DANIEL ADAIR V STATE OF MICHIGAN
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Michigan Supreme Court
Lansing, Michigan
Opinion
Chief Justice
Justices
Maura D. Corrigan
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
FILED JUNE 9, 2004
DANIEL ADAIR, a taxpayer of
the Fitzgerald Public
Schools, and FITZGERALD
PUBLIC SCHOOLS, et al.,
Plaintiffs-Appellants,
o. 121536
N
v
STATE OF MICHIGAN, DEPARTMENT
OF EDUCATION, DEPARTMENT OF
MANAGEMENT AND BUDGET, and
TREASURER OF THE STATE OF
MICHIGAN,
Defendants-Appellees.
_______________________________
BEFORE THE ENTIRE BENCH
TAYLOR, J.
This Court is once again called on to decide if the
state has met its constitutional mandate to adequately fund
public
education.
districts
seeking
Plaintiffs
a
declaratory
are
taxpayers
judgment
that
and
the
school
state
failed to meet its funding responsibility mandated by Const
1963, art 9, § 29, a section of our Constitution that is
commonly known as the “Headlee Amendment.”
The complaint
asserts that the state did not provide funding to school
districts in Michigan for the necessary increased costs of
providing activities and services that are new or mandated
at an increased level since December 23, 1978.
The Court
of Appeals found that claims plaintiffs did raise or could
have raised in earlier suits were barred pursuant to the
doctrine of res judicata.1
As to those issues that were not
subject to res judicata analysis, the Court of Appeals held
that they were otherwise barred because of releases the
parties executed or the activities2 were not new or were not
increased activities within the meaning of Const 1963, art
9, § 29.
We affirm in part, reverse in part, and remand.
I. CONSTITUTIONAL PROVISIONS
Under Michigan’s Headlee Amendment,3 as of 1978, the
state is forbidden from reducing funding levels for the
necessary costs of existing activities or services mandated
by the Legislature, and is to completely fund the necessary
costs of new or increased activities or services mandated
by the Legislature:
1
Adair v Michigan, 250 Mich App 691; 651 NW2d 393
(2002).
2
Throughout
this
opinion,
for
brevity’s
“activities and services” are frequently referred
simply “activities.”
3
Const 1963, art 9, §§ 25-34.
2
sake,
to as
The state is hereby prohibited from reducing
the state financed proportion of the necessary
costs of any existing activity or service
required of units of Local Government by state
law. A new activity or service or an increase in
the [level] of any activity or service beyond
that required by existing law shall not be
required by the legislature or any state agency
of units of Local Government, unless a state
appropriation is made and disbursed to pay the
unit of Local Government for any necessary
increased costs. The provision of this section
shall not apply to costs incurred pursuant to
Article VI, Section 18.
[Const 1963, art 9, §
29.]
These two different provisions in art 9, § 29 have
been described by this Court as follows:
The
first
sentence
of
this
provision
prohibits reduction of the state proportion of
necessary costs with respect to the continuation
of state-mandated activities or services.
The
second sentence requires the state to fund any
additional necessary costs of newly mandated
activities or services and increases in the level
of such activities or services from the 1978 base
year.
[Judicial Attorneys Ass’n v Michigan, 460
Mich 590, 595; 597 NW2d 113 (1999), quoting 228
Mich App 386, 396; 597 NW2d 378 (1998).]
To assist the public in understanding the different
thrusts of these two sentences, this Court has described
the
first
provision
sentence
and
the
as
a
second
“maintenance
of
sentence
a
unfunded mandates” (POUM) provision.
as
support”
(MOS)
“prohibition
See id.
on
Accordingly,
to establish a Headlee violation under the MOS clause, the
plaintiffs must show “(1) that there is a continuing state
mandate, (2) that the state actually funded the mandated
activity at a certain proportion of necessary costs in the
3
base year of 1978-1979, and (3) that the state funding of
necessary
costs
has
succeeding year.”
dipped
below
that
proportion
in
a
Oakland Co v Michigan, 456 Mich 144,
151; 566 NW2d 616 (1997)(opinion by Kelly, J.).
Under the
POUM clause, they must show that the state-mandated local
activity was originated without sufficient state funding
after the Headlee Amendment was adopted or, if properly
funded
initially,
increased
by
the
that
state
the
mandated
without
state
local
funding
role
was
for
the
necessary increased costs.
However, not all activity changes established pursuant
to statute or rule constitute “new or increased” activity
requiring state funding.
