Title: MUSKEGON AREA RENTAL ASSN V CITY OF MUSKEGON
Citation: N/A
Docket Number: 118416
State: Michigan
Issuer: Michigan Supreme Court
Date: December 18, 2001

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____________________________________________________________________________________________________________________________ 
__________________________________ 
Michigan Supreme Court 
Lansing, Michigan 48909 
C hief Justice 
Justices 
Maura D. Corrigan  
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Opinion 
Stephen J. Markman 
FILED DECEMBER 18, 2001  
MUSKEGON AREA RENTAL ASSOCIATION, 
ROGER NIELSON, and ARTHUR JASICK,  
Plaintiffs-Appellees,  
v  
No. 118416  
CITY OF MUSKEGON,  
Defendant-Appellant.  
PER CURIAM  
A Muskegon city ordinance provides that before a  
residential dwelling may be rented, all past due property  
taxes on the property must be paid. The plaintiffs, who are  
owners of rental property within the city, brought this action  
challenging the validity of the ordinance on various grounds.  
The circuit court granted summary disposition for the city on  
all the plaintiffs’ claims, but the Court of Appeals reversed  
in part, finding that the ordinance violated the Equal  
Protection Clauses of US Const, Am XIV, and Const 1963, art 1,  
§ 2.  
 
 
 
We conclude that the ordinance does not violate equal  
protection guarantees, reverse the judgment of the Court of  
Appeals in part, and reinstate the judgment of the Muskegon  
Circuit Court.  
I  
The city of Muskegon enacted a property maintenance code  
that sets forth the maintenance standards for all existing  
structures, new structures, and additions to existing  
structures.1  The code also requires a property owner to  
1 The purpose of the property maintenance code is stated 
in Muskegon Ordinance § 4-61:  
(b) Purpose. The purpose of this code is to 
protect the public health, safety and welfare in 
buildings 
intended 
for 
human 
habitation 
and  
accessory structures as hereafter provided by:  
(1) 
Establishing 
minimum 
standards 
for  
exterior 
property 
areas, 
exterior 
structure, 
interior structure, basic facilities, light and 
ventilation, 
occupancy 
requirements 
and 
fire  
safety.
 These standards are designed to be  
reasonably high but, at the same time, practical 
and attainable and should not be interpreted as a 
guarantee to the purchaser.  
(2) Fixing the responsibilities of owners, 
operators and occupants of every building or  
structure used or intended for commercial or  
residential use or occupancy, in whole or in part.  
(3) Provide for administration, enforcement 
and penalties.  
The provisions of this chapter shall apply to 
all 
existing structures. 
Any 
new 
building 
construction or additions to existing structures in 
the city must comply with the requirements of the 
building code as amended.  The minimum standards  
required under this code are designed to prevent 
(continued...)  
2  
obtain a certificate of compliance before the owner may rent  
the property.  
On May 27, 1997, the city amended the ordinance to impose  
additional 
conditions 
for 
obtaining 
a 
certificate of  
compliance.
 Muskegon Ordinance § 4-83(b) was amended to  
provide:  
The 
City shall 
issue 
a 
certificate 
of  
compliance for a rental dwelling when the city 
finds that the rental dwelling, its units and 
accessory structures and yards comply with the 
standards set forth in this code; however, no  
certificate of compliance shall be issued until all 
of the following fees and debts to the city have 
been paid in full:  
(1) all previously billed property taxes;  
(2) all current or past due special assessment 
installments;  
(3) water or sewer bills outstanding;  
(4) all charges against the property for 
mowing, cleanup, weed or debris removal and similar 
charges by the city;  
(5) any fees, fines, penalties or debts of any 
sort arising from the provisions or enforcement of 
the Property Maintenance Code.  
The issue in this appeal is whether § 4-83(b)(1) violates  
the principle of equal protection under the law.  
1 (...continued) 
fire hazard, structural deterioration, inadequate 
light, air and heat and unsanitary and overcrowded 
conditions which constitute a menace to the safety, 
health and welfare of the occupants or to the 
surrounding area.  
3  
II 
  Plaintiff Muskegon Area Rental Association is an  
organization of about 145 members who own approximately 2,000  
rental dwellings in the city of Muskegon.  The individual  
plaintiffs 
are 
members of the association.  Plaintiffs brought  
this action after the city attempted to enforce § 4-83(b)(1).  
Among other claims not before the Court, plaintiffs alleged  
that the ordinance violated their equal protection rights.  
The plaintiffs argued that their equal protection rights  
were violated because other businesses who must register to do  
business in Muskegon are not required to pay real estate taxes  
before securing a certificate of registration under another  
ordinance.2 After discovery, both sides moved for summary  
disposition 
under 
MCR 2.116(C)(10).  The circuit court granted  
the city’s motion.  Regarding the equal protection claim, the  
court said:  
The 1990 Census of Population and Housing 
shows that 45% of Muskegon’s 14,767 occupied 
housing units were rental units. . . . Undisputed 
sworn testimony demonstrates that a substantial 
majority of rental properties which are not current 
in their tax payments are deteriorated, and unsafe 
for human occupancy. . . . When they deteriorate, 
the City generally does not apply to receive these 
tax reverted properties. . . .  Tax delinquency 
carries over to lack of interest in providing safe 
rentals for the public. . . . Finally, the City’s 
tax collection percentage is lower than the  
majority of Michigan municipalities. This results  
in higher interest costs when the City borrows or 
issues bonds. . . .  
2 See Ordinance 1166, adopted August 11, 1998, amending 
Chapter 5 of the Muskegon Code of Ordinances.  
4  
 
