HURON VALLEY SCHOOLS V SECRETARY OF STATEAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
HURON VALLEY SCHOOLS, ROBERT M.
O'BRIEN, MICHIGAN EDUCATION
ASSOCIATION, HURON VALLEY
EDUCATION ASSOCIATION, and UTICA
June 7, 2005
Ingham Circuit Court
LC No. 00-092488-AZ
SECRETARY OF STATE,
HURON VALLEY SCHOOLS and ROBERT M.
MICHIGAN EDUCATION ASSOCIATION,
HURON VALLEY EDUCATION
ASSOCIATION, and UTICA EDUCATION
Ingham Circuit Court
LC No. 00-092488-AZ
SECRETARY OF STATE,
Official Reported Version
Before: Kelly, P.J., and Sawyer and Wilder, JJ.
In Docket No. 253649, defendant Michigan Secretary of State appeals the trial court's
order granting summary disposition and declaratory judgment in favor of plaintiffs Robert M.
O'Brien and Huron Valley Schools. In Docket No. 253650, plaintiffs Michigan Education
Association, Huron Valley Education Association, and Utica Education Association1 appeal the
trial court's order granting summary disposition in defendant's favor. We affirm in part and
reverse in part on the basis of our determination that the trial court lacked subject-matter
jurisdiction over plaintiffs' claims.
Several months before the November 2000 election, "Kids First! Yes!" filed complaints
with defendant alleging that several school districts were violating the Michigan Campaign
Finance Act (MCFA), MCL 169.201 et seq. After reviewing the complaints, defendant, in a
memorandum dated July 24, 2000, addressed "All School Districts," including Huron Valley
Schools. In the memorandum, defendant provided her interpretation of the MCFA's § 57—
dealing with the contributions and expenditures of public bodies. The memorandum further
stated: "Public bodies are hereby put on notice that they may not utilize public resources to
support or oppose a candidate or ballot question." In conclusion, the memorandum stated:
This memorandum is not intended to suggest that your school district has
misused public resources. Rather the Department wishes to be absolutely clear in
its position regarding the enforcement of Section 57: it is up to the people, and not
public bodies, to decide elections. Even if a school district or its employees
believe a candidate or ballot question is not in their best interest, they may not
utilize public resources to oppose the candidate or ballot question. Public body
employees must use their own time and own resources to create and fund
candidate and ballot question committees to engage in the political process.
Please contact the Compliance and Rules Division . . . if you have any
questions regarding Section 57.
On or about August 23, 2000, defendant addressed a similar letter to O'Brien stating that
"there may be reason to believe that Huron Valley School District has violated Section 57 of the
[MCFA]." In this letter, defendant individually addressed materials submitted to defendant by
"Kids First! Yes!," namely: a "Power-Point Presentation," "Voucher Presentation Memos," a
presentation by the Huron Valley School District entitled "Fiscal Facts II," an article entitled
"HVS Board votes to Oppose Vouchers" appearing in the school district's newsletter "Education
Matters," e-mails from Huron Valley School District's director of communications, the "Huron
Valley Educator," and press releases from the Huron Valley Schools Board of Education.
Were refer to these plaintiffs collectively as "plaintiff associations."
Applying her interpretation of § 57 of the MCFA, defendant determined that every one of these
materials "with the exception of the Huron Valley Educator, constitutes an expenditure on the
part of HVSD." With regard to the Huron Valley Educator, the letter stated:
The Huron Valley Educator clearly opposes the Voucher Ballot Initiative.
However, in your response, you indicated that the Educator was published and
distributed by the Huron Valley Education Association. Thus, we have no reason
to conclude that public resources were used to fund this anti-voucher initiative
piece. We add, merely for informational purposes, that school resources, such as
teacher mailboxes, may not be used to distribute material such as the Educator if
it opposes a candidate or ballot question.
The letter further stated:
Because this is a case of first impression, we will let this letter serve as a
warning to refrain from any further involvement in the election or defeat of
candidates or the qualification, passage or defeat of ballot questions. However, if
you choose to continue to make expenditures, we will request a hearing in which
we will seek to levy fines and damages on the school district. The hearing will
cover conduct described in this letter as well as any subsection of Section 57. The
Department will seek $1,000 for each violation of the act as well as the full cost
of resources utilized to create and distribute the material, including printing,
postage, employee time, etc.
On August 31, 2000, defendant addressed a letter to George Contis, apparently
representing the Utica School District, regarding "Dismissal of Campaign Finance Complaint."
In the letter, defendant stated: "After a thorough review of all the evidence submitted in this case,
we have found that there may be reason to believe that Utica Schools resources were used in
violation of Section 57 of the [MCFA]. However, due to the nature of the violations, we have
decided not to take any further action in this matter."
