TODD DAWSON V SECRETARY OF STATE
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STATE OF MICHIGAN
COURT OF APPEALS
TODD DAWSON, RONALD J. HALE, WILBUR
LOEW, MICHAEL MEDORE, and MICHELLE
ZAINEA,
FOR PUBLICATION
March 20, 2007
9:15 a.m.
Plaintiffs-Appellants,
v
SECRETARY OF STATE and DEPARTMENT
OF TREASURY,
Defendants-Appellees.
No. 264103
Court of Claims
LC No. 05-000043-MM
Official Reported Version
Before: Wilder, P.J., and Zahra and Davis, JJ.
WILDER, P.J.
Plaintiffs appeal as of right a Court of Claims order granting defendants' motion for
summary disposition under MCR 2.116(C)(8) and (10). On appeal, plaintiffs seek to have the
matter remanded for a class certification of all persons assessed fees under subsections 2(a) and
(b) of the driver responsibility law, MCL 257.732a, arguing that the provisions violate the
double jeopardy and equal protection clauses of the United States and Michigan constitutions.
Plaintiffs also challenge subsections 2(a) and (b) on the grounds that the provisions violate the
uniformity of taxation clause, art 9, § 3, and the "distinct statement" clause, art 4, § 32,1 of the
Michigan Constitution. Because we hold that subsections 2(a) and (b) of the driver
responsibility law do not violate those constitutional provisions, we affirm.
I. The Law at Issue
Michigan's driver responsibility law (DRL), became effective October 1, 2003. 2003 PA
165. Subsequent amendments of it became effective May 1, 2004.2 The DRL provides for a fee
1
For convenience, we dub article 4, § 32 the "distinct statement" clause. It provides: "Every law
which imposes, continues or revives a tax shall distinctly state the tax." Const 1963, art 4, § 32.
2
See 2004 PA 52.
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assessment against drivers who are convicted of specific misdemeanor or felony offenses or who
accumulate seven or more qualifying points on their driving records.3 MCL 257.732a(1) and (2).
Under the DRL, the Secretary of State assesses the fee and "shall transmit the fees collected . . .
to the state treasurer," who credits the money received to the general and the fire protection
funds. MCL 257.732a(10). The fees assessed by the Secretary of State are in addition to any
fines, fees, and costs imposed in court.
The Secretary of State "shall" suspend the driver's license of an individual who fails to
pay the fee assessed or establish an installment plan within the time limits specified by MCL
257.732a(3) and (5). The suspension of driving privileges is removed upon the payment of the
delinquent assessment and any other fees. MCL 257.732a(5).
II. Facts and Procedural History
Each plaintiff was convicted of an enumerated driving offense or an equivalent local
ordinance referred to in MCL 257.732a(2)(a)(i) to (v)4 or MCL 257.732a(2)(b)(i) to (iv).5
3
Plaintiffs do not challenge MCL 257.732a(1), which provides for the assessment of fees against
licensed and unlicensed drivers once in each year that a driver has seven or more points on his or
her driving record that have accumulated in a two-year period under the point system set forth in
MCL 257.320a and MCL 257.629c.
4
The offenses in MCL 257.732a(2) include misdemeanors and felonies. The qualifying offenses
under MCL 257.732a(2)(a) include:
(i) Manslaughter, negligent homicide, or a felony resulting from the
operation of a motor vehicle, ORV, or snowmobile.
(ii) Section 601b(2) or (3), 601c(1) or (2), or 653a(3) or (4) [of the
Michigan Vehicle Code, MCL 257.601b(2) and (3), MCL 257.601c(1) and (2),
and MCL 257.653a(3) and (4)].
(iii) Section 625(1), (4), or (5), section 625m [of the Michigan Vehicle
Code, MCL 257.625(1), (4), and (5) and MCL 257.625m], or section 81134 of the
natural resources and environmental protection act, 1994 PA 451, MCL
324.81134, or a law or ordinance substantially corresponding to section 625(1),
(4), or (5), section 625m, or section 81134 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.81134.
(iv) Failing to stop and disclose identity at the scene of an accident when
required by law.
(v) Fleeing or eluding an officer.
5
The offenses in MCL 257.732a(2)(b) also include misdemeanors and felonies. The qualifying
offenses under MCL 257.732a(2)(b) include:
(continued…)
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Accordingly, each plaintiff was assessed either a "$1,000.00 driver responsibility fee each year
for 2 consecutive years" under MCL 257.732a(2)(a) or a "$500.00 driver responsibility fee each
year for 2 consecutive years" under MCL 257.732a(2)(b).6
Plaintiffs filed an amended complaint seeking a declaration that subsections 2(a) and (b)
are constitutionally invalid, alleging that the provisions violate federal and state double jeopardy
and equal protection guarantees. Plaintiffs further alleged that the driver responsibility fees
constitute a tax imposed on an arbitrary class of taxpayers, in violation of the uniformity of
taxation clause, Const 1963, art 9, § 3, and that the tax is unconstitutional for failing to identify
the DRL as a "tax," in violation of Const 1963, art 4, § 32 of the Michigan Constitution. In
addition, plaintiffs sought an order certifying a class of similarly situated persons and a refund of
all driver responsibility fees paid.7 Defendants filed a motion for summary disposition, and
plaintiffs responded with a countermotion for summary disposition, requesting that their claim be
permitted to proceed on the issues of class certification and remedy.
