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### STATE OF MICHIGAN

COURT OF APPEALS

SOLO CUP OPERATING CORPORATION,

Plaintiff-Appellant, UNPUBLISHED December 20, 2016

v No. 327766
Court of Claims DEPARTMENT OF TREASURY, LC No. 14-000014-MT

Defendant-Appellee.

SOLO CUP OPERATING CORPORATION,

Plaintiff-Appellant,

v No. 332891
Court of Claims DEPARTMENT OF TREASURY, LC No. 15-000121-MT

Defendant-Appellee.

Before: M. J. K ELLY , P.J., and O’C ONNELL and B ECKERING , JJ.

P ER C URIAM

.

These consolidated tax cases involve the Michigan business tax (MBT) liability of plaintiff Solo Cup Operating Corporation, an out-of-state corpo ration, for the 2009 through 2011 tax years. In Docket No. 327766 regarding the 2009 tax year, p laintiff appeals the Court of Claims’ opinion and order grantin g summary disposition to defen dant Department of Treasury under MCR 2.116(C)(4) (lack of subject matter jurisdiction). I n Docket No. 332891 pertaining to the 2009 through 2011 tax years, plaintiff appeals the Court of Claims’ final judgment granting partial summary disposition for defendant under MCR 2. 116(I)(1) (pleadings compel judgment as a matter of law). We affirm.

I. PERTINENT FACTS AND PROCEDURAL HISTORY

For the tax years at issue in both appeals, plaintiff timely f iled its MBT returns electing to use a three-factor apportionment formula to calculate its tax b ase under Article IV of the Multistate Tax Compact (Compact), as incorporated into Michigan law under then-existing MCL-2- 205.581. Defendant disallowed plain tiff’s election of this methodology in each of these tax years
based on MCL 208.1301 of the Michi gan Business Tax Act (MBTA), which mandated use of a sales-factor apportionment formula. 1

Litigation between the parties ensued and, in the interim, the Michigan Supreme Court
decided IBM v Dep’t of Treasury , 496 Mich 642, 657-659; 852 NW2d 865 (2014), in which the Court held that the MBTA did not repeal the Compact’s three-fac tor apportionment formula and that out-of-state taxpayers, like plaintiff, were eligible to u se the formula for the 2008 through 2011 tax years. Shortly thereafter, the Legislature passed 201 4 PA 282 (PA 282), which retroactively repealed the Compact and required all MBT taxpaye rs to apportion their tax base using the MBTA’s sales-factor apportionment formula beginning J anuary 1, 2008. 2014 PA 282. This Court upheld PA 282 against multiple constitutional challe nges inGillette Commercial Operations North America & Subs idiaries v Dep’t of Treasury , 312 Mich App 394; 878 NW2d 891 (2015)

. Notwithstanding the Gillette Court’s holding, pl aintiff’s substantive claims for a refund in Docket No. 332891 are predicated on the purported unc onstitutionality of PA 282. Plaintiff’s appeal in Docket No. 327766 is predicated on an all eged error in the determination that the court lacked subject-ma tter jurisdiction regarding the 2009 tax year.

A. DOCKET NO. 327766

For the 2009 tax year, plaintiff timely filed its Michigan Bus iness Tax (MBT) return, reflecting an overpayment of $58,676 and requesting that this a mount be carried forward to the next tax year. This overpayment resulted from plaintiff’s use of the Compact’s three-factor apportionment formula.

As noted, defendant rejected plaintiff’s apportionment method and issued to plaintiff an MBT Annual Return Notice of Additional Tax Due (hereinafter, In itial Notice) for the 2009 tax year, assessing plaintiff an additional MBT tax liability of $5 2,248, including interest and

1 Articles III(1) and IV of the Compact allowed a business to el ect to apportion income using an equally-weighted, thre e-factor apportionment formula based on a business’s sales, property, and payroll. See Gillette Commercial Operations North America & Subsidiaries v Dep’t of Treasury , 312 Mich App 394, 402; 878 NW2d 891 (2015)

. Effective January 1, 2008, the Legislature enacted the MBTA, MCL 208.1101 et seq., which provi ded that “each tax base
established under this act shall be apportioned in accordance with this chapter.” MCL 208.1301(1) (emphasis added). MCL 208.1301(2) of the MBTA prov ided for an apportionment formula based solely on a sales factor and made no mention of t he three-factor apportionment formula. Effective May 26, 2011, the Legislature amended the C ompact’s election provision, MCL 205.581, art III and IV, to re quire, beginning January 1, 2 011, taxpayers subject to the MBTA “to apportion and allocate i n accordance with the provisio ns of [the MBTA] and shall not apportion or allocate in accordance with article IV [of the Com pact].” 2011 PA 40 (PA 40). As a result of the enactment of the MBTA and PA 40, a legal questi on existed whether the Legislature had intended for the MBTA to repeal the Compact’s e lection provision or whether, for tax years before May 2011, ta xpayers could still utilize th e Compact’s election.-3- penalties. Plaintiff submitted a Letter of Disagreement in res ponse to the Initial Notice, but its response was untimely. Consequently, defendant issued to plaintiff an Intent to Assess Bill for Taxes Due, to which plaintiff did not respond. Ultimately, def endant issued to plaintiff a Final Bill For Taxes Due (hereinafter Final Assessment) in November 2 012. Plaintiff did not appeal the decision to the Court of Claims until over a year later in January 2014, after it had received defendant’s October 2013 response to plaintiff’s Letter of Disa greement. In its complaint, plaintiff alleged that it had “timely filed an MBT return for the Year in Issue, reflecting an overpayment of MBT in the am ount of $58,676 and requesting thatsuch overpayment be carried forward to the next tax period.”

Defendant answered plaintiff’s complaint and moved for summary disposition under MCR 2.116(C)(4), alleging that the Court of Claims lacked subje ct-matter jurisdiction. The Court of Claims agreed, finding that plaintiff failed to file i ts claim of appeal within 90 days of the Final Assessment and pay th e tax under protest before appea l, which the court concluded was required by MCL 205.22(1) and (2). The Court of Claims’ opinio n and order, issued February 18, 2015, however, did not have the opportunity to consider a n ew MBT Annual Return Notice of Additional Tax Due (hereinafter Superseding Notice) and Fina l Bill for Taxes Due Corrected (hereinafter Corrected Final Assessment) for the 2009 tax year, which defendant had issued to plaintiff three days before the court issued its opinion and or der.

