WHITBECK, P.J.
These consolidated cases involve the relationship between the Open Meetings Act
We further conclude that the trial court abused its discretion by granting injunctive relief through its various rulings and orders in the proceedings below, in two major ways. First, the trial court failed to apply controlling legal principles in determining that the Detroit Financial Review Team was a public body. Second, the trial court erred by finding that there would be per se irreparable harm to the people if it did not grant injunctive relief.
Thus, in Davis v. Detroit Financial Review Team (Docket No. 309218), we reverse the trial court's orders granting declaratory and injunctive relief to Davis and remand the case to the trial court for entry of judgment in favor of defendants
The emergency financial manager act became effective March 16, 2011.
If the State Treasurer makes a finding of "probable financial stress," the Governor must appoint a review team for that municipal government.
Under the emergency financial manager act, the review team has the power to examine the books and records of the local government, utilize the services of other state agencies and employees, and negotiate and sign a consent agreement with the chief administrative officer of the local government.
Importantly, the review team must meet with the local government as part of its review.
The Open Meetings Act
The Open Meetings Act defines the term "public body" for its purposes to include:
The Open Meetings Act defines a "meeting," in part, as "the convening of a public body at which a quorum is present for the purpose of deliberating toward or rendering a decision on a public policy...."
On December 21, 2011, State Treasurer Andy Dillon provided Governor Rick Snyder with a preliminary review, concluding that probable financial stress existed in the city of Detroit. On December 27, 2011, the Governor appointed the Detroit Financial Review Team. The Governor subsequently granted the financial review team a 30-day extension.
On February 1, 2012, Robert Davis filed a complaint in the Ingham Circuit Court, seeking a declaratory judgment and injunctive relief based on his assertions that defendant — the Detroit Financial Review Team, the Governor, and the State Treasurer — had violated multiple provisions of the Open Meetings Act. Davis later filed an emergency motion for declaratory judgment and injunctive relief, and defendants moved for summary disposition. The trial court heard arguments on February 6 and February 15, 2012, and made rulings from the bench that it incorporated into two orders, one that it issued on February 6, 2012, and the other that it issued on February 29, 2012.
In the February 29, 2012 order, the trial court granted Davis's motion for declaratory judgment, denied defendants' motion for summary disposition, and granted Davis's motion for a permanent injunction barring defendants from violating any and all provisions of the Open Meetings Act. The trial court also held that the Detroit Financial Review Team was a public body subject to the provisions of the Open Meetings Act and that the Detroit Financial Review Team had violated the act by (1) failing to hold its January 10, 2012, meeting in public, (2) failing to keep minutes of the January 10, 2012, meeting and failing to provide Davis with a copy of the minutes, (3) failing to post notice of the January 10, 2012, meeting, and (4) meeting in closed session for impermissible purposes on January 10, 2012.
The trial court further held that the Detroit Financial Review Team violated
On March 21, 2012, defendants filed a claim of appeal from the trial court's February 29, 2012, order. Defendants have subsequently stated that, although they dispute the correctness of the trial court's decision, they have conducted subsequent meetings of the Detroit Financial Review Team in conformance with the Open Meetings Act.
On March 1, 2012, Davis filed in the trial court an ex parte motion for civil contempt and order to show cause why defendants should not be held in contempt for establishing a subcommittee that would violate the trial court's February 29, 2012, order. The trial court issued a show-cause order on March 1, 2012, requiring all 10 members of the Detroit Financial Review Team to appear for a show-cause hearing on March 12, 2012. Defendants moved for reconsideration of that order. They asserted that the subcommittee had yet to meet and that advisory committee meetings do not violate the Open Meetings Act. In two orders issued March 8, 2012, the trial court adjourned the show-cause hearing and denied defendants' motion for reconsideration.
On March 9, 2012, Davis noticed a show-cause hearing in the trial court, supported by affidavits from him and his counsel, indicating that there were additional questions that defendants had not answered. On March 13, 2012, the trial court scheduled the show-cause hearing for March 22, 2012. Defendants assert that the trial court directed Davis's counsel to provide defendants' counsel with a list of witnesses that he wished to present at the March 22, 2012, hearing. However, at a March 13, 2012, public meeting of the Detroit Financial Review Team, Davis's counsel distributed subpoenas to each of the team members, requiring them to appear at the show-cause hearing.
Defendants filed an emergency motion in the trial court to quash the subpoenas and to hold Davis's counsel in contempt for failing to follow the trial court's direction concerning witnesses. The trial court held a hearing on the motion on March 20, 2012. At the hearing, Davis represented that defendants continued to violate the Open Meetings Act when the State Treasurer allegedly met individually with Detroit City Council members and the Mayor's staff, allegedly exchanged drafts of documents, and allegedly negotiated for the Detroit Financial Review Team. Davis asserted that the State Treasurer acted as a member of the Detroit Financial Review Team and that he was in contempt of court.