Following a hearing, the Court of Claims dismissed plaintiffs' claims, concluding that no
double jeopardy violation occurred because the Legislature intended to impose a civil, and not a
criminal, penalty. The Court of Claims further concluded that the DRL fees do not violate equal
protection guarantees, given the statute's purpose to raise revenue, and that a rational basis
existed for assessing fees against persons who drain state resources by committing offenses
related to driving. In rejecting plaintiffs' claim that subsections 2(a) and (b) impose a tax without
distinctly identifying it as a tax in violation of art 4, § 32 of the Michigan Constitution, the court
determined that the label "tax" was not necessary because the object of the assessments is
apparent. Accordingly, the court concluded that plaintiffs' request for class certification was
moot and granted defendants' motion for summary disposition. Plaintiffs now appeal.
III. Standards of Review
This Court reviews de novo questions of law involving statutory interpretation.
Michigan Muni Liability & Prop Pool v Muskegon Co Bd of Co Road Comm'rs, 235 Mich App
(…continued)
(i) Section 625(3), (6), (7), or (8) [of the Michigan Vehicle Code, MCL
257.625(3), (6), (7), and (8)].
(ii) Section 626 [of the Michigan Vehicle Code, MCL 257.626].
(iii) Section 904 [of the Michigan Vehicle Code, MCL 257.904].
(iv) Section 3101, 3102(1), or 3103 of the insurance code of 1956, 1956
PA 218, MCL 500.3101, 500.3102, and 500.3103.
6
The DRL also assesses fees of $150 and $200 each year for two consecutive years upon
conviction of qualifying offenses listed in MCL 257.732a(2)(c) and (d), respectively.
7
Plaintiffs concede that not all of them have paid the driver responsibility fees assessed.
Whether all the named plaintiffs paid the fees is not dispositive of this appeal.
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183, 189; 597 NW2d 187 (1999). This Court also reviews de novo the trial court's grant of
summary disposition pursuant to MCR 2.116(C)(8) and (10). See Maiden v Rozwood, 461 Mich
109, 119-120; 597 NW2d 817 (1999). Whether a statute violates the federal constitution is a
question of law reviewed de novo. Westlake Transportation, Inc v Pub Service Comm, 255 Mich
App 589, 616; 662 NW2d 784 (2003).
IV. Legal Analysis
A. Double Jeopardy
The first question before us is whether the automatic assessment of driver responsibility
fees under subsections 2(a) and (b)8 of the DRL upon a conviction of a qualifying misdemeanor
or felony offense violates the United State and Michigan constitutions' prohibitions against
double jeopardy. We hold that there is no double jeopardy violation.
Statutes are presumed to be constitutional unless their unconstitutionality is readily
apparent. See Neal v Oakwood Hosp Corp, 226 Mich App 701, 719; 575 NW2d 68 (1997). A
party challenging the constitutionality of a statute has the burden of proving its
unconstitutionality. Complete Truck & Auto Parts, Inc v Secretary of State, 264 Mich App 655,
659; 692 NW2d 847 (2004). The primary objective of constitutional interpretation is to realize
the intent of the people by whom and for whom the constitution was ratified and to interpret the
constitution according to the intent of the voters who ratified it. Wayne Co v Hathcock, 471
Mich 445, 468; 684 NW2d 765 (2004).
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). This Court
gives effect to the Legislature's intent as expressed in the statute's terms, giving the words of the
8
MCL 257.732a(2)(a) and (b) provide, in relevant part:
An individual, whether licensed or not, who violates any of the following sections
or another law or local ordinance that substantially corresponds to those sections shall be
assessed a driver responsibility fee as follows:
(a) Upon posting of an abstract that an individual has been found guilty
for a violation of law listed or described in this subdivision, the secretary of state
shall assess a $1,000.00 driver responsibility fee each year for 2 consecutive years
....
* * *
(b) Upon posting of an abstract that an individual has been found guilty
for a violation of law listed in this subdivision, the secretary of state shall assess a
$500.00 driver responsibility fee each year for 2 consecutive years . . . .
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statute their plain meaning and ordinary meaning. Willett v Waterford Charter Twp, 271 Mich
App 38, 48; 718 NW2d 386 (2006). "If the statutory language is clear and unambiguous, judicial
construction is neither required nor permitted, and courts must apply the statute as written."
USAA Ins Co v Houston Gen Ins Co, 220 Mich App 386, 389; 559 NW2d 98 (1996). Nothing
will be read "into an unambiguous statute that is not within the manifest intent of the Legislature
as derived from the language of the statute itself." Roberts v Mecosta Co Gen Hosp, 466 Mich
57, 63; 642 NW2d 663 (2002).
