Title: BARAGA COUNTY V MICHIGAN STATE TAX COMMISSION
Citation: N/A
Docket Number: 118922
State: Michigan
Issuer: Michigan Supreme Court
Date: June 12, 2002

____________________________________________________________________________________________ 
____________________________________________________________________________________________________________________________ 
___________________________________ 
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 JUNE 12, 2002  
BARAGA COUNTY, BARAGA TOWNSHIP, 
L’ANSE TOWNSHIP, ROSEMARY 
HAATAJA, and AMY ST. ARNOLD,  
Plaintiffs-Appellees,  
v  
No. 118922  
STATE TAX COMMISSION,  
Defendant-Appellant.  
BEFORE THE ENTIRE COURT  
CAVANAGH, J.  
This is an action seeking an order of mandamus.  The  
State Tax Commission seeks a determination whether a consent  
judgment entered by the Michigan Tax Tribunal is enforceable  
against defendant, which was not a party to the action before  
the tribunal.  
We hold that the consent judgment is not enforceable  
against defendant because defendant was not a party to the  
tribunal proceedings.  Under the rules of how privity applies  
among governmental units that we adopt today, we further hold  
that privity does not exist in this case to bind the state by  
a judgment entered into by a subordinate political division.  
Therefore, we reverse the decision of the Court of Appeals and  
remand to the trial court for entry of a denial of plaintiffs’  
request for an order of mandamus.  
I  
The history of this case dates back to 1992, when the  
State Treasurer petitioned the Baraga Circuit Court for the  
right to sell properties for delinquent taxes.  The properties  
were owned by members of the Keweenaw Bay Indian Community  
(KBIC), including plaintiffs in this case, Haataja and St.  
Arnold, and was located within the boundaries of the  
community’s reservation. 
The property owners objected,  
arguing that under an 1854 treaty between the United States  
and the Chippewa, the state of Michigan lacked jurisdiction to  
impose ad valorem property taxes on lands owned by members of  
the KBIC and located within the boundaries of the community’s  
reservation.  
After losing in the circuit court, the property owners  
filed petitions with the tribunal, naming L’Anse Township and  
Baraga Township1 as respondents. Baraga County intervened in  
1 Some of the property in question is located in one 
township and some in the other township.  
2  
 
the tribunal proceedings as a respondent.  A settlement was  
reached during the tribunal proceedings, which resulted in a  
consent judgment being entered in May 1994.  Although the  
properties owned by tribal members residing within the  
reservation boundaries were to be “removed” from the tax and  
assessment rolls and were listed as exempt, the townships and  
county 
were 
required 
to have their township assessors continue  
to assess the properties in the same way they assess nontribal  
member owned property and to maintain such information  
separately. This was to allow for the proper calculation of  
“payment in lieu of taxes” to be billed to the KBIC, which was  
to make a payment in lieu of taxes for the full amount of the  
tax that would be due if the property were owned by a  
nontribal member.  For almost five years,  the townships, the  
KBIC, and tribal members apparently abided by the consent  
judgment.  
On December 28, 1998, defendant issued Bulletin No. 18,  
regarding Indian-owned lands.  In that bulletin, defendant  
notified local assessors of the June 8, 1998, decision of the  
United States Supreme Court in Cass Co, Minn v Leech Lake Band  
of Chippewa Indians, 524 US 103; 118 S Ct 1904; 141 L Ed 2d 90  
(1998).  The bulletin indicated that it was defendant’s  
position that Indian lands owned in trust by the United States  
Government 
were 
exempt from the Michigan General Property Tax,  
3  
MCL 211.1 et seq. Lands owned in fee by individual Indians or  
Indian communities were not exempt and were assessable.  
Defendant further advised local assessors that any Indian  
lands not held in trust by the United States that had been  
previously exempted were no longer qualified for such  
exemption and should be placed upon the assessment rolls.  
Defendant also advised local assessors that agreements to  
exempt from, and accept payments in lieu of, taxes were not  
authorized by law, and that appropriate steps should be taken  
to correct these situations.  
Pursuant to Bulletin No. 18, the assessor for L’Anse and  
Baraga Townships contacted defendant in regard to certain  
lands within the townships that had previously been exempted  
through the May 1994 consent judgment.  The assessor was  
advised to place the previously exempted properties on the  
assessment roll unless they were held in trust by the federal  
government, which gave rise to the present dispute.  