 
At oral argument, the parties explored the 
link between the stated goals and the ordinance. 
Plaintiff’s counsel argued there was little or no 
connection 
between 
fiscal 
responsibility 
and  
providing suitable housing.  A landlord could be  
fiscally responsible and provide horrific housing. 
One could provide exemplary rental housing and owe 
delinquent taxes.  The Court is, however, satisfied  
that the City has established the requisite 
connection.  In any event, it is not for this Court 
to second guess local governing bodies absent a 
showing that the body was arbitrary or capricious. 
Kropf v City of Sterling Heights, 391 Mich [139, 
161]; 215 NW2d 179 (1974). [Circuit Court opinion 
issued January 19, 1999, pp 8-9.]  
III  
The plaintiffs appealed, and the Court of Appeals  
affirmed the circuit court decision on all grounds except the  
equal protection claim.3  The majority noted that an ordinance  
is presumed constitutional and that the burden is on the party  
challenging the ordinance to show that it is not rationally  
related to a legitimate governmental interest. In finding a  
violation of the Equal Protection Clauses of the Michigan and  
U. S. Constitutions, the Court of Appeals majority reasoned as  
follows:  
We utilize the test set forth in Alexander v  
Detroit, 392 Mich 30, 35-36; 219 NW2d 41 (1974), a 
case involving a constitutional attack on a city 
refuse collection ordinance.  This test contains  
two 
prongs: 
(1) 
whether 
the 
ordinance’s  
classifications are based on natural distinguishing 
characteristics and whether the classifications  
bear a reasonable relationship to the object of the 
ordinance and (2) whether all persons of the same 
class are included and affected alike or whether  
immunities or privileges are extended to an  
3 244 Mich App 45; 624 NW2d 496 (2000).  
5  
 
 
 
