintiff William Kincaid
Plaintiff Bishop Bernadel Jefferson

ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED

Plaintiff Paul Jordan
Plaintiff Rev. Jim Holley
Plaintiff Rev. Charles E. Williams, II

represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED

Plaintiff Rev./Dr. Michael A. Owens
Plaintiff Rev. Lawrence Glass

Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED

Plaintiff Rev./Dr. DeeDee Coleman
V. Defendant RICHARD D. SNYDER
Defendant Andrew Dillon

represented by Herbert A. Sanders (See above for address) ATTORNEY TO BE NOTICED
Huwaida Arraf (See above for address) ATTORNEY TO BE NOTICED
John C. Philo (See above for address) ATTORNEY TO BE NOTICED
Julie H. Hurwitz (See above for address) ATTORNEY TO BE NOTICED
William H. Goodman (See above for address) ATTORNEY TO BE NOTICED
Cynthia Heenan (See above for address) ATTORNEY TO BE NOTICED
represented by Ann M. Sherman MI Dept of Attorney General P.O. Box 30212 Lansing, MI 48909 517−335−7628 Email: shermana@michigan.gov ATTORNEY TO BE NOTICED
Denise C. Barton MI Dept of Atty Gen Public Employment, Elections and Torts Division P.O. Box 30736 525 W. Ottawa St. Lansing, MI 48909−8236 517−373−6434 Fax: 517−373−2454 Email: AG−PEET@michigan.gov ATTORNEY TO BE NOTICED
Michael F. Murphy MI Dept of Attorney General MDOC Division P.O. Box 30217 Lansing, MI 48909 517−335−3055 Fax: 517−7157 Email: AG−Complex@michigan.gov ATTORNEY TO BE NOTICED
represented by Ann M. Sherman (See above for address) ATTORNEY TO BE NOTICED

Defendant R. Kevin Clinton
Defendant Nick Khouri

Denise C. Barton (See above for address) ATTORNEY TO BE NOTICED
Michael F. Murphy (See above for address) ATTORNEY TO BE NOTICED
represented by Ann M. Sherman (See above for address) ATTORNEY TO BE NOTICED
Denise C. Barton (See above for address) ATTORNEY TO BE NOTICED
Michael F. Murphy (See above for address) ATTORNEY TO BE NOTICED
represented by Ann M. Sherman (See above for address) ATTORNEY TO BE NOTICED
Denise C. Barton (See above for address) ATTORNEY TO BE NOTICED
Michael F. Murphy (See above for address) ATTORNEY TO BE NOTICED

Date Filed 12/01/2017
12/01/2017 12/01/2017
12/27/2017 01/16/2018 01/16/2018 02/07/2018

# Docket Text
1 COMPLAINT for Declaratory Relief filed by All Plaintiffs against All Defendants. Plaintiff requests summons issued. Receipt No: 0645−6500395 − Fee: $ 400. County of 1st Plaintiff: Wayne − County Where Action Arose: Wayne − County of 1st Defendant: Wayne. [Previously dismissed case: No] [Possible companion case(s): USDC−Eastern District, 13−11370−GCS−RSW, Judge George Caram Steeh] (Heenan, Cynthia) (Entered: 12/01/2017)
2 SUMMONS Issued for *R. Kevin Clinton, Andrew Dillon, Nick Khouri, RICHARD D. SNYDER* (Krause, S) (Entered: 12/01/2017)
A United States Magistrate Judge of this Court is available to conduct all proceedings in this civil action in accordance with 28 U.S.C. 636c and FRCP 73. The Notice, Consent, and Reference of a Civil Action to a Magistrate Judge form is available for download at http://www.mied.uscourts.gov (Krause, S) (Entered: 12/01/2017)
3 WAIVER OF SERVICE Returned Executed. RICHARD D. SNYDER waiver sent on 12/27/2017, answer due 2/26/2018. (Barton, Denise) (Entered: 12/27/2017)
4 WAIVER OF SERVICE Returned Executed. Nick Khouri waiver sent on 12/15/2017, answer due 2/13/2018. (Heenan, Cynthia) (Entered: 01/16/2018)
5 WAIVER OF SERVICE Returned Executed. R. Kevin Clinton waiver sent on 12/19/2017, answer due 2/20/2018. (Heenan, Cynthia) (Entered: 01/16/2018)
6 WAIVER OF SERVICE Returned Executed. Andrew Dillon waiver sent on 1/11/2018, answer due 3/12/2018. (Heenan, Cynthia) (Entered: 02/07/2018)

02/12/2018 02/14/2018 02/20/2018 03/09/2018 03/12/2018
03/12/2018
03/20/2018 03/23/2018 03/23/2018 03/23/2018 03/23/2018 03/25/2018 04/03/2018
05/24/2018 05/24/2018 05/24/2018
06/01/2018

7 STIPULATION AND ORDER extending time to respond to 1 Complaint Response due by 3/12/2018 Signed by District Judge George Caram Steeh. (MBea) (Entered: 02/12/2018)
8 ATTORNEY APPEARANCE: Denise C. Barton appearing on behalf of R. Kevin Clinton, Andrew Dillon, Nick Khouri, RICHARD D. SNYDER (Barton, Denise) (Entered: 02/14/2018)
9 NOTICE of Appearance by Michael F. Murphy on behalf of All Defendants. (Murphy, Michael) (Entered: 02/20/2018)
10 Ex Parte MOTION for Leave to File Excess Pages of Brief in Support of Motion to Dismiss by R. Kevin Clinton, Andrew Dillon, Nick Khouri, RICHARD D. SNYDER. (Barton, Denise) (Entered: 03/09/2018)
TEXT−ONLY ORDER Granting 10 Ex Parte MOTION for Leave to File Excess Pages of Brief in Support of Motion to Dismiss filed by RICHARD D. SNYDER, Andrew Dillon, R. Kevin Clinton, Nick Khouri. Entered by District Judge George Caram Steeh. (MBea) (Entered: 03/12/2018)
11 MOTION to Dismiss by R. Kevin Clinton, Andrew Dillon, Nick Khouri, RICHARD D. SNYDER. (Attachments: # 1 Index of Exhibits Exhibit List, # 2 Exhibit 1. Enrolled Senate Bill No. 865, # 3 Exhibit 2. Legislative Analysis Emergency Manager Law, # 4 Exhibit 3. Senate Bill Analysis 865) (Barton, Denise) (Entered: 03/12/2018)
12 NOTICE OF HEARING on 11 MOTION to Dismiss . Response due by 4/12/2018 Reply due by 5/3/2018 Motion Hearing set for 5/22/2018 10:00 AM before District Judge George Caram Steeh (MBea) (Entered: 03/20/2018)
13 ATTORNEY APPEARANCE: John C. Philo appearing on behalf of All Plaintiffs (Philo, John) (Entered: 03/23/2018)
14 NOTICE of Appearance by William H. Goodman on behalf of All Plaintiffs. (Goodman, William) (Entered: 03/23/2018)
15 NOTICE of Appearance by Julie H. Hurwitz on behalf of All Plaintiffs. (Hurwitz, Julie) (Entered: 03/23/2018)
16 NOTICE of Appearance by Huwaida Arraf on behalf of All Plaintiffs. (Arraf, Huwaida) (Entered: 03/23/2018)
17 NOTICE of Appearance by Herbert A. Sanders on behalf of All Plaintiffs. (Sanders, Herbert) (Entered: 03/25/2018)
18 STIPULATION AND ORDER extending deadlines re 11 MOTION to Dismiss Response due by 5/24/2018, Reply due by 6/7/2018, Motion Hearing reset for 6/27/2018 02:30 PM before District Judge George Caram Steeh Signed by District Judge George Caram Steeh. (MBea) (Entered: 04/03/2018)
19 Ex Parte MOTION for Leave to File Excess Pages to Response to Defendants' Motion to Dismiss by All Plaintiffs. (Philo, John) (Entered: 05/24/2018)
20 RESPONSE to 11 MOTION to Dismiss , 19 Ex Parte MOTION for Leave to File Excess Pages to Response to Defendants' Motion to Dismiss filed by All Plaintiffs. (Philo, John) (Entered: 05/24/2018)
21 *STRICKEN* RESPONSE to 11 MOTION to Dismiss , 19 Ex Parte MOTION for Leave to File Excess Pages to Response to Defendants' Motion to Dismiss Brief in Support filed by All Plaintiffs. (Attachments: # 1 Index of Exhibits, # 2 Exhibit 1 − Wendy Baxter Decision, # 3 Exhibit 2 − Legislative Record PA 4, # 4 Exhibit 3 − Kevyn Orr Email, # 5 Exhibit 4 − Contract of Kevyn Orr, # 6 Exhibit 5 − Legislative Record PA 436, # 7 Exhibit 6 − Fiscal Indicator Scores, # 8 Exhibit 7 − Munetrix Fiscal Indicator Scores, # 9 Exhibit 8 − MCRC Report, # 10 Exhibit 9 − Ecorse Exit Letter, # 11 Exhibit 10 − Pontiac Exit Letter) (Philo, John) Modified on 6/1/2018 (MBea). (Entered: 05/24/2018)
22 ORDER granting in part and denying in part 19 Ex Parte MOTION for Leave to File Excess Pages to Response to Defendants' Motion to Dismiss filed by William Kincaid, et al and STRIKING 21 plaintiffs' brief in Response to Motion : Motion Hearing