Plaintiff 's attack on the constitutionality of subsections 2(a) and (b) of the DRL is framed
in the abstract, not based on the application of the particular facts. Thus, plaintiffs challenge the
facial validity of the provisions. A party bringing a facial challenge "must show that no
circumstances exist under which [the challenged statutory provision] would be valid." People v
Sands, 261 Mich App 158, 160-161; 680 NW2d 500 (2004). Because plaintiffs bring a facial
challenge to the law, our decision is narrow.
Both the United States and Michigan constitutions prohibit placing a person twice in
jeopardy for the same offense. US Const, Am V;9 Const 1963, art 1, § 15.10 Michigan's Double
Jeopardy Clause is "essentially identical" to its federal counterpart and is "construed consistently
with the corresponding federal provision." People v Nutt, 469 Mich 565, 575, 594; 677 NW2d 1
(2002). "The prohibition against double jeopardy provides three related protections: (1) it
protects against a second prosecution for the same offense after acquittal; (2) it protects against a
second prosecution for the same offense after conviction; and (3) it protects against multiple
punishments for the same offense." Id. at 574 (emphasis added).
Hudson v United States, 522 US 93, 99; 118 S Ct 488; 139 L Ed 2d 450 (1997), noted
that the Double Jeopardy Clause "protects only against the imposition of multiple criminal
punishments for the same offense, and then only when such occurs in successive proceedings."
(Internal citations omitted; second emphasis added.) Here, there were not successive
proceedings, but only one criminal adjudicative proceeding in each case, followed by the
ministerial act of the imposition of fees by the Secretary of State. By the plain language of MCL
257.732a(2), liability for a driver responsibility fee attaches automatically upon conviction of a
relevant crime. Therefore, as in Hudson, there is no second prosecution or proceeding in
violation of double jeopardy. Hudson, supra at 99.
We also conclude there is no multiple punishment double jeopardy violation. Generally,
if alleged multiple punishment is involved, the Double Jeopardy Clause restrains prosecutors and
courts, not the Legislature. People v Mitchell, 456 Mich 693, 695; 575 NW2d 283 (1998);
People v Ford, 262 Mich App 443, 448; 687 NW2d 119 (2004). "Where the issue is one of
9
US Const, Am V provides in relevant part: "[N]or shall any person be subject for the same
offence to be twice put in jeopardy of life or limb . . . .
10
Const, 1963, art 1, § 15, provides in relevant part: "No person shall be subject for the same
offense to be twice put in jeopardy."
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multiple punishment rather than successive trials, the double jeopardy analysis is whether there
is a clear indication of legislative intent to impose multiple punishment for the same offense. If
so, there is no double jeopardy violation." Mitchell, supra at 695-696. Here, the Legislature
unmistakably intended to add additional sanctions to the offenses listed in MCL 257.723a(2)(a)
and (b). Because the Double Jeopardy Clause does not prohibit multiple punishments imposed
by the Legislature, the driver responsibility fee does not violate double jeopardy.
Clearly, the Legislature could have directly amended the statutes proscribing the various
criminal offenses listed in MCL 257.732a(2)(a) and (b) and indicated that upon conviction of
one of those offenses, the trial court would require the offender to pay a higher fee. See People v
Shipley, 256 Mich App 367, 378; 662 NW2d 856 (2003). Although the Legislature instead
chose to amend the Michigan Vehicle Code, we hold that it does not matter for double jeopardy
purposes that the Legislature chose to place the higher fees in one single new section of the
Michigan Vehicle Code. To hold otherwise would elevate form over substance. See generally,
e.g., FACE Trading, Inc v Dep't of Consumer & Industry Services, 270 Mich App 653, 663; 717
NW2d 377 (2006) ("Courts are not bound by labels in determining whether the 'beyond a
reasonable doubt' standard is required. . . . To do so would place form over substance.").
The constitutional provisions against double jeopardy are not violated when the civil
penalty serves a purpose distinct from any punitive purpose. People v Duranseau, 221 Mich
App 204, 206; 561 NW2d 111 (1997). The driver responsibility fees serve purposes distinct
from punitive purposes. Revenues generated by the driver responsibility fee go to the general
fund or the fire protection fund. MCL 257.732a(10). Any money appropriated from the fire
protection fund is used for fire protection grants to certain cities, villages, and townships. MCL
257.732a(9). Accordingly, the fees serve the purpose of (1) raising revenue and (2)
compensating the government (and therefore society) for some of the costs related to acts of the
offenders.
Hudson used a two-step analytical framework to distinguish between a secondary civil
remedy and a prohibited second criminal punishment. Hudson, supra at 99.11 The first step
requires a court to use principles of statutory construction to determine "whether the legislature,
'in establishing the penalizing mechanism, indicated either expressly or impliedly a preference
11
In doing so, the United States Supreme Court disavowed United States v Halper, 490 US 435,
436; 109 S Ct 1892; 104 L Ed 2d 487 (1989), in which the Supreme Court originally considered
"whether and under what circumstances a civil penalty may constitute 'punishment' for the
purposes of double jeopardy analysis." The Halper Court deemed as punitive the government's
subsequent civil action to impose a $2,000 civil penalty for each of the defendant's violations
because the civil penalty was "more than 220 times greater than the Government's measurable
loss . . . ." Id. at 439. The Hudson Court concluded that Halper had improperly departed from
traditional double jeopardy analysis by focusing on whether the sanction was so grossly
disproportionate to the harm caused as to constitute punishment and by assessing the character of
the actual sanctions imposed. Hudson, supra at 101.