MCL 21.234(5) explains what the
POUM provision excludes:
(a) A requirement imposed on a local unit of
government by a state statute or an amendment to
the state constitution of 1963 adopted pursuant
to an initiative petition, or by a state law or
rule enacted or promulgated to implement such a
statute or constitutional amendment.
(b) A requirement imposed on a local unit of
government by a state statute or an amendment to
the state constitution of 1963, enacted or
adopted pursuant to a proposal placed on the
ballot by the legislature, and approved by the
voters, or by a state law or rule enacted or
promulgated to implement such a statute or
constitutional amendment.
(c) A court requirement.
(d) A due process requirement.
(e) A federal requirement.
4
(f) An implied federal requirement.
(g) A requirement of a state law which
applies
to
a
larger
class
of
persons
or
corporations and does not apply principally or
exclusively
to
a
local
unit
or
units
of
government.
(h) A requirement of a state law which does
not require a local unit of government to perform
an activity or service but allows a local unit of
government to do so as an option, and by opting
to perform such an activity or service, the local
unit of government shall comply with certain
minimum standards, requirements, or guidelines.
(i) A requirement of a state law which
changes the level of requirements, standards, or
guidelines of an activity or service that is not
required of a local unit of government by
existing law or state law, but that is provided
at the option of the local unit of government.
(j) A requirement of a state law enacted
pursuant to section 18 of article 6 of the state
constitution of 1963.
Thus, under a POUM analysis, not every required change in
school activities requires state funding under the Headlee
Amendment.
Judicial
Attorneys
Ass’n,
supra
at
603.
Headlee, at its core, is intended to prevent attempts by
the Legislature “to shift responsibility for services to
the local government . . . in order to save the money it
would have had to use to provide the services itself.”
Id.
at 602-603.
Taxpayers
alleging
a
violation
of
the
Headlee
Amendment may file a request for declaratory relief in the
5
Court of Appeals under Const 1963, art 9, § 32.4
case,
plaintiffs
have
brought
suit
under
art
In this
9,
§
32,
alleging that the Legislature violated the second provision
of art 9, § 29 by requiring new activities and increases in
existing activities without providing sufficient additional
funding.
Because
of
the
extensive
history
of
similar
litigation between these parties, a brief review of the
earlier suits is required.
II. HISTORY
Many of these plaintiffs have brought allegations of
underfunding against these defendants in earlier suits.
1980,
the
first
of
these
suits
was
resolved until seventeen years later.
filed;
it
was
In
not
Durant v Michigan,
456 Mich 175; 566 NW2d 272 (1997) (Durant I).
Chiefly at
issue in Durant I was a reduction in state funding for
special education activities.
only
granted
declaratory
Ultimately, this Court not
relief
for
the
plaintiffs,
but
also, in an award that deeply divided the Court on the
issue of the Court’s authority, awarded money damages.
4
The remedy provision reads:
Any taxpayer of the state shall have
standing to bring suit in the Michigan State
Court of Appeals to enforce the provisions of
Sections 25 through 31, inclusive, of this
Article and, if the suit is sustained, shall
receive from the applicable unit of government
his costs incurred in maintaining such suit.
6
In
this case, there is no claim for damages and we need not
revisit the issue of the propriety of a damages award, but
would note that even the proponents of money damages in
Durant
I
described
it
as
“atypical”
and
predicated
the
claim for the award on the prolonged duration of Durant I.
Subsequently, the Legislature, perhaps taken aback by the
monetary damages award, undertook to work statewide equity
by
making
available
similar
relief
to
those
local
and
intermediate school districts that were not plaintiffs in
Durant I.
As the legislation described it, it was to be in
“settlement and compromise of any claim or claims that were
or
could
have
been
asserted
by
these
districts
and
intermediate districts” in the Durant I litigation.
388.1611f(1), (2), (4).
however,
a
school
MCL
To receive the settlement funds,
district
had
to
provide
the
State
Treasurer with a board resolution
waiving any right or interest the district or
intermediate district has or may have in any
claim or litigation based on or arising out of
any claim or potential claim through September 3,
1997 that is or was similar to the claims
asserted by the plaintiffs in the consolidated
cases known as Durant v State of Michigan. [MCL
388.1611f(1). Similarly, see MCL 388.1611f(2).]
Three hundred eighty-two of the local and intermediate
school districts named as plaintiffs in the instant suit
adopted the statutorily prescribed resolution, timely sent
7
the
executed
resolutions
to
the
State
Treasurer,
and
received settlement payments.5
Several months later, in 1998, plaintiffs taxpayers
and school districts brought a second suit, alleging that
the system the state used for distributing funds resulted
in an underfunding of the schools for the years 1997-1998
through 2000-2001 in violation of the Headlee Amendment.