06/04/2018 06/05/2018
06/12/2018 06/12/2018 06/14/2018 06/14/2018 07/24/2018 09/05/2018 09/19/2018 09/21/2018 10/10/2018 10/18/2018 10/25/2018 10/25/2018
10/25/2018

reset for 7/18/18 at 2:30 PM Signed by District Judge George Caram Steeh. (MBea) (Entered: 06/01/2018)
23 STIPULATION AND ORDER extending deadlines re 11 MOTION to Dismiss :Reply due by 6/14/2018 Signed by District Judge George Caram Steeh. (MBea) (Entered: 06/04/2018)
24 RESPONSE to 11 MOTION to Dismiss Brief in Support filed by All Plaintiffs. (Attachments: # 1 Index of Exhibits, # 2 Exhibit 1 − Opinion of Hon. Wendy Baxter, # 3 Exhibit 2 − Legislative Record of Public Act 4 of 2011, # 4 Exhibit 3 − Email of Kevyn Orr dated 1/31/13, # 5 Exhibit 4 − Contract for Kevyn Orr as EM, # 6 Exhibit 5 − Legislative Record of Public Act 436 of 2012, # 7 Exhibit 6 − Fiscal Indicator Scores, MI Dept of Treasury, SOM, # 8 Exhibit 7 − Munetrix, Fiscal Indicator Scores, # 9 Exhibit 8 − Michigan Civil Rights Commission, The Flint Water Crisis: Systemic Racism Through the Lens of Flint (excerpts), # 10 Exhibit 9 − Ecorse Receivership Exit letter, # 11 Exhibit 10 − Pontiac Receivership Exit letter) (Philo, John) (Entered: 06/05/2018)
Set/Reset Deadlines as to 11 MOTION to Dismiss . Motion Hearing RESET for 7/24/2018 02:30 PM before District Judge George Caram Steeh Room 1080 (MBea) (Entered: 06/12/2018)
25 MOTION for Leave to File Excess Pages for Reply Brief in Support of Motion to Dismiss by R. Kevin Clinton, Andrew Dillon, Nick Khouri, RICHARD D. SNYDER. (Sherman, Ann) (Entered: 06/12/2018)
TEXT−ONLY ORDER Granting 25 MOTION for Leave to File Excess Pages for Reply Brief in Support of Motion to Dismiss filed by RICHARD D. SNYDER, Andrew Dillon, R. Kevin Clinton, Nick Khouri. Entered by District Judge George Caram Steeh. (MBea) (Entered: 06/14/2018)
26 REPLY to Response re 11 MOTION to Dismiss filed by R. Kevin Clinton, Andrew Dillon, Nick Khouri, RICHARD D. SNYDER. (Sherman, Ann) (Entered: 06/14/2018)
Minute Entry for proceedings before District Judge George Caram Steeh: Motion Hearing held on 7/24/2018 re 11 MOTION to Dismiss filed by RICHARD D. SNYDER, Andrew Dillon, R. Kevin Clinton, Nick Khouri Disposition: Motion taken under advisement (Court Reporter: Andrea Wabeke) (MBea) (Entered: 07/25/2018)
27 ORDER granting in part and denying in part 11 defendants' Motion to Dismiss. Signed by District Judge George Caram Steeh (MBea) (Entered: 09/05/2018)
28 ANSWER to Complaint with Affirmative Defenses by All Defendants. (Murphy, Michael) (Entered: 09/19/2018)
29 NOTICE TO APPEAR: Scheduling Conference set for 10/15/2018 10:00 AM before District Judge George Caram Steeh, Room 1067. Rule 26(f) Discovery Plan due 10/18/18 (MBea) (Entered: 09/21/2018)
*CORRECTION* Set/Reset Deadlines/Hearings: Scheduling Conference reset for *10/25/2018* 10:00 AM before District Judge George Caram Steeh Rule 26(f) Discovery Plan due 10/18/18. (MBea) (Entered: 10/10/2018)
30 DISCOVERY plan jointly filed pursuant to Federal Rules of Civil Procedure 26(f) (Philo, John) (Entered: 10/18/2018)
Minute Entry for proceedings before District Judge George Caram Steeh: Scheduling Conference held on 10/25/2018 (MBea) (Entered: 10/25/2018)
31 SCHEDULING ORDER: Discovery due by 7/31/2019 Dispositive Motion Cut−off set for 9/30/2019 Final Pretrial Conference set for 1/13/2020 10:00 AM before District Judge George Caram Steeh Bench Trial set for 1/27/2020 09:00 AM before District Judge George Caram Steeh Signed by District Judge George Caram Steeh. (Refer to image for additional dates) (MBea) (Main Document 31 replaced on 10/25/2018) (MBea). (Entered: 10/25/2018)
32 CORRECTED SCHEDULING ORDER re 31 Signed by District Judge George Caram Steeh. (Refer to image for dates) (MBea) (Entered: 10/25/2018)

11/15/2018 12/11/2018

33 STIPULATION AND ORDER for an extension to file Rule 26 Disclosures. Signed by District Judge George Caram Steeh. (MBea) (Entered: 11/15/2018)
34 STIPULATED ORDER DISMISSING CASE without prejudice. Signed by District Judge George Caram Steeh. (MBea) (Entered: 12/11/2018)

 
 2:17-cv-13887-GCS-MKM Doc # 1 Filed 12/01/17 Pg 1 of 30 Pg ID 1

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

Russ Bellant, Detroit Library Commissioner; Tawanna Simpson; Lamar Lemmons, Detroit Public Schools Board Member; Elena Herrada; Kermit Williams, Pontiac City Council Member; Donald Watkins; Duane Seats, Juanita Henry, and Mary Alice Adams, Benton Harbor Commissioners; William “Scott” Kincaid, Flint City Council Member; Bishop Bernadel Jefferson; Paul Jordan; Rev. Jim Holley, National Board Member Rainbow Push Coalition; Rev. Charles E. Williams II, Michigan Chairman, National Action Network; Rev. Dr. Michael A. Owens, Rev. Lawrence Glass, Rev. Dr. Deedee Coleman, Executive Board, Council of Baptist Pastors of Detroit and Vicinity;

Case No.: Judge:

Plaintiffs, v.

RICHARD D. SNYDER, as Governor of the State of Michigan; ANDREW DILLON, as former Treasurer of the State of Michigan, R. KEVIN CLINTON as former Treasurer of the State of Michigan, and NICK KHOURI, as Treasurer of the State of Michigan, acting in their individual and/or official capacities,

Complaint for Declaratory Relief

Defendants. __________________________________________________________________/
Herbert A. Sanders (P43031) THE SANDERS LAW FIRM PC 615 Griswold St. Ste. 913

1

2:17-cv-13887-GCS-MKM Doc # 1 Filed 12/01/17 Pg 2 of 30 Pg ID 2
Detroit, Michigan 48226 (313) 962-0099/Fax: (313) 962-0044 haslawpc@gmail.com Attorneys for Plaintiffs
John C. Philo (P52721) Anthony D. Paris (P71525) SUGAR LAW CENTER FOR ECONOMIC & SOCIAL JUSTICE 4605 Cass Ave., 2nd Floor Detroit, Michigan 48201 (313) 993-4505/Fax: (313) 887-8470 jphilo@sugarlaw.org tparis@sugarlaw.org Attorneys for Plaintiffs
Julie H. Hurwitz (P34720) William H. Goodman (P14173) GOODMAN HURWITZ & JAMES PC on behalf of the DETROIT & MICHIGAN NATIONAL LAWYERS GUILD 1394 E. Jefferson Ave. Detroit, Michigan 48207 (313) 567-6170/Fax: (313) 567-4827 jhurwitz@goodmanhurwitz.com bgoodman@goodmanhurwitz.com Attorneys for Plaintiffs
Darius Charney Ghita Schwarz Britney Wilson CENTER FOR CONSTITUTIONAL RIGHTS 666 Broadway, 7th floor New York, New York 10012 (212) 614-6464/Fax: (212) 614-6499 dcharney@ccrjustice.org
2

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Attorneys for Plaintiffs Cynthia Heenan (P53664) Hugh M. Davis, Jr. (P12555) CONSTITUTIONAL LITIGATION ASSOCIATES PC 450 W Fort St Ste 200 Detroit, MI 48226 (313) 961-2255/Fax: (313) 961-5999 conlitpc@sbcglobal.net Attorneys for Plaintiffs __________________________________________________________________/
COMPLAINT FOR DECLARATORY RELIEF
NOW COME Plaintiffs, and by and through their attorneys and for their Complaint, do hereby allege as follows.
I. NATURE OF PLAINTIFFS’ CLAIMS 1. This is a federal civil rights cause of action brought pursuant to 42 U.S.C. §1983 for violations of the Plaintiffs’ rights under the Equal Protection Clause of the United States Constitution, Amend. XIV. 2. The Local Financial Stability and Choice Act, Act No. 436, Public Acts of 2012, MCL §§ 141.1541 et. seq. (Public Act 436) establishes a new form of government within the State of Michigan that discriminates against communities composed of a majority of African-descended residents. The new government allows Michigan cities and other forms of municipal corporations to be ruled by
3