B. DOCKET NO. 332891

Plaintiff paid under protest the amount due under the 2009 Sup erseding Notice and Corrected Final Assessment, as well as the amounts due under th e final assessments for the 2010 and 2011 tax years. As in 2009, plaintiff had elected to appor tion its Michigan income using the three-factor apportionment formula under Article IV of the Comp act and defendant had denied plaintiff’s election of thi s methodology for both the 2010 and 2011 tax years.

In May 2015, plaintiff filed a three-count complaint for a ref und regarding its MBT liability for the 2009 through 2011 tax years, specifically cha llenging the 2009 Corrected Final Assessment that plaintiff had not challenged in the prior litig ation. Count I alleged that defendant’s rejection of plainti ff’s election of the three-fact or apportionment formula violated the Compact and Michigan law; Count II alleged that defendant’s denial of the same violated the
Contracts Clause and Due Process Clause of the United States an d Michigan Constitutions and the Commerce Clause of the United States Constitution; and Coun t III requested abatement of penalties for the years in issue.

In June 2015, the Court of Cla ims sua sponte granted defendantpartial summary disposition as to Counts I and II under MCR 2.116(I)(1). The c ourt reasoned that PA 282, in which the Legislature retroactively repealed the Compact and wh ich the Court of Claims had previously held withstood constit utional challenge, applies and negated plaintiff’s claim for relief. After granting plainti ff partial relief as to its abat ement of penalties claim, the Court of Claims entered a final judgmen t that plaintiff now appeals onlyas to Counts I and II.-4- II. STANDARD OF REVIEW

This Court reviews a summary disposition motion under MCR 2.11 6(C)(4) and (I)(1) de

novo. Toaz v Dep’t of Treasury , 280 Mich App 457, 459; 760 NW2d 325 (2008); Sobiecki v Dep’t of Corrections , 271 Mich App 139, 141; 721 NW2d 229 (2006). Judgment under M CR 2.116(C)(4) is proper if the court lacks subject-matter jurisdi ction over the matter at issue. Further, a court shall render judgment without delay under MCR 2.116(I)(1) “[i]f the pleadings show that a party is entitled to judgment as a matter of law, o r if the affidavits or other proofs show that there is no genuine issu e of material fact . . . .” However, “appellate courts will sua sponte refuse to hear cases that they do not have the power to decide, including cases that are moot[.]” People v Richmond , 486 Mich 29, 35; 782 NW2d 187 (2010). Whether a case is moot is a question this Court reviews de novo. See Thomas M Cooley Law Sch v Doe 1 , 300 Mich App 245, 254; 833 NW2d 331 (2013).

III. DOCKET NO. 327766

In Docket No. 327766, plaintiff argues that the original 2009 Final Assessment is “no longer legally effective” because defendant’s Superseding Notic e and Corrected Final
Assessment rescinded the Final Assessment. It follows, accordi ng to plaintiff, that the Final Assessment “cannot possibly act as a bar to this action[.]”

We agree with plaintiff that the Final Assessment at issue in Docket No. 327766 is legally void. In February 2015, before the Court of Claims iss ued its opinion and order in this case, but apparently unbeknownst to the court, plaintiff receiv ed a Superseding Notice indicating that “[t]his notice supersedes prior [MBT] notifications for [the 2009 tax year]” (emphasis added). The notice further indi cated that the Final Assessment would be corrected to reflect the changes. Plaintiff also received a Corrected Final Assessment that was backdated to the date of the original Final Assessment, reflecting the alleged correct amount due. Thus, the Superseding Notice and the Corrected Final Assessment dictate that the orig inal Final Assessment is no longer legally operative.

We disagree with plaintiff’s assertion, however, that the resc ission of the original Final Assessment grants the Court of Claims subject-matter jurisdicti on over the dispute filed in Docket No. 327766. “[T]his Court does not reach moot questions or declare principles or rules of law that have no practical legal effect in the case before i t.” Richmond , 486 Mich at 34 (quotation marks and citation om itted). “[A] moot case is one which seeks to get a judgment on a pretended controversy, when i n reality there is none, . . . o r a judgment upon some matter which, when rendered, for any reason, cannot have any practical legal effect upon a then existing controversy.” Id . at 34-35 (quotation marks and citation omitted).

Here, as a result of the Superseding Notice and Corrected Fina l Assessment, plaintiff’s challenge in Docket No. 327766 to the original Final Assessmentis essentially a challenge to a
now non-existent tax assessment that effectively denied plainti ff’s claim for a refund. Because the Final Assessment is void, there is no controversy to resolv e regarding the propriety of that assessment and no relief to be had from its (now void) impositi on. We will not resolve a dispute that does not rest upon existing facts; when an event occurs th at makes it impossible to grant the relief requested, the issue is moot. Gen Motors Corp v Dep’t of Treasury , 290 Mich App 355,-5- 386; 803 NW2d 698 (2010). We conclude that this matter is mootand non-justiciable. Given that this appeal is moot, we do not consider whether the Court of Claims erred by dismissing this case for lack of subject-matter jurisdiction. As noted below, however, plaintiff’s substantive appellate issues are preserved for purposes of appeal in DocketNo. 332891, associated with the Superseding Notice and Corrected Final Assessment.

IV. DOCKET NO. 332891

In Docket No. 332891, plaintiff argues that the Court of Claim s erred by dismissing its
constitutional claims as to th e 2009 through 2011 tax years und er MCR 2.116(I)(1). Plaintiff concedes that this Court considered and rejected its arguments in Gillette , 312 Mich App at 407- 447. Indeed, the Gillette Court concluded that the Compact was not a binding interstate c ontract and, therefore, PA 282’s retroactive repeal of the Compact did not violate the Contract Clause and further, that the retroactive repeal of the Compact did not : (1) violate due process because taxpayers have no vested interes t in the continuation of the ta x laws and the Legislature had a legitimate purpose in enacting PA 282; (2) violate the Commerce Clause because PA 282 is not facially discriminatory and no discriminatory purpose or effect is inherent in PA 282; (3) violate the Separation of Powers Clause because PA 282 did not overrule a judgment of a court; or (4) violate various constitutional pr ovisions of the Michigan Const itution pertaining to the legislative process. Gillette , 312 Mich App at 409-410, 414, 431-433, 428, 444-447. Notwithstanding that Gillette is binding precedent, plaintiff argues that Gillette was wrongly
decided and asks this Court to i ssue a decision disagreeing wit h Gillette so that a conflict panel may be convened. MCR 7.215(J)(2) a nd (3). For the reasons tha t follow, we decline to do so.