Durant v Michigan (On Remand), 238 Mich App 185; 605 NW2d
66
(1999)
(Durant
II).
The
Court
of
Appeals
granted
declaratory relief largely in the plaintiffs’ favor.
This
Court denied leave on the substantive issues of the case.
462 Mich 882 (2000).
A year later, similar plaintiffs returned to file two
suits.
In the first, Durant v Michigan, 251 Mich App 297;
650 NW2d 380 (2002) (Durant III), the plaintiffs alleged
that 2000 PA 297, which had been enacted in response to
Durant II to cure the deficiencies the Court had found in
the
State
School
constitutional.
system
was
Aid
Act,
MCL
388.1601
et
seq.,
was
However, the Court of Appeals found this
constitutional,
467 Mich 900 (2002).
and
this
Court
denied
leave.
The second lawsuit, which is the
subject of this appeal, was similar to Durant I except,
5
For further discussion of the settlement and
resolution, see the Court of Appeals opinion in this case,
Adair, 250 Mich App 691.
8
unlike Durant I, which focused on the first sentence of art
9, § 29, the MOS clause, this action focused on the second
sentence, the POUM clause.
state
did
not
provide
Thus, plaintiffs claim that the
sufficient
funding
for
activities
that were new or were mandated to be provided at increased
levels, causing a Headlee-prohibited unfunded mandate.
Specifically,
plaintiffs
alleged
in
count
I
that,
through seven administrative rules,6 the state mandated that
the
school
districts
provide
a
variety
of
new
special
education activities and services7 and then failed to fund
those activities.
In count II, they alleged that, pursuant
to MCL 380.1284, school districts were required to increase
annually the hours of pupil instruction without increased
state funding.8
6
These
340.1740, R
340.1758.
Count III alleged that, through twelve
are: 1999 AC, R 340.1721e, R 340.1738,
340.1744, R 340.1745, R 340.1750, and
R
R
7
These include provisions for transitional services, a
lower student-teacher ratio in four different situations, a
classroom aide, adaptive devices, a director of special
education, and autistic services.
8
In 1978, local school districts were required to
provide a minimum of 900 hours of pupil instruction a year;
the statute increased this incrementally, requiring 1134
hours by 2006-2007.
9
statutes9 and Executive Order No. 2000-9, the state mandated
local
districts
to
provide
activities
and
services
not
required in 1978,10 again without providing funding.
9
MCL 380.622, 380.1169, 380.1272a, 380.1277, 380.1278,
380.1279,
380.1280,
380.1282,
380.1282a,
380.1527,
388.1752, and 257.1851.
10
The Court of Appeals opinion succinctly described
these as
(1) an annual financial records audit by a
certified public accountant for intermediate
school districts; (2) the instruction of students
regarding dangerous communicable diseases; (3)
specialized training for teachers regarding human
immunodeficiency virus infection and acquired
immunodeficiency syndrome; (4) the provision of a
breakfast program; (5) the annual development and
implementation of a three- to five-year school
improvement plan [the “school improvement plan”
obligation]; (6) the development of a continuing
school improvement process; (7) the provision of
a
core
academic
curriculum;
(8)
the
administration of state assessment tests to high
school pupils; (9) the provision of remedial
educational services and periodic retesting for
pupils who fail the required assessment tests;
(10) the accreditation of school buildings; (11)
the provision of “learning processes” and special
and sufficient assistance to each pupil in order
to enable each pupil to achieve a state-endorsed
diploma [the “special assistance” obligation];
(12) the provision of summer school classes for
pupils who fail to meet standards for basic
literacy skills or basic mathematics skills by
the end of the third grade year; (13) the
provision of a minimum of four days of “teacher
professional development” in the 2000-01 school
year and a minimum of five days in the 2001-02
school year and each subsequent school year; (14)
the
creation
and
maintenance
of
data
on
“essential
student
data
elements”
and
the
transmission of this data through the Internet in
a
standardized
form
to
the
Department
of
(continued…)
10
Defendants moved for summary disposition of all counts
pursuant to MCR 2.116(C)(7) (claim barred as a matter of
law) and C(8) (failure to state a claim on which relief can
be granted), as well as summary disposition of count I
pursuant to C(10) (no genuine issue of material fact).
Defendants argued chiefly that, under C(7), plaintiffs
were barred by the doctrine of res judicata because of the
Durant I litigation and by release and waiver because of
the statutorily required release they had executed pursuant
to
the
Legislature’s
388.1611f.
Defendants
post-Durant
further
I
argued