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one unelected official and by its terms and in practice is overwhelmingly invoked to disempower African-descended majority communities.
3. On its face and as applied, Public Act 436 violates Plaintiffs’ right to equal protection of law.
II. JURISDICTION AND VENUE 4. Federal question jurisdiction is conferred by 28 USC §§ 1331, 1343(a)(3), 1343(a)(4), 2201 and 2202 over Plaintiffs’ claims. 5. Venue is proper pursuant to 28 USC §1391, since four of the Defendants reside or are located in the Eastern District of Michigan and the events giving rise to this action occurred, in part, within this District.
III. PARTIES 6. Plaintiff Russ Bellant is a citizen of the United States, a resident of the City of Detroit, County of Wayne, and the State of Michigan. Plaintiff Bellant is also a member of the Detroit Library Commission. 7. Plaintiff Tawanna Simpson is a citizen of the United States, a resident of the City of Detroit, County of Wayne, and the State of Michigan. Plaintiff Simpson is a former Detroit Public Schools Board Member. 8. Plaintiff Lamar Lemmons is a citizen of the United States, a resident of the City of Detroit, County of Wayne, and the State of Michigan. Plaintiff Lemmons is also a Detroit Public Schools Board Member.
4

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9. Plaintiff Elena Herrada is a citizen of the United States, a resident of the City of Detroit, County of Wayne, and the State of Michigan. Plaintiff Herrada is also a former Detroit Public Schools Board Member.
10. Plaintiff Donald Watkins is a citizen of the United States, a resident of the City of Pontiac, County of Oakland, and the State of Michigan. Plaintiff Watkins is also a former member of the Pontiac City Council.
11. Plaintiff Kermit Williams is a citizen of the United States, a resident of the City of Pontiac, County of Oakland, and the State of Michigan. Plaintiff Williams is also a member of the Pontiac City Council.
12. Plaintiff Duane Seats is a citizen of the United States, a resident of the City of Benton Harbor Michigan, County of Berrien, and the State of Michigan. Plaintiff Seats is also a Benton Harbor Commissioner.
13. Plaintiff Juanita Henry is a citizen of the United States, a resident of the City of Benton Harbor Michigan, County of Berrien, and the State of Michigan. Plaintiff Henry is also a Benton Harbor Commissioner.
14. Plaintiff Mary Alice Adams is a citizen of the United States, a resident of the City of Benton Harbor Michigan, County of Berrien, and the State of Michigan. Plaintiff Adams is also a Benton Harbor City Commissioner.
5