A. THE COMPACT AS A CONTRACT

Plaintiff first argues that Gillette wrongly concluded that the Compact is not a binding contract, maintaining that this conclusion is contrary to United States Steel Corp v Multistate Tax

Comm’n , 434 US 452; 98 S Ct 799; 54 L Ed 2d 682 (1978), and makes Mic higan an outlier with respect to the status of the Compact as a contract. Plaintiff further maintains that Gillette is wrong because the Legislature’s enactment of the Compact evince s an intent to be bound by its provisions.

While it is a general principle of Michigan jurisprudence that one legislature may not bind another, the Legislature m ay in certain limited circumstan ces contractually bind a subsequent legislature. In re Request for Advisory Opinion Regarding Constitutionality of 2011

PA 38 , 490 Mich 295, 319-320; 806 NW2d 603 (2011). This authority i s subject to strict limitations and courts will not construe laws as contracts by i mplication because to do so would be to severely limit the Legislature’s sovereign authority to e nact laws in the future. Id . at 320. Consequently, a “strong presump tion [exists in Michigan law] th at statutes do not create contractual rights.” Studier v Mich Pub Sch Employees Retirement Bd , 472 Mich 642, 661; 698 NW2d 350 (2005). The proponent of the legislative creation of a contract must establish that the statutory language is plain and “susceptible of no other reason able construction than that the Legislature intended to be bound to a contract.” In re Request for Advisory Opinion Regarding Constitutionality of 2011 PA 38 , 490 Mich at 320-321 (quotation marks and citation omitted). “That is, [b]efore a statute, pa rticularly one relating to taxa tion, should be held to be irrepealable or not subject to amendment, an intent not to repeal or amend m ust be so directly and-6- unmistakably expressed as to leave no reason for doubt. Otherw ise the intent is not plainly expressed.” Id . at 321 (quotation marks and citation omitted). Relatedly, Co nst 1963, art 9, § 2 provides, “The power of taxati on shall never be surrendered, su spended or contracted away.”

The Gillette panel squarely rejected plainti ff’s claim that the Compact is a contract, stating:

There are no words in the Compact, as adopted by the Legislature under 1969 PA 343, that indicate that the state intended to be bound to the Compact, and specifically to Article III(1) . Therefore, the presumption must be that the state did not surrender its legi slative power to require use of a particular apportionment formula. Such inte rpretation comports with the S upreme Court’s recognition of “the basic principl e[] that the States have wide latitude in the selection of apportionment formulas . . . .” Moorman [ Mfg Co v Bair ], 437 US [267,] 274[; 98 S Ct 2340; 57 L Ed 2d 197 (1978)]. This interp retation is also consistent with the Court’s recent acknowledgement that states “do not easily cede their sovereign powers . . . .” Tarrant [ Regional Water Dist v Herrmann ], [569 US ___, ___;] 133 S Ct [ 2120,] 2132[; 186 L Ed 2d 153 (201 3)]. Because
there is no clear indication under MCL 205.581 that the state contracted away its ability to either select an apportionment formula that differs from the Compact , or to repeal the Compact altogether, the Court concludes that no c ontractual obligation was created by enactment of 1969 PA 343 that would p rohibit the enactment of [2014] PA 282. [ Gillette , 312 Mich App at 409-410 (emphasis added).]

We agree with the Gillette panel’s analysis. Nothing in former MCL 205.581, demonstrates an intent to create a binding contract that is so unmistakable as to leave no other
reasonable construction. There i s no express statutory languag e providing for the execution of a written contract on behalf of the State, nor did the Legislatur e covenant not to amend the legislation. See Studier , 472 Mich at 662-663.

Plaintiff, however, relies on th e first sentence of former MCL 205.581, which states that the Compact “is enacted into law and entered into with all juri sdictions legally joining therein.” Plaintiff asserts that the phrase “entered into” would be mere surplusage if the Compact is not interpreted to be a contract. However, the phrase “entered int o” in no way expresses the creation of a promise on behalf of a member state, including terms of mu tual assent, mutual obligation, and consideration, as contracts are traditionally understood inthe law. Moreover, the terms of the Compact itself suggest that it is not, in fact, a binding c ontract. Mainly, former MCL 205.581, art X(2), provides that a member state may withdraw fr om the compact at any time. Because the State could exercise, in its sole discretion, when to withdraw from the compact, any of its supposed “obligations” unde r the Compact were illusory. See Restatement Contracts, 2d, § 77, comment a, p 195 (“Illusory promises. Words of promise whi ch by their terms make performance entirely optional with the ‘promisor’ do not consti tute a promise.”).

In further support of its decision that the Compact is not a b inding agreement on the State, Gillette applied the “three classic ind icia of a binding interstate compact,” finding that the Compact was not a “binding interstate compact” because it did n ot create a regulatory body, did-7- not require reciprocal action to obtain benefits, and could be modified unilaterally by member

states. Gillette , 312 Mich App at 410-414. Plain tiff also challenges this reas oning, arguing that this holding is contrary to US Steel Corp , 434 US 452, in which the Court allegedly held that the Compact is a “binding interstate compact.” However, contrary t o plaintiff’s assertion, US Steel Corp did not conclude that the Compact is a binding contractual agreement. In fact, its analysis suggests otherwise, as Gillette recognized when it quoted the language from US Steel Corp. “

‘ each State retains complete freedom [under th e Compact] to adopt or reject the rules and regulations of the Commission .’ ” Gillette , 312 Mich App at 412, quoting US Steel Corp , 434 US at 473 (emphasis added in Gillette ). Indeed, the focus of the decision in United States Steel was whether the Compact violated the Compact Clause 2 of the United States Constitution by elevating states’ powers to the detriment of federal supremacy, not whether the Compact formed a contractually binding agreement between member states. To th e extent US Steelreferred to the Compact as a “compact,” it never characterized it as a binding agreement or as a contract, as that term is understood under traditional principles of contract law

.

