Court Opinion

ID: 823601
Source: CourtListenerOpinion
Date Created: 2013-03-01 19:27:19.330366+00
Date Added: 2024-06-11T12:40:02.798310
License: Public Domain

Order                                    Michigan Supreme Court
                                               Lansing, Michigan

  November 9, 2012                              Robert P. Young, Jr.,
                                                          Chief Justice

  145961-2 & (15)(16)(17)                       Michael F. Cavanagh
                                                      Marilyn Kelly
                                                Stephen J. Markman
                                                Diane M. Hathaway
                                                    Mary Beth Kelly
  AFT MICHIGAN, AFT, AFL-CIO,                       Brian K. Zahra,
  ALPENA MONTMORENCY-ALCONA ISD                                Justices
  PARAPROFESSIONALS, ALPENA
  MONTMORENCY-ALCONA ISD TEACHERS,
  ARENAC EASTERN FEDERATION, BAY
  ARENAC SKILLS CENTER FEDERATION,
  BROWN CITY EMPLOYEES ORGANIZATION,
  BROWN CITY FEDERATION OF TEACHERS,
  CHEBOYGAN OTSEGO PRESQUE ISLE
  INTERMEDIATE PARAPROFESSIONAL AND
  BUS PERSONNEL, CHEBOYGAN-OTSEGO
  PRESQUE ISLE ISD TEACHERS,
  CHEBOYGAN-OTSEGO PRESQUE ISLE
  SUPPORT PERSONNEL, CHESANING
  UNION AUXILIARY SERVICE EMPLOYEES,
  CLARE-GLADWIN ISD FEDERATION,
  CRAWFORD AUSABLE BUS DRIVERS
  FEDERATION, CRAWFORD AUSABLE
  CUSTODIANS/SECRETARIAL FEDERATION,
  CRAWFORD AUSABLE SUPPORT STAFF
  FEDERATION, CRAWFORD AUSABLE
  FEDERATION OF TEACHERS, CRESTWOOD
  FEDERATION OF TEACHERS, DEARBORN
  FEDERATION OF SCHOOL EMPLOYEES,
  DEARBORN FEDERATION OF TEACHERS,
  DETROIT ASSOCIATION OF EDUCATIONAL
  OFFICE EMPLOYEES, DETROIT
  FEDERATION OF PARAPROFESSIONALS,
  DETROIT FEDERATION OF TEACHERS,
  EAST DETROIT FEDERATION OF TEACHERS,
  ECORSE FEDERATION OF TEACHERS,
  FAIRVIEW FEDERATION OF TEACHERS,
  GLEN LAKE FEDERATION OF TEACHERS,
  HALE FEDERATION OF TEACHERS,
  HAMTRAMCK FEDERATION OF TEACHERS,
  HEMLOCK AUXILIARY SERVICE
  EMPLOYEES, HEMLOCK FEDERATION OF
  TEACHERS, HENRY FORD COMMUNITY
  COLLEGE ADJUNCT FACULTY
  ORGANIZATION, HENRY FORD
  COMMUNITY COLLEGE FEDERATION OF
  TEACHERS, HIGHLAND PARK
  FEDERATION OF PARAPROFESSIONALS,
  HIGHLAND PARK FEDERATION OF
  TEACHERS, IMLAY CITY FEDERATION OF
  TEACHERS, INKSTER FEDERATION OF
  TEACHERS, IOSCO ISD INTERMEDIATE
  FEDERATION OF AUXILIARY EMPLOYEES,
  IOSCO ISD FEDERATION OF TEACHERS,
                                      2