The trial court indicated that at a prior hearing, it had informed the parties that the appointment of a subcommittee to do the job of the Detroit Financial Review Team would be a violation of the Open Meetings Act. The trial court further stated that it would not allow the Detroit Financial Review Team to approve any agreement until the trial court was satisfied that there was proper adherence to the Open Meetings Act.
After the hearing, the trial court issued its March 20, 2012, order. In that order, the trial court adjourned the show-cause hearing to March 29, 2012, and ordered defendants' counsel to produce five members of the Detroit Financial Review Team (including the State Treasurer) to provide
On March 22, 2012, this Court issued its order granting defendants' motion for immediate consideration, holding the application for leave and the motion for stay in abeyance, and requiring Davis to file responsive pleadings. After Davis filed his responsive pleadings, on March 23, 2012, this Court issued its order, reversing that part of the trial court's order of March 20, 2012, that precluded defendants from executing a consent agreement. This Court held that § 10 of the Open Meetings Act
On March 27, 2012, this Court issued its order granting defendants' application for leave to appeal, consolidating Docket No. 309250 with Docket No. 309218, setting an expedited briefing schedule, continuing to retain jurisdiction, and giving the order immediate effect.
On March 29, 2012, Edward McNeil filed a complaint and motion for preliminary injunctive relief against the same defendants as in the Davis litigation (Docket Nos. 309250 and 309218) previously described. The complaint alleged that the Detroit Financial Review Team, specifically the State Treasurer, had been negotiating a consent agreement in violation of the Open Meetings Act and that the Detroit Financial Review Team's report was based on meetings that were held in violation of the Open Meetings Act. McNeil sought a temporary restraining order prohibiting defendants from taking any further actions under the emergency financial manager act and from acting on the Detroit Financial Review Team's March 26, 2012, report.
On March 30, 2012, the trial court, without hearing from defendants, issued a temporary restraining order and order to show cause, which found, among other things, that McNeil was likely to succeed on the merits of the claims that defendants had violated the Open Meetings Act. Somewhat confusingly, the trial court also ordered that McNeil's motion for a temporary restraining order and order to show case be "held in abeyance" because McNeil was entitled to a hearing on that motion. The trial court ordered that a show-cause hearing take place on April 9, 2012, regarding why the trial court should not grant the preliminary injunction enjoining defendants from taking any action regarding the city of Detroit in violation of the Open Meetings Act. As of April 4, 2012, four Detroit Financial Review Team members were served with subpoenas to appear and produce documents at the April 9, 2012, show-cause hearing.
On April 4, 2012, defendants filed an emergency application for leave to appeal and application for stay with this Court.
After receiving and reviewing briefs from all the parties in these consolidated cases, this Court heard oral argument on May 4, 2012.
The main thrust of the arguments of Davis and McNeil in these consolidated cases is that the State Treasurer and the Detroit Financial Review Team, acting under the authority of the emergency financial manager act, violated the Open Meetings Act. At the core of this argument is the assertion that the State Treasurer and the Detroit Financial Review Team are "public bodies" subject to the Open Meetings Act.
As we outline later in this opinion, we conclude that the meetings of a financial review team — and therefore the Detroit Financial Review Team — are not covered by the Open Meetings Act. We hold that such a financial review team is not a "governing body" and, therefore, not a "public body" as the Open Meetings Act uses these terms. We reach that decision because we conclude, after examining the authority and functions of a financial review team and analyzing them within the framework of the Open Meetings Act, that the emergency financial manager act does not empower a financial review team (1) as a "governing body" (2) to exercise independent governmental or proprietary authority or (3) to perform an independent governmental or proprietary function, (4) either one of which results in independent decision-making that effectuates or formulates public policy. We also hold that the State Treasurer, whether acting in his executive capacity or as a "one man committee" of the Detroit Financial Review Team, is not a "public body."
This Court reviews de novo issues of statutory construction.
Davis and McNeil sued the State Treasurer in his official capacity as the duly appointed Treasurer for the State of Michigan and in his official capacity as a member of the Detroit Financial Review Team. Davis and McNeil have also asserted that the State Treasurer acted as a "one man committee" in this matter. We will consider each allegation in turn.
It is appropriate to note that Davis and McNeil also sued the Governor in somewhat the same fashion. But on appeal, Davis and McNeil have made no further argument regarding the Governor's role in this case. A party may not leave it to this Court to discover and rationalize the basis for his or her claims,
Turning first to whether an individual acting in an executive capacity can constitute a "public body" as the Open Meetings Act defines that term, the leading case on this subject is Herald Co. v. Bay City.
It is plain that this analysis applies directly to the State Treasurer as an individual executive acting alone in his executive capacity. It would be beyond "awkward" to envision that the State Treasurer, while acting, for example, in his executive capacity as the "state financial authority" of a local government and conducting a preliminary review to determine the existence of a local governmental financial problem,
Such a tortured, and tortuous, process is clearly outside the framework of the Open Meetings Act. As the Supreme Court stated in Herald Co., "an individual executive acting in his executive capacity is not a public body for the purposes of the [Open Meetings Act]."