arbitrary or unreasonable class while denied to 
others of a like kind.  Accord, Brittany Park  
Apartments [v Harrison Charter Twp, 432 Mich 798;  
443 NW2d 161 (1989)], supra, p 804.  
[T]he problem here is that the ordinance 
treats rental property owners differently from 
other businesses. 
Other businesses (nonrental 
properties) are required to obtain a certificate of 
registration and one of the prerequisites for 
obtaining 
such 
a 
certificate 
is 
that 
all  
outstanding debts to defendant be paid, except real  
property or income taxes. 
Muskegon Code of  
Ordinances, § 5-9.6.  Thus, defendant has created a 
subset of businesses—the owners of rental dwelling 
properties—and treats them entirely differently 
than 
it 
treats 
other, 
nonrental 
property 
businesses.  
We hold that defendant’s ordinance violates  
the guarantee of equal protection because it  
violates the second prong of the test set forth in 
Alexander.  The ordinance does not include and  
affect all persons of the same class (businesses) 
and 
extends 
immunities 
or 
privileges 
to 
an  
arbitrary class (businesses who are not owners of 
rental properties and who are immune from the  
requirement of paying real property or income taxes 
before obtaining a certificate of registration), 
while denying the exact immunities and privileges 
to others of a like kind (businesses who are owners 
of rental properties and are required to pay all 
previously billed property taxes before obtaining a 
certificate of compliance). Consequently, we find 
that defendant’s ordinance impermissibly treats 
certain components of the same class (businesses) 
differently.  [244 Mich App 55-57 (emphasis in  
original).]  
The 
dissent 
disagreed 
with 
the 
majority’s 
equal  
protection analysis.  
The purpose of defendant treating rental  
property 
businesses 
differently 
than 
other  
businesses is apparent.  By requiring payment of  
taxes “up front,” before units can be rented, 
defendant seeks to reduce the fiscal, safety, 
health, 
and 
welfare 
problems 
that 
result  
disproportionately from rental properties.  
6  
 
 
 
 
 
The majority states that defendant’s position 
regarding 
the 
rational 
basis 
for 
this  
classification scheme “is not supported in any way 
by record evidence.”  Ante at 57. 
I first note  
that the majority’s analysis in this regard ignores 
the 
presumption 
of 
constitutionality 
that  
defendant’s ordinance enjoys and the corresponding 
heavy burden of proof that plaintiffs must bear to 
show that the ordinance is unconstitutional.  In  
effect, the majority places the burden of proof on 
defendant, as if this is a “strict scrutiny” case. 
The question here is not whether defendant has  
proved the rational basis for the classification 
scheme.  The question is whether plaintiffs have  
come forward with evidence sufficient to show  
defendant’s ordinance to be arbitrary and wholly 
unrelated to a legitimate government purpose.  
I conclude they have not.  There has been no  
showing 
that 
rental 
properties 
are 
not  
disproportionately tax delinquent compared to  
properties owned by other businesses.  In fact, the  
record includes admissions by members of the  
Muskegon Area Rental Association that allowing 
rental properties to become delinquent is a common 
business practice. 
Defendant has articulated  
reasons why its failure to promptly receive taxes 
when due causes fiscal problems, and plaintiffs 
have offered no evidence to suggest that those 
problems do not result from tax delinquencies. 
Thus, if the purpose of the classification scheme 
here was simply to encourage prompt payment of 
taxes for fiscal reasons, by enacting a special 
penalty against a class of property owners who 
disproportionately 
are 
tax 
delinquent, 
the  
classification would pass constitutional muster.  
However, defendant has articulated other  
reasons 
for 
treating 
rental 
property 
owners  
differently than other businesses. 
In sum, 
defendant’s position is that the deteriorating 
conditions of residential properties are commonly 
the result of or exacerbated by the failure to pay 
taxes when due. 
This seems a common sense  
conclusion to anyone familiar with “urban blight.” 
It is certainly at least “rational speculation” on 
defendant’s part.  See Alexander v Merit Systems  
Protections Bd, 165 F3d 474, 484 (CA 6, 1999) 
(“legislative choice is not subject to courtroom 
factfinding 
and 
may 
be 
based 
on 
rational  
speculation unsupported by evidence or empirical  
7  
 