Relatedly, plaintiff’s claim that Gillette ’s conclusion that the Compact is a non-binding agreement makes Michigan an outli er is not supportable. Member states have enacted legislation that deviates from the Compact, effectively altering its terms while remaining members. See, e.g., Minn Stat 290.191; Or Rev Stat 314.650; Idaho Code 63-302 7(i); Tex Tax Code Ann 171.106(a); Col Rev Stat 24-60-1301 & 1308; Utah Code Ann 59-7- 311. Moreover, members have supported the interpretation that the Compact is not, in f act, a binding contract. IBM , 496 Mich at 682 n 7 (2014) (M C C ORMACK , J., dissenting) (“It bears emphasizing that Compact members have not only refrained from bringing legal action agai nst one another for deviating from Articles III and IV, they h ave endorsed the Commissioner’s interpretation of the Compact . . . [as a non-] binding contract .”). Moreover, Michigan is not the only jurisdiction to have concluded that the Compact does not form a binding contract. S ee Kimberly-Clark Corp v Comm’r of Revenue , 880 NW2d 844 (Minn, 2016); Health Net, Inc v Dep’t of Revenue , 22 OTR 128 (Or TC, 2015).

Finally, plaintiff argues that defendant violated former MCL 2 05.581, art X(2), of the Compact, which provides that “[a] ny party state may withdraw fr om this compact by enacting a statute repealing the same. No withdrawal shall affect any lia bility already incurred by or chargeable to a party state prio r to the time of such withdrawa l.” According to plaintiff, this provision prohibits retroactive withdrawal from the Compact. P laintiff explains that because the Compact is a binding contract, th e State is prohibited under Ar ticle X(2) from retroactively repealing the Compact. It follows, according to plaintiff, tha t PA 282 irreconcilably conflicts with the Compact by retroactivel y repealing it and PA 282 is, thus, unlawful. This argument is based on two erroneous assumptions.

2 The Compact Clause of Art I, § 10, cl 3 of the United States C onstitution provides: “No State shall, without the Consent of Congress, . . .enter into any Agr eement or Compact with another State, or with a foreign Power . . . .”-8- First, plaintiff assumes that t he Compact is a contract and th at the State, therefore, is bound by its provisions. As we hav e already explained, the Com pact does not form a binding contractual agreement. Therefore, even assuming former MCL 205 .581, art X, prohibited retroactive repeal of the Compact, the State cannot be said to have violated former MCL 205.581, art X, because, absent a binding contractual obligatio n, the alleged “prohibition” is merely aspirational.

Second, plaintiff presumes that the second sentence of former MCL 205.581, art X(2), prohibits retroactive repeal. However, the second sentence rel ating to liabilities already incurred by or chargeable to a party state is a statement describing a l imited consequence of the unconditional right to withdraw f rom the Compact . It does not expressly prohibit a member state from retroactively repealing the Compact. And, when read in co ntext of the entire Compact, the second sentence refers to liabilities or charges owed to the Co mmission that have already been incurred by members states, notto taxpayers’ liabilities or cl aims for a refund. See former MCL 205.581, art VI(4), (requiring member states to appropriate fun ds to the commission for its budget), and art VIII(2) (granting the commission authority to charge member states for the performance of an audit). 3 Consequently, article X(2) does not prohibit retroactive repe al of the Compact. Gillette correctly concluded that the Comp act is not a binding contract.

B. CONTRACT CLAUSE

Plaintiff next claims that PA 282 violates the Contract Clause of the United States and Michigan Constitutions. “The United States Constitution provid es that ‘[n]o State shall . . . pass any . . . Law impairing the Obligation of Contracts . . .,’ US Const, art I, § 10, cl 1, while our state Constitution similarly prov ides that ‘[n]o . . . law impa iring the obligation of contract shall be enacted,’ Const 1963, art 1, § 10.” Gillette , 312 Mich App at 407. The Contract Clause has not been interpreted as an absolute bar against the impairment of contracts, but instead prohibits laws that “operate[] as a substantial impairment of a contractu al relationship.” Allied Structural Steel Co v Spannaus , 438 US 234, 244; 98 S Ct 2716; 57 L Ed 2d 727 (1978). This i nquiry involves a three-part analysis: “ whether there is a contractual relationship, whether a change in law impairs that contractual relationship, and whether the impa irment is substantial.” General Motors Corp v Romein , 503 US 181, 186; 112 S Ct 1105; 117 L Ed 2d 328 (1992). If t he impairment is deemed substantial, then it must be the result of a legitimate public purpose that is carried out by reasonable means. Blue Cross & Blue Shield v Milliken , 422 Mich 1, 21-22; 367 NW2d 1 (1985).

In Gillette , the Court found that because the Compact did not form a contr act, there can
be no violation of the Contract Clause. Gillette , 312 Mich App at 410. The Court then found that even if the Compact did form a contract, no substantial im pairment of the alleged contract

3 Even if “already incurred liab ilities” could be construed to i nclude amounts the State owed taxpayers before legislative with drawal so as to prohibit retro active withdrawal, the effect of
such a conclusion would be immaterial. This is because the Com pact is not a binding contract and, thus, the State is not bound by the terms of the Compact.-9- occurred because PA 282 did not interfere with “plaintiff’s rea sonably expected contractual
benefits.” Id . at 413-414. The Court stated:

Given the fact that these taxpaye rs have no vested interest in the continuation of a tax law, and that tax law is one of the more highly regulated a reas in the law, it is difficult to see what reasonable expectation was actually inter fered with. See,

e.g., All Star, Inc v Georgia Atlanta Amusements, LLC , 332 Ga App 1, 9; 770 SE2d 22 (2015), and cases cited therein. This is particularly so when considering Treasury’s position on this issue over the past five years or s o. [ Gillette , 312 Mich App at 414.]

