Detroit Alliance Against the Rain Tax v. City of Detroit ( 2021 )

Order Michigan Supreme Court
Lansing, Michigan
February 12, 2021 Bridget M. McCormack,
Chief Justice
158852 (115) Brian K. Zahra
David F. Viviano
Richard H. Bernstein
Elizabeth T. Clement
Megan K. Cavanagh
DETROIT ALLIANCE AGAINST THE RAIN Elizabeth M. Welch,
TAX, DETROIT IRON & METAL COMPANY, Justices
AMERICAN IRON & METAL COMPANY,
McNICHOLS SCRAP IRON & METAL
COMPANY, MONIER KHALIL LIVING TRUST,
and BAGLEY PROPERTIES, LLC,
Plaintiffs-Appellants,
v SC: 158852
COA: 339176
CITY OF DETROIT, DETROIT WATER AND
SEWERAGE DEPARTMENT, and DETROIT
BOARD OF WATER COMMISSIONERS,
Defendants-Appellees.
_________________________________________/
On order of the Court, the motion for reconsideration of this Court’s December 11,
2020 order is considered, and it is GRANTED, in part. We MODIFY our order dated
December 11, 2020 to provide that the appellants may participate in the proceedings below
undertaken pursuant to MCR 7.206(E)(3)(d). In all other respects, the motion for
reconsideration is DENIED.
We do not retain jurisdiction.
CLEMENT, J. (concurring).
I am concerned about the confusion expressed by the movants in this motion about
what is to be achieved on remand, and I write separately to identify what I believe needs
doing. The Court of Appeals held that the sewer system at issue is distinguishable from
the sewer system we considered in Bolt v City of Lansing, 459 Mich 152 (1998), because
the Bolt system was “separated” while this sewer system is “combined.” In remanding this
matter for further factual development, I believe the Court has communicated that the mere
fact that this sewer system is combined is not, on its own, sufficient to uphold the
constitutionality of this financing scheme. By the same token, however, the Court has
remanded because it clearly does not believe it has enough factual understanding of this
case to strike down the sewer charge either. The critical problem, it seems to me, is that
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we have no way of assessing how proportional the money being assessed is to the benefit
that is being conferred.
How would a court go about determining that? It seems to me that a court would,
at minimum, need reasonable estimates on issues such as: (1) what is the overall cost of
the sewer system, (2) what portion of that overall cost is reasonably ascribed to the storm-
sewer service vis-à-vis the sanitary-sewer service, (3) how is the cost of the storm-sewer
service being apportioned among property owners in the city, and (4) are the city’s
assumptions about the amount of water that runs off of permeable vs. impermeable ground
reasonable? It goes without saying that these inquiries cannot be calculated with absolute
mathematical precision, but at least some effort at an estimate should be made. As a trivial
example I can think of, we might calculate approximately how many gallons of storm-
sewer water the system processes vis-à-vis the number of gallons of sanitary-sewer water,
and use this as a way of apportioning the overall cost of the system between its storm and
sanitary components. Of course, it may be reasonable to refine this further—perhaps
sanitary-sewer water is, on average, more expensive to treat, thus affecting the ratio. In
any event, it seems to me the only way we can assess whether property owners are being
charged no more than the fair value of the service provided to each owner’s parcel is to
have a reasonable estimate of the total cost of the storm-sewer system.
Plaintiffs have raised facially legitimate questions about this system. It is, for
example, fair to wonder how, if many property owners are not being assessed anything, the
overall system can remain financially viable unless those owners who are paying are being
charged more than the value of the service being provided to them to make up for foregone
revenue from parcels not being charged. It is also fair to question whether the cost of
clearing water from city streets is a benefit that can be involuntarily paid for via a “fee”
rather than a “tax.” But by the same token, I am not aware of a rule in our Headlee
jurisprudence saying that municipalities may not provide services at less than their cost to
property owners (including, perhaps, to the municipality itself as a landowner); rather, I
understand our law as allowing municipalities to charge no more than the reasonable cost
of the service conferred. It appears to me that on this record, we simply cannot determine
whether property owners are being overcharged. I would note, in this regard, that we sit in
review of the Court of Appeals, and it made no findings on these matters. Even if,
theoretically, the answers to these questions appear somewhere in the record, it is not for
this Court to identify them. Therefore, I concur with the order remanding for fact-finding,
both in the technical sense of “[t]he process of considering the evidence presented to
determine the truth about a disputed point of fact,” Black’s Law Dictionary (11th ed), as
well as in the nonlegal, very literal sense of locating these facts within the record.
I further note that plaintiffs have maintained throughout these proceedings, and
continue to maintain in this motion, that fact-finding of the sort this Court has ordered is
unnecessary. By contrast, the plaintiffs in Binns v Detroit (Docket No. 158856) argued in
this Court that the Court of Appeals erred by ruling on this case without referring the matter
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to a circuit court for fact-finding under MCR 7.206(E)(3)(d). I believe our initial orders
directing that these matters be remanded to the Court of Appeals and that this matter be
held in abeyance for Binns were a fair reflection of this distinction between the cases, and
I therefore do not believe it is necessary that we grant this relief. That said, I also believe
granting this relief is harmless, and so I do not object to the entry of this order.
WELCH, J., did not participate because the Court considered this case before she
assumed office.
I, Larry S. Royster, 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.
February 12, 2021
s0209b
Clerk