data”).  Again, plaintiffs have not shown that  
there 
is 
no 
relationship 
between 
housing 
deterioration and tax delinquency or otherwise 
proved that the classification scheme at issue here 
has no “rational basis” in this regard. [244 Mich 
App 61-62.]  
The city filed an application for leave to appeal to this  
Court.4  
IV  
We review de novo a trial court’s decision to grant or  
deny summary disposition.  Hazle v Ford Motor Co, 464 Mich  
456, 461; 628 W2d 515 (2001).  After reviewing the evidence in  
the light most favorable to the nonmoving party, the court  
must grant summary disposition if there is no genuine issue of  
material fact. Hazle, supra at 461.  
V  
The tests applicable to challenges based on the Equal  
Protection Clauses are well established and were recently  
summarized in Crego v Coleman, 463 Mich 248, 259; 615 NW2d  
218(2000):  
When a party raises a viable equal protection 
challenge, the court is required to apply one of 
three traditional levels of review, depending on 
the nature of the alleged classification. The 
highest level of review, or "strict scrutiny," is 
invoked where the law results in classifications  
based on "suspect" factors such as race, national 
origin, or ethnicity, none of which are implicated 
in this case. Plyler v Doe, 457 US 202, 216-217; 
102 S Ct 2382; 72 L Ed 2d 786 (1982).  Absent the  
implication of these highly suspect categories, an 
equal 
protection 
challenge 
requires 
either  
4 
 The plaintiffs did not cross-appeal on the issues 
decided against them by the Court of Appeals.  
8  
  
 
 
 
rational-basis 
review 
or 
an 
intermediate, 
"heightened scrutiny" review.  
In 
this 
case, 
the categorization does not involve suspect  
classifications, 
to 
which 
“strict 
scrutiny” 
analysis 
 
applies,  
nor does it involve classifications to which the courts apply  
a heightened level of scrutiny, such as illegitimacy and  
gender. Id. at 260. Thus, the ordinance is reviewed under  
the rational-basis test.  As we explained in TIG Ins Co v  
Treasury Dep’t, 464 Mich 548, 557-558; 629 NW2d 402 (2001):  
“Rational basis review does not test the  
wisdom, 
need, 
or 
appropriateness 
of 
the  
legislation, or whether the classification is made 
with 'mathematical nicety,' or even whether it 
results in some inequity when put into practice." 
Crego v Coleman, 463 Mich 248, 260; 615 NW2d 218  
(2000). 
Rather, 
it 
tests 
only 
whether 
the  
legislation is reasonably related to a legitimate 
governmental purpose. The legislation will pass 
"constitutional muster if the legislative judgment 
is supported by any set of facts, either known or 
which could reasonably be assumed, even if such 
facts may be debatable." Id. at 259-260. To prevail 
under this standard, a party challenging a statute 
must overcome the presumption that the statute is 
constitutional. Thoman v Lansing, 315 Mich 566, 
576; 24 NW2d 213 (1946).  Thus, to have the 
legislation stricken, the challenger would have to 
show that the legislation is based "solely on 
reasons totally unrelated  to the pursuit of the 
State's goals," Clements v Fashing, 457 US 957, 
963; 102 S Ct 2836; 73 L Ed 2d 508 (1982), or, in 
other words, the challenger must "negative every 
conceivable 
basis 
which 
might 
support" 
the  
legislation. Lehnhausen v Lake Shore Auto Parts Co,  
410 US 356, 364; 93 S Ct 1001; 35 L Ed 2d 351 
(1973).  
VI  
In 
this 
case, 
the city has advanced legitimate objectives  
for its ordinance, including encouraging prompt payment of  
9  
 