Davis and McNeil also assert that the State Treasurer met with various Detroit officials and other city leaders, and negotiated part or all of the consent agreement/financial stability agreement that the Detroit Financial Review Team ultimately signed in this matter. The emergency financial manager act clearly authorizes a financial review team to "[n]egotiate and sign a consent agreement with the chief administrative officer of the local government."
In Booth Newspapers, the University of Michigan Board of Regents attempted to evade the requirements of the Open Meetings Act. Among other things, it entrusted one regent with the authority to make the "first cut" in the candidate list for the position of president of the university.
The board of regents argued that Regent Brown's actions did not constitute that of a subcommittee. Therefore, the board asserted, his actions fell outside the reach of the Open Meetings Act.
The majority went on to hold that the "selection of a public university president constitutes the exercise of government authority, regardless of whether such authority was exercised by Regent Brown, the nominating committee, the full board, or even subcommittees."
But, importantly, in Herald Co. the Supreme Court later explained that the individual member of the public body in Booth Newspapers — Regent Brown — was distinguishable
As outlined in Herald Co., the definition of a "public body" in the Open Meetings Act contains two requirements.
It is clear that the Detroit Financial Review Team is a state body. The emergency financial manager act authorized the creation of financial review teams and the Governor appointed the members of the Detroit Financial Review Team pursuant to that act.
The Open Meetings Act does not define the term "legislative body." But when a statute does not define words contained within it, we must construe and understand them according to the common and approved usage of the language.
Near the time of the enactment of the Open Meetings Act, the American Heritage Dictionary of the English Language, New College Edition defined the word "legislative" as "[h]aving the power to create laws; designed to legislate."
The emergency financial manager act does not give a financial review team the power to make or enact law, to bring something into or out of existence by making law, or to attempt to bring about or control by legislation. Therefore, a financial review team cannot legislate and it has no legislative functions. And while the emergency financial manager act gives the state financial authority (that is, in the case of a municipal government, the State Treasurer) rulemaking authority,
The question whether the Detroit Financial Review Team is a "governing body" is more complex. Again, the Open Meetings Act does not define the term "governing body," but, as defendants point out, The American Heritage Dictionary of the English Language, New College Edition, defines "govern" as "[t]o make and administer public policy" for a political unit and to "exercise sovereign authority in."
It is also instructive to examine the entire context of the Open Meetings Act to determine the Legislature's intent when it used the term "governing body."
Section 12(3)
The report given to the Governor must include "the existence, or an indication of the likely occurrence of," a number of criteria relating to the financial condition of a local government.
In addition, a financial review team is empowered, with the approval of the State Treasurer as the state financial authority, to "appoint an individual or firm to carry out the review and submit a report to the review team for approval."
In arguing that a financial review team is not a governing body, defendants place considerable emphasis on The American Heritage Dictionary's use of the words "sovereign authority." The Attorney General couples these words with the definition in The American Heritage Dictionary of the English Language, New College Edition of the word "sovereign" as meaning "[h]aving supreme rank or power" or "[s]elf-governing; independent[.]"
To the extent that defendants describe a public body's authority as "supreme," we find that definition to be overstated and therefore, paradoxically, too narrow. In our view, the question is not whether a financial review team exercises "supreme" sovereign authority in the manner of the early English kings or the Russian czars. In Michigan's constitutional democracy with, at the state level, three coequal branches of government exercising checks and balances on one another, together with various local governmental entities exercising various responsibilities, it is the rare individual or entity indeed that exercises "supreme" and unchecked authority. Defendants' definition would winnow the number of public bodies in this state down to a precious few. And we do not believe that the Legislature intended such a constricted definition.
However, we do accept defendants' definition to the extent that a governing body should be one that is "[s]elf-governing; independent";
Davis and McNeil, on the other hand, appear to argue that we should consider any state or local body empowered by law to exercise governmental or proprietary authority or perform a governmental or proprietary function to be a public body under the Open Meetings Act. Indeed, Davis asserts that in Booth Newspapers the Supreme Court "clarified" that a public body does not have to be a legislative or governing body.
Treating any state or local body that is empowered by law to exercise governmental or proprietary authority or perform a governmental or proprietary function as a public body under the Open Meetings Act would improperly render nugatory the Legislature's use of the adjective "governing" to limit the types of bodies that are public bodies subject to the Open Meetings Act. By identifying whether the body in question exercises governmental or proprietary authority as a key determination under the Open Meetings Act, the Supreme Court did not say, nor can it reasonably be inferred, that this was the only determination to be made under the act. As defendants point out, the fact that a body exercises governmental authority is not itself dispositive. The body must also be a legislative or governing body.
This Court's opinion in Crowley v. Governor
We note that, pointing to the definition of "decision," plaintiffs argue that the financial review team was involved in decision-making by making recommendations. In other words, plaintiffs contend that the act of making a recommendation alone constitutes a decision within the meaning of the Open Meetings Act's definition.