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15. Plaintiff William “Scott” Kincaid is a citizen of the United States, a resident of the City of Flint Michigan, County of Genesee, and the State of Michigan. Plaintiff Kincaid is also a member of the Flint City Council.
16. Bishop Bernadel Jefferson is a citizen of the United States, a resident of the City of Flint Michigan, County of Genesee, and the State of Michigan.
17. 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.
18. Plaintiff Rev. Jim Holley is a citizen of the United States, a resident of the City of Detroit, County of Wayne, and the State of Michigan. Plaintiff Rev. Holley is also a National Board Member of the Rainbow Push Coalition.
19. Rev. Charles E. Williams II is a citizen of the United States, a resident of the City of Detroit, County of Wayne, and the State of Michigan. Plaintiff Rev. Williams is also the Michigan Chairman of the National Action Network.
20. Plaintiff Rev. Dr. Michael A. Owens is a citizen of the United States, a resident of the City of Detroit, County of Wayne, and the State of Michigan. Plaintiff Rev. Dr. Michael A. Owens is also President of the Council of Baptist Pastors of Detroit and Vicinity.
21. Plaintiff Rev. Lawrence Glass is a citizen of the United States, a resident of the City of Redford, County of Wayne, and the State of Michigan.
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Plaintiff Rev. Lawrence Glass is also First Vice-President of the Council of Baptist Pastors of Detroit and Vicinity.
22. Plaintiff Rev. Dr. Deedee Coleman is a citizen of the United States, a resident of the City of Detroit, County of Wayne, and the State of Michigan. Plaintiff Rev. Dr. Deedee Coleman is also President of the Council of Baptist Pastors of Detroit and Vicinity.
23. Defendant Richard D. Snyder is the Governor of the State of Michigan. Governor Snyder maintains his principal residence in the City of Ann Arbor in Washtenaw County, Michigan, and at all times relevant hereto was acting individually and in his official capacity as State Governor and top policymaker for the State of Michigan.
24. Defendant Andrew Dillon is a former Treasurer of the State of Michigan. The Defendant maintains his principal residence in Redford Township in Wayne County, Michigan, and at all times relevant hereto was acting individually and in his official capacity as State Treasurer and as a policymaker.
25. Defendant R. Kevin Clinton is a former Treasurer of the State of Michigan. The Defendant maintains his principal residence in East Lansing in Ingham County, Michigan, and at all times relevant hereto was acting individually and in his official capacity as State Treasurer and as a policymaker.
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26. Defendant Nick Khouri is the Treasurer of the State of Michigan. Treasurer Dillon maintains his principal residence in Plymouth in Wayne County, Michigan, and at all times relevant hereto was acting individually and in his official capacity as State Treasurer and as a policymaker.
IV. COMMON FACTS 27. Through its provisions, Public Act 436 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.
Legislative Background Of Municipal Financial Distress In Michigan 28. During the Great Depression in the 1930s, 4,770 cities defaulted on their debt. Among all states, Michigan had the fourth highest number of defaulting municipalities throughout Great Depression. At that time, creditors of defaulting cities were commonly required to file a mandamus action in state courts seeking to compel the municipality to raise taxes to pay debt obligations. Courts commonly then appointed receivers to oversee the finances of municipal debtors. 29. To improve procedures for creditors and municipal debtors, the federal government adopted Chapter 9 of the federal bankruptcy code in 1937. Chapter 9 permits the use of federal bankruptcy procedures for municipalities. Under Chapter 9, elected officials remain in office and retain significant autonomy
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while bankruptcy procedures oversee the development of a plan to adjust debts and pay creditors. Before a Chapter 9 petition may be filed however, the State must authorize the municipality to file for bankruptcy.
30. Prior to 1988, unless proceeding through Chapter 9, Michigan municipalities were 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.
31. Since 1937, two Michigan cities have defaulted on bond payments or been placed under a court imposed receivership due to insolvency. Muskegon Township defaulted on revenue bond payments in the early 1960s and the City of Ecorse was placed in receivership by a Wayne County Circuit Court in 1986. Neither municipality sought the protections of Chapter 9 bankruptcy. Muskegon Township entered into a settlement agreement with its creditors that resolved their defaults. Ecorse remained under court receivership through 1990 and was subject to further State oversight until the late 1990s.
32. In response to the troubled insolvency of the City of Ecorse, the State enacted Public Act 101 of 1988 (PA 101). Public Act 101 allowed the State to intervene when local municipalities were found to be in financial distress. The statute allowed the State to appoint emergency financial managers over cities experiencing a financial emergency.
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33. In 1990, the legislature replaced PA 101 with the Local Government Fiscal Responsibility Act, Act No. 72, Public Acts of 1990 (PA 72). Public Act 72 authorizes State officials to intervene when local governments face a financial emergency. Pursuant to PA 72, Michigan’s local financial emergency review board could appoint an emergency financial manager (EFM) after the Governor declared a financial emergency within the local government. As an alternative to appointing an EFM, the local government could enter into a consent agreement with the emergency review board and provided a process for filing Chapter 9 bankruptcy on behalf of the local government.
34. Under PA 72 when an EFM was appointed, local elected officials were not removed from office and they were not divested of all powers of their office. The EFM’s powers only extended to matters of municipal finances. Their powers did not extend to policy or purely administrative matters.
35. Michigan municipalities derive most of their revenue from two sources - property taxes and state revenue sharing. A few cites such as Detroit, Flint and Pontiac also generate revenue from income taxes.1 Declines in any of these three revenue streams will readily challenge the fiscal stability of any municipality primarily composed of low income residents with high service needs.
1 Detroit is one of the few cities that has a fourth major source of revenue – casino taxes.
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36. Michigan school districts derive almost all of their revenue from federal and state payments and local property taxes. Again, declines in any of these three revenue streams will readily challenge the fiscal stability of any school district with significant numbers of low income households and students with high service needs.
37. In the late 1990s, State legislation severely reduced the amount of funds shared by the State with local government. Local governments saw further revenue reductions when income and property tax revenues sharply declined during the recession of 2000-2003. As a result, municipalities experienced significant financial stress during the late 1990s and early 2000s.
38. During this time period, the State’s local financial emergency review board appointed PA 72 EFMs in the cities of Hamtramck,2 Highland Park,3 and Flint.4
39. With the onset of the historic Great Recession that began in 2007 and resulted in record foreclosures and steep increases in unemployment, cities and municipal corporations in Michigan saw severe reductions to income and property tax revenue. State revenue sharing laws were further amended to again reduce
2 Appointed in 2000 and EFM remained until 2007. 3 Appointed in 2001 and EFM remained until 2010. 4 Appointed in 2002 and EFM remained until 2004.
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revenue sharing with local governments and thereby balance State budgets. As a result, Michigan municipalities again faced widespread financial stress.
40. Again, the State’s local financial emergency review board appointed PA 72 EFMs in various cities and one school district.
41. The second wave of Public Act 72 EFMs were appointed as follows: a. Village of Three Oaks - EFM appointed in 2008; b. Detroit Public Schools - EFM appointed in 2009; c. Ecorse - EFM appointed in 2009; d. Pontiac - EFM appointed in 2010; e. Benton Harbor - EFM appointed in 2010;
42. The State also entered its first PA 72 consent agreement when the State entered a consent agreement with the City of River Rouge in December 2009.
43. Following elections in November of 2010 and the turnover of state offices in January 2011, the Michigan legislature introduced House Bill 4214 (2011) on February 9, 2011. The bill was not intended to and did not substantively reform financial oversight of local governments; did not provide additional tools to EFMs to address financial issues within local government; and did not provide additional financial resources for local governments.
44. Rather, the bill was a response to a court ruling finding that the Detroit Public Schools’ School Board, and not the EFM, possessed the power
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under State law to determine what curriculum would be taught and which texts would be used in the city’s public schools.5 The court decision provoked elements of the State legislature who opposed the decisions of the city’s elected school board and who sought greater control over Detroit’s schools. The bill was thus intended to curtail the power of local voters and the officials they elected over matters unrelated to local financial issues.
45. House Bill 4214 was rushed through and within a month was passed by the State legislature. Defendant Governor Richard D. Snyder signed the Local Government and School District Fiscal Accountability Act, Act No. 4, Public Acts of 2011 (PA 4) into law on March 16, 2011. The new law repealed PA 72 and was given immediate effect.
46. Public Act 4 automatically converted all EFMs to Public Act 4 Emergency Managers (EM) and greatly expanded the scope of their powers over nonfinancial matters. The Act also brought all existing consent agreements under the new law.
47. At the time that PA 4 became law, Benton Harbor, Detroit Public Schools, Ecorse, and Pontiac had emergency managers while River Rouge had a consent agreement. The largest racial group in each of these communities is African-descended residents. At the time PA 4 became law and divested these 5 The EFM acknowledged that these decisions were unrelated to the school system’s financial issues.
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communities of their elected officials, the Michigan legislature was composed of an overwhelming majority of White legislators.
Public Act 4’s Radical Revision of State Law 48. Public Act 4 radically revised State law governing the appointment of EMs over cities and school districts during times of financial stress. 49. Public Act 4 provided that once the Governor declared a financial emergency, the Governor could then appoint an individual to be the municipality’s or school district’s EM. The Governor was granted broad discretion to declare a financial emergency. 50. Tellingly, the PA 4 changed the title of PA 72’s “emergency financial managers” to “emergency managers” and expanded the scope of their powers to control all facets of the local government or school district. 51. The PA 4 EM’s powers extended not only to financial practices and fiscal policy, but rather permitted EMs to fully act “for and in the place of” any elected governing body, boards, commissions, and appointed officials. The grant of powers also included a general grant of legislative power (the power to unilaterally adopt local laws and resolutions) to PA 4 EMs. 52. Public Act 4’s grant of legislative power to EMs extended to the full scope of legislative power possessed by local elected officials. In the State of Michigan, local legislative power is of the same scope and nature as the police
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power possessed by the State - limited only by the jurisdictional limits of the municipality and where preempted by the general laws of the State. Public Act 4’s grant of general legislative power to EMs thus extended to a grant of the full of scope of the local government’s police power, previously reserved to local government’s elected legislative body and elected mayor.
53. Emergency managers were further granted powers to act in disregard of local laws, regulations and policies – including city charters, ordinances, administrative regulations, school district bylaws, etc.
54. The Act again granted a State financial review team the power to enter into a consent agreement with the local government, in lieu of appointing an EM.
55. At the time PA 4 became law, reports from the State indicated that, based on their financial conditions, over eighty (80) municipalities and/or school systems were eligible to have EMs appointed.
56. After passage of PA 4, existing EFMs in the cities of Benton Harbor, Ecorse and Pontiac and over the Detroit Public Schools were converted to EMs and vested with PA 4 powers. The State’s consent agreement with the city of River Rouge was also converted to a PA 4 agreement.
57. Following enactment of PA 4, the Governor appointed an EM over the City of Flint and entered into a consent agreement with the City of Detroit.
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58. The largest racial group in each of these communities are Africandescended residents.
Michigan Citizen’s Rejection of Public Act 4 And the State’s Resurrection of Public Act 72 59. In opposition to Public Act 4, citizens began circulating petitions in May 2011 to place a referendum on the ballot that would reject the law. Over 200,000 signatures were gathered and the petitions were submitted to the Secretary of State in February 2012. 60. The petitions were challenged solely on the basis that the title of the petitions had not been printed in 14 point font, but rather were printed in slightly smaller font of approximately 13.75 or larger. 61. After appeals, the Michigan Supreme Court issued an opinion ordering the State’s Board of Canvassers to certify the petitions and place the referendum on the ballot. 62. The Board of Canvassers certified the petitions on August 8, 2012 and by operation of Michigan law, PA 4 was then suspended until the November election. 63. The State’s Attorney General issued a formal opinion stating that once the petitions were certified suspending PA 4, PA 72 would spring back into effect and would remain in effect if voters rejected PA 4 at the November 2012 election.
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64. After certification of the petitions, State officials then reappointed all existing PA 4 EMs as PA 72 EFMs and proclaimed that all existing consent agreements would continue in place as PA 72 consent agreements.
65. At the general election on November 6, 2012, Michigan voters overwhelmingly rejected PA 4. At that time, PA 72 remained in effect.
66. During PA 72’s resurrection as State law, the Governor appointed an EM over the City of Allen Park and entered into a consent agreement with the City of Inkster.
Michigan’s Legislature Overrides the Citizen’s Vote and Enacts Public Act 436
67. In response to the Michigan voters rejecting PA 4, incensed officials and segments within the legislature quickly moved to enact a new law with emergency manager provisions substantially identical to the rejected law.
68. During the lame-duck session, the State legislature introduced a new bill containing the emergency manager provisions of Public Act 4. The new bill passed the Michigan House and Senate on December 13, 2012 and was signed into law as the Local Financial Stability and Choice Act, Act No. 436, Public Acts of 2012, (PA 436) on December 26, 2012.
69. Public Act 436 retained PA 4’s title of “emergency managers”. The PA 436 EM’s powers are substantially identical to the powers that had been granted under PA 4. Public Act 436 EMs are empowered to fully act “for and in
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the place of” the municipality or school district’s governing body, boards, commissions and appointed officials. The powers again include a general grant of legislative power to EMs and exempts EMs from following local laws and regulations.