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for one label or the other.'" Id. (citation omitted). Here the Legislature specifically identified the
assessment as a "fee." MCL 257.732a.
In addition, such monetary assessments are traditionally not viewed as punishment.
Hudson, supra at 104. The Legislature did not label the fee as a "criminal penalty," though it
used that term elsewhere in the Michigan Vehicle Code. See MCL 257.204b(2) ("The court
shall impose a criminal penalty for a conviction of an attempted violation of this act or a local
ordinance substantially corresponding to a provision of this act in the same manner as if the
offense had been completed."). Furthermore, revenue from driver responsibility fees goes into
the common treasury of the general fund and the fire protection fund. MCL 257.732a(10). As a
result of the Legislature's specific use of the term "fee," and the intent of the Legislature to raise
revenue, we hold that the Legislature meant what it said: that the driver responsibility fee is
intended to be a fee (a civil sanction).
However, even if the Legislature intended a fee to be a civil penalty, with regard to the
second step of the analysis, Hudson stated that a seemingly civil penalty may be "'so punitive
either in purpose or effect,' as to 'transfor[m] what was clearly intended as a civil remedy into a
criminal penalty.'" Hudson, supra at 99 (citations omitted). Hudson enumerated guideposts for
this inquiry. "'[T]hese factors must be considered in relation to the statute on its face,' and 'only
the clearest proof ' will suffice to override legislative intent and transform what has been
denominated a civil remedy into a criminal penalty." Hudson, supra at 100 (citations omitted;
emphasis added).
First, this Court must consider "'[w]hether the sanction involves an affirmative disability
or restraint[.]'" Hudson, supra at 99 (citation omitted). Plaintiffs concede that the driver
responsibility fee is a monetary assessment and does not involve an affirmative disability or
restraint.
Second, this Court must consider "'whether [the sanction] has historically been regarded
as a punishment[.]'" Id. (citation omitted). Monetary penalties have not historically been
considered punishment; "'the payment of fixed or variable sums of money [is a] sanction which
ha[s] been recognized as enforceable by civil proceedings since the original revenue law of
1789.'" Id. at 104, quoting Helvering v Mitchell, 303 US 391, 400; 58 S Ct 630; 82 L Ed 917
(1938).
Third, this Court must consider "'whether [the sanction] comes into play only on a
finding of scienter[.]'" Hudson, supra at 99 (citation omitted). The relevant driver responsibility
fees are assessed only upon conviction of certain crimes. MCL 257.732a(2). Therefore, the
scienter required for the fee is identical to that required for the crime on which it is premised.
However, "no one factor should be considered controlling as they 'may often point in differing
directions.'" Hudson, supra at 101 (citation omitted).
Fourth, this Court must consider "'whether [the sanction's] operation will promote the
traditional aims of punishment—retribution and deterrence[.]'" Id. at 99 (citation omitted). As
the Court stated in Montana Dep't of Revenue v Kurth Ranch, 511 US 767, 778; 114 S Ct 1937;
128 L Ed 2d 767 (1994), "[c]riminal fines, civil penalties, civil forfeitures, and taxes all share
certain features: They generate government revenues, impose fiscal burdens on individuals, and
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deter certain behavior." However, the Hudson Court found that "the mere presence of [a
deterrent] purpose is insufficient to render a sanction criminal, as deterrence 'may serve civil as
well as criminal goals.'" Hudson, supra at 105 (citation omitted).
Fifth, this Court must consider "'whether the behavior to which [the sanction] applies is
already a crime[.]'" Id. at 99 (citation omitted). Imposition of the fee at issue is contingent upon
conviction of a crime. MCL 257.732a(2). However, in Hudson, the conduct for which the
sanctions were imposed similarly formed the basis for criminal indictments. Hudson, supra at
105. The Court noted that this "fact is insufficient to render the money penalties . . . criminally
punitive, particularly in the double jeopardy context." Id. (citations omitted). A legislature "may
impose both a criminal and a civil sanction in respect to the same act or omission[.]" Helvering,
supra at 399. In addition, Helvering upheld the imposition of an administrative penalty for
income tax fraud despite the taxpayer's acquittal of criminal fraud charges. See id. at 395.