Plaintiffs (the Indian landowners, Baraga and L’Anse  
Townships, and Baraga County) sought mandamus and an order to  
show cause in the Baraga Circuit Court.  The trial court  
ordered mandamus, and the Court of Appeals affirmed, holding  
that defendant was in privity with the local units of  
government in regard to property tax appeals before the  
tribunal and, as such, the doctrine of res judicata applied to  
4  
bind defendant to the terms of consent judgments entered by  
the Tax Tribunal in matters where defendant was not a party.2 
 We granted defendant’s application for leave to appeal.  
II  
We must first determine whether the trial court properly  
issued the order of mandamus.  An order of mandamus will only  
be issued if a plaintiff proves it has a “‘clear legal right  
to performance of the specific duty sought to be compelled’  
and the defendant has a ‘clear legal duty to perform such act  
. . . .’” In re MCI Telecommunications, 460 Mich 396, 443­
444; 596 NW2d 164 (1999), quoting Toan v McGinn, 271 Mich 28,  
34; 260 NW 108 (1935).  We review a trial court’s decision  
regarding an order of mandamus for abuse of discretion. Id.  
at 443.  
III  
A. Privity  
Defendant asserts that plaintiffs did not establish they  
had a “clear legal right” to force defendant to abide by the  
terms of the consent judgment because defendant was not a  
party to the tribunal proceedings.  The Court of Appeals  
disagreed and concluded that the consent judgment was binding  
on defendant under the principle of res judicata. There are  
three prerequisites to the application of the doctrine of res  
2243 Mich App 452, 454-456; 622 NW2d 109 (2000).  
5  
 
judicata: “a prior decision on the merits; the issues must  
have been resolved in the first case . . . ; and both actions  
must be between the same parties or their privies.” Sloan v  
Madison Heights, 425 Mich 288, 295; 389 NW2d 418 (1986).  
Further, the burden of proving the applicability of the  
doctrine of res judicata is on the party asserting it. Id.  
We disagree with the Court of Appeals that defendant was  
in privity with plaintiffs Baraga Township and L’Anse  
Township.3
 The Court of Appeals stated that “[p]rivity  
between a party and a nonparty requires both a ‘substantial  
identity of interests’ and a ‘working or functional  
relationship . . . in which the interests of the nonparty are  
presented and protected by the party in the litigation.’” 243  
Mich App 456, quoting Phinisee v Rogers, 229 Mich App 547,  
553-554; 
582 
NW2d 
852 (1998) (citations and internal quotation  
marks omitted).  This definition of privity was taken from  
Phinisee, an action involving a paternity judgment, in which  
the Court of Appeals adopted the definition from a Colorado  
paternity case.4  Thus, the Court of Appeals applied a  
3Because we hold that plaintiffs have failed to prove 
privity, we need not decide whether plaintiffs have satisfied 
the other requirements for the application of res judicata. 
Sloan, 425 Mich 295.  
4SOV v Colorado, 914 P2d 355, 360 (Colo, 1996), quoting 
Public Service Co v Osmose Wood Preserving, Inc, 813 P2d 785, 
787 
(Colo 
App, 
1991) 
(involving 
an 
indemnification 
agreement).  
6  
definition of privity that originated in cases involving  
private parties. 
In this case, the parties involved are  
governmental units.  
There is law directly describing how privity applies  
among governmental units.  Both Corpus Juris Secundum and  
American Jurisprudence Second indicate that there is no  
privity in this situation.  50 CJS, § 869, Judgments, p 443,  
states:  
A state may be bound by a judgment for or 
against a public officer, or agency, but only with 
respect to a matter concerning which he or the 
agency is authorized to represent it, and it is not 
bound by a judgment to which a subordinate  
political subdivision was a party in the absence of 
a showing that such political body had an interest 
in the litigation as a trustee for the state.  
47 Am Jur 2d, Judgments, § 700, p 167, states:  
Courts have also generally found that no 
privity 
exists 
between 
state 
and 
federal  
governments, between the governments of different 
states, or between state and local governments.  
We agree with both these statements.  As 50 CJS, § 869  
indicates, 
there 
may 
be specific circumstances under which the  
state may be bound by a judgment to which a subordinate  
political division was a party and the state was not, such as  
when the subordinate political subdivision is found to have  
been acting as a trustee for the state.  Such circumstances  
are not present here.  