70. Under PA 436, all EMs appointed under PA 4 and EFMs appointed under PA 72 were automatically converted to PA 436 EMs. Likewise, all previous consent agreements were converted to PA 436 consent agreements.
71. Under PA 436, all EMs serve at the pleasure of the Governor and continue to serve until removed by the Governor or until the Governor finds that the financial emergency has been rectified. The new law contains a provision that permits a local government or school district to remove an individual appointed as an EM but permits the Governor to replace that individual within another person to act as EM.
72. Once the Governor declares a financial emergency under Public Act 436, municipalities and school districts have an initial option to request neutral evaluation,6 a consent agreement, an emergency manager, or approval to file for Chapter 9 bankruptcy. The local body’s preferred option is subject to approval of State officials.
6 Neutral evaluation is simply a form of mediated negotiation with creditors under time deadlines. It is within the discretion of creditors whether they will participate.
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73. When PA 436 took effect on March 28, 2013, EMs were in place over the cities of Allen Park, Benton Harbor, Ecorse, Flint, Pontiac and over the Detroit Public Schools, Highland Park Public Schools, and Muskegon Heights Public Schools. The State’s consent agreements with Inkster and River Rouge were again converted – now to PA 436 agreements.
74. The Governor appointed EMs over the City of Detroit and Highland Park Public Schools before the new law took effect; however, the new EMs did not assume their offices until after PA 436 took effect. An EM was also subsequently appointed over the City of Lincoln Park and a consent agreement was subsequently entered with Wayne County.
Public Act 436 on its Face & In Application 75. There is no question that Michigan’s emergency manager laws have disproportionately impacted communities composed of African-descended populations. 76. Given local governments’ heavy reliance on State revenue sharing and property tax revenues and the sensitivity of these revenue streams to economic downturns, the terms of PA 436 and the suspension of elected local governance is overwhelmingly likely to be imposed on low-income communities composed of residents with high services needs. In Michigan, such communities are disproportionately composed of African-descended citizens.
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77. At the time PA 436 was adopted, State officials were well aware of such facts and would not have adopted PA 436 had it been likely to apply equally to majority white communities.
78. Because historical and structural circumstances have created a form of economic racial apartheid in Michigan, a reference to a community in severe financial distress is functionally a racial reference.
79. Consequently, emergency manager legislation as it has been framed in Michigan is facially in violation of the equal protection clause because the legislation targets communities that, because of their economic condition are believed to be, and are in fact populated by African-descended residents.
80. State intervention under PA 436 curtails local residents “ability to meaningfully participate in decision-making that directly affects their well-being and exerts this influence on precisely the populations with the least power in society—that is, minorities and the urban poor.”7
81. A longstanding historical narrative of disenfranchisement of these communities from meaningful economic and political power within Michigan and the nation is well-established.
7 SJ Lee, A Krings, S Rose, K Dover, J Ayoub, F Salman - Children and Youth Serv. Rev., at 6 (2016).
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82. The State’s action in adopting and implementing P.A. 436 is an
intentional and purposeful continuation of this extended narrative of structural and strategic racism.8
83. Statistics establish that for each 1% increase in the African-descended
population of a local government, there is a 5% increase in the likelihood of State
intervention under PA 436 and correspondingly, a 20% increase in a community’s
Black/African American population would result in a 100% increase in the likelihood of intervention.9
84. The African-descended population of each of the communities where
a PA 436 EM or consent decree has been in place are as follows:
a. Allen Park (EM): 587 persons comprising 2.1% of the city’s population;
b. Benton Harbor (EM): 8,952 persons comprising 89.2% of the city’s population;
c. Detroit (EM): 590,226 persons comprising 82.7% of the city’s population,
d. Ecorse (EM): 4,315 persons comprising 46.4% of the city’s population;
8 See generally, Peter J. Hammer, The Flint Water Crisis, KWA and StrategicStructural Racism, at 9-13 (July 18, 2016) (written testimony submitted to the Michigan Civil Rights Commission Hearings on the Flint Water Crisis). Available online at http://www.michigan.gov/documents/mdcr/. 9 See L. Owen Kirkpatrick, and Nate Breznau, The (Non)Politics of Emergency Political Intervention: The Racial Geography of Urban Crisis Management in Michigan, at 19 (March 24, 2016). Available online at SSRN: https://ssrn.com/abstract=2754128.
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e. Flint (EM): 57,939 persons comprising 56.6% of the city’s population;
f. Hamtramck (EM): 4,266 comprising 19.3% of the city’s population.
g. Highland Park (Neutral Evaluation & EM): 10,906 persons comprising 93.5% of the city’s population;
h. Inkster (Consent Agreement): 18,569 persons comprising 73.2% of the city’s population;
i. Lincoln Park (EM): 2,250 persons comprising 5.3% of the city’s population;
j. Muskegon Heights (EM): 8,501 persons comprising 78.3% of the city’s population;
k. Pontiac (EM): 30,988 persons comprising 52.1% of the city’s population;
l. River Rouge (Consent Agreement): 3,994 persons comprising 50.5% of the city’s population;
m. Royal Oak Township (EM): 4,191 persons comprising 95.3% of the township’s population; and
n. Wayne County (Consent Agreement): 737,336 persons comprising 40.5% of the county’s population.
The African-descended population of these cities totals 847,907 persons. 85. As a result of the Defendants’ actions, fifty-six (56%) of the State’s
African-descended population has seen the suspension of elected local governance
and come under the governance of a PA 346 EM, consent agreement and/or a
transition advisory board compared under 3% of the State’s White population.
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86. Cities and school districts with African-descended majority
populations did not request State review of their finances under PA 72/PA 4/PA
436 before an EM or consent agreement was imposed by the State while
comparable cities and school districts composed of a majority White population
commonly only received such reviews upon the request of governing officials and
then commonly only received an EM when city officials requested an EM’s
appointment.
87. The Defendants’ intent to engage in racial discrimination by adopting
and implementing the emergency manager law is evidenced by the above-stated
facts and the following:
a. In much the same way that enslaved Africans were essentially powerless political placeholders for purposes of the Constitution’s Three-Fifths Compromise, the Michigan emergency manager law reduced residents of predominantly black municipalities to powerless political placeholders for those who maintained for their own benefit the fiction of local democracy in places where emergency managers are in charge. The residents of emergency manager cities must stand mute as appointed, unelected individuals carry out an agenda that is not created by the residents, and these emergency managers speak, act and govern in the residents’ name – without their consent, and almost as though they own them. It is this political use and exploitation of human beings in a way that is reminiscent of chattel slavery that betrays the racial intent of the Defendants;
b. In the immediate aftermath of the referendum that resulted in the repeal of PA 4, the Defendants knew or should have known that voting was highly racialized, and that substantial numbers of African-descended Michigan residents actively opposed the emergency manager law. Nevertheless, and in the face of disparate
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racial sentiments about the law in white and black communities, the Defendants proceeded with the enactment of PA 436:
c. In 2013, Kevyn Orr, the former emergency manager for the City of Detroit, commented: "For a long time the city was dumb, lazy, happy and rich. Detroit has been the center of more change in the 20th century than I dare say virtually any other city, but that wealth allowed us to have a covenant [that held] if you had an eighth grade education, you'll get 30 years of a good job and a pension and great health care, but you don't have to worry about what's going to come;" and
d. Notwithstanding Orr’s own African ancestry, the characterization of the city’s predominantly black population in this way betrays an attitude rooted in the worst racial stereotypes. Notwithstanding a perspective that is racist at worst and racially insensitive at best, Orr enjoyed the full support and confidence of the Defendants
88. At the time of filing this complaint, the Highland Park School District
remains under the governance of a PA 436 EM and the cities of Ecorse, Flint and
Hamtramck remain under the control of PA 436 Transition Advisory Boards
(TABs) following the completion of an EMs term in office.
89. Transition Advisory Boards have final authority over the finances of
the city or school district; commonly control appointments; and have broad
authority under powers delegated by the former EM and/or the Governor. These
boards remain in place and continue to govern for an indeterminate length of time
until dissolved by the Governor.
90. In each of the communities where an EM, consent agreement, or
transition advisory board is in place, citizens will experience the loss of democratic
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norms and experience severe restrictions imposed on their ability to govern and participate in local affairs on equal footing with other citizens of Michigan.
V. CAUSES OF ACTION COUNT I – 42 U.S.C. §1983 -- Constitutional Violation US Const, Amend. XIV, § 1 –Equal Protection based on Race 91. Plaintiffs incorporate by reference paragraphs 1 through 90 above as though fully stated herein. 92. Plaintiffs bring this claim pursuant to 42 U.S.C. §1983. 93. Acting under color of law and pursuant to the customs, policies and practices of the State of Michigan, Defendants, acting in their respective individual and/or official capacities, have engaged in conduct and adopted laws and policies that violate Plaintiffs’ rights under Amend. XIV, §1 of the U.S. Constitution 94. Amendment XIV, § 1 states in pertinent part, “No state shall make or enforce any law which shall … deny to any person within its jurisdiction the equal protection of the laws." 95. The Equal Protection Clause protects against laws and the application of laws that invidiously discriminate against a suspect class and between similarly situated individuals or between groups of persons. 96. On its face, as applied, and in practice, PA 436 violates the Equal Protection Clause of US Const., Amend. XIV, § 1 through provisions of the statute
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that disparately impact and intentionally discriminate against municipalities and school districts composed of African-descended majority populations.
97. On its face, Public Act 436’s provisions create a scheme that invidiously discriminates against communities composed of African-descended majority citizens. The scheme was adopted with knowing intent that PA 436’s measures resulting in the total loss of local governing power would be disproportionately imposed on African-descended majority communities given the sensitivity of their revenue streams and human services to economic downturns, while majority White communities would escape PA 436’s application.
98. In its application, the Defendants applied Public Act 436’s provisions to invidiously discriminate against African-descended majority communities. The Defendants disproportionately and intentionally applied the provisions of PA 436 to African-descended majority communities resulting in residents’ loss of governing power while not applying the law to similarly situated majority White municipalities and school districts suffering equal or greater financial distress.
99. On its face, as applied, and in practice, Public Act 436 violates the Equal Protection Clause of US Const., Amend. XIV, § 1 through provisions of the statute that discriminate in the appointment of an EM and revocation of the community’s governing power based on the racial composition of that community. Such provisions include those that provide for EMs to:
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a. Provide for the preliminary financial review of municipalities and school districts solely at the discretion of the State Treasurer or State Superintendent of Public Instruction. See provisions including but not limited to MCL §141.1544;
b. Provide for the determination of whether a financial emergency exists in a municipality or school district solely at the discretion of the Governor. See provisions including but not limited to MCL §141.1546;
c. Provide for the selection and appointment of an EM solely at the discretion of the Governor. See provisions including but not limited to MCL §141.1549 and §141.1564;
d. Become vested with Public Act 436 EM powers for persons previously appointed or acting as EFMs under prior laws; See provisions including but not limited to MCL §141.1549;
e. Ratify appointments made and acts taken by EMs acting under Public Act 4. See provisions including but not limited to MCL §141.1570;
c. Act for and in the place and stead of the governing body and elected officials of local government and to assume all the powers and authority of the local governing body and local elected officials. See provisions including but not limited to MCL §141.1549, §141.1550, and §141.1552;
d. Rule by decree local governments through powers that permit the EM to contravene and thereby implicitly repeal local laws, regulations, and rules of local government; See provisions including but not limited to MCL §141.1552;
f. Explicitly repeal, amend, and enact local laws, regulations and rules. See provisions including but not limited to MCL §141.1549 and §141.1552;
g. Provide for the determination of whether a local government may enter a consent agreement with the state solely at the discretion of
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the State Treasurer. See provisions including but not limited to MCL §141.1548; and h. Provide for governance by a receivership transition advisory board with many of the same powers as the EM and that is granted any powers that the Governor in his sole discretion deems to convey and that serves at his pleasure. See provisions including but not limited to MCL §§141.1563. 100. Defendants have caused injury to the Plaintiffs by exercising the authority granted under Public Act 436 by terminating and/or removing the authority of duly elected public officials in various municipalities comprising more than 56% of the State’s population of citizens who are African-descended. 101. The provisions of PA 436 and the powers granted thereby, are not necessary, narrowly tailored, rationally, or otherwise lawfully related to achieving the asserted government interests of achieving local government financial stability. 102. Numerous other states have far less restrictive statutory schemes to oversee and aid local communities undergoing financial distress during economic downturns, which do not invidiously discriminate against African-descended majority communities. 103. As a direct and proximate result of the enactment of Public Act 436 and Defendants’ actions, Plaintiffs have suffered and will continue to suffer a loss of their constitutionally protected rights.
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PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray this Honorable court enter Judgment against Defendants providing: a. For declaratory relief holding that Public Act 436 violates the United
States Constitution, Amend. XIV; b. For attorneys’ fees and costs; and c. For such further relief as is just and equitable.