We observe that rarely do recommendations coming from a public body originate from the entire public body itself. As an example, when the State Administrative Board meets to approve contracts, the recommendation for approval comes from a committee of the board, not the board itself. Similarly, when a local city council meets to consider a budget, the recommendation for approval of the budget usually comes from the mayor, not the city council itself. In those circumstances, the public body acts "upon" a recommendation made to it by another entity, group, or person. The public body does not usually initiate or make a recommendation to itself.
With this distinction in mind, we turn to the "authority" or "function" that the emergency financial manager act empowers a financial review team to exercise or perform. Consequently, we must consider § 13
A financial review team's first function under § 13 is to examine the books and records of the local government.
As defendants point out, perhaps the closest analogue to a financial review team under the emergency financial manager
A financial review team is also empowered under § 13 to utilize the services of other state agencies and employees.
It is a financial review team's third function under § 13 — the power to negotiate and sign a consent agreement with the chief administrative officer of the local government
As a result, when we consider the entirety of this critical subdivision of the emergency financial manager act, we conclude that a consent agreement that a financial review team negotiates and signs is but the first step in the process of effectuating or formulating public policy. A financial review team is not acting "upon" a "motion, proposal, recommendation, resolution, order, ordinance, bill or measure" that has come before it.
Such a consent agreement is, until the governing body of the local government approves it and the State Treasurer approves and executes it, only a recommendation. And, in our view, a recommendation for action by another entity, group, or individual, by its very nature, cannot constitute "governing" either through the effectuating
Therefore, under the process established by the emergency financial manager act, a financial review team can only, together with the chief administrative officer of a local government, provide a recommended consent agreement to the governing body of the local government and the State Treasurer. The financial review team itself has no capacity to act upon this recommendation and has no power to implement it. The effectuating and formulating of public policy can only occur by and through the actions of the governing body of the local government and the State Treasurer. They, and only they, can act upon the recommended consent agreement after the financial review team forwards that recommended consent agreement for approval.
This differs critically from the acts of individual or subquorum groups of regents in Booth Newspapers. In that case, the individual regents or subquorum groups were not merely making recommendations. Rather, they were effectively exercising the authority of the University of Michigan Board of Regents to narrow the field of candidates and ultimately choose the person to be the university president. In contrast, a financial review team cannot exercise authority to adopt a consent agreement but can merely participate in preparing a recommended consent agreement. And, in our view, the preparation of a recommended consent agreement cannot constitute "governing" either through the effectuating or the formulating of public policy.
Until approved by the governing body of the local government (presumably in accordance with the Open Meetings Act), a financial review team's recommended consent agreement does not and cannot "govern" the actions of such a local government. And, even then, until approved and executed by the State Treasurer, it does not and cannot "govern" the actions of state government. Stated another way, until properly acted "upon" — not by the financial review team, but by the governing body of the local government and by the State Treasurer — a consent agreement that a financial review team negotiates and signs is not a contract and has no legal effect.
And, as defendants point out, the functions that the emergency financial manager act empowers a financial review team to undertake do not include public policymaking with respect to a local governmental unit. While a financial review team performs its functions, local officials still govern the local governmental unit. The emergency financial manager act does not suspend or alter the authority of these officials until the Governor puts the local governmental unit into receivership and appoints an emergency financial manager.
We further recognize that the rather intricate workings of the emergency financial manager act create a situation whereby a financial review team's decision not to negotiate and sign a consent agreement might be considered a "determination, action, vote, or disposition,"
Rather clearly, however, the Legislature anticipated such a circumstance. Under § 15(1)
Therefore, a financial review team's decision not to negotiate and sign a consent agreement would eliminate one option — the approval and execution of a consent agreement — but that decision would leave at least two options open for the Governor. Thus, that decision still effectively functions as a recommendation "upon" which the Governor can act by selecting one of the remaining alternatives. In effectively recommending, but not itself acting "upon" the selection of one of these remaining alternatives, a financial review team is not itself "governing" as it is neither effectuating nor formulating public policy.
More broadly, a refusal to negotiate and sign a consent agreement is not an affirmative act of "governing." Rather, it is a refusal to govern, a negative act. Logically speaking, therefore, a financial review team could not be a "governing body" if it, in fact, refused to govern.
A financial review team's fourth function under § 13 is to meet with the local government and receive, discuss, and consider information provided by the local government concerning the financial condition of the local government.
A financial review team's fifth function under § 13 is to report its findings to the Governor, with a copy to the State Treasurer acting as the state financial authority.
Again, the financial review team is not acting on these advisory recommendations as it has no power to do so. Rather, the financial review team is making recommendations on which others may, at their discretion, act. And a financial review team has no discretion in the matter. Section 13(3) of the emergency financial manager act states that a financial review team "shall report its findings to the governor" and that the findings "shall include the existence, or an indication of the likely occurrence," of any of a delineated set of financial conditions.