While the definition of privity applied by the Court of  
7  
 
Appeals may be applicable in determining privity between  
private parties, a determination that is not before this  
Court, we hold today that privity does not exist in this case  
to bind the state by a judgment entered into by a subordinate  
political division.  
B. Differing Roles of Townships and the Commissions  
The Court of Appeals concluded that defendant was in  
privity with plaintiffs Baraga Township and L’Anse Township,  
reasoning:  
Both townships were required by statute to 
carry out assessments of properties within their 
boundaries.
 MCL 211.10. 
Defendant was also  
charged by statute to “take such measures as will 
secure the enforcement of the provisions of this 
act, to the end that all the properties of this 
state liable to assessment for taxation shall be  
placed upon the assessment rolls . . . .”  MCL  
211.150(1). The governmental entities that signed 
the consent judgment were charged with assessing 
property and collecting taxes, and, therefore, had 
a 
“substantial 
identity 
of 
interests” 
with  
defendant and represented the same legal right. 
The townships secured that interest when they 
negotiated to have the KBIC make payments in lieu 
of the taxes that normally would have been  
assessed.
 [Baraga Co, 243 Mich App 456-457  
(citation omitted).]  
The Court of Appeals erred in focusing on the fact that  
the townships carry out the same set of property tax laws that  
defendant is required to enforce.  Rather, the Court should  
have focused on the differing roles of the townships, to carry  
out the tax laws, versus defendant, to step in if the  
townships fail to carry out their duties. It properly noted  
8  
that, under MCL 211.10, the townships were required to carry  
out assessments of properties within their boundaries.  
However, the townships, in defendant’s view, removed taxable  
property from the tax rolls. This must be an example of the  
type of situation in which defendant is charged with  
intervening so as to secure uniformity in the implementation  
of the provisions of the General Property Tax Act.  MCL  
211.150 states:  
It shall be the duty of the commission: (1) To 
have and exercise general supervision over the 
supervisors and other assessing officers of this 
state, and to take such measures as will secure the 
enforcement of the provisions of this act, to the 
end that all the properties of this state liable to 
assessment for taxation shall be placed upon the 
assessment rolls and assessed at that proportion of 
true cash value which the legislature from time to 
time shall provide pursuant to the provisions of 
article 9, section 3 of the constitution.  
Given the supervisory role that the Legislature has assigned  
to defendant over local assessors, it would be inconsistent  
with the statutory scheme to allow agreements entered into by  
such local assessors to bind defendant.  Accordingly, we fail  
to see, even using the definition of privity applied by the  
Court of Appeals, how the parties could have a “substantial  
identity of interests” and represent the same legal right when  
defendant is empowered to intervene if it concludes that  
municipalities have failed to place taxable property on the  
tax rolls and defendant is specifically charged with  
9  
exercising general supervision over local assessors.  
Further, we reject the Court of Appeals reasoning that  
this 
is 
all 
somewhat 
academic because “[t]he townships secured  
that interest [the interest in proper payment of taxes] when  
they negotiated to have the KBIC make payments in lieu of the  
taxes that normally would have been assessed.” 243 Mich App  
457.  Whether the taxes effectively got paid is important, of  
course, but it is not to this alone that the statute is  
directed.  Under MCL 211.150(1), defendant is charged with  
ensuring that all taxable properties are placed on the  
assessment rolls.5
 Plaintiffs and defendant cannot be  
representing the same legal right or have a substantial  
identity of interests if the townships purposefully did not  
place taxable properties on the assessment rolls, an action  
that defendant is required to ensure.  
C. Estoppel  
Plaintiffs ask this Court to find privity between  
defendant and the townships, arguing that the history of this  
case creates an estoppel to deny privity.  In support of this  
theory, plaintiffs claim that the Baraga Township supervisor  
5That this is indeed not academic can be seen from the  
fact that certain state-to-local aid formulas key on those 
very rolls and their cumulative taxable values.  See, e.g., 
MCL 380.1226 (requiring a county treasurer to provide a 
statement of assessed valuation of each school district or  
fraction of a school district in a county).  