December 1, 2017

Respectfully Submitted,

By: /s/Cynthia Heenan______ Cynthia Heenan (P53664) Hugh M. Davis, Jr. (P12555) CONSTITUTIONAL LITIGATION ASSOCIATES PC 450 W Fort St Ste 200 Detroit, MI 48226 (313) 961-2255/Fax: (313) 922-5130 Heenan@ConLitPC.Com Attorney for Plaintiffs
Herbert A. Sanders (P43031) THE SANDERS LAW FIRM PC 615 Griswold St. Ste. 913 Detroit, Michigan 48226 (313) 962-0099/Fax: (313) 962-0044 haslawpc@gmail.com Attorneys for Plaintiffs
John C. Philo (P52721) Anthony D. Paris (P71525) SUGAR LAW CENTER FOR ECONOMIC & SOCIAL JUSTICE
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4605 Cass Ave., 2nd Floor Detroit, Michigan 48201 (313) 993-4505/Fax: (313) 887-8470 jphilo@sugarlaw.org tparis@sugarlaw.org Attorneys for Plaintiffs
Julie H. Hurwitz (P34720) William H. Goodman (P14173) GOODMAN HURWITZ & JAMES PC on behalf of the DETROIT & MICHIGAN NATIONAL LAWYERS GUILD 1394 E. Jefferson Ave. Detroit, Michigan 48207 (313) 567-6170/Fax: (313) 567-4827 jhurwitz@goodmanhurwitz.com bgoodman@goodmanhurwitz.com Attorneys for Plaintiffs
Darius Charney Ghita Schwarz Britney Wilson CENTER FOR CONSTITUTIONAL RIGHTS 666 Broadway, 7th floor New York, New York 10012 (212) 614-6464/Fax: (212) 614-6499 dcharney@ccrjustice.org Attorneys for Plaintiffs
F:\Cases\Phillips v. Snyder\USDC-Eastern\Pldgs\Draft 2017 Complaint\Complaint & Jury Demand (Hurwitz) (2017-12-01).doc
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 Case 2:17-cv-13887-GCS-MKM ECF No. 27 filed 09/05/18 PageID.568 Page 1 of 21

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

RUSS BELLANT, et al.,

Plaintiffs, v. RICHARD D. SNYDER et al.,

Case No. 2:17-CV-13887 HON. GEORGE CARAM STEEH

Defendants. _____________________________/

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS= MOTION TO DISMISS [ECF NO. 11]

This action challenging the constitutionality of Michigan=s Emergency

Manager Law, the Local Financial Stability and Choice Act, Act No. 436,

Public Acts of 2012, Mich. Comp. Laws Ann. '' 141.1451 et seq. (West

2013) (APA 436"), was commenced by plaintiffs who include local elected

officials, unelected citizens, and members of the governing boards of

various religious and civil rights organizations. Defendants, the Governor

and former and current Treasurers of the State of Michigan, move to

dismiss the single count alleged by plaintiffs in their Complaint for

Declaratory Relief. For the reasons stated below, defendants= motion to

dismiss is GRANTED IN PART AND DENIED IN PART.