KINGSLEY FEDERATION OF TEACHERS
KIRTLAND COMMUNITY COLLEGE
FEDERATION OF TEACHERS, LAKE CITY
SUPPORT STAFF FEDERATION, LAKE CITY
TEACHERS & PARAPROFESSIONALS
FEDERATION, LAKE SHORE FEDERATION
OF EDUCATIONAL SECRETARIES, LAKE
SHORE FEDERATION SUPPORT STAFF,
LAKE SHORE FEDERATION OF TEACHERS,
LAMPHERE FEDERATION OF
PARAPROFESSIONALS, LAMPHERE
FEDERATION OF TEACHERS, LANSING
COMMUNITY COLLEGE ADMINISTRATIVE
ASSOCIATION, LES CHENEAUX
FEDERATION OF SUPPORT STAFF, LES
CHENEAUX FEDERATION OF TEACHERS,
MACOMB INTERMEDIATE FEDERATION
OF PARAPROFESSIONALS, MACOMB
INTERMEDIATE FEDERATION OF
TEACHERS, MELVINDALE/NAP
PARAPROFESSIONALS, MELVINDALE/NAP
FEDERATION OF TEACHERS, MIDLAND
FEDERATION OF PARAPROFESSIONALS,
MIDLAND ISD FEDERATION OF
PARAPROFESSIONALS, MIDLAND ISD
FEDERATION OF TEACHERS, NORTHVILLE
FEDERATION OF PARAPROFESSIONALS,
ONAWAY FEDERATION OF SCHOOL
RELATED PERSONNEL, ONAWAY
FEDERATION OF TEACHERS, PLYMOUTH-
CANTON COMMUNITY SCHOOLS
SECRETARIAL UNIT, PLYMOUTH-CANTON
FEDERATION OF PLANT ENGINEERS,
ROMULUS FEDERATION OF
PARAPROFESSIONALS, ROSEVILLE
FEDERATION OF TEACHERS, RUDYARD
FEDERATION OF AIDES, RUDYARD
FEDERATION OF TEACHERS, SAGINAW
ISD FEDERATION OF TEACHERS, TAWAS
AREA FEDERATION OF TEACHERS,
TAYLOR FEDERATION OF TEACHERS,
UTICA FEDERATION OF TEACHERS,
VAN DYKE EDUCATIONAL ASSISTANTS
FEDERATION, VAN DYKE PROFESSIONAL
PERSONNEL, WARREN WOODS
FEDERATION OF PARAPROFESSIONALS,
WASHTENAW INTERMEDIATE SCHOOL
EMPLOYEES FEDERATION, WATERFORD
ASSOCIATION OF SUPPORT PERSONNEL,
WAYNE COUNTY COMMUNITY COLLEGE
PROFESSIONAL & ADMINISTRATIVE
ASSOCIATION, WAYNE COUNTY
COMMUNITY COLLEGE FEDERATION OF
                                                                                      3

TEACHERS, WAYNE COUNTY RESA
SALARIED STAFF, WEXFORD- MISSAUKEE
ISD FEDERATION OF TEACHERS,
WHITEFISH TOWNSHIP FEDERATION OF
TEACHERS,
          Plaintiffs-Appellees,
v                                                     SC: 145961
                                                      COA: 312260
                                                      Ct of Claims: 12-000104-MM
STATE OF MICHIGAN,
          Defendant-Appellant.

_________________________________________/
MICHIGAN EDUCATION ASSOCIATION,
         Plaintiff-Appellee,
v                                                     SC: 145962
                                                      COA: 312261
                                                      Ct of Claims: 12-000105-MM
MICHIGAN PUBLIC SCHOOL
EMPLOYEES RETIREMENT SYSTEM,
MICHIGAN PUBLIC SCHOOL
EMPLOYEES RETIREMENT SYSTEM
BOARD, TRUST FOR PUBLIC EMPLOYEE
RETIREMENT HEALTH CARE FUNDING
FOR MEMBERS OF THE MICHIGAN PUBLIC
SCHOOL EMPLOYEES RETIREMENT
SYSTEM, MICHIGAN DEPARTMENT OF
TECHNOLOGY, MANAGEMENT & BUDGET,
DIRECTOR OF THE MICHIGAN
DEPARTMENT OF TECHNOLOGY,
MANAGEMENT & BUDGET, DIRECTOR OF
THE OFFICE OF RETIREMENT SERVICES
OF THE MICHIGAN DEPARTMENT OF
TECHNOLOGY, MANAGEMENT & BUDGET,
and TREASURER OF THE STATE OF
MICHIGAN,
          Defendants-Appellants.