 
property 
taxes 
to 
minimize the fiscal problems associated with  
delinquent taxes due on rental properties and promoting  
appropriate 
maintenance 
of 
rental 
properties. 
Thus,  
plaintiffs must show that the ordinance is not rationally  
related to those objectives.  We conclude that the plaintiffs  
have not met that burden for the reasons articulated in the  
Court of Appeals partial dissent.  
The Court of Appeals majority explained its finding of an  
equal protection violation by stating that the ordinance  
does not include and affect all persons of the same 
class (businesses) and extends immunities or  
privileges to an arbitrary class (businesses who 
are not owners of rental properties and who are 
immune from the requirement of paying real property 
or income taxes before obtaining a certificate of 
registration), while denying the exact immunities 
and privileges to others of a like kind (businesses 
who are owners of rental properties and are  
required to pay all previously billed property 
taxes 
before 
obtaining 
a 
certificate 
of  
compliance). [244 Mich App 56-57.]  
This 
analysis 
is incomplete.  The majority concludes that  
there is an equal protection violation simply because two  
classes of businesses are treated differently. If that were  
all that is required, then virtually any classification could  
be successfully challenged.  The rational basis test requires  
that the plaintiff also demonstrate that there is no rational  
basis 
for 
the 
challenged 
distinction. 
As 
to 
that  
consideration, the Court of Appeals majority said:  
[W]e find that plaintiffs have met their 
burden 
of 
showing 
that 
the 
classification  
established by the ordinance is not rationally 
related to a legitimate governmental interest  
10  
because 
the 
ordinance 
subjects 
a 
subset 
of  
businesses to a financial requirement to operate 
and does not include or affect the entire class, 
thus extending a privilege to a certain set of 
businesses while denying that privilege to another 
(rental dwellings).  Accordingly, we find this 
distinction to be a violation of equal protection. 
[244 Mich App 57 (emphasis added).]  
Manifestly, 
this 
conclusion 
merely 
repeats 
the 
majority’s  
previous observation that the city has treated these  
properties differently than others, and fails to analyze the  
reasons supporting that legislative decision.  
As noted in the dissent, the plaintiffs have not disputed  
the city’s claims that residential rental properties are  
disproportionately delinquent compared to other classes of  
property and that the failure to receive taxes when due causes  
the city fiscal problems. Nor did the plaintiffs refute the  
city’s explanation of the distinction between owners of  
residential rental properties who must obtain certificates of  
compliance pursuant to the property maintenance code and  
owners of other businesses who must obtain certificates of  
registration.  By encouraging timely payment of taxes,  
interest and penalties are avoided.  This, in turn, frees  
funds to maintain the property, thereby promoting the health,  
safety, and welfare of residents.5  These concerns do not  
5 Interestingly, in its analysis of the plaintiff’s due 
process claim, the Court of Appeals majority found this 
justification a rational basis for the ordinance:  
[W]e agree with defendant that requiring 
rental owners to pay delinquent property taxes 
(continued...)  
11  
 
necessarily apply to other businesses, which are more likely  
to be tenants rather than owners of leased property.  
Although legitimate arguments can be made regarding the  
wisdom of the approach taken by the city in addressing the  
problems of delinquent taxes and the failure to maintain  
residential rental property, it is not for the courts to  
substitute their judgment for that of legislative bodies on  
such questions of economic and social policy.  We affirm that  
as long as the ordinance is rationally related to the city’s  
legitimate purposes, it does not violate equal protection  
guarantees.  
VII  
Because 
the 
plaintiffs 
have 
not 
overcome 
their  
considerable burden of demonstrating that the city lacked any  
5 (...continued) 
before receiving a certificate of compliance is 
reasonably related to defendant's stated purpose of 
protecting the safety, health, and welfare of those 
inhabiting 
dwellings 
and 
of 
eliminating 
deteriorated 
dwellings 
from 
the 
city.  
Uncontroverted 
affidavits 
of 
city 
officials  
indicate that houses in the city that revert to the 
state because of tax delinquency are normally 
rental properties and are usually dilapidated when 
they do revert to the state.  
Accordingly, we conclude that there is a  
rational relationship between the requirement that  
any delinquent property taxes be paid before a  
certificate of compliance can be issued for a  
rental dwelling unit and the city's legitimate  
interest in providing safe and habitable rental  
dwellings 
to 
its 
citizens. 
Consequently, 
defendant's 
ordinance 
does 
not 
violate 
the  
substantive due process rights of plaintiffs.  [244 
Mich App 54-55 (emphasis added).]  
12  
 
 
 
 
rational basis for its ordinance, the city was entitled to  
summary 
disposition 
on 
the 
equal 
protection 
claim.  
Accordingly, we reverse the judgment of the Court of Appeals  
in part, and reinstate the judgment of the Muskegon Circuit  
Court.  
CORRIGAN, C.J., and CAVANAGH, WEAVER, 
KELLY, TAYLOR, 
YOUNG, 
and  
MARKMAN, JJ., concurred.  
13