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FACTS I. Procedural Posture
Plaintiffs bring this action under 42 U.S.C. ' 1983, challenging the constitutionality of PA 436. The claim under the Fourteenth Amendment’s Equal Protection Clause was originally asserted in an earlier action, Phillips v. Snyder, No. 13-cv-11370. The parties stipulated to the dismissal of that claim without prejudice to allow plaintiffs’ appeal of this court’s dismissal of their other claims. See Phillips v. Snyder, 836 F.3d 707, 713 (6th Cir. 2017). The Sixth Circuit affirmed the dismissal and the Supreme Court denied plaintiffs’ certiorari petition. Bellant v. Snyder, 138 S. Ct. 66 (2017).
In their complaint, plaintiffs argue that on its face, as applied, and in practice, PA 436 violates the Equal Protection Clause by disparately impacting and intentionally discriminating against municipalities and school districts comprised of majority black populations. Plaintiffs allege that PA 436 is facially discriminatory because it was adopted with knowing intent that the measures resulting in the total loss of local governing power would be disproportionately imposed on black communities given the sensitivity of their revenue streams and human services to economic downturns, while majority white communities would escape PA 436’s application. As applied, PA 436 allegedly discriminates against black communities while it
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is not applied to white communities suffering equal or greater financial distress. II. Background of PA 436
Prior to 1988, municipalities in Michigan that were experiencing financial difficulties could be placed into receivership by the courts. Courtappointed receivers were compensated from the property that the courts placed within the care of the receiver. In 1988, the State of Michigan enacted PA 101, which allowed the State to appoint an emergency financial manager (“EFM”) over cities experiencing a financial emergency. In 1990, the legislature replaced PA 101 with the Local Government Fiscal Responsibility Act, PA 72, which authorized Michigan=s local financial emergency review board to appoint an EFM only after the Governor declared the local government to be in a financial emergency. The EFM=s powers extended to matters of finances, including the authority to renegotiate contracts, while local elected officials remained in control of administrative and policy matters. Under PA 72, the State’s local financial emergency review board appointed EFMs in the cities of Benton Harbor, Ecorse, Flint, Hamtramck, Highland Park and Pontiac, as well as over the Detroit Public Schools.
In 2011, Michigan repealed PA 72 when it passed the Local
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Government and School District Fiscal Accountability Act, PA 4. PA 4 converted all EFMs into Emergency Managers (AEM@) and expanded the scope of their powers. EMs could act Afor and in the place of@ the municipality=s elected governing body, including a general grant of legislative power.
Citizens gathered signatures to place a referendum on the ballot to reject PA 4. The petitions were certified on August 8, 2012, and by operation of law PA 4 was suspended and PA 72 went back into effect. All PA 4 EMs were reappointed as PA 72 EFMs. At the general election on November 6, 2012, Michigan voters voted to reject PA 4.
During the lame-duck session that followed the repeal of PA 4, the state legislature passed, and the Governor signed, the Local Financial Stability and Choice Act, PA 436. PA 436 changed the title of EFMs to EMs and expanded the scope of their powers to cover all the conduct of local government - both finance and governance. PA 436 contains some new provisions for local government not present in previous laws, including expanded local government options to address the financial emergency1
1 A local government has four options when confronted with a finding of a financial emergency: the local government can (1) enter into a consent agreement with the state treasurer; (2) accept the appointment of an emergency manager; (3) undergo a neutral evaluation process, which is akin to arbitration, with its creditors; or (4) enter into Chapter 9 bankruptcy. § 141.1547(1)(a)–(d).
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and a procedure to remove the EM after he or she has served 18 months.2 The EMs appointed under PA 4 and EFMs appointed under PA 72 all became EMs under PA 436.
Since PA 436 took effect on March 28, 2013, thirteen local units of government and five school districts have been under emergency management. But currently, no local governments in Michigan are subject to emergency management. Two school districts, Benton Harbor Area Schools, and Pontiac Public Schools, are subject to consent agreements. Muskegon Heights School District is under a receivership transition advisory board (“TAB”)3, but it is not represented by any of the plaintiffs in this case for purposes of bringing an as-applied challenge.
The City of Detroit, which proceeded through bankruptcy under an EM, is no longer subject to PA 436. Rather, the City is subject to both the confirmed bankruptcy plan and a legislatively created financial review commission created as part of what was referred to as the “Grand Bargain.” §§ 1631-1638; In re City of Detroit, 524 BR 147, 244 (2014). The Detroit
2 If a local government wishes to have an emergency manager removed before that emergency manager has served eighteen months, the law provides the local government with a mechanism for petitioning the governor to do so. § 141.1549(11). 3 PA 436 allows the governor to appoint a receivership transition advisory board (TAB) once the financial emergency in a given locality has been rectified. § 141.1563. TABs generally monitor the operations of the local government and ensure that it is operating in a financially conscious and sound way. Id.
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Public Schools (DPS) and its School Board are no longer subject to PA 436. They have been replaced by the new Community Schools District and exist only for the limited purpose of paying off DPS debt. Mich. Comp. Laws § 380.12b (1)-(15); 380.383; 380.384. Neither the DPS nor the new Community District is currently subject to PA 436. III. Impact of PA 436
Ten of Michigan’s thirteen majority black communities had a solution under PA 436 imposed upon them by the State. In contrast, only four majority white communities have come under PA 436, and their city officials selected whether to have an emergency manager or to enter a consent agreement.
The Michigan Department of Treasury previously maintained a scoring system to determine the financial health of the State’s cities and townships. Fiscal indicator scores between five and seven placed a municipality on a fiscal watch list, while scores between eight and ten resulted in the community receiving consideration for review. Six out of seven communities (85%) with a majority population of racial and ethnic minorities received EMs when they had scores of seven. At the same time, none of the twelve communities with a majority white population received an EM despite having scores of seven or higher.
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In 2010 the State’s scoring system was taken over by a private company, Munetrix. Munetrix is a municipal financial metrics company that consults with municipalities on budgeting, forecasting and reporting. Their numbers allegedly indicate that numerous predominately white school districts were in as much fiscal distress as those that received EMs, yet no predominately white school district came under PA 436 or received an EM.
While recognizing that there are presently no EMs in office, plaintiffs assert that 56% of the State=s black population is under the continuing effects of an EM, a consent agreement or a TAB, while only 3% of the State=s white population is similarly impacted. Plaintiffs allege that as a result of PA 436, a disproportionate number of minorities are under the control of an EM instead of the local officials who were voted into office.
LEGAL STANDARD A motion to dismiss under Fed. R. Civ. P. 12(b)(6) tests the sufficiency of the complaint. Viewing the facts in a light most favorable to the plaintiff, the court assumes that the plaintiff=s factual allegations are true in determining whether the complaint states a valid claim for relief. See Bower v. Fed. Express Corp., 96 F.3d 200, 203 (6th Cir. 1996). ATo survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to >state a claim to relief that is plausible on its face.=@
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Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). AA claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.@ Id. at 678 (citing Twombly, 550 U.S. at 556).
ANALYSIS I. Mootness
“The test for mootness ‘is whether the relief sought would, if granted, make a difference to the legal interests of the parties . . . .’” McPherson v. Michigan High Sch. Ath. Ass'n, 119 F.3d 453, 458 (6th Cir. 1997) (citation omitted). No local governments in Michigan have an EM at this time, so defendants argue that plaintiffs’ lawsuit is moot. However, under P.A. 436, the EM’s budget cannot be amended for two years following a community’s exiting of receivership – including all contractual and employment agreements – and EM orders and ordinances cannot be amended for one year following receivership. MCL 141.1561(2). For this reason, plaintiffs argue that most communities are still under PA 436’s ongoing restrictions.
Plaintiffs describe the residual effect of PA 436. The EM is given broad authority during the period of supervision and their decisions have a lasting impact. This is no different than a new city council that is bound by
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decisions made by its predecessor. Viewed this way, only the two school districts that are currently under a consent agreement, Benton Harbor Area Schools and Pontiac Public Schools, have a claim under the Equal Protection Clause that is not moot.
Plaintiffs’ next argument, that PA 436 is likely to be invoked again with the next economic downturn, is speculative. As the Sixth Circuit found, PA 436 is not triggered by the wealth of a community but rather by its solvency, which is the result of how a community manages its resources. Phillips, 836 F.3d at 719. While there is an exception to mootness where the issues presented are capable of repetition and review may again be evaded, Chirco v. Gateway Oaks, L.L.C., 384 F.3d 307, 309 (6th Cir. 2004), financial management of a community is not predictable for purposes of the mootness exception.
The court finds that plaintiffs’ Equal Protection Clause claim is moot as to all the local units of government and school districts represented by plaintiffs except for the Benton Harbor Area Schools and Pontiac Public Schools. II. Standing
To invoke the subject matter jurisdiction of an Article III federal court, individual plaintiffs must establish, among other things, an injury-in-fact that
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is concrete and particularized, not conjectural or hypothetical. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). The harm that plaintiffs allege is from the enforcement of any of PA 436’s four remedial options, not only the loss of locally elected officials’ governing authority due to the appointment of an EM. Defendants concede that if the court construes the complaint to encompass all four of PA 436’s options, then the two school districts have standing.
Benton Harbor Area Schools and Pontiac Public Schools are currently subject to PA 436 consent agreements. The consent agreement applicable to Pontiac Public Schools provides that if the governor chooses to place the school district into a “receivership,” which means an EM will be appointed in response to a material breach of the consent agreement, the district cannot contest that decision. Benton Harbor Area Schools’ consent agreement contains very similar provisions. Therefore, in addition to still being subject to PA 436 because they are bound by consent agreements, it is possible that each school district could have an EM reappointed if either district is found to have breached the consent agreement.
The court finds that Pontiac City Council Member Kermit Williams and Benton Harbor Commissioners Donald Watkins, Duane Seats, Juanita Henry and Mary Alice Adams have standing to bring this lawsuit on behalf
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of Benton Harbor Area Schools and Pontiac Public Schools. III. Former State Treasurer Defendants Dillon and Clinton
Plaintiffs stipulate to dismiss their claims against former State Treasurers Dillon and Clinton for the reason that the claims are barred by the Eleventh Amendment. IV. Equal Protection Clause
The Fourteenth Amendment of the United States Constitution provides in relevant part that A[n]o state shall make or enforce any law which shall . . . deny to any person within its jurisdiction the equal protection of the laws.@ The Supreme Court has stated that this language Aembodies the general rule that States must treat like cases alike but may treat unlike cases accordingly.@ Vacco v. Quill, 521 U.S. 793, 799 (1997). Equal protection prevents states from making distinctions that burden a fundamental right, target a suspect class, or intentionally treat one individual differently from others similarly situated without any rational basis. Radvansky v. City of Olmstead Falls, 395 F.3d 291, 312 (6th Cir. 2005). To state an equal protection claim, a plaintiff must Aadequately plead that the government treated the plaintiff >disparately as compared to similarly situated persons and that such disparate treatment either burdens a fundamental right, targets a suspect class, or has no rational basis.=@ Ctr.
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for Bio-Ethical Reform, Inc. v. Napolitano, 648 F.3d 365, 379 (6th Cir. 2011) (citations omitted).
Invidious discriminatory intent is an impermissible justification for state action, which triggers strict scrutiny. See Arlington Heights, 429 U.S. at 265-66 (AWhen there is a proof that a discriminatory purpose has been a motivating factor in the decision, [judicial] deference is no longer justified.@); Yick Wo, 118 U.S. at 373 (AThough the law itself be fair on its face . . . if it is applied and administered by public authority . . . so as practically to make unjust and illegal discriminations between persons in similar circumstances . . . the denial of equal justice is still within the prohibition of the Constitution.@). A plaintiff need not demonstrate racial discrimination was dominant in the reasoning for state action to trigger strict scrutiny, but only that it was a motivating factor. United States v. City of Birmingham, 727 F.2d 560, 565 (1984).
The Supreme Court “‘has identified objective factors that may be probative of racially discriminatory intent among legislative bodies.” Id. at 565 (citing Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 266-68 (1977)). First, “the fact…that the law [or practice] bears more heavily on one race than another” supports an inference of racial discrimination. Farm Labor Org. Comm., 308 F.3d at 534 (quoting
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Washington v. Davis, 426 U.S. 229, 242 (1976)). See also NAACP v. Lansing Bd. of Educ., 559 F.2d 1042, 1047-48 (6th Cir. 1977). Plaintiffs alleging race-based discrimination can demonstrate discriminatory effect “through the use of statistical” evidence showing that one class is being treated differently from another class that is otherwise similarly situated. Farm Labor Org. Comm., 308 F.3d at 534 (internal citations omitted). In addition, courts consider the historical background of the decision, the sequence of events, procedural and substantive departures from normal procedure, and legislative or administrative history.” Arlington Heights, 429 U.S. at 267-68 (1977). These factors, which consider both direct and circumstantial evidence of intent, are not exhaustive, and no one factor is dispositive. Id. at 266.
At the motion to dismiss stage, plaintiffs need only state a plausible claim for relief. Iqbal, 556 U.S. at 678. To support their claim, plaintiffs’ complaint avers that over 50% of Michigan’s black population came under PA 436’s emergency management. At the same time, only about 3% of Michigan’s white citizens lived in communities that were governed by an EM. To further support an inference of discriminatory intent, plaintiffs argue: other majority white communities were experiencing the same or greater financial distress; numerous academics who studied the issue have
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found clear discrimination under the law; the statute was passed under highly unusual and rushed circumstances; and it was adopted in response to biases against African-American school boards in Detroit.
A plaintiff can challenge the constitutionality of a statute in two ways. “A facial challenge to a law's constitutionality is an effort to invalidate the law in each of its applications, to take the law off the books completely.” Speet v. Schuette, 726 F.3d 867, 871 (6th Cir. 2013) (internal quotation marks omitted). The plaintiff must establish “‘that no set of circumstances exist under which [the statute] would be valid.’” Id. at 872 (quoting United States v. Stevens, 559 U.S. 460, 472 (2010)). In contrast, an as-applied challenge “argues that a law is unconstitutional as enforced against the plaintiffs before the court.” Id. at 872.
“[T]he distinction between facial and as-applied challenges is not so well defined that it has some automatic effect or that it must always control the pleadings and disposition in every case involving a constitutional challenge.” Citizens United v. Fed. Election Comm'n, 558 U.S. 310, 331, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010). In fact, a claim can have characteristics of as-applied and facial challenges: it can challenge more than just the plaintiff's particular case without seeking to strike the law in all its applications. John Doe No. 1 v. Reed, 561 U.S. 186, 194, 130 S.Ct.
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2811, 177 L.Ed.2d 493 (2010). In constitutional challenges reaching
beyond the plaintiff's circumstances, the plaintiff must satisfy the “standards
for a facial challenge to the extent of that reach.” Id.; Green Party of
Tennessee v. Hargett, 791 F.3d 684, 691–92 (6th Cir. 2015).
A. Facial Challenge
A facial challenge to a legislative act is the most difficult challenge to
mount successfully, since the challenger must establish that no set of
circumstances exists under which the act would be valid. United States v.
Salerno, 481 U.S. 739, 745, 107 S. Ct. 2095, 2100, 95 L. Ed. 2d 697
(1987). In the earlier appeal of this case, the Sixth Circuit upheld PA 436
as a legitimate tool to address and resolve “the financial situation of a
distressed locality . . . .” Phillips, 836 F.3d at 718. The Court reasoned:
An entity in a distressed financial state can cause harm to its citizenry and the state in general. Improving the financial situation of a distressed locality undoubtedly is a legitimate legislative purpose, and PA 436, while perhaps not the perfect remedy, is one that is rationally related to that purpose. The emergency manager’s powers may be vast, but so are the problems in financially distressed localities, and the elected officials of those localities are most often the ones who — through the exercise of their powers — led the localities into their difficult situations.
Id.
Plaintiffs’ asserted constitutional violation is that PA 436 has a
discriminatory purpose and violates equal protection guarantees because
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the law “reduced residents of predominantly black municipalities to powerless political placeholders for those who maintained for their benefit the fiction of local democracy in places where emergency managers are in charge.” (R. 1, Compl. ¶ 87). In plaintiffs’ words, by revoking or restricting the political power of residents in majority African-descended communities, while exempting residents in similarly-situated majority white communities, PA 436 discriminates on the basis of race, both on its face and in its application.
A facially neutral law with a legitimate purpose will be subject to strict scrutiny “only if the plaintiff can prove that it ‘was motivated by a racial purpose or object,’ or ‘is unexplainable on grounds other than race.’” Moore v. Detroit Sch. Reform Bd., 293 F.3d 352, 369 (6th Cir. 2002) (citations omitted). To make this determination, the court analyzes the five factors identified by the Supreme Court and the Sixth Circuit. Village of Arlington Heights, 429 U.S. at 266-68; Moore v. Detroit Sch. Reform Bd., 293 F.3d 352, 369-70 (6th Cir. 2002).
1. Impact on Particular Racial Groups Because PA 436 impacts financially troubled communities, all citizens residing in those Michigan communities are impacted by the fiscal emergency. While an overwhelming number of Michigan’s black citizens
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who were affected by the Act reside in just two of Michigan’s cities—Flint and Detroit—both Detroit and Flint had objective financial difficulties. Predominantly white communities have also been subject to the Act, just as have predominantly black communities. In fact, four of the 14 jurisdictions under emergency management when this lawsuit was initially filed in 2013 were made up of more than 50% white citizens, with two overwhelmingly so: Allen Park (92.9% white and 2.1% black); Lincoln Park (84.2% white and 5.9% black); Hamtramck (53.6% white), and Wayne County (52.3% white).
2. Historical Background of Challenged Act In enacting PA 436, the Legislature determined that local fiscal stability is necessary for the State’s health, welfare, and safety, and thus, PA 436 is necessary to protect those interests. This is a reasonable nonracial explanation for the Act.
3. Sequence of Events Preceding Act The legislative history of PA 436 demonstrates that addressing problems presented by the growing fiscal instability among the State’s local governments was a significant concern of the Legislature.
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4. Departures from Government’s Normal Procedural Process The Sixth Circuit rejected plaintiffs’ argument that the passage of PA 436 departed from the normal procedure because it was passed during a “lame duck session.” See Phillips, 836 F.3d at 721 (“Michigan would have been allowed to pass P.A. 436 even if it were identical to P.A. 4. See Michigan Farm Bureau v. Hare, 151 N.W.2d 797, 802 (Mich. 1967).”). Plaintiffs’ general dissatisfaction with the legislative process that preceded the enactment of PA 436 does not inevitably lead to an inference of racial discrimination.
5. Legislative or Administrative History The legislative history of PA 436 was recounted in the statement of facts above. Plaintiff has not demonstrated that the legislature had a racially discriminatory intent. There is a clear non-racial explanation for why the majority of Michigan’s black population came under emergency management, that being to restore financial stability among local governments. PA 436 is a facially neutral law with a legitimate purpose. Where plaintiffs fail to prove that the law is unexplainable on grounds other than race, the law will be subject to rational basis review. Such is the case here with plaintiffs’ facial challenge.
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To survive rational basis scrutiny, PA 436 need only be Arationally related to legitimate government interests[,]@ Doe v. Mich. Dep=t of State Police, 490 F.3d 491, 501 (6th Cir. 2007), and Amust be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification.@ FCC v. Beach Comm=ns, Inc., 508 U.S. 307, 313 (1993). AWhen social or economic legislation is at issue, the Equal Protection Clause allows the States wide latitude, and the Constitution presumes that even improvident decisions will eventually be rectified by the democratic processes.@ City of Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 440 (1985); Sailors, 387 U.S. at 109 (ASave and unless the state, county, or municipal government runs afoul of a federally protected right, it has vast leeway in the management of its internal affairs.@)
This court recognizes Michigan=s legitimate government interest in preventing or rectifying the insolvency of its political subdivisions. Mich. Comp. Laws Ann. '141.1543 (West 2013) (finding it necessary to protect the credit of the state and the fiscal stability of the local governments in order to protect the health, safety, and welfare of the citizens of the state). The court thus finds that PA 436 survives rational basis review with regard to plaintiffs’ facial challenge.
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B. As-Applied Challenge Plaintiffs’ statistical evidence supports an inference of racial