We therefore conclude that the authority and functions of a financial review team under § 13 of the emergency financial manager act
The fact that a financial review team can hire outside experts,
In light of our conclusion that a financial review team is not itself a public body, we conclude that the Supreme Court's holding in Booth Newspapers is inapplicable here. That is, since the Detroit Financial Review Team is not itself a public body, then the State Treasurer could not himself, even if acting as a "one man committee," be a public body exercising governmental authority.
Additionally, we note that the fact that the Governor — who is clearly not a public body — appoints the financial review team, takes this case out of the realm of cases like Morrison v. East Lansing,
But, ultimately this Court in Morrison concluded that the Hannah Building Committee was a public body under the Open Meetings Act, emphasizing that, unlike the advisory committee to the city manager in Herald Co., the Hannah Building Committee was created by the East Lansing City Council — a public body under the Open Meetings Act as a local legislative body — and that the city council "effectively authorized the [Hannah Building Committee] to perform a governmental function."
We recognize that, under Morrison, an advisory committee to a public body that is created by that public body may itself constitute a derivative public body. But the question of a financial review team under the emergency financial manager act differs markedly from the committee at issue in Morrison. Unlike the Hannah Building Committee, a financial review team is not created by a public body to serve in an advisory role to a public body. Rather, as discussed previously, the emergency financial manager act provides a method for the Governor — who, again, is clearly not a public body — to appoint a financial review team.
We have explained our conclusion that a financial review team under the emergency financial manager act is not a "governing body" as the Open Meetings Act defines that term and, consequently, is not a "public body" subject to that act. The trial court in these consolidated cases issued various forms of injunctive relief primarily based upon its contrary conclusion that the Detroit Financial Review Team is a "public body." In examining the analysis in which the trial court engaged to reach that contrary conclusion, we find that analysis to have been, at best, superficial.
The trial court appeared to be concerned mainly with its own view that, in the general scheme of things, the Open Meetings Act ought to cover the Detroit Financial Review Team, not whether a close reading of the text of the Open Meetings Act actually warranted a conclusion that it does cover the Detroit Financial Review Team. In short, the trial court concentrated on what the law should be, not what the law is. More specifically, while the trial court did appear to recognize, at least superficially, the traditional standards for injunctive relief, it essentially leapfrogged to the conclusion that the Detroit Financial Review Team was a public body and therefore that there was a substantial likelihood that Davis and McNeil would prevail on the merits of their claims. In our analysis,
The trial court further found that there would be irreparable harm to the public if it did not issue injunctive relief, apparently without considering whether the declarative relief contained in its various rulings and orders was sufficient under the circumstances then prevailing and under applicable precedent of this Court and the Supreme Court. We therefore conclude that the trial court's issuance of injunctive relief was contrary to controlling principles of law and an abuse of discretion.
The grant or denial of a preliminary injunction is within the sound discretion of the trial court, and this Court will not reverse that decision absent an abuse of that discretion.
As this Court has recognized, "[a]n injunction represents an extraordinary and drastic use of judicial power that should be employed sparingly and only with full conviction of its urgent necessity."
Stated another way, injunctive relief "`"is an extraordinary remedy that issues only
Further, with respect to irreparable harm, we
As previously noted, on February 1, 2012, Davis filed his action in the Ingham Circuit Court seeking both declaratory and injunctive relief based upon his assertions that the Detroit Financial Review Team, the Governor, and the State Treasurer had violated multiple provisions of the Open Meetings Act. On February 6, 2012, the trial court issued its order in this case granting a preliminary injunction and denying defendants' motion for stay. The trial court granted the preliminary injunction against the Detroit Financial Review Team "for the reasons stated from the bench and incorporated herein" and denied defendants' motion for stay on the same basis. The trial court made no mention of the standards for injunctive relief in this order.
And on February 29, 2012, the trial court granted Davis's motion for declaratory judgment, denied defendants' motion for summary disposition, and granted Davis's motion for permanent injunction "for the reasons stated from the bench on February 6 and 15, 2012 and incorporated herein." Once again, the trial court made no mention of the standards for injunctive relief in this order.
We observe that the trial court's orders depend on the rationale that the trial court advanced in its rulings from the bench on February 6 and February 15, 2012. While the February 15 ruling made no reference to the likelihood that Davis would prevail on the merits — a critical element in determining whether to issue an injunction — the trial court did shed some light on the reasoning behind its determination that the Detroit Financial Review Team was subject to the Open Meetings Act. In particular, the trial court mentioned that a financial review team had the "power to enter into a contract," as well as the power to subpoena witnesses and the power to go to court to compel the production of documents.
In its ruling from the bench on February 6, the trial court articulated much the same rationale. After generally commenting on cases that the trial court had presided over involving advisory committees, the trial court stated that, "[v]ery importantly, [financial review teams] can negotiate and sign ... a consent agreement with the chief administrative office of the local government." The trial court also mentioned that a financial review team has the
It is therefore clear that the trial court did in these two rulings from the bench give some indication that it had examined the functions of a financial review team under the emergency financial manager act. However, the trial court, in its various rulings and orders, never mentioned the requirements of the Open Meetings Act and the cases interpreting it.