Plaintiff first argues that Gillette erred by concluding that the Compact is not a contract, referring to its previous argument. However, we have already c oncluded that Gillette correctly concluded that the Compact is not a contract. Plaintiff also s uggests that Gillette ’s Contract Clause analysis was erroneous b ecause “protecting the public fi sc” is not a legitimate reason for a substantial impairment of contract. However, the Gillette Court did not predicate its Contract Clause analysis on this reasoning. Instead, it found that evenassuming the Compact formed a contract, PA 282’s repeal of th e Compact was not a substantial impairment because taxpayers
have no vested interest in the continuation of tax laws. Gillette , 312 Mich App at 413-414. Plaintiff does not expressly a ddress this rationale of the Gillette opinion and does not otherwise explain why Gillette ’s analysis is wrong. “It is not sufficient for a party simplyto announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority
either to sustain or r eject his position.” Innovation Ventures, LLC v Liquid Mfg, LLC , 499 Mich 491, 518; __ NW2d __ (2016) (quotation marks and citation omitt ed). Plaintiff has failed to
show that Gillette ’s Contract Clause an alysis is erroneous.

C. DUE PROCESS CLAUSE

Plaintiff next argues that the retroactive repeal of the Compa ct violates the Due Process Clauses of the United States and Michigan Constitutions. The F ourteenth Amendment of the United States Constitution and Const 1963, art 1, § 17 guarante e that no state shall deprive any person of “life, liberty or property, without due process of la w.” Taxpayers do not have a vested right in the tax laws that is protected by due process. Gen Motors Corp v Dep’t of Treasury , 290 Mich App at 370-371. This is because the Due Process Clause pr otects actual property rights, such as those in which legal or equitable title is vested; a ta xpayer has no vested property right in
tax laws or their continuance. Id . Nonetheless, retroactive tax legislation must meet the ratio nal basis test to satisfy due proces s: the legislation must serve a legitimate purpose and be furthered by a rational means. Id . at 371-372; United States v Carlton , 512 US 26, 30-31, 33; 114 S Ct 2018; 129 L Ed 2d 22 (1994). “A le gislature’s action to mend aleak in the public treasury or tax revenue—whether created by poor drafting of legislation in the first instance or by a judicial decision—with retroactive legisla tion has almost universally be en recognized as ‘rationally related to a legitimate legislative purpose.’ ” Gen Motors Corp , 290 Mich App at 373, quoting

Carlton , 512 US at 35. However, the period of retroactivity is relevant to whether the means employed are rational to meet the legitimate purpose. See Carlton , 512 US at 32-33.-10- Relying on United States Suprem e Court precedent, as well as c ases from the Michigan Supreme Court and this Court, Gillette , 312 Mich App at 414-421, concluded that taxpayers have no vested rights in the tax laws or continuance of the tax laws protected by the Due Process Clause. In support, the Court recognized that vested rights ar e legal rights to the enjoyment of property, and not a mere expectation in the continuance of a la w. Id . at 419, 421. Therefore, the Court held that the plaintiffs had no vested interest protected by Due Process in the continuation of the Compact. Id . at 421. The Court further found that the Legislature had a l egitimate purpose in enacting PA 282: to correct a misinterpretation 4 of the prior statute and to eliminate revenue loss that would stem from that misinterpretation. Id . at 421-422. The panel also found that the period of retroactivity was comparable to the periods of retroactivity for other legislation that had been upheld, id . at 420 (noting that a five and seven-year period had been uph eld), and specifically rejected plaintiff’s “bait and switch” argument, id . at 424-425, i.e., the argument that “Michigan engaged in a ‘bait and switch’ by enticing foreign co mpanies to engage in commerce in Michigan by providing the thr ee-factor apportionment formula and then retroactively taking away this apportionment method,” id . at 424.

Again, plaintiff doe s not, for the most p art, explain why it thinks the Gillette decision was wrongly decided, but merely parrots back arguments that Gillette already rejected or makes arguments without connecting them to Gillette . It is not this Court’s role to develop or provide the rationale for an appellant’s arguments on appeal. Innovation Ventures, LLC , 499 Mich at 518. To the extent that plaintiff does make arguments specific ally challenging the Gillette panel’s rationale, we are unpersuaded that Gillette ’s reasoning was wrong.

Plaintiff, for example, argues that Gillette wrongly concluded that PA 282’s repeal of the Compact served a legitimate purpos e to protect state revenues. According to plaintiff, the protection of state revenues is not a valid legitimate purpose because the retention of unlawfully collected taxes is not legitimate and is “constitutionally inco mplete and short-sighted.” Plaintiff cites no authority in support of this contention and we deem th is claim abandoned. Innovation Ventures, LLC , 499 Mich at 518. 5

Plaintiff also challenges Gillette ’s conclusion that PA 282’s six- and–a-half-year period of retroactivity is modest. Plaintiff explains that United States Supreme Court precedent indicates that a retroactive period of six years is unlawful, noting that the periods of retroactivity considered by the Court ranged from five months to two years. Plaintiff misses, however, that

4 I.e., our Supreme Court’s holding in IBM , 496 Mich at 659, that 2011 PA 40 created a window wherein certain taxpayers could still use the three-factor appo rtionment option available under Article IV of the Compact. Gillette , 312 Mich App at 406.

5 In any case, we note that plaintiff’s claim ignores that the L egislature’s purpose was multifaceted and not simply to protect revenues, but to also correct a misinterpretation of the law that
would have led to the loss of revenue. Gillette cites United States Supreme Court precedent in support of its conclusion that leg islative action is legitimate if it seeks to both correct a misinterpretation of a statute and eliminate a revenue loss stemming from that misinterpretation.

See Gillette , 312 Mich App at 422, citing Carlton , 512 US at 32.-11- the Supreme Court has never arti culated a bright line rule in this regard—just because the periods the Court considered reasonable were shorter than the p eriod in the instant case does not mean that a longer period cannot p ass constitutional muster. P laintiff also says that Gillette erred by relying on Gen Motors Corp and GMAC LLC v Dep’t of Treasury , 286 Mich App 365; 781 NW2d 310 (2009), in which retroactive tax legislation periods o f five and seven years were upheld, because those cases did not involve settled expectation s based on a binding interstate compact. See Gen Motors Corp , 290 Mich App at 376-377; GMAC , 286 Mich App at 378. This distinction is inapposite; contra ry to plaintiff’s wish, the Co mpact is not a binding contract and it gave plaintiff no settled expectations.