_________________________________________/

       On order of the Court, the motions for immediate consideration and to waive the
requirements of MCR 7.302(I) and MCR 7.209(A)(2) and (3) are GRANTED. The
motion for stay of the Court of Claims orders of September 4, 2012 and September 5,
2012 is DENIED. The application for leave to appeal prior to decision by the Court of
Appeals is considered, and it is DENIED, because the Court is not persuaded that the
question presented should be reviewed by this Court before consideration by the Court of
Appeals.
                                                                                           4

       MARKMAN, J. (dissenting).

      I respectfully dissent and would grant the application to bypass the Court of
Appeals. MCR 7.302(B)(4) provides that, “in an appeal before decision by the Court of
Appeals,” an applicant for leave to appeal in this Court must show that

              (a) delay in final adjudication is likely to cause substantial harm, or
              (b) the appeal is from a ruling that a provision of the Michigan
       Constitution, a Michigan statute, a rule or regulation included in the
       Michigan Administrative Code, or any other action of the legislative or
       executive branch of state government is invalid[.]
Defendants, in my judgment, have made a substantial showing under both (a) and (b).
First, the temporary restraining orders (TROs) issued by the trial court are likely to cause
substantial harm in the form of multi-million-dollar losses to the school employee
pension and healthcare funds. Defendants estimate that if the statute at issue here, 2012
PA 300, does not go into effect, the Michigan Public School Employees Retirement
System (MPSERS) will be underfunded by $200 million in the current fiscal year alone.
Plaintiffs contend that allowing lower-court review to run its course will not result in a
full year of delays and that defendants thus overstate the financial harm that will be
caused by the TROs. But even assuming a more expeditious resolution, MPSERS will
still be underfunded at a rate of more than $16 million a month. Second, it is clear that
the TROs have effectively invalidated — albeit temporarily — a duly enacted statute of
our Legislature. The trial court judge has unilaterally suspended the enforcement of the
selection period prescribed by 2012 PA 300. Under both subdivisions (a) and (b) of
MCR 7.302(B)(4), therefore, bypass review is appropriate. Indeed, it seems that MCR
7.302(B)(4) was promulgated precisely for the purpose of expediting review in cases like
this one.

       I also believe the trial court clearly erred in issuing the TROs. In determining
whether to issue a TRO, a trial court should consider four factors: (1) whether the
applicant will suffer irreparable harm if the TRO is not granted, (2) the likelihood that the
applicant will prevail on the merits, (3) harm to the public interest if the TRO issues, and
(4) whether the harm to the applicant in the absence of a TRO outweighs the harm to the
opposing party if a TRO is granted. See Mich Coalition of State Employee Unions v Civil
Serv Comm, 465 Mich 212, 241 (2001).

      There was really little danger of irreparable harm here. If 2012 PA 300 were
allowed to go into effect, and then later invalidated, the appropriate remedy for those
school employees who had made benefits elections under the statute would be to allow
them to opt back out of the healthcare and pension elections they had made. This would
be accomplished by restoring their previous benefits and refunding any applicable
                                                                                           5

monies. The only harm to school employees would be financial and thus fully
compensable. In fact, the trial court judge acknowledged that appropriate relief could be
granted after the fact, noting that the courts could “let [2012 PA 300 go into effect] and
fix it later.”

        Additionally, it is unlikely, in my view, that plaintiffs will prevail on the merits.
For starters, “[s]tatutes are presumed to be constitutional, and courts have a duty to
construe a statute as constitutional unless its unconstitutionality is clearly apparent.” In
re Request for Advisory Opinion Regarding Constitutionality of 2011 PA 38, 490 Mich
295, 307 (2011) (quotation marks and citation omitted). The Legislature enacted 2012
PA 300 in response to constitutional challenges brought against 2010 PA 75, which had
itself amended the Public School Employees Retirement Act, MCL 38.1301 et seq., to
require all members of that retirement system to contribute up to 3 percent of their
salaries to a trust fund for retiree healthcare. It appears that the Legislature took the
constitutional challenges to 2010 PA 75 to heart and was particularly determined to craft
2012 PA 300 in a way that would withstand constitutional scrutiny. I believe the
Legislature has probably succeeded.