Sixth, this Court must consider "'whether an alternative purposed to which [the sanction]
may rationally be connected is assignable for it[.]'" Hudson, supra at 99 (citation omitted). It is
rational to conclude that assessing a fee on persons convicted of specific offenses will deter
those offenses. However, "deterrence 'may serve civil as well as criminal goals.'" Id. at 105
(citation omitted). The driver responsibility fees will protect the law abiding public by deterring
dangerous driving and similar offenses. Just as Hudson reasoned that "[t]o hold that the mere
presence of a deterrent purpose renders such sanctions 'criminal' for double jeopardy purposes
would severely undermine the Government's ability to engage in effective regulation of
institutions such as banks," to hold here that the deterrent effect of the driver responsibility fee
renders the fee criminal for double jeopardy purposes might undermine our Legislature's ability
to protect the public from dangerous driving and similar offenses. Id.
Finally, this Court must consider "'whether [the sanction] appears excessive in relation to
the alternative purpose assigned[.]'" Hudson, supra at 99-100 (citation omitted). Here, the
alternative purpose is the generation of revenue. See MCL 257.732a(10). Violators of the
criminal statutes enumerated in MCL 257.732a(2) cause government entities significant
expenses, including the costs of police response, prosecutor's offices, and courts. As the trial
court noted, "given the cost of state funding of police agencies, prosecutor's offices, courts, and
all the other direct and indirect costs associated with criminal driving offenses, it cannot be said
that the assessments are excessive for purposes of raising revenue."
Plaintiffs contend that the language and context of the driver responsibility law do not
permit characterization of the statute as an enactment by the Legislature for the police power
purpose of recouping costs incurred by the state as a result of the criminal conduct. Plaintiffs
further contend that if "that argument is made and considered, . . . then a fact question exists
regarding the actual amount of unreimbursed costs incurred by the State and the amount
anticipated to be received from the fees." We disagree. The sixth Hudson factor requires the
court to ponder "'whether an alternative purpose to which [the sanction] may rationally be
connected is assignable for it[.]'" Hudson, supra at 99 (citation omitted; emphasis added). We
conclude that the alternative purpose, revenue generation, is an alternative purpose to which the
fees are rationally connected. Moreover, the Hudson factors "'must be considered in relation to
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the statute on its face,' and 'only the clearest proof ' will suffice to override legislative intent . . .
." Id. at 100 (citations omitted). Here, plaintiffs lack the required clearest proof.
Finally plaintiff 's facial attack on the constitutionality of MCR 257.732a(2) requires
showing that no circumstances exist under which the challenged provision is valid. Sands, supra
at 160-161. Because there are circumstances in which the driver responsibility fees are valid (at
the very least in situations where the criminal conduct imposes great costs on society and the
government), the unconstitutionality of the DRL is not readily apparent, and we reject plaintiff 's
facial challenge to the law under the double jeopardy clauses.
B. Equal Protection and Uniformity of Taxation
Plaintiffs next argue that subsections 2(a) and (b) violate the equal protection clauses of
the Michigan and United States constitutions, and the Michigan Constitution's uniformity of
taxation clause, by imposing fees on an arbitrary class of persons. We disagree.
Both the United States and Michigan constitutions guarantee the equal protection of the
laws. US Const, Am XIV; Const 1963, art 1, § 2; Frame v Nehls, 452 Mich 171, 183; 550
NW2d 739 (1996). Because "Michigan's equal protection provision [is] coextensive with the
Equal Protection Clause of the federal constitution," Crego v Coleman, 463 Mich 248, 258; 615
NW2d 218 (2000), our equal protection analysis is unitary.
When reviewing allegations of equal protection violations, we use one of three tests.
"Which test applies depends on the type of classification made by the statute and the nature of
the interest affected." Proctor v White Lake Twp Police Dep't, 248 Mich App 457, 469; 639
NW2d 332 (2001). In this case, plaintiffs concede that the proper standard of review is the
rational basis test. The rational basis test is deferential: "Under the rational basis test, a statute
qualifies as constitutional if its classification scheme rationally relates to a legitimate
governmental purpose." Id. (emphasis added). In TIG Ins Co, Inc v Dep't of Treasury, 464 Mich
548, 557-558; 629 NW2d 402 (2001), our Supreme Court explained the leniency of the rational
basis test:
The legislation will pass "constitutional muster if the legislative judgment
is supported by any set of facts, either known or which could reasonably be
assumed, even if such facts may be debatable." To prevail under this standard, a
party challenging a statute must overcome the presumption that the statute is
constitutional. Thus, to have the legislation stricken, the challenger would have
to show that the legislation is based "solely on reasons totally unrelated to the
pursuit of the State's goals," or, in other words, the challenger must "negative
every conceivable basis which might support" the legislation. [Citations omitted;
emphasis added.]
Plaintiffs also acknowledge that whether the driver responsibility assessment is a fee or a
tax, "'there is no discernable difference between the equal protection and uniformity of taxation
clauses,'" quoting Armco Steel Corp v Dep't of Treasury, 419 Mich 582, 592; 358 NW2d 839
(1984). Therefore, the proper level of review, regardless of whether the driver responsibility
fees are fees or taxes, is the rational basis test.