Finally, plaintiff claims that the Gillette holding guts the Due Process Clause leaving “no due process protections for taxpa yers from retroactive legislat ion.” Plaintiff warns that this
result will stem from the Court’ s recognition that the taxpayer s’ due process claim must fail because taxpayers have no vested rights in a tax refund based o n the continuance of tax laws. This argument ignores that Gillette ’s holding was not based solely on such a conclu sion. Rather,

Gillette recognized, and applied, the test of due process for retroacti ve tax legislation: the legislation must be enacted for a legitimate legislative purpos e and be furthered by a rational means. This is the same test applied in Carlton , 512 US at 33, which also recognized that taxpayers have no vested right in the tax laws. Thus, plaintif f’s warning is unfounded and

Gillette is not, contrary to plaintiff’s assertion, directly at odds wi th the United States Supreme
Court’s decision in Carlton . Plaintiff has not demonstrated that Gillette ’s due process analysis is

wrong.

D. COMMERCE CLAUSE

Plaintiff next claims that PA 282 violates the Commerce Clause of the United States Constitution because it facially d iscriminates against intersta te commerce. Gillette reached the opposite conclusion, holding that PA 282 did not violate the Co mmerce Clause because it was facially neutral and did not othe rwise have a discriminatory pu rpose or effect. Gillette , 312 Mich App at 431-432. It noted:

The United States Supreme Court . . . has established a fourpronged test to determine whether a state tax violates the Comm erce Clause. Complete Auto Transit, Inc v Brady , 430 US 274, 279; 97 S Ct 1076; 51 L Ed 2d 326 (1977). A state tax will withstand scruti ny under a Commerce Clause challenge and will be held to be constitutional ly valid under the four-pronged test articulated in Complete Auto provided that the tax: (1) is applied to an activity having a substantial nexus w ith the taxing state, (2) is fairly apportioned, (3) does not discriminate aga inst interstate commerce, and (4) is fairly related to the services provided by the state. [ Caterpillar, Inc v Dep’t of Treasury , 440 Mich 400, 415; 488 NW2d 182 (1992).]

Only the third prong is challeng ed in this case; plaintiffs co ntend that 2014 PA 282 discriminates ag ainst interstate com merce. “A tax viola tes the third prong
of the Complete Auto test if it is facially discriminatory, has a discriminatory purpose, or has the effect of unduly burdening interstate comme rce.” Caterpillar

,-12- 440 Mich at 422, citing Amerada Hess Corp v NJ Dep’t of Treasury , 490 US 66, 75; 109 S Ct 1617; 104 L Ed 2d 58 (1989). [ Gillette , 312 Mich App at 430-431.]

Under this test, Gillette found that PA 282 (1) is not facially discriminatory because i t does not, “on its face, create any classif ication based on a taxpayer’s s tate of origin or the location of commerce[;]” (2) does not have a discriminatory purpose because “there is no evidence of a legislative intent to give a benefit to local industry that is denied to out-of-state businesses[;]” and (3) does not have a discriminatory effect because it “precl udes both instate and out-of-state taxpayers from electing the three-factor apportionment formula previously available under the Compact.” Gillette , 312 Mich App at 431-433.

First, regarding Gillette ’s conclusion that PA 282 is faci ally neutral, plaintiff does n ot specifically explain why it thinks Gillette ’s reasoning is wrong. Again, “[i]t is not sufficient for a party simply to announce a position or assert an error and th en leave it up to this Court to discover and rationalize the basis for his claims, or unravel a nd elaborate for him his arguments, and then search for authority either to sustain or reject his p osition.” Innovation Ventures, LLC

, 499 Mich at 518 (quotation marks a nd citation). Plaintiff’s cl aim is abandoned. 6 Id

.

Second, regarding Gillette ’s holding that PA 282 does not have a discriminatory purpose or effect, the panel rejected the same arguments that plaintiff now raises on appeal and plaintiff fails to develop cogent and compelling reasons why the Gillette decision was in error. Gillette

, 312 Mich App at 432. For example, Gillette rejected the taxpayers’ assertions that the statements of a legislator show a discriminatory purpose becaus e such statements are not evidence of legislative intent. Like the taxpayers in Gillette , plaintiff does not cite any law that legislators’ media comments are relevant to establishing legisl ative intent. See id . Plaintiff also
attacks Gillette for allegedly failing to consider that PA 282 solely disadvanta ges out-of-state
taxpayers. Gillette , however, did not ignore this argument. Rather, the Court, re lying on United States Supreme Court precedent, recognized that any effect on o ut-of-state taxpayers was not inherent in PA 282 itself, but a consequence of different formu las used by different states.

Gillette , 312 Mich App at 433-434. Plaintiff does not explain why this reasoning is wrong and its claim in this regard is also abandoned. Innovation Ventures, LLC , 499 Mich at 518. Plaintiff
has failed to demonstrate that Gillette ’s Commerce Clause analysis is erroneous.

6 Putting aside plaintiff’s failure to develop this argument, we note that plaintiff’s position that defendant admitted that PA 282 is facially discriminatory in a motion in IBM does not support that the law is facially discriminatory. The State’s admission that upholding the Compact “ ‘may significantly impact the manner in which out of state businesses pay taxes to the State[,]’ ” is not an admission of a facially discriminatory law. This is because this “impact” cannot be gleaned from the face of the law and defendant was apparently referenci ng a consequence of the Compact’s repeal.-13- E. SEPARATION OF POWERS

Plaintiff also argues that PA 282 violates the Separation of P owers Clause of the Michigan Constitution, Const 1963, art 4, § 1. The Separation of Powers Clause provides: “The powers of government are divided i nto three branches: legislati ve, executive and judicial. No person exercising powers of one branch shall exercise powers pr operly belonging to another branch except as expressly provided in this constitution.” Con st 1963, art IV, § 1. Under this clause,

the legislative branch makes the laws, the executive branch exe cutes them, and the judicial branch interprets and applies them in cases proper ly before the courts. Kyser v Kasson Twp , 486 Mich 514, 535; 786 NW2d 543 (2010). More recently, our Supreme Court further explained that “[t]he true meaning [o f the doctrine] is that the whole power of one of th ese departments should not be exercised by the same hands which possess the whole power of either of the other departments; and that such exercise of the whole would subvert the principle s of a free
Constitution. Makowski v Governor , 495 Mich 465, 482; 852 NW2d 61 (2014). [ Okrie v State , 306 Mich App 445, 454; 857 NW2d 254 (2014).]