       In Studier v Mich Pub Sch Employees’ Retirement Bd, 472 Mich 642 (2005), we
held that school employee retiree healthcare benefits are not guaranteed by contract and
do not constitute an accrued benefit protected from impairment or diminution by the
pension clause of the state constitution or the contract clauses in the state and federal
constitutions. Additionally, unlike 2010 PA 75, 2012 PA 300 gives school employees the
choice to either contribute 3 percent of their salaries to maintain entitlement to healthcare
coverage as a retiree or opt out of the retirement healthcare coverage system.

       Similarly, in regard to pensions, 2012 PA 300 gives school employees a choice
among three options: (1) pay a percentage of their salaries in order to continue receiving
service credit at 1.5 percent per year, (2) decline to make the salary-percentage payment
and accrue credit at the reduced rate of 1.25 percent a year, or (3) freeze their defined-
benefit entitlement as of December 1, 2012, and thereafter participate in a defined-
contribution system in which the employer matches contributions up to 4 percent of
compensation. Under none of these scenarios do the school employees lose any of the
pension benefits already accrued to them. Thus, the pension clause is not violated. “The
deferred compensation protected as a contractual obligation by [Const 1963, art 9,] § 24
                                                                                                                6

[the pension clause] is the pension payments themselves earned by the retiree . . . .” In re
Advisory Opinion, 490 Mich at 317 (quotation marks omitted; emphasis added).

        I also do not see any constitutional infirmities in the implementation schedule set
forth in 2012 PA 300. School employees originally had 52 days between the enactment
of 2012 PA 300 and the October 26, 2012, deadline to make their decision as to which
healthcare and pension options to select. As defendants have pointed out, other recently
enacted retirement system reform legislation has utilized shorter windows of time without
ill effect. Of course, given the unfortunate procedural developments in this case to date,
new election deadlines will now have to be set should 2012 PA 300 ultimately go into
effect.

        In short, I believe that 2012 PA 300 will ultimately be found constitutional and
that, at any rate, even if the statute is invalidated, no irreparable harm will occur to
plaintiffs if the statute is allowed to go into effect in the meantime. Regarding the third
and fourth TRO factors to be considered by the trial judge, I believe the public has a
strong interest in ensuring that the statutes enacted by its elected Legislature are put into
effect. The public also has an interest in avoiding massive MPSERS funding shortfalls.
Finally, the potential harm to plaintiffs in the absence of the TROs here — if indeed there
is any legally cognizable harm to them at all — does not outweigh the harm to defendants
caused by the TROs.

       Given all this, we should not allow a single trial court judge to unilaterally halt the
implementation of a statute duly enacted by the Legislature (the democratic
representatives of the entire state) and signed by the Governor on such questionable
grounds. Judicial intervention in the affairs of the executive in a way that essentially
forbids the latter to exercise its executive power always “raises a question ‘of
considerable delicacy, as it requires one of the co-ordinate branches of the government to
pass its judgment on the acts of another, and the presumption is that the executive
department has the same desire to keep within constitutional limits as either of the other
two.’” Smith v Dep’t of Human Servs Dir, 491 Mich 898, 898 (2012) (MARKMAN, J.,
dissenting), quoting Dullam v Willson, 53 Mich 392, 397 (1884). When, as here, a lone
judge has acted to frustrate both the executive and legislative branches and fails to
present persuasive — let alone compelling — reasons for doing so, this Court should
intervene to correct such overreaching.

       For these reasons, I respectfully dissent.

                          I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
                    foregoing is a true and complete copy of the order entered at the direction of the Court.
                          November 9, 2012                    _________________________________________
        t1106                                                                 Clerk