Accordingly, the trial court gave no indication — other than to say that its enumeration of a financial review team's functions went "far beyond" those of an advisory committee — whether it considered a financial review team to be either a "legislative body" or a "governing body" as the Open Meetings Act uses those terms.
This lack of an Open Meetings Act analytical framework is best illustrated by the trial court's handling of a review team's power to negotiate and sign a consent agreement.
But a financial review team does not have such authority. As we have said, a consent agreement that a financial review team negotiates and signs is but the first step in the process of effectuating or formulating public policy. It is, until the governing body of the local government approves it and the State Treasurer approves and executes it, only a recommendation. And making a recommendation does not constitute "governing" either through the effectuating or the formulating of public policy. As we have outlined, a review team is not acting upon a recommendation when it negotiates and signs a consent agreement. Rather, it is making such a recommendation to the local governing body and to the State Treasurer.
In this respect, as well as with respect to the other powers of a financial review team that the trial court enumerated — all of which, in our view, are in furtherance of a financial review team's investigative function and do not constitute governing — the trial court's conclusion that Davis would prevail on the merits was contrary to controlling legal principles. Consequently, there was no likelihood, much less a substantial likelihood, that Davis would prevail on the merits. We conclude that to the extent that the trial court issued declaratory and injunctive relief in Docket No. 309218, that relief was unwarranted and inappropriate.
As described earlier in this opinion, the trial court held a hearing on defendant's
The trial court went on to comment:
The trial court concluded by stating:
After the hearing, the trial court issued its March 20, 2012, order. In that order, the trial court adjourned the show-cause hearing to March 29, 2012, and ordered defendants' counsel to produce five members of the Detroit Financial Review Team to provide testimony at the show-cause hearing. The trial court further ordered the Detroit Financial Review Team and the State Treasurer not to execute or sign a consent agreement or its equivalent with the City of Detroit, the Detroit City Council, or the Mayor of Detroit until further order of the trial court.
We presume, from the context of this case, that the trial court relied on its previous finding that Davis was likely to prevail on the merits as one of the underlying reasons for issuing its March 20, 2012, order, although that is not clear from the record. While the trial court did, for the first time, make some brief references to the provisions of the Open Meetings Act, its ruling from the bench and its subsequent order simply contain no analysis of the functions of a financial review team through the lens of the requirements of that act.
Accordingly, we conclude that the trial court's analysis was contrary to controlling legal principles. And, thus, there was no basis for the trial court to conclude that Davis was likely to prevail on the merits.
After McNeil filed his complaint on March 29, 2012, the trial court, without hearing from defendants, on March 30, 2012, issued a temporary restraining order and order to show cause that, among other things, found that McNeil was likely to succeed on the merits of his claims because the defendants "have issued at least one decision, on March 26, 2012, which was done based upon deliberations and/or decisions which took place in private." The trial court further found that McNeil was likely to succeed on the merits of his claim that defendants had violated the Open Meetings Act "by engaging in discussions and deliberations concerning the negotiations or execution of a consent agreement and/or similar document (i.e., financial stability agreement), as such discussions and deliberations were not in public."
In that order, the trial court was making distinctly factual findings. Presumably, these findings were based on McNeil's complaint because there was no other record before the trial court at the time of its order. Indeed, the trial court apparently issued its order without hearing from defendants, which is of itself distressing given the accessibility of defendants' attorneys in the Lansing area. We decline to review these factual findings because they are irrelevant in light of our conclusion that the State Treasurer and the Detroit Financial Review Team are not public bodies under the Open Meetings Act. Therefore, the trial court's finding that McNeil was likely to succeed on the merits is contrary to controlling legal principles.
The trial court twice referred to the irreparable-harm standard in its various rulings and orders in these consolidated cases. The first reference was contained in its ruling concerning the preliminary injunction on February 6, 2012, when it stated:
The second reference was in the trial court's order of March 30, 2012, concerning McNeil's request for a temporary restraining order, in which the trial court stated:
Thus, the trial court was aware of the requirement for a showing of irreparable harm before the issuance of injunctive relief. Further, the idea that there is per se irreparable harm to the public when a violation of the Open Meetings Act occurs has some support in caselaw.
In this case, in its February 15, 2012, ruling from the bench concerning Davis's motion for a declaratory judgment, the trial court clearly found that there was no bad faith on the part of defendants. The trial court stated, "There is no question in my mind that none of these people had any bad motives. No one had any ulterior motives. They simply were following what they believe the statute gave them the powers to do." And in its February 6, 2012, ruling from the bench in the same case, the trial court stated, "I don't think there is any allegation that our Governor or Mr. Dillon did anything wrong other than meet under this statute that they were required to by the legislature." With such findings concerning the lack of bad faith in the record, there was no basis for the trial court's conclusion that there was per se irreparable harm to the people.