In their complaint, plaintiffs referred to these three documents as "a memorandum and
several campaign finance complaint decisions . . . ." Plaintiffs alleged that, as a result of
defendant's "edicts," the Huron Valley School District and the Utica School District "have been
forced to censor their employees' unions' communications, and have prohibited or will prohibit
communications between unions and their members dealing with the election of the state and
local candidates, and regarding ballot proposals such as Proposal 1 (the 'voucher' proposal)."
They further alleged that if defendant "is not immediately restrained," plaintiffs and their
employees and members "will suffer immediate and irreparable harm, because they will be
severely hampered in their ability to communicate with them regarding important, time-sensitive
matters relating to upcoming elections." Plaintiffs further alleged that they "have no adequate
remedy at law because the passage of time will moot Plaintiffs' communications, depriving them
of any meaningful effect whatsoever."
Plaintiffs' complaint consisted of three counts. In count I, plaintiffs alleged that
defendant issued the "Huron Valley decision" without properly complying with the MCFA.
Specifically, plaintiffs alleged that defendant should have proceeded under MCL 169.215(5) to
informal methods such as "conference, conciliation, or persuasion" to reach an agreement and
defendant's failure to do so deprived O'Brien and the Huron Valley Schools of due process and
their rights under § 57(1) in regard to Proposal 1 on the November 7, 2000, ballot. Plaintiffs
further alleged that the "Huron Valley decision" prevents O'Brien and the Huron Valley Schools
from expressing their views and disseminating factual information on "issues relevant to the
function of Huron Valley Schools . . . ."
In count II, plaintiffs alleged that the MCFA does not prohibit plaintiff associations from
using internal school district communication systems because that use is not an expenditure
under MCL 169.206. Plaintiffs alleged that defendant's "decision" prevented them from
communicating with their union members "during the last two months before the November
2000 election by using the usual and contractually permitted method of doing so."
In count III, plaintiffs alleged that defendant's "decision" deprived plaintiff associations
of their constitutional rights to communicate with their members by the school districts' internal
The trial court granted O'Brien's and the Huron Valley Schools' motion for summary
disposition of count I and granted declaratory judgment to O'Brien and the Huron Valley Schools
"as to all of Section 57(1) of the [MCFA]." The trial court subsequently granted summary
disposition in defendant's favor with regard to counts II and III. Defendant appeals the trial
court's ruling with respect to count I. Plaintiff associations appeal the trial court's ruling with
respect to counts II and III.
II. Failure to Exhaust Administrative Remedies
A. Robert M. O'Brien and Huron Valley Schools
Defendant contends that the trial court had no jurisdiction over count I of plaintiffs'
complaint because plaintiffs failed to exhaust their administrative remedies. We agree. Whether
a court has subject-matter jurisdiction is a question that this Court reviews de novo. Papas v
Gaming Control Bd, 257 Mich App 647, 656-657; 669 NW2d 326 (2003).
Section 15(9) of the MCFA, MCL 169.215(9), now § 15(16), MCL 169.215(16)
There is no private right of action, either in law or equity, pursuant to this
act. The remedies provided in this act are the exclusive means by which this act
may be enforced and by which any harm resulting from a violation of this act may
This Court has held that "[a] declaratory judgment action cannot be maintained to resolve
disputes which are within the exclusive jurisdiction of an administrative agency." St Paul Fire &
Marine Ins Co v Littky, 60 Mich App 375, 378; 230 NW2d 440 (1975). This position is
supported by this Court's more recent decision in Citizens for Common Sense in Gov't v Attorney
General, 243 Mich App 43, 50; 620 NW2d 546 (2000), which held generally that "if the
Legislature has expressed an intent to make an administrative tribunal's jurisdiction exclusive,
then the circuit court cannot exercise jurisdiction over those same areas." With respect to the
MCFA, this Court held:
The Legislature has directed the Secretary of State to promulgate rules and
issue declaratory rulings to implement the MCFA pursuant to the APA
[Administrative Procedures Act, MCL 24.201 et seq.] MCL 169.215(1)(e) . . . .
The APA provides a formal procedure for submitting requests for declaratory
rulings and governing treatment of any such requests. Greenbriar Convalescent
Center, Inc v Dep't of Public Health, 108 Mich App 553, 560; 310 NW2d 812
(1981). Under the APA, an agency may issue declaratory rulings concerning the
applicability of statutes, rules, or orders of the agency. MCL 24.263 . . . .
Plaintiff could have requested a declaratory ruling regarding § 57, and, if the
Secretary of State refused to issue such a ruling, plaintiff could have sought a
declaratory judgment in the circuit court. MCL 24. 264 . . . . If the plaintiff had
sought, and the Secretary of State had issued a ruling, that ruling would have been
subject to judicial review under MCL 24.263 . . . . [Citizens, supra at 51.]
