Constitutionality of Michigan’s anti-democratic Emergency Manager law headed to federal court

Federal District Court Judge George Caram Steeh has found that a lawsuit challenging Michigan’s anti-democratic Emergency Manager law, Public Act 436, can move forward based on its disparate impact on African Americans in Michigan.

The suit alleges that PA 436 is unconstitutional based on nine specific causes:

1. Denial of “substantive due process” by violating the right to vote of Michigan citizens living in municipalities controlled by Emergency Managers
2. Violation of the Guarantee Clause which guarantees ” to every State in this Union a Republican Form of Government”
3. Violation of the Equal Protection Clause by the denial of the “fundamental right to vote [which] has been denied, abridged, and/or diluted by PA 436 because governing authority is stripped from local elected officials and transferred to one unelected EM with no accountability to local citizens”
4. Violation of the Equal Protection Clause by discrimination based on race
5. Violation of the Equal Protection Clause by discrimination based on wealth
6. Violation of the Voting Rights Act
7. Violation of the First Amendment by:
   1. Viewpoint discrimination which violates the First Amendment when it regulates speech based on substantive content
   2. Denial of Freedom of Speech
   3. Denial of the right to petition the government
8. Violation of the Thirteenth Amendment prohibiting slavery
9. Discrimination against localities with Emergency Manager appointed under previous laws

Every one of these was found to be invalid except for #4, the violation of the Equal Protection Clause by discrimination based on race.

Judge Steeh’s commentary on this is lengthy but well worth a read (full decision is HERE):

Discrimination Based on Race (Count 4)
Plaintiffs assert that the disproportionate impact the appointment of emergency managers has had on African Americans establishes an equal protection claim. By plaintiffs’ calculations, over 52% of Michigan’s African Americans are under emergency manager authority pursuant to the enactment of PA 436, compared to two percent of Michigan’s Caucasian citizens. Plaintiffs argue that as applied, PA 436 invidiously discriminates between similarly situated groups in the exercise of their fundamental rights, and should thus be subject to strict scrutiny. Defendants, on the other hand, argue that rational basis is the appropriate standard because the law is facially neutral, and plaintiffs have not alleged facts raising a plausible inference of discriminatory intent. They also argue that PA 436 and its application pass rational basis scrutiny, so plaintiffs have failed to state an equal protection claim for racial discrimination.

The Constitution’s equal protection requirement does not invalidate a facially-neutral law “simply because it may affect a greater proportion of one race than of another.” Washington v. Davis, 426 U.S. 229, 242 (1976). Disparate impact “is not irrelevant, but it is not the sole touchstone of an invidious racial discrimination.” Village of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 264-65 (1977). However, a facially neutral law with a legitimate purpose can still violate the Equal Protection Clause if that law “had a discriminatory effect . . . and was motivated by discriminatory purpose.” Farm Labor Org. Comm. v. Ohio State Highway Patrol, 308 F.3d 523, 533-34 (6th Cir. 2002) (citing Wayte v. United States, 470 U.S. 598, 608 (1985)).

Invidious discriminatory intent is an impermissible justification for state action, which triggers strict scrutiny. See Arlington Heights, 429 U.S. at 265-66 (“When there is a proof that a discriminatory purpose has been a motivating factor in the decision, [judicial] deference is no longer justified.”); Yick Wo, 118 U.S. at 373 (“Though the law itself be fair on its face . . . if it is applied and administered by public authority . . . so as practically to make unjust and illegal discriminations between persons in similar circumstances . . . the denial of equal justice is still within the prohibition of the Constitution.”). A plaintiff need not demonstrate racial discrimination was dominant in the reasoning for state action to trigger strict scrutiny, but only that it was a motivating factor. United States v. City of Birmingham, 727 F.2d 560, 565 (1984).

Since it is inherently difficult to prove discriminatory intent, as legislators rarely admit to it, claimants may use a number of objective factors to determine the existence of such intent. Id. (citing Arlington Heights, 429 U.S. at 266-68). For example, proof of discriminatory impact may demonstrate unconstitutionality in “circumstances [in which] the discrimination is very difficult to explain on nonracial grounds.” Batson v. Kentucky, 476 U.S. 79, 93 (1986). The legislative or factual history may also be relevant, as well as any procedural or substantive departures from the state’s usual course of action. Arlington Heights, 429 U.S. at 266-68. Additionally, and most important to this case, claimants may also use statistics to demonstrate the absence of a rational, nonracial purpose for a certain policy. Farm Labor Org. Comm., 308 F.3d at 534 (citations omitted).

At the motion to dismiss stage, plaintiffs need only state a plausible claim for relief. Iqbal,, 556 U.S. at 678. Since statistical evidence can be used to demonstrate unconstitutional discriminatory action, plaintiffs at this stage must plead some facts that demonstrate the plausibility that emergency managers have been appointed in an intentionally discriminatory manner. The First Amended Complaint states that 52% of Michigan’s African American population resides in cities with an EM, a consent agreement, or a transition advisory board. At the same time, only about 2% of Michigan’s white citizens live in communities governed by an EM. PA 436 has been applied to multiple municipalities of different sizes and jurisdictions, and almost all of them are predominantly black.

Additionally, the Michigan Department of Treasury maintains a scoring system to determine the financial health of the state’s cities and townships. The latest information available from the state is for fiscal year 2009. Fiscal indicator scores between 5 and 7 place a municipality on a fiscal watch list, while scores between 8 and 10 result in the community receiving consideration for review. However, six out of seven communities (85%) with a majority population of racial and ethnic minorities received EMs when they had scores of 7. At the same time, none of the twelve communities (0%) with a majority white population received an EM despite having scores of 7 or higher. Defendants argue that these statistics are old and of no application to PA 436, but the history of state intervention makes it reasonable to assume that similar statistics are available in discovery to support plaintiffs’ claims regarding the pattern of decision making.

There are twelve factors that may be considered by state authorities in assessing whether a local government is eligible for appointment of an EM, yet only one factor is necessary to serve as the basis for state intervention. This confers enormous discretion to state decision makers and creates a significant potential for discriminatory decisions. This court is satisfied that at this juncture plaintiffs have pleaded a plausible equal protection claim based on the racial impact of PA 436’s implementation. Defendants’ motion to dismiss Count 4 is denied.

Basically what Judge Steeh is saying here is that the Governor Snyder and those involved in making decisions about which communities will be put under Emergency Management use 12 factors outlined in PA 436 in making their decision. Because of this, they have an enormous amount of discretion. Because a municipalities’ financial situation is based on a score, we have an objective measure by which we can determine if they abused that discretion. And, indeed, they seem to have abused it. As Judge Steehs points out, 85% of the communities with scores of 7 or higher and a majority population of racial and ethnic minorities were put under an Emergency Manager while NONE of those with a score of 7 or higher and with a majority white population was.

I have mixed feelings about the fact that I was the first to report the disparate impact of Public Act 4 on African Americans in Michigan in December of 2011. While I’m proud of having crunched the numbers (with a BIG hat tip to Marcy Wheeler for putting me onto that path), I am ashamed of my state government for what they have done.

This is going to be interesting to watch. The attorneys for the plaintiffs are the Sugar Law Center and AFSCME and they plan to appeal the eight dismissed counts.

I wish them well in their fight. Other states are now looking into using Emergency Managers to take over struggling communities. The most recent is New Jersey where Republican Governor Chris Christie, who was apparently making fact-finding missions to Michigan last year to set the stage for putting Atlantic City under an Emergency Manager with “extraordinary supervisory powers”. So what happens here could impact how widespread this becomes nationally.