MICHIGAN EDUCATION ASSOCIATION V SECRETARY OF STATE
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
MICHIGAN EDUCATION ASSOCIATION,
FOR PUBLICATION
August 28, 2008
9:05 a.m.
Petitioner-Appellee,
v
No. 280792
Ingham Circuit Court
LC No. 06-001537-AA
SECRETARY OF STATE,
Respondent-Appellant,
Advance Sheets Version
and
MICHIGAN CHAMBER OF COMMERCE,
MICHIGAN STATE AFL-CIO, CHANGE TO
WIN, MACKINAC CENTER FOR PUBLIC
POLICY, SENATE MAJORITY LEADER,
SENATE MAJORITY FLOOR LEADER, and
SENATE CAMPAIGN AND OVERSIGHT
COMMITTEE CHAIR,
Amici Curiae.
Before: Wilder, P.J., and O’Connell and Whitbeck, JJ.
O’CONNELL, J.
Respondent Secretary of State appeals by leave granted the trial court order setting aside
as arbitrary and capricious respondent’s declaratory ruling interpreting § 57 of the Michigan
Campaign Finance Act, MCL 169.201 et seq. (MCFA). We reverse.
I. Basic Facts and Procedural History
A. The Parties
1. The Secretary of State
The respondent-appellant in this matter is the Secretary of State (the Secretary). The
position of Secretary of State is an elective office under the Michigan Constitution. See Const
-1-
1963, art 5, § 21. The Secretary is the single executive heading the Department of State (the
Department). See Const 1963, art 5, § 3. The Department of State is one of the principal
departments in the executive branch of state government. See MCL 16.104(1). The Secretary
has certain duties and responsibilities, see MCL 11.4 et seq., including the administration of the
MCFA, MCL 169.215. Under the MCFA, MCL 169.215(1)(e), and under the Administrative
Procedures Act, MCL 24.263, the Secretary of State may issue “a declaratory ruling as to the
applicability to an actual state of facts of a statute.”
2. The MEA
The petitioner-appellee in this matter is the Michigan Education Association (MEA).
The MEA is a voluntary, incorporated labor organization that in August 2006 represented some
136,000 members employed by public schools, colleges, and universities throughout Michigan.
The MEA’s MEA-PAC is a separate segregated fund under § 55 of the MCFA, MCL 169.255.
According to the MEA: MEA-PAC is funded in part by MEA member payroll deductions; the
MEA or its affiliates have entered into collective bargaining agreements with various public
school districts throughout the state; some of those collective bargaining agreements, including
the agreement between the Kalamazoo County Education Association/Gull Lake Education
Association (presumably affiliates of the MEA) and the Gull Lake Public Schools, include a
requirement that the school district employer administer a payroll deduction plan for
contributions to MEA-PAC; the Gull Lake collective bargaining agreement also requires the Gull
Lake Public Schools to make other payroll deductions, such as the payment of MEA dues and
service fees; and in 2006, it proposed that it pay the Gull Lake Public Schools, in advance, for all
anticipated costs of Gull Lake Public Schools attributable to administering payroll deductions to
MEA-PAC or any other separate segregated fund affiliated with the MEA. The MEA contends
that under this proposal, Gull Lake Public Schools would not incur any costs or expenses in
administering the requested deductions, because the Gull Lake Public Schools would be
reimbursed, in advance, for such costs and expenses.
3. The Amici
Various entities and persons have filed helpful briefs amicus curiae in this matter. They
are the Mackinac Center for Public Policy, the Michigan State AFL-CIO and Change to Win, the
Michigan Chamber of Commerce, and Senate Majority Leader Michael D. Bishop, Senate
Majority Floor Leader Alan Cropsey, and Senator Michael McManus, Chairman of the Senate
Campaign and Election Oversight Committee.
B. The MEA’s Request for Declaratory Ruling
On August 22, 2006, the MEA filed a request for a declaratory ruling by the Secretary.
The MEA detailed the facts concerning the Gull Lake Public Schools summarized above and
asserted that the administration of the payroll deductions by the school district did not “constitute
an ‘expenditure’ under the MCFA” and did not constitute a violation of § 57 of the MCFA, MCL
169.257. The MEA then requested a declaratory ruling on three questions:
-2-
1. May the Gull Lake Public Schools continue to make and transmit to
MEA-PAC the payroll deductions requested by MEA members through a
properly completed, voluntary consent form?
2. May the Gull Lake Public Schools, consistent with the provisions of
the MCFA, administer the payroll deductions to MEA-PAC if either the MEA or
MEA-PAC pays the school district, in advance, for any costs associated with
administering those payroll deductions?