10  
“repeatedly contacted” a member of the commission regarding  
the taxable status of the properties at issue for 1992-1994  
and informed him of the proceedings.  Moreover, plaintiffs  
assert that the supervisor repeatedly requested guidance from  
defendant, 
but 
the 
requests were ignored, thus, consigning the  
townships 
to 
represent 
themselves 
in 
the 
tribunal 
proceedings.  
Given all this, plaintiffs argue that there was acquiescence  
so as to estop the State Tax Commission from challenging the  
outcome of the litigation.  
In countering this estoppel theory, defendant argues  
here, as it did in the Court of Appeals, that nothing in the  
legislation establishing lines of authority provides that the  
State Tax Commission must render aid to local assessors or be  
estopped to assert certain positions because of that.  The  
Court of Appeals, in deciding for plaintiffs disagreed. The  
Court relied on MCL 209.104 to conclude that defendant was  
“statutorily required” to render assistance to plaintiffs.  
MCL 209.104 states in part:  
The state tax commission shall have general 
supervision of the administration of the tax laws 
of the state, and shall render such assistance and 
give such advice and counsel to the assessing 
officers of the state as they may deem necessary 
and essential to the proper administration of the 
laws governing assessments and the levying of taxes 
in this state.  
We disagree that this section required defendant to  
provide assistance merely because an assessing officer  
11  
requested it.  It follows, therefore, that we also disagree  
with the estoppel argument that is based upon this flawed  
“requirement to assist” concept.  
The 
statute 
states that the commission “shall render such  
assistance . . . as they may deem necessary and essential  
. . . .”6  This section of the statute is designed to outline  
the duties of the State Tax Commission. One of those duties  
is to provide “advice and counsel to the assessing officers of  
the state.”  The statute then qualifies this obligation by  
providing that the advice shall be “as they may deem necessary  
and essential to the proper administration of the laws  
governing assessments and the levying of taxes in this state.”  
(Emphasis added.)  Because the predicate of the statutory  
scheme is that defendant possesses greater expertise than the  
subordinate 
assessing 
officers, 
it 
is 
logically 
necessary 
that  
defendant–not 
the 
recipients 
of 
any 
advice–must 
determine 
what  
6While we recognize that “they” is a plural pronoun, 
“they,” as used in this statutory provision, must refer to the 
“state tax commission” even though this is a singular noun. 
This construction is required to make the rest of the statute 
organizationally coherent.  
[T]he entire act must be read, and the  
interpretation to be given to a particular word in 
one section arrived at after due consideration of  
every other section so as to produce, if possible, 
a harmonious and consistent enactment as a whole.  
[Grand Rapids v Crocker, 219 Mich 178, 182-183; 189  
NW 221 (1922).]  
12  
advice is “necessary and essential.”  
Thus, construing the statute in this fashion, it is  
within the discretion of defendant when or if it renders  
assistance.  Defendant is never “required,” except by its own  
good-faith 
judgment, 
to render assistance to anyone under this  
statute.  Therefore, we refuse to find privity on the basis of  
an estoppel theory.  
D. Practical Efforts  
We 
would 
also 
point 
out 
that 
defendant 
argues  
convincingly 
that 
plaintiffs’ position is unworkable if for no  
other reason than that there could be between 7,000 and 10,000  
property tax disputes filed yearly in the tribunal, most of  
which are disposed of through consent judgments.  Clearly,  
defendant could not have been expected by the Legislature to  
routinely monitor these proceedings to ascertain whether the  
state’s interests are being adequately represented by the  
local units of government.  Thus, in addition to the language  
of the statute controlling the relationship between the State  
Tax Commission and the local assessors, we note that the way  
these cases are handled militates against plaintiffs’  
position.  
IV  
The consent judgment entered by the tribunal is not  
enforceable against defendant, which was not a party to the  
13  
 
tribunal proceedings.  Privity does not exist in this case to  
bind the state by a judgment entered into by a subordinate  
political 
division. 
 
Therefore, res judicata cannot be applied  
to bind defendant by the consent judgment.  Without res  
judicata, plaintiffs cannot satisfy the requirements for an  
order of mandamus because they have no legal right to the  
performance requested. Accordingly, we reverse the judgment  
of the Court of Appeals and remand this case to the trial  
court for entry of a denial of plaintiffs’ request for an  
order of mandamus.  
CORRIGAN, C.J., and WEAVER, 
KELLY, TAYLOR, YOUNG, and MARKMAN,  
JJ., concurred with CAVANAGH, J.  
14