Further, it is well-established that “ ‘the Legislature may not reverse a judicial decision or repeal a final judgment, Wylie v Grand Rapids City Comm , 293 Mich 571, 582; 292 NW 668 (1940),’ ” but it may “amend a law that it believes the judiciary has wron gly interpreted,” Gen Motors Corp , 290 Mich App at 373 (citation omitted).

In Gillette , the Court recognized that the Separation of Powers Clause pre cluded the Legislature from reversing a j udicial decision or “repealing a final judgment,” but that the Legislature could “cure the judic ial misinterpretation of a sta tute.” Gillette, 312 Mich App at 426-427. Because PA 282 did not reverse a judicial decision or repeal a final judgment, the
Court held that PA 282 did not viol ate separation of powers pri nciples. Id . at 430.

Once again, plaintiff does not specifically connect its separation of powers arguments to
the Gillette Court’s reasoning and it makes no attempt to explain why it thi nks that Court’s reasoning is wrong. It is not inc umbent on this Court to devel op plaintiff’s arguments on appeal and we may deem this argument abandoned. Innovation Ventures, LLC , 499 Mich at 518.

Notwithstanding the deficiencyof plaintiff’s briefing, we not e that Gillette rejected the very same arguments and authorities that plaintiff relies on an d plaintiff does not provide additional reasons why Gillette ’s reliance on these authorities is wrong. Plaintiff, for exam ple, asserts that PA 282 violated the separation of powers doctrine by declaring the intent of a prior legislature, relying on the fact that composition of the Legisl ature that enacted PA 282 in 2014 is different than the 2007 Legislature, citing Bd of Educ Isle Twp v Presque Isle Co Bd of Educ

, 364 Mich 605, 612; 111 NW2d 853 (1961). Gillette rejected this very same argument and authority. Gillette , 312 Mich App at 428. Plaintiff also asserts that PA 282 viol ates the separation of powers principle because it reversed IBM . Again, Gillette rejected this argument, stating as follows:-14- There are several reasons why the Legislature did not violate t he Separation of Powers Clause by retroactively re pealing the Compact to January 1, 2008, thereby obviating the IBM Court's legal conclusions. Fir st, 2014 PA 282 did not reverse a judicial decision or repeal a final judgment. In IBM, 496 Mich at 645, 658–659, 662; 852 N.W.2d 865 (opinion by VIVIANO, J.), the lead opinion held that 2007

PA 36 did not implicitly repeal the Compact's election provision. 20 14 PA 282 did not overturn that judicial int erpretation of the 2007 law. Instead, the Legislature created a new la w, not interpreted by the IBM Court, that explicitly repealed the Compact provision s effective January 1, 2008, to f urther what the Legislature understood to have b een its original intent when it enacted 2007 PA 36. This did not impinge on the judiciary’s role of interpreti ng the law but instead corrected a mistake that was made clear by the holding in IBM. That is, the Legislature in 2014 PA 282 explicitly repealed the Compact provisions after the holding in IBM revealed that the Compact election provision had not been implicitly repealed by the enactment of 2007 PA 36. Although 2014 PA 282 may have rendered moot the effect of the judicial interpretation in IBM , this did not overturn that Court’s judgment a nd did not violate the Separati on of Powers Clause. [ Id . at 428.]

Plaintiff’s conclusory asserti on that PA 282 reversed a judicia l decision ( IBM ) is thus a distortion
of the well-established rule that Gillette relied on because PA 282 did not actually reverse a judicial decision. Gillette ’s separation of powers anal ysis is not erroneous.

F. LEGISLATIVE PROCESS REQUIREMENTS

Plaintiff raises three constitutional challenges related to th e legislative process that resulted in PA 282. Originally introduced in February 2013, SB 156, which led to the repeal of the Compact, did not refer to the Compact, but referenced the r epeal or amendment of various provisions of the MBTA pertaini ng to the calculation of taxpaye rs’ tax bases. The bill lingered in both the Senate and House, being sent to various committees. Then, after the release of IBM in July 2014, the House, on September 9, 2014, adopted substitute H-1, which added enacting language that retroactively repe aled the Compact. Specifically , the language “to repeal acts and parts of acts” was added to SB 156’s enacting language, which w as in reference to the Compact’s repeal. The Senate concurred with H-1 on September 1 0th and SB 156 was approved by the Governor on September 11, 2 014, taking immediate effect as PA 282.

Plaintiff raises three constitutional challenges to this legis lative process under Mich Const 1963, art IV, §§ 24 and 26. The former, known as the Tit le-Object Clause, provides:

No law shall embrace more than one object, which shall be expr essed in its title. No bill shall be altered or amended on its passage through either house so as to change its original purpose as determined by its total co ntent and not alone by its title. [Mich C onst 1963, art IV, § 24.]

Three types of challenges may be raised under this clause, onlytwo of which are relevant here: a “title-body” challenge and a “ch ange of purpose” challenge. Pl aintiff also raises a challenge under the Five-Day Rule Clause, w hich states in relevant part:-15- No bill shall be passed or become a law at any regular session of the legislature until it has been printed or reproduced and in the possession of each house for at least five days. [Mich Const 1963, art IV, § 26.]

1

. TITLE-BODY CHALLENGE

Plaintiff alleges that PA 282 violates the title-body rule bec ause PA 282 makes no reference to the Compact and the phrase “to repeal acts and parts of acts” is “insufficient as a matter of law.” Regarding a title -body challenge , this Court h as stated:

The title of an act must expre ss the general purpose or object of the act. However, the title of an act is not required to serve as an index to all of the provisions of the act. Instead, the test is whether the title gives the Legislat ure and the public fair notice of the challenged provisi on. The fair-notice requiremen t is violated only where the subjects [of the tit le and body] are so diverse in na ture that they have no necessary connection . . . . [ People v Bosca , 310 Mich App 1, 83; 871 NW2d 307 (2015) (quotation marks and citation omitted)]

The Gillette panel applied these rules and directly rejected the arguments p laintiff now
raises:

Again, the title of 2014 PA 282 e xpresses the general purpose or object of amending the MBT Act and refers to the repeal of acts or parts of acts

. Although the title does not use the word “Compact,” the title need not be an index of all of the act’s provisions. City of Livonia [ v Dep’t of Social Servs ], 423 Mich [466,] 501[; 378 NW2d 466 (1985)]. The repeal of the Compact is germa ne, auxiliary,
or incidental to the amendment of the MBT Act because the elimi nation of the Compact’s election provision is pertinent to the proper method of apportionment of the MBT tax base. The subjects are not so diverse in nature that they lack a necessary connection, and neither the legislators nor the publi c were deprived of notice of the challenged provision. See also Mooahesh [ v Dep’t of Treasury ], 195 Mich App [551,] at 569[; 492 NW 2d 246 (1992)] (“Despite [1988 P A 516’s] failure to state explicitly in the title that the Lottery Act e xemption was being repealed, we are able to declare that the subjects are not so d iverse as to have ‘no necessary connection.’ ”). [ Gillette , 312 Mich App at 444 (emphasis added to indicate analysis re jecting plaintiff’s ar guments in the instan t appeal).]