3. What costs should be considered by the Gull Lake Public Schools in
determining the costs attributable to administering the payroll deductions that are
to be transmitted to the PAC [political action committee]?
C. The Secretary’s Declaratory Ruling
On November 20, 2006, the Secretary issued her declaratory ruling in response to the
MEA’s request. Regarding the MEA’s first question, the Secretary noted that the Department of
State and the Attorney General had both concluded that a public body is prohibited from
collecting and remitting contributions to a “committee” through its administration of a payroll
deduction plan. The Secretary noted that § 55 of the MCFA allowed the named private entities
to make “expenditures” for the establishment and administration and solicitation of contributions
to a separate segregated fund to be used for political purposes. However, citing § 55(1) and § 57,
the Secretary went on to note that “no corresponding provision authorizes a public body to do so.
“The Secretary stated that “[t]he Department is constrained to conclude that the school district is
prohibited from expending government resources for a payroll deduction plan that deducts wages
from its employees on behalf of MEA-PAC.”
Regarding the MEA’s second question, the Secretary stated that the Department was
mindful of the Attorney General’s recent conclusion that
a violation [of § 57] could not be avoided by requiring the union to pay the
anticipated costs before they are incurred. The language of MCL 169.257(1)
unqualifiedly prohibits the use of public resources for the described purposes,
making no exception for compensated uses. [OAG, 2005-2006, No 7187, p 81
(February 16, 2006).]
The Secretary stated that this opinion was consistent with the Department’s previous
position, citing several previous interpretative statements, and that the Department saw no reason
to depart from this rationale. The Secretary also concluded that it was unnecessary to address the
MEA’s third question, given her response to the first and second questions.
-3-
D. The Trial Court’s Decision
The MEA filed in the Ingham Circuit Court a petition for review challenging the
Secretary’s declaratory ruling.1 On September 4, 2007, the trial court issued its opinion setting
aside the Secretary’s declaratory ruling. The trial court summarized the Secretary’s declaratory
ruling and stated: “This means that unions cannot take voluntary payroll deductions from their
member employees and contribute those funds to PACs established by the unions, if the
employees in the union work for a public body.”
After stating the standard of review contained in the Administrative Procedures Act,
MCL 24.306(1),2 the provisions of § 57 of the MCFA, and the positions of the parties, the trial
court determined that the Secretary’s declaratory ruling was “arbitrary, capricious, and an abuse
of discretion.” The trial court concluded that under the plain language of § 57, the administration
of payroll deductions to a union PAC constitutes an “expenditure” under the MCFA. The trial
court then stated:
However, where the costs of administration are reimbursed, no transfer of
money to the union PAC occurs, and therefore an “expenditure” has not been
made within the meaning of the MCFA. Thus, a public body may administer
payroll deductions so long as all costs of making deductions are reimbursed by
the PAC. § 57 does not explicitly prohibit a public body from administering the
payroll deduction requests of its employees.
The trial court also disagreed with the Secretary’s assertion that her declaratory ruling
was consistent with past rulings and statements. While the trial court agreed with the Secretary
that she is free to make prospective changes in the course and direction of the declaratory
rulings, it stated that such changes “must not be arbitrary, capricious, or in violation of any other
law.” The trial court concluded that the Secretary made such an arbitrary change when she
issued her declaratory ruling. The trial court then held that public bodies, such as the Gull Lake
Public School system, may “administer payroll deductions requested by their employees,
provided that all expenses of making the deductions are borne by the PAC or its sponsoring labor
organization and are paid in advance.”
1
“A declaratory ruling is subject to judicial review in the same manner as an agency final
decision or order in a contested case.” MCL 24.263.
2
See also Const 1963, art 6, § 28.
-4-
E. The Secretary’s Appeal
On September 27, 2007, the Secretary filed an application for leave to appeal the trial
court’s decision, and on December 19, 2007, a panel of this Court granted that application. In
her brief on appeal, the Secretary outlined the question involved as follows:
The Secretary of State issued a declaratory ruling that § 57 of the
Michigan Campaign Finance Act prohibits a school district, as a public body,
from administering a payroll deduction plan on behalf of a union’s political action
committee and that a violation could not be remedied by a union’s reimbursement
of the costs associated with administering such a plan. On appeal, the circuit
court found that the plain language of § 57 prohibited the administration of
payroll deductions by a union political action committee, but that where the costs
of administration are reimbursed in advance, a violation does not occur. Was the
circuit court correct in finding that the declaratory ruling by the Secretary of State
was arbitrary, capricious, and an abuse of discretion?