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In this case, the class of persons subject to the driver responsibility fees consists of
licensed or unlicensed individuals who are convicted of any of the offenses listed in MCL
257.732a(2). As noted earlier, one apparent governmental purpose for this subsection is to
generate revenue. MCL 257.732a(10). Thus the assessment of the driver responsibility fees is
rationally related to the governmental purpose of generation of revenue. Further, the state,
including its local subdivisions, is responsible for costs associated with arresting, processing, and
adjudicating individuals who violate the offenses listed in MCL 257.732a(2)(a) and (b).
Therefore, the classification scheme imposed by the DRL is rationally related to the legitimate
governmental purpose of generating revenue from individuals who impose costs on the
government and society. We hold that the DRL does not, on its face, deprive plaintiffs of the
equal protection of the law.
C. The "Distinct Statement" Clause
Plaintiffs argue that the DRL violates article 4, § 32 of the Michigan Constitution, which
provides: "Every law which imposes, continues or revives a tax shall distinctly state the tax."
We disagree.
All statutes and ordinances are given a strong presumption of constitutionality. Taylor
Commons v City of Taylor, 249 Mich App 619, 625; 644 NW2d 773 (2002). In other words,
legislation is presumed constitutional absent a clear showing to the contrary. Caterpillar, Inc v
Dep't of Treasury, 440 Mich 400, 413; 488 NW2d 182 (1992).
The distinction between a governmental "fee" and a tax is the subject of much caselaw.
First, we consider cases addressing whether state fees are disguised taxes. "Whether a charge is
a permissible fee or an illegal tax is a question of law." Westlake Transportation, Inc, supra at
611. "Taxes have a primary purpose of raising revenue, while fees are usually in exchange for a
service rendered or a benefit conferred." Id. at 612. "'[W]here revenue generated by a regulatory
"fee" exceeds the cost of regulation, the "fee" is actually a tax in disguise.'" Id. at 614 (citation
omitted). "The test is whether the fee is proportional, not whether it is equal, to the amount
required to support the services it regulates. We conclude that the Court of Claims did not
clearly err in finding that the fees were not 'wholly disproportionate.'" Id. at 615 (citation
omitted). Westlake Transportation, Inc upheld the state's annual fees of $100 for interstate and
intrastate motor carriers under the Motor Carrier Act, MCL 475.1 et seq. Id. at 592. The Court
held that the charges were regulatory fees, not unconstitutional taxes. Id. at 616.
In City of Dearborn v State Tax Comm, 368 Mich 460, 463; 118 NW2d 296 (1962), the
city of Detroit maintained facilities in Dearborn and Highland Park for the storage and repair of
equipment, including buses. Dearborn and Highland Park assessed as personal property such
buses and other equipment stored and maintained within their city limits. Id. The city of Detroit
paid the personal property taxes so assessed. But then Detroit decided that its buses and
equipment were not subject to property taxes because it had paid 50¢ a vehicle to the state under
the Michigan Vehicle Code for license plates. Id. at 463-464. The trial court held that the 50¢
charge for license plates and registration was not a tax. Id. at 465. Our Supreme Court held that
the 50¢ registration and license plate charge was regulatory in nature, a legitimate exercise of the
police power, and the Court found it significant that the charge was not designated as a tax in the
statute. Id. at 468. The Court further stated:
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[W]e think that the requirement that the sum of 50¢ shall be paid in
connection with the furnishing of a set of number plates for a State or municipally
owned and operated motor vehicle is merely an incident of a proper regulation.
The amount thereof and the obvious intent of the legislature to provide a
reasonable method for identification of publicly owned and operated motor
vehicles . . . [are] not consistent with the claim that such payment was intended
as a tax. [Id. at 469 (emphasis added).]
City of Dearborn further reasoned:
The precise nature of a burden imposed by public authority is not
necessarily determined by the name applied to it but depends on the intent of the
legislative body prescribing it, the purpose thereof, and the incidents pertaining
to it. The fact that such a burden is expressly designated as a tax is not
necessarily controlling. If the application of that term rests on implication, as in
the present case, obviously the nature and purpose of the required payment ha[ve]
added significance. In the case of Van Horn v. People, 46 Mich 183 [9 NW 246
(1881)], there was involved an act of the legislature of Michigan imposing, in
terms, a tax on dogs. The Court held, however, that the act was regulatory in its
nature, that it could not be regarded as a revenue measure but was in fact a
regulatory expedient adopted for a specific purpose. In consequence, the amount
of the charge imposed was not subject to constitutional provisions relating to
taxes and taxation generally.
In Vernor v. Secretary of State, 179 Mich 157 [146 NW 338 (1814)], the
distinction between a tax and a license fee was considered at some length, the
amount thereof and the relation to the purpose sought to be accomplished being
emphasized. It was pointed out that imposing an exaction larger than necessary
to defray expenses is not mere regulation but amounts to the raising of revenue as
a main purpose and is, in consequence, a tax. In connection with the discussion it
was said (p 168):
"It is true that it has been held that what is a reasonable fee must depend
largely upon the sound discretion of the Legislature, having reference to all the
circumstances and necessities of the case. It will be presumed that the amount of
the fee is reasonable, unless the contrary appears upon the face of the law itself,
or is established by proper evidence." (Citing cases.)