discrimination in that PA 436 treats majority black school districts differently

than similarly situated majority white school districts. The court finds that

the two school districts that have standing to challenge PA 436 have stated

a plausible claim that the act violates the Equal Protection Clause as

applied to them. Plaintiffs will be given the opportunity to engage in

discovery limited to their as-applied challenge. However, plaintiffs will need

to show much more than the statistical evidence they have presented at the

complaint stage to survive summary judgment.

CONCLUSION

Defendants= motion to dismiss for mootness and lack of standing is

granted as to all plaintiffs except for Pontiac Public Schools and Benton

Harbor Area Schools. Defendants’ motion to dismiss plaintiffs’ facial

challenge is granted. Defendants’ motion to dismiss plaintiffs’ as-applied

challenge is denied. In addition, the claims against defendants Dillon and

Clinton are dismissed as stipulated to by plaintiffs.

Dated: September 5, 2018

s/George Caram Steeh GEORGE CARAM STEEH UNITED STATES DISTRICT JUDGE

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CERTIFICATE OF SERVICE Copies of this Order were served upon attorneys of record on
September 5, 2018, by electronic and/or ordinary mail. s/Marcia Beauchemin Deputy Clerk
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 Case 2:17-cv-13887-GCS-MKM ECF No. 34 filed 12/11/18 PageID.644 Page 1 of 2

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

Russ Bellant, Detroit Library Commissioner;

Tawanna Simpson; Lamar Lemmons, Detroit

Public Schools Board Member; Elena Herrada;

Kermit Williams, Pontiac City Council Member;

Case No.: 2:17-13887

Donald Watkins; Duane Seats, Juanita Henry,

Judge: George Caram Steeh

and Mary Alice Adams, Benton Harbor

Commissioners; William “Scott” Kincaid, Flint

City Council Member; Bishop Bernadel Jefferson;

Paul Jordan; Rev. Jim Holley, National Board Member

Rainbow Push Coalition; Rev. Charles E.

Williams II, Michigan Chairman, National

Action Network; Rev. Dr. Michael A. Owens,

Rev. Lawrence Glass, Rev. Dr. Deedee Coleman,

Executive Board, Council of Baptist Pastors of

Detroit and Vicinity;

Plaintiffs,

Stipulation to Dismiss

v.

Without Prejudice

RICHARD D. SNYDER, as Governor of the State of Michigan; ANDREW DILLON, as former Treasurer of the State of Michigan, R. KEVIN CLINTON as former Treasurer of the State of Michigan, and NICK KHOURI, as Treasurer of the State of Michigan, acting in their individual and/or official capacities,

Defendants. __________________________________________________________________/
STIPULATED ORDER OF DISMISSAL WITHOUT PREJUDICE

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Pursuant to the stipulation of the parties: IT IS HEREBY STIPULATED AND SO ORDERED that this matter be dismissed without prejudice and without costs or attorney fees as to either party. IT IS FURTHER STIPULATED AND SO ORDERED that Plaintiffs shall not appeal the Court’s ruling as it relates to Defendants’ FRCP 12 (b) (6) Motion in this matter.

Dated: December 11, 2018

s/George Caram Steeh HON. GEORGE CARAM STEEH U.S. District Court Judge

Approved by:
/s/ Herbert A. Sanders Herbert A. Sanders (P43031) The Sanders Law Firm PC Attorney for Plaintiffs 615 Griswold Street, Suite 913 Detroit, Michigan 48226 313.962.0099

Dated: 12/6/18

/s/with permission of Michael Murphey Denise C. Barton (P41535) Michael F. Murphy (P29213) Attorneys for Defendants P.O. Box 30736 Lansing, MI 48909

Dated: 12/6/18