II. Standard of Review
We review de novo questions of statutory interpretation.
Independence Agency, 232 Mich App 391, 406; 591 NW2d 314 (1998).
Faircloth v Family
[A]gency interpretations are entitled to respectful consideration, but they
are not binding on courts and cannot conflict with the plain meaning of the
statute. While the agency’s interpretation may be helpful in ascertaining the
legislative intent, courts may not abdicate to administrative agencies the
constitutional responsibility to construe statutes. Giving uncritical deference to an
administrative agency would be such an improper abdication of duty. [In re
Complaint of Rovas Against SBC Michigan, 482 Mich 90, 117-118; 754 NW2d
259 (2008).]
III. Statutory Interpretation
MCL 169.257(1) provides, in pertinent part:
A public body[3] or an individual acting for a public body shall not use or
authorize the use of funds, personnel, office space, computer hardware or
software, property, stationery, postage, vehicles, equipment, supplies, or other
public resources to make a contribution or expenditure or provide volunteer
personal services that are excluded from the definition of contribution under
section 4(3)(a).
3
There is no dispute that a school district is a public body and, therefore, governed by MCL
169.257.
-5-
The MCFA defines “expenditure” as “a payment, donation, loan, or promise of payment
of money or anything of ascertainable monetary value for goods, materials, services, or facilities
in assistance of, or in opposition to, the nomination or election of a candidate, or the
qualification, passage, or defeat of a ballot question.” MCL 169.206(1). “[W]hen a statute
specifically defines a given term, that definition alone controls.” Tryc v Michigan Veteran’s
Facility, 451 Mich 129, 136; 545 NW2d 642 (1996). The Secretary previously issued an
interpretive statement indicating that “the department interprets the term ‘expenditure’ to include
the costs associated with collecting and delivering contributions to a committee” and that “[a]
payroll deduction system is one method of collecting and delivering contributions.”
Interpretative Statement to Mr. Robert LaBrant (November 14, 2005).
None of the parties appears to question this interpretation.4 Rather, as stated above, the
sole issue before us is whether, under the MCFA, advance reimbursement for the costs of a
payroll deduction system prevents what is otherwise an illegal expenditure from ever becoming
an “expenditure.” We conclude that it does not. We find nothing in the plain language of the
MCFA that indicates reimbursement negates something that otherwise constitutes an
expenditure. This Court presumes that the Legislature intended the meaning clearly expressed in
unambiguous statutory language, and no further construction is required or allowed. Nastal v
Henderson & Assoc Investigations, Inc, 471 Mich 712, 720; 691 NW2d 1 (2005). We note that
although MCL 169.204(3)(c) provides that “[a]n offer or tender of a contribution, if expressly
and unconditionally rejected, returned, or refunded in whole or in part within 30 business days
after receipt” is not a contribution, MCL 169.206(2)(e) provides that only rejection and return
prevent an expenditure and does not permit “refund.” “[N]othing may be read into a statute that
is not within the manifest intent of the Legislature as derived from the act itself.” Omne
Financial, Inc v Shacks, Inc, 460 Mich 305, 311; 596 NW2d 591 (1999). We may not assume
that the omission of the term “refund” from MCL 169.206(2)(e) was inadvertent. South Haven v
Van Buren Co Bd of Comm’rs, 478 Mich 518, 530; 734 NW2d 533 (2007).
We also conclude that reimbursement, advance or otherwise, does not prevent an
otherwise illegal expenditure from ever becoming an expenditure because “there is no transfer of
value.” Contrary to the trial court’s reasoning, a transfer of value has occurred because there is
time spent by employees that monetary reimbursement cannot return. For example, it takes
employees to distribute voluntary payroll deduction forms, receive the signed forms, make
certain the forms conform to legal requirements, enter the information into the payroll system,
and update the information yearly. Although monetary reimbursement can compensate the
school district for the salary paid for the time spent by the employees performing those functions,
the time spent on non-school district business is irretrievably lost and cannot be recovered. This
work constitutes a transfer of value for which monetary reimbursement is insufficient.
Accordingly, reimbursement does not prevent an expenditure from occurring. The trial court
erred by concluding that reimbursement prevents an expenditure from occurring, and its
declaratory ruling was arbitrary and capricious.
4
In fact, the trial court and the appellate briefs concede that an expenditure has occurred absent
the asserted magical effects of prior reimbursement.