In the case at bar it does not appear that the sum of 50¢ for a set of license plates
for a motor vehicle operated on the public highway is more than a mere nominal
amount, which actually may be less than the expense involved.
We are in accord with the conclusion of the circuit court of Wayne county
in the suit for a declaratory decree. The amount of the charge for license plates
may not properly be regarded as a tax exempting the buses of the Detroit
transportation system from taxation as personal property under the general law of
the State. It is, rather, an incident of regulation under the police power having for
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its purpose means of identification of motor vehicles operating on public streets
and highways. [Id. at 471-473 (some emphasis added).]
Thus, City of Dearborn held that the 50¢ license charge was a fee and not a tax.
Under City of Dearborn, if a state charge is involved, it is not sufficient, in order to find
that a charge is a "tax," merely to show that the "fee" is larger than the costs it would defray.
Rather, the standard is:
"[W]hat is a reasonable fee must depend largely upon the sound discretion
of the legislature, having reference to all the circumstances and necessities of the
case. It will be presumed that the amount of the fee is reasonable, unless the
contrary appears upon the face of the law itself, or is established by proper
evidence." [Id. at 472 (citation omitted; emphasis added)].
Under this standard, if the charge is "reasonable," it is a fee and not a tax; if it is "unreasonable,"
i.e., larger than needed to defray the relevant costs, and mainly has a revenue-raising purpose, it
is a tax.
There is also law relating to whether a municipal "fee" is an illegal subterfuge for raising
revenue. In Kircher v Ypsilanti, 269 Mich App 224; 712 NW2d 738 (2005), this Court
considered whether a municipal fee was so high as to constitute an illegal revenue-raising
measure. The Court stated the law:
Fees charged by a municipality must be reasonably proportionate to the
direct and indirect costs of providing the service for which the fee is charged.
Merrelli v St Clair Shores, 355 Mich 575, 583, 588, 96 NW2d 144 (1959). Such
a fee is presumed reasonable unless it is facially or evidently so "wholly out of
proportion to the expense involved" that it "must be held to be a mere guise or
subterfuge to obtain the increased revenue." Id. at 584, quoting Vernor v
Secretary of State, 179 Mich 157, 168, 170, 146 NW 338 (1914). [Id. at 231-232
(emphasis added).]
Kircher considered a $50 fee imposed for missing a scheduled property inspection, even though
the fees for actual inspections were lower. Id. at 231. This Court found "no showing that the
[$50] fee generates more than incidental revenue or that it is not reasonably related to the cost of
sending an inspector to a location and then rescheduling the inspection." Id. at 232.
Whether municipal "fees" are actually taxes that must be approved by local voters under
the Headlee amendment12 has also been the subject of appellate review. Wheeler v Shelby
12
The Headlee amendment provides, in pertinent part: "Units of Local Government are hereby
prohibited from levying any tax not authorized by law or charter when this section is ratified . . .
without the approval of a majority of the qualified electors of that unit of Local Government
voting thereon." Const 1963, art 9, § 31.
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Charter Twp, 265 Mich App 657, 661-662; 697 NW2d 180 (2005), considered whether
municipal solid waste disposal fees were actually taxes:
Plaintiff alleged that the various fees . . . constituted taxes because those
fees served a revenue generating purpose and were disproportionate to the value
of the benefit provided . . . . Plaintiff further alleged that the tax imposed by . . .
the ordinance was not approved by a majority of the township electors as
mandated by the Headlee Amendment . . . .
Wheeler discussed the fee versus tax distinction: "'Generally, a "fee" is "exchanged for a service
rendered or a benefit conferred, and some reasonable relationship exists between the amount of
the fee and the value of the service or benefit." . . . A "tax," on the other hand, is designed to
raise revenue.'" Id. at 665 (citations omitted; emphasis added).
Wheeler noted three criteria for a municipal user or service fee: "(1) [A] user fee serves a
regulatory purpose, (2) a user fee is proportionate to the necessary costs of that service, and (3) a
user fee is voluntary." Id., citing Bolt v City of Lansing, 459 Mich 152, 161-162; 587 NW2d 264
(1998).13 Bolt is the principal case for the three "fee" criteria. "These factors should be
considered in their totality, and a weakness in one area does not mandate a particular finding."
Westlake Transportation, Inc, supra at 612.
Similarly, Lapeer Co Abstract & Title Co v Lapeer Co Register of Deeds, 264 Mich App
167, 181-182; 691 NW2d 11 (2004), considered whether a $1 a page fee for copies of property
records was a tax for Headlee purposes. This Court held that it was not. The $1 fee for copies
was imposed by the register of deeds as a seller in a transaction. Id. at 182. See also Kowalski v
Livonia, 267 Mich App 517, 520; 705 NW2d 161 (2005) (holding that "franchise fee" imposed
by city on cable service provider was not a tax for Headlee purposes).