In count I of their complaint, plaintiffs sought a declaratory judgment interpreting § 57 of
the MCFA. Plaintiffs alleged that defendant improperly interpreted the MCFA in a "campaign
finance decision." However, defendant did not make a "decision," but, rather, sent a letter to
O'Brien indicating that she had reason to believe that violations of § 57 of the MCFA were
occurring. The letter further warned that if a violation were ultimately determined after a
hearing, sanctions would follow. Thus, in order to properly challenge defendant's interpretation
of the MCFA, plaintiffs should have first made a request for a declaratory ruling under § 15(2).
If defendant refused to make such a ruling, then plaintiff could have sought a declaratory
judgment in the circuit court. Further, if defendant made a declaratory ruling that plaintiffs
disagreed with, then plaintiffs could have sought review of that ruling in the circuit court.
Citizens, supra at 51. Because § 15(16) of the MCFA states that there is no private cause of
action in law or equity, plaintiffs' declaratory judgment action is precluded.
2. Time Sensitivity and Futility Are Not Exceptions to the MCFA's Administrative Procedures
O'Brien and the Huron Valley Schools assert that even if they were subject to the
administrative procedures of the MCFA, there was insufficient time before the November 2000
election and pursuing the available administrative remedies would have been futile. We
disagree; time sensitivity and futility are not exceptions to the MCFA's administrative
The primary goal of judicial interpretation of statutes "'is to ascertain and give effect to
the intent of the Legislature.'" Neal v Wilkes, 470 Mich 661, 665; 685 NW2d 648 (2004)
(citation omitted). This Court "may read nothing into an unambiguous statute that is not within
the manifest intent of the Legislature as derived from the words of the statute itself." Roberts v
Mecosta Co Gen Hosp, 466 Mich 57, 63; 642 NW2d 663 (2002). The plain language of § 15(16)
of the MCFA provides that the remedies afforded by the act "are the exclusive means by which
this act any be enforced . . . ." (Emphasis added). Even if plaintiffs' claims of time sensitivity or
futility had merit, the MCFA nonetheless clearly requires plaintiffs to exhaust their
administrative remedies before seeking review in the courts.
In any event, the claim of O'Brien and the Huron Valley Schools of time sensitivity is
without merit. Plaintiffs' mere speculation about how long the proper administrative procedure
would have taken is insufficient ground for avoiding those procedures when the MCFA sets forth
specific time requirements for defendant's response. According to MCL 169.215(2), defendant is
required to publicize a proposed response within forty-five business days of receiving the request
for a declaratory ruling. Defendant is required to issue a final declaratory ruling within sixty
business days of receiving a request for a declaratory ruling. Only under "extenuating
circumstances" is defendant permitted to "issue a notice extending for not more than 30 business
days the period during which [defendant] shall respond to a request for a declaratory ruling."
MCL 169.215(3). These time requirements can only be waived by the party requesting a
declaratory ruling. Id.
Here, defendant sent the memorandum to all school districts on July 24, 2000. Defendant
sent the letter to O'Brien on August 23, 2000. And, finally, defendant sent the letter to Contis on
August 31, 2000. If plaintiffs had promptly sought a declaratory ruling under the MCFA,
defendant's proposed response would have been due several weeks before November 7, 2000. If
plaintiffs had sought administrative review after receiving the July 24, 2000, memo, even
defendant's final declaratory ruling could have been issued well before the November 2000
election. Notably, the time required for defendant's response is significantly shorter than the
time it has taken the courts to resolve this matter. By proceeding in circuit court, rather than
administratively as required, plaintiffs never obtained the timely "decision" they argue they are
entitled to and actually extended the time for ultimate resolution of this matter.
We also find no merit in the claim by O'Brien and the Huron Valley Schools that seeking
administrative remedies would have been futile because defendant had already made her position
clear in the memorandum and letters. In Citizens, the plaintiff similarly argued that it was not
required to exhaust the administrative remedies provided in the MCFA when the effort would
have been useless. Specifically, the plaintiff felt that the effort would have been useless because
the Secretary of State's decision could be guessed when she was required to follow an opinion of
the Attorney General. Even then, this Court rejected the plaintiff 's argument noting that "courts
should not presume futility in an administrative appeal but should assume 'that the administrative
process will, if given a chance, discover and correct its own errors.'" Citizens, supra at 52,
quoting Greenbriar, supra at 562, quoting Canonsburg Gen Hosp v Dep't of Health, 492 Pa 68,
74; 422 A2d 141 (1980) (punctuation deleted). This Court further noted that administrative law
requires courts to move cautiously when called on to interfere with the jurisdiction of
administrative agencies. Citizens, supra at 52. A mere expectation that an administrative agency
will act a certain way is insufficient to satisfy the futility exception. WA Foote Mem Hosp v
Dep't of Pub Health, 210 Mich App 516, 524-525; 534 NW2d 206 (1995).