-6-
IV. Additional Issues
The dissent raises two issues that were not set forth in the statement of questions
presented on appeal, nor were they raised by any of the nine parties or amici in their briefs or at
oral argument. We are not obligated to consider issues not properly raised and preserved or
those that were first raised on appeal, People v Stanaway, 446 Mich 643, 694; 521 NW2d 557
(1994); Booth Newspapers, Inc v University of Michigan Bd of Regents, 444 Mich 211, 234; 507
NW2d 422 (1993), and we generally do not consider any issues not set forth in the statement of
questions presented, Caldwell v Chapman, 240 Mich App 124, 132; 610 NW2d 264 (2000). We,
therefore, decline to address them because they are not properly before us. Polkton Charter Twp
v Pellegrom, 265 Mich App 88, 95; 693 NW2d 170 (2005). Although the dissent’s legal
argument may “have substantive merit, it can be of no avail [because each of the parties and
amici] failed to raise the issue in a timely fashion.” Forton v Laszar, 463 Mich 969, 970 (2001)
(CORRIGAN, C.J., concurring).5
If the parties wish to make arguments to resolve these “other issues,” they are free to file
a separate lawsuit. However, this Court should not sua sponte create issues on appeal and then
remand to the trial court for a determination of those issues, or request additional briefing to
dispose of the issues for the first time on appeal.6
5
The dissent’s description of the MCFA as a “self-contained looking-glass” full of circus type
mirrors may be accurate. However, in light of the MCFA prohibitions, we believe that the
dissent “has traveled one mirror too far.” Unlike § 55 for corporations, § 57 does not authorize a
public body to make expenditures to establish, administer, or solicit “contributions” for a
management PAC, nor is there authorization to administer a payroll deduction plan for
“contributions” to a separate segregated fund. Absent such authorization, school districts are
prohibited from engaging in the political process. In our opinion, the prohibition on expenditures
and contributions, coupled with the absence of express permission for a payroll deduction plan,
should end the discussion.
We concede that the Legislature may have the authority to allow public bodies to engage
in some limited form of partisan politics. However, until the Legislature explicitly makes such a
pronouncement, courts should be reluctant to allow public bodies to engage in any form of
politics. Sincere advocates can read self-contained looking-glass legislation and reach different
results, but it is beyond question that the intent of this legislation was to prevent taxpayer funded
public bodies from engaging in partisan politics. In our view, the methodological manner in
which the dissent interprets the MCFA turns the statute upside down and inside out, resulting in
permission for that which the statute was intended to prevent.
6
If we were to address the dissent’s issues, we would still reverse. The MCFA treats public
entities and private entities differently. Compare MCL 169.254 with 169.257. Given this
differential treatment, we would conclude that the allocated costs of collecting and delivering
payroll deductions by members of the MEA affiliate to the MEA-PAC are both an expenditure
and a contribution to the MEA-PAC by the Gull Lake Public Schools. See OAG, 2005-2006, No
7187, p 81, (February 16, 2006) (Concluding that “[a] public body’s use of its resources to
administer the payroll deduction plan would ‘cause’ the contribution to ‘happen,’ and thus
violate section 57.”).
(continued…)
-7-
We reverse the circuit court’s order. We do not retain jurisdiction.
/s/ Peter D. O’Connell
/s/ Kurtis T. Wilder
(…continued)
Under our system of government, public bodies should not participate in the political
process. To effectuate this, our Legislature prohibited them from making “expenditures” and
“contributions.” MCL 169.257(1). Over time, the prohibition became more detailed, and now
includes “the use or authoriz[ation of] the use of funds, personnel, office space, computer
hardware or software, property, stationery, postage, vehicles, equipment, supplies, or other
public resources to make a contribution or expenditure . . . .” Id. Numerous Attorney General
opinions have made this proposition clear. See, e.g., OAG, 1993-1994, No 6763, p 45 (August
4, 1993) (“School districts may not permit their offices and phone equipment to be used in a
restrictive manner for advocacy of one side of a ballot issue . . . . School districts may not
endorse a particular candidate or ballot proposal.”); OAG, 1965-1966, No 4291, p 1 (January 4,
1965) (School district not allowed to spend funds to advocate a favorable vote on a tax and bond
ballot proposal). Given the consistency with which the MCFA has been interpreted to prohibit
public bodies from spending public funds or otherwise utilizing public resources paid for by all
taxpayers to advocate for a particular political position or candidate, it is absolutely illogical,
inconsistent, and contrary to the very purpose of MCL 169.257 to conclude that it is permissible
for a school district (a public body) to administer payroll deductions sent to MEA-PAC (a group
whose very purpose is to advocate for various political positions and candidates).
-8-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