Plaintiff does not make any argument explaining why this analys is is wrong and merely repeats the same arguments that Gillette already considered and rejecte d. Without any explanation as t o why Gillette is wrong in this regard, plain tiff has not demonstrated that i t is entitled to a conflict panel and has abandoned this claim. Innovation Ventures, LLC , 499 Mich at 518. In any case, we agree with Gillette that the title of PA 282 gave the public sufficient notice that laws relating to the MBTA would be affected by the new law. It is not necess ary that the title of an act specifically mention the Compact’s repeal. Mooahesh , 195 Mich App at 569.-16- 2

. CHANGE OF PURPOSE CHALLENGE

Plaintiff’s change-of-purpose challenge asserts that the repea l of the Compact is only tangentially related to SB 156, as that bill as originally draf ted merely sought to amend the MBTA. When addressing a change-of-purpose challenge, “[t]he te st for determining if an amendment or substitute changes a purpose of the bill is whethe r the subject matter of the amendment or substitute is germ ane to the original purpose.” People v Kevorkian , 447 Mich 436, 461; 527 NW2d 714 (1994) (opinion by C AVANAGH

, C.J., AND B RICKLEY AND G RIFFEN
, JJ.).

Applying this test, the Gillette panel rejected plaintiff’s change of purpose challenge:

With respect to 2014 PA 282, both the original and amended bil l contained provisions related to th e MBT tax base. The original purpose of SB 156 was to amend the MBT Act in various ways, including by enac ting amendments concerning the gross -receipts tax base under the MBT . The change implemented by substitute H-1, as enrolled as 2014 PA 282, did not introduce an entirely new and different subject matter . Instead, it amended or extended the basic purpose of the original bi ll by retaining the original am endments and adding other provisions, including langu age retroactively repealing th e Compact provisions and expressing legis lative intent concerning the use of the single-factor apportionment formula and the elimination of the Compact’s elec tion provision. This was germane to the original purpos e of amending the MBT Act because, as discussed, the elimination of the Compac t’s election provision was pertinent to the proper method of appor tionment under the MBT Act

. Therefore, the repeal of the Compact was sufficiently interconnected with the MBT Act th at it fell within the basic purpose of the original bill. This was a far cry from the introduction of an entirely new and different subject matter, as in Toth v Callaghan , 995 F Supp 2d 774, 778 (ED Mich, 2014), where a bill that began by allowin g emergency managers to reject, modify, or terminate collective bargaining agreements ended up being passed as a bill that ex cluded graduate student resear ch assistants from the definition of “public employee.” [ Gillette , 312 Mich App at 445-446 (emphasis added).]

Once again, plaintiff has fa iled to explain why it thinks Gillette ’ s reasoning was wrong and merely repeats arguments that Gillette already rejected. Like the taxpayers in Gillette

, plaintiff has simply characteri zed SB 156 and H-1 as having two entirely different and unrelated purposes and wishes that the Gillette panel had agreed. However, in our view, Gillette correctly determined that no change-of-pur pose violation occurred: repeal of the Compact is intimately related to the original purpose of SB 156, as each sought to ma ke changes in the way that a taxpayer’s tax base is calculated. Plaintiff has not cited anyauthority that would compel us to
reach a different conclusion.

3

. FIVE-DAY RULE CHALLENGE

Finally, plaintiff says that pa ssage of SB 156 violated the fi ve-day rule because the amended bill did not remain in either house for the required fi ve days. As noted, the five-day rule requires that the bill remain in each house for five days before passage. With respect to the-17- five-day challenge, the Court in Gillette measured this five-day peri od from the date that SB 156 was originally before the Legisl ature, not from the date that t he bill was amended by substitute
H-1. The Court stated:

The legislative record establish es that SB 156 wa s before each house for at least five days. And as discussed earlier, there was no change of the original bill’s purpose. Accordingly, no violation of the Five-Day Rule occurred. [ Gillette , 312 Mich App at 447.]

Certainly, SB 156, as amended by substitute H-1, was not befor e each house five days before enactment. Substitute H-1 was presented in the house an d adopted the same day; the next day, H-1 was approved by the Senate; and, the following day, th e Governor signed SB 156 into law, taking immediate effect as PA 282. That the substitute di d not remain in eac h house for five days, however, is immaterial because substitute H-1 was germane to the original purpose of SB 156, the latter of which was introduced in February 2013 and re mained in each house well over five days. The five-day rule is not violated if a substitute b ill, which was not in each house for five days, is for the same purpose and germane to the original bill that was in each house for the requisite number of days. See United States Gypsum Co v State Dep’t of Revenue , 363 Mich 548, 553, 556; 110 NW2d 698 (1961). Plaintiff has failed to sh ow thatGillette was wrongly
decided on this issue.

G. CONCLUSION

In sum, having reviewed plaintiff’s arguments in light of the analysis in Gillette , we are of the opinion that Gillette correctly determined that the Compact is not a binding contract and that PA 282 did not violate any of the constitutional provision s on which plaintiff relies. Plaintiff makes no cogent arguments why this Court’s decision i n Gillette was wrongly decided to persuade us otherwise. Accordingly, we decline to issue a d ecision disagreeing with Gillette

. Plaintiff’s challenges related to the retroactive repeal of the Compact were rejected in Gillette and we reject them here as well. The Court of Claims did not e rr by dismissing Counts I and II of plaintiff’s complaint in Docket No. 332891.

Affirmed.

/s/ Michael J. Kelly
/s/ Peter D. O’Connell /s/ Jane M. Beckering