There’s a lot of procedural history to digest in the Michigan Court of Appeals’ opinion in AFT Michigan v. Michigan, No. 303702 (June 7, 2016), because it is merely the latest in a long string of opinions from that court, and the Michigan Supreme Court, interspersed with the Michigan legislature’s attempts to react. The opinion lays it all out, and we won’t repeat it here.
The short story is that the legislature adopted a statute which required public school employees to contribute 3% of their salaries to the retirement and health care system. Adding insult to injury, the withholding was labeled as an employer contribution.
The employees sued, alleging a taking among other claims. The court of appeals agreed it was a taking, but while the case languished in the Michigan Supreme Court awaiting discretionary review, the legislature revised the offending parts of the statute. In a different case, the court of appeals upheld the statute, concluding that the revisions to the law “served to remedy the constitutional defects” which the court had identified in the earlier version. The Michigan Supreme Court affirmed. Shortly thereafter, the Michigan Supreme Court vacated the court of appeals’ earlier decision and sent the case back to that court to determine whether that case was moot in light of subsequent events.
The court held that no, it was not moot, and stuck by its earlier ruling, concluding that the statute, prior to its revision, effected a taking, at least while it was in effect. IN other words, the statute was a taking for the period in which it required school employees to contribute 35 of their wages, even though that statute was later amended.
We’re going to skip over the court’s Contracts Clause analysis on pages 8 to 11 of the opinion and its substantive due process analysis (pages 14 to 15), and jump straight to the takings analysis. Here’s the summary:
- Salaries are “specific funds” in which the employees “unquestionably had a property interest.” Slip op. at 12.
- The court rejected the State’s argument that money was somehow a different kind of property than real property (we thought this was settled in Koontz).
- During the time the mandatory withholding was effective, “[t]here is no doubt” that “three percent of plaintiff employees’ wages were ‘taken’ in the dictionary-defintion sense of the word.” Id.
- This was not an assessment of money or a fee (which would not be a taking), but rather a case where the employees “had a contract-based property right in their own wages” that was taken from them. Slip op. at 13.
Case over (for now?).
AFT Michigan v. Michigan, No. 303702 (Mich. App. June 7, 2016)