In this case, defendant issued a memorandum and two letters giving a general
interpretation of § 57 of the MCFA and warning first "All School Districts" and then O'Brien
specifically that violations of the MCFA may be occurring. Defendant did not conduct a
hearing, make any findings of fact, or make a decision. Plaintiffs apparently disagreed with
defendant's interpretation and did not believe that they were violating the MCFA. Because the
Legislature directed defendant to issue declaratory rulings and implement the MCFA, plaintiffs
were required to pursue the administrative remedies provided in the MCFA. We disagree with
the suggestion that administrative remedies would have been futile simply because defendant had
already rendered an interpretation of § 57 of the MCFA and concluded that violations of the
MCFA may be occurring. Following well-established precedent, we assume that the
administrative process will, if given a chance, discover and correct any errors there might be in
defendant's interpretation and application of the MCFA. Plaintiffs' mere speculation, based on
defendant's memorandum and letters, regarding what defendant's ruling might be is insufficient
to establish futility.
3. Administrative Procedures Act
O'Brien and the Huron Valley Schools also assert that the trial court had jurisdiction over
count I under the Administrative Procedures Act (APA), specifically MCL 24.263 and 24.301,
which govern, respectively, appeals from declaratory rulings and contested case hearings. We
MCL 24.263 provides:
On request of an interested person, an agency may issue a declaratory
ruling as to the applicability to an actual state of facts of a statute administered by
the agency or of a rule or order of the agency. An agency shall prescribe by rule
the form for such a request and procedure for its submission, consideration and
disposition. A declaratory ruling is binding on the agency and the person
requesting it unless it is altered or set aside by any court. An agency may not
retroactively change a declaratory ruling, but nothing in this subsection prevents
an agency from prospectively changing a declaratory ruling. A declaratory ruling
is subject to judicial review in the same manner as an agency final decision or
order in a contested case.
MCL 24.301 provides:
When a person has exhausted all administrative remedies available within
an agency, and is aggrieved by a final decision or order in a contested case,
whether such decision or order is affirmative or negative in form, the decision or
order is subject to direct review, by the courts as provided by law. . . .
Under MCR 7.105(A)(2), "'Contested case' means a proceeding including but not limited to
ratemaking, price fixing, and licensing, in which determination of the legal rights, duties, or
privileges of a named party is required by law to be made by an agency after an opportunity for
evidentiary hearing. . . ."
Neither MCL 24. 263 nor MCL 24.301 permits a binding decision to be imposed on a
party before it has had the opportunity for a hearing. O'Brien and the Huron Valley Schools
assert that they had a due process right to a hearing before defendant issued an opinion. We
agree that, pursuant to these statutes, this is true. However, defendant's memorandum and letters
were not declaratory rulings or decisions. Indeed, pursuant to MCL 24.263 and MCL 24.301, we
could not construe defendant's memorandum and letters to be "decisions" precisely because they
were not preceded by a hearing. Therefore, we reject the argument of O'Brien and the Huron
Valley Schools that the trial court had jurisdiction over count I of plaintiffs' complaint under
these sections of the APA.
In conclusion, defendant's memorandum and letters were not decisions that could be
reviewed by the circuit court under either the MCFA or the APA. Because plaintiffs sought
resolution of how the MCFA should be interpreted and applied under the circumstances of this
case, they were required to follow the procedures set forth in the MCFA, and defendant had
exclusive jurisdiction over these matters. Therefore, the trial court lacked subject-matter
jurisdiction over count I of plaintiffs' complaint. The trial court erred in denying defendant's
motion to dismiss plaintiffs' count I.
B. Plaintiff Associations
Plaintiff associations present several arguments for their proposition that the trial court
erred in granting defendant's motion for summary disposition of counts II and III of plaintiffs'
complaint. However, for the same reasons discussed above, the trial court did not have
jurisdiction over plaintiffs' claims in counts II and III. Plaintiff associations argue that they were
not required to exhaust the administrative remedies under the MCFA because they were not
parties to defendant's memorandum and letters. We disagree. Plaintiff associations were
required to exhaust their administrative remedies because they sought review of defendant's
interpretation of the MCFA and because the remedies afforded by the act "are the exclusive
means by which this act may be enforced." MCL 169.215(16) (emphasis added). With respect
to count III, which raised constitutional challenges, the mere framing of an issue as constitutional
does not excuse plaintiff associations "from pursuing statutorily imposed administrative
remedies when other issues are in controversy." WA Foote Mem Hosp, supra at 524. Therefore,
the trial court did not err in granting defendant's motion for summary disposition of counts II and
III even though it did so for other reasons. Taylor v Laban, 241 Mich App 449, 458; 616 NW2d
Affirmed in part and reversed in part.
/s/ Kirsten Frank Kelly
/s/ David H. Sawyer
/s/ Kurtis T. Wilder