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Michigan emergency manager law could be ideological challenge to state supreme court

If a legal challenge to the Emergency Manager law makes its way to the Michigan Supreme Court, the conservative majority will be faced with an ideological and political dilemma — a strict interpretation of the Constitution’s contract clause would deliver a victory for collective bargaining.

In an article for Dome magazine, retired Ingham County Circuit Court Judge Lawrence M. Glazer, a former advisor to Gov. James Blanchard, looks at the possible outcomes of various lawsuits expected against initiatives by the Snyder administration.

Public Act 4 — the Emergency Manager law — gives the governor’s appointees unprecedented power over local governments including the ability to end collective bargaining contracts, suspend local officials and dissolve municipalities.

Voiding an existing collective bargaining contract would seem to be an obvious violation of the letter of the state constitution, Glazer writes, but court interpretations of this clause could complicate matters because rulings as far back as 1937 have allowed that financial emergency may justify temporarily suspending some contracts.

Justices may look to how the California Supreme Court handled a situation where the governor vetoed cost-of-living adjustments for state employees. Some municipalities had already bargained these raises with their employees and the employees unions filed suit for violation of state and federal contracts clauses.

That case resulted in the development of a test for when it might be permissible to alter contracts.

In Sonoma County Organization of Public Employees v. County of Sonoma … the California Supreme Court denied the unions’ challenge and upheld the state law.

“[The Court] identified four factors … to use in determining whether a legislative impairment of a contract will be upheld in the face of a Contracts Clause challenge. First, the contract modification must arise out an actual emergency. Second, relief from the contract must be necessary to protect a basic societal interest rather than for the benefit of a particular group of individuals. Third, the modification or relief must be appropriately tailored to the emergency it was designed to address, and the conditions that result must be reasonable. And finally, the modification imposed must be temporary and limited to the exigency that prompted the legislative response.”

Glazer writes that he thinks that guidelines like those developed in the County of Sonoma case will gradually prevail in cases involving municipal emergencies.

If the above prediction should prove accurate, it will pose both an ideological and political dilemma for the justices of Michigan Supreme Court. The Republican majority has ruled unequivocally that:

“…the primary objective of constitutional interpretation is to realize the intent of the people by whom and for whom the constitution was ratified. In order to reach the objective of discerning the intent of the people when ratifying a constitutional provision, we apply the plain meaning of each term used therein at the time of ratification unless technical, legal terms were employed.” (Studier v Michigan Pub Sch Employees’ Ret Bd, 472 Mich 642, 698 NW2d 350)

Yet there is nothing in the plain language of the Michigan Constitution’s “accrued benefits” or “impairment of contracts” clauses about an exception for financial emergencies. If those justices stick with their prevailing constitutional interpretation, one would expect that they would strike down the Emergency Financial Manager’s power to void collective bargaining agreements. This would be consistent with their judicial philosophy.

But it would also put them in the unusual position of going against State power and in favor of collective bargaining rights.

In the end, I think it will come down to how dire the municipal financial picture looks at the time the case reaches the Supreme Court. If it is as bad or worse than it is currently, the best guess is that a majority of the justices will adopt something like the rule in the County of Sonoma decision.

The issue with the contracts clause in the state constitution is, however, just one of several legal challenges being pursued by opponents of the Emergency Manager law.

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