Our conclusion here is further supported by Nicholas v. Meridian Charter Township Board,
Thus, we conclude that the trial court's issuance of injunctive relief in Davis's case on the basis of a finding of irreparable harm was an abuse of discretion. The trial court explicitly found that there was no bad faith on the part of the defendants. And there had been no showing that declaratory relief had failed. Rather, the trial court's February 29, 2012, order contained declaratory relief that obviated any need for injunctive relief at that time.
We are, of course, cognizant of the fact that, after the trial court made its decisions on the merits of Davis's Open Meetings Act claim, Davis sought civil contempt relief against the State Treasurer and the Detroit Financial Review Team. However, Davis's allegation of contemptuous conduct was made after the trial court had issued its injunctive orders on February 6 and February 29, 2012. Rather obviously, events occurring subsequent to the grant of injunctive relief cannot retroactively justify the grant of such relief. But equally obviously, parties to litigation must follow rulings and orders of a trial court acting within its jurisdiction unless and until those rulings and orders are stayed or reversed. It is well established that a person may not disregard a court order simply on the basis of a subjective view that the order is wrong or will be declared invalid on appeal.
We review for an abuse of discretion a trial court's issuance of a contempt order, but we review for clear error its underlying factual findings, and we review de novo questions of law.
In his motion for civil contempt, Davis alleged that the Detroit Financial Review Team, including the State Treasurer, voted by resolution at a public meeting to create a five-member subcommittee and to delegate to that subcommittee authority to consider the risks and benefits of appointment of an emergency manager or institution of a consent agreement as well as to utilize staff of the Department of Treasury, conduct interviews, and hire professional consultants if necessary and that this subcommittee convened in private, with Davis being denied entry to the subcommittee meeting. Davis supported these allegations with affidavits from himself and another person.
We have determined that the Detroit Financial Review Team was not a public body and that the trial court abused its discretion by issuing injunctive relief. Therefore, we have determined that various rulings and orders of the trial court in these consolidated cases were incorrect. But, of course, that is immaterial to the fact that defendants were obligated to obey those orders while they were in effect. And we cannot conclude that the trial court abused its discretion by scheduling a show-cause hearing based upon Davis's motion for civil contempt.
Before an order to show cause why a party should not be held in contempt may issue, "there must be `a sufficient foundation of competent evidence, and legitimate inferences therefrom.'"
It is well established in Michigan caselaw, particularly by the Supreme Court's opinion in Booth Newspapers and this Court's opinion in Morrison, that a public body cannot evade its duty to comply with the Open Meetings Act by delegating its powers to a subcommittee.
We emphasize that our holding that a review team is not actually a public body subject to the Open Meetings Act is immaterial to this conclusion. Again, a party may not disregard a court order on the basis of a subjective view that an order is wrong or will be declared invalid on appeal.
Accordingly, we remand Davis v. Detroit Financial Review Team (Docket No. 309250) to the trial court for further appropriate proceedings regarding Davis's motion for civil contempt. We note that, generally, coercion to force compliance with a court order and compensatory relief for a complainant are both appropriate potential sanctions for civil contempt.
Nevertheless, Davis could potentially be entitled to a civil contempt sanction in the form of a compensatory award of attorney fees, other costs, or both that he incurred on the basis of any proven civil contempt by the Detroit Financial Review Team, the State Treasurer, or both. For example, Davis may be entitled to an award for attorney fees incurred in bringing his motion for civil contempt relief in the event that he proves such civil contempt.
We hold that a financial review team, and therefore the Detroit Financial Review Team, is not a "governing body" and therefore is not a "public body" under the Open Meetings Act and is not statutorily required to comply with the Open Meetings Act. We also conclude that the State Treasurer, whether acting in his executive capacity or as a "one man committee" of the Detroit Financial Review Team, is not a "public body."
We further conclude that the trial court's various rulings and orders in these consolidated cases on their face constituted injunctive relief, and we hold that the trial court abused its discretion when it issued such injunctive relief. We therefore reverse and vacate these rulings and orders in their entirety. Accordingly, with regard to Docket Nos. 309218 and 309482, we remand to the trial court for entry of judgment in favor of defendants on the merits of the Open Meetings Act claims brought by Davis and McNeil, respectively. However, in Docket No. 309250, we
No costs, a public question being involved. Pursuant to MCR 7.215(F)(2), this opinion shall be given immediate effect. We do not retain jurisdiction.
M.J. KELLY, J., concurred with WHITBECK, P.J.
O'CONNELL, J. (concurring in part and dissenting in part).
I concur with the majority opinion that the City of Detroit Financial Review Team is not subject to the Open Meetings Act (OMA), MCL 15.261 et seq. I also concur that the Governor and the State Treasurer, being individual executive branch officeholders, are not subject to the strictures of the OMA in these cases.
I also write separately to remind all public servants that our governmental system turns on a respectful balance of power among the three branches of government. As Thomas Jefferson aptly explained, "the constitution, in keeping three departments distinct and independent, restrains the authority of the judges to judiciary organs, as it does the executive and legislative to executive and legislative organs." Ford, ed, Letter from Thomas Jefferson to William Charles Jarvis (September 28, 1820), in The Writings of Thomas Jefferson, (New York: G.P. Putnam's Sons, The Knickerbocker Press, 1899), vol X, p. 161. The judicial branch's responsibility is to interpret the law impartially, free from the political process reserved for the other two branches of government. In my view, these tenets preclude any remand in this case. I would reverse all of the trial court's rulings.
All judges, including me, are at risk of overstepping boundaries during an intense, frenetic legal battle, and, for that reason, all judges must rely on the federal and state constitutions, each other, and the appellate system to recognize and respect boundaries.
At the heart of the cases now before the Court is the political question doctrine.
With these considerations in mind, the critical legal question for the trial court to consider was whether the Detroit Financial Review Team is a "public body" within the meaning of the OMA — not whether a review team should (in the trial court's opinion) be subject to the OMA or whether it is desirable (again, in the trial court's opinion) for some or all of the meetings of the Detroit Financial Review Team to be open to the public. Unfortunately, the trial court missed this critical question. Rather, as reflected in the trial court's emphasis at the February 15, 2012, hearing in this matter on its belief that "[t]he first caveat of this society is that we have an open government," it appears that the trial court's personal views clouded its resolution of the legal issues. No matter how laudable, a judge's personal views have no place in jurisprudence: "courts are not free to manipulate interpretations of statutes to accommodate their own views of the overall purpose of legislation." Twichel v. MIC Gen. Ins. Corp., 469 Mich. 524, 531, 676 N.W.2d 616 (2004).
Further, a trial court's most comfortable function is to review historical facts, apply the law to those facts, and to reach a conclusion as to the lawfulness of the actions of the parties. In the present cases, the trial court preempted the parties' political actions by first assuming that the OMA applied to the Detroit Financial Review Team and then by issuing injunctions to stop the political process, particularly with regard to the Detroit Financial Review Team being able to negotiate a consent agreement with the city of Detroit. As set forth in the majority opinion, the trial court failed to apply the law concerning issuance of injunctions and failed to analyze the OMA in any systematic manner. It is worth repeating that courts interpret the law based on existing facts. In this matter, the trial court overstepped its bounds by asserting power over the political process before the process was complete.
Indeed, as referred to by the majority, in Straus v. Governor, 459 Mich. 526, 530, 592 N.W.2d 53 (1999), the Michigan Supreme Court adopted as its own this Court's opinion in that case. Straus includes the following discussion of the propriety of injunctive relief against the Governor or other executive branch actors:
Thus, even if the trial court had been correct in its determination that a financial review team constitutes a public body subject to the OMA, it abused its discretion by granting permanent injunctive relief against the Detroit Financial Review Team.
Accordingly, in future circumstances involving questions of the legality of conduct by state government officials or entities within the executive or legislative branches, a trial court should issue a declaratory judgment regarding those questions and presume that the other branches will follow the court's decision. This measured approach avoids a court immersing itself in the political process reserved for the political branches of government and thereby reduces the risk of stigmatizing the judiciary as being merely another political actor.
Moreover, even apart from the special consideration due to state level executive and legislative branch actors, injunctive relief is an extraordinary remedy that issues only when justice requires, there is no adequate remedy at law, and there exists a real and imminent danger of irreparable injury. Pontiac Fire Fighters Union Local 376 v. City of Pontiac, 482 Mich. 1, 8, 753 N.W.2d 595 (2008). This Court has specifically applied that standard in the context of the OMA and, accordingly, noted that "[m]erely because a violation of the OMA has occurred does not automatically mean that an injunction must issue restraining the public body from using the violative procedure in the future." Nicholas v. Meridian Charter Twp. Bd., 239 Mich.App. 525, 533, 609 N.W.2d 574 (2000). This underscores that the grant of injunctive relief by the trial court in this case was inappropriate.
The trial court's interference in the activities of the Detroit Financial Review Team, even going so far as to enter an injunctive order to preclude that review team from entering into a consent agreement with the city of Detroit, markedly disrupted the political process, particularly with sensitive matters involving financial reforms of city government that by their very nature are beyond judicial competence and lack judicially discoverable and manageable standards for resolution. See Zivotofsky, 566 U.S. at ___, 132 S.Ct. at 1427.
Courts should not allow themselves to be used as vehicles to interfere with the political process. Except in highly unusual circumstances, it is sufficient for a trial court to issue a declaratory judgment regarding an allegedly improper action by an executive or legislative branch actor. While the trial court's actions were presumably done with no political agenda and with a view to the best interests of the parties (and the city of Detroit), the results were inappropriate injunctions issued against another branch of government, when a simple declaratory judgment would have sufficed.
I would reverse all of the trial court's rulings in their entirety.