In Mapleview Estates, Inc v Brown City, 258 Mich App 412; 671 NW2d 572 (2003), a
manufactured housing community developer challenged, as a disguised tax, the city's raising of
fees for connecting new homes to its water and sewer systems. "'[T]here is no bright-line test for
distinguishing between a valid user fee and a tax that violates the Headlee Amendment.'" Id. at
414 (citation omitted). Applying the three-part Bolt test, this Court held that the charges were
fees, not taxes. The charges were lower than the actual costs and were voluntary, because a
homeowner could choose not to use the services. Id. at 415-416.
In Gorney v Madison Hts, 211 Mich App 265; 535 NW2d 263 (1995), the plaintiff
challenged city property tax administration fees. The fees were authorized by MCL 211.44(7).
The plaintiff contended that the fees violated the distinct statement clause and the prohibition
13
See also Jones v Detroit Bd of Water Comm'rs, 34 Mich 273, 275 (1876) (holding that "water
rates paid by consumers are in no sense taxes, but are nothing more than the price paid for water
as a commodity").
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against double taxation.14 Id. at 267. Relying on Foreman v Oakland Co Treasurer, 57 Mich
App 231, 238; 226 NW2d 67 (1974), Gorney noted that "in order for a fee to be deemed a tax,
there must be no reasonable relationship between the fee and the expense of the service
provided." Gorney, supra at 268 (emphasis added). Gorney discussed "taxes" versus
"assessments":
"[T]axes and assessments . . . have a number of elements in common.
Both are exactions or involuntary contributions of money the collection of which
is sanctioned by law and enforceable by the courts. . . . [H]owever, . . .
[e]xactions which are imposed primarily for public rather than private purposes
are taxes. . . . Revenue from taxes, therefore, must inure to the benefit of all, as
opposed to exactions from a few for benefits that will inure to the persons or
group assessed." [Id. at 269 (citations omitted; emphasis added).]
Gorney held that the property tax administration fees were not unconstitutional taxes disguised
as fees. Id. at 267-270.
We find that under these standards, regardless of whether the three-pronged Bolt test or
the City of Dearborn standard is applied, the driver responsibility fees are not fees but taxes.15
Applying the Bolt standards, we conclude that even if the driver responsibility fees serve a
regulatory purpose, they are not proportional to the cost of any service provided and are clearly
not voluntary, but automatic upon the conviction of relevant offenses. MCL 257.732a(2).16
Moreover, rather than being fees for a service provided, the driver responsibility fees are a
revenue-raising measure for the general and fire protection funds. MCL 257.732a(10).
Alternatively, applying the City of Dearborn standard, the driver responsibility fees are
clearly unreasonable as fees, as they are beyond the cost of any regulation of driver's licenses.
There is no evidence that these substantial fees are proportional to the costs of regulating the feepayers' driver's licenses. Therefore, we hold that the driver responsibility fees are in reality taxes
designed to raise revenue and, as such, were required to comply with the distinct statement
clause.
The next question is whether the driver responsibility "fees," which we hold to be taxes,
are "distinctly state[d]," as required by the distinct statement clause. Our Supreme Court has
stated that the intent of the distinct statement clause is "to prevent the Legislature from being
14
See Const 1963, art 9, § 3.
15
Notably, at oral argument, the assistant attorney general representing the Secretary of State
conceded as much.
16
Although the only sanction for failure to pay the "fee" is revocation of the offender's driver's
license, we hold that this sanction is severe enough to remove the "fee" from the realm of
voluntariness. The loss of a driver's license is a significant enough sanction that the payer of the
"fee" cannot be said to do so "voluntarily."
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deceived in regard to any measure for levying taxes, and from furnishing money that might by
some indirection be used for objects not approved by the Legislature." Westinghausen v People,
44 Mich 265, 267; 6 NW 641 (1880) (emphasis added), quoted in Rockwell Spring & Axle Co v
Romulus Twp, 365 Mich 632, 637-638; 114 NW2d 166 (1962); see also Dukesherer Farms, Inc v
Dep't of Agriculture Director, 73 Mich App 212, 221; 251 NW2d 278 (1977) (holding that even
if a statutory assessment were construed to instead be a tax, the statute would not be
unconstitutional because the language of the statute "is not obscure or deceitful"). There is
nothing obscure or deceitful about the way the driver responsibility "fees" are stated in the law.
While the statute does not identify the fees as taxes, the amounts of the assessments to be paid by
drivers who are convicted of specific misdemeanor or felony offenses are clearly stated. MCL
257.732a(2)(a) and (b). Accordingly, because the actual "fees" paid are not obscure or deceitful,
the distinct statement clause has not been violated, and DRL "fees" are not unconstitutional.
V. Conclusions
The driver responsibility "fees" imposed by MCL 257.732a(2)(a) and (b) do not violate
the double jeopardy or the equal protection guarantees of the United States and Michigan
constitutions or the uniformity of taxation clause of the Michigan Constitution. Although the
driver responsibility "fees" are in reality taxes, they are distinctly stated and do not violate the
distinct statement clause of the Michigan Constitution. Therefore, we affirm.
/s/ Kurtis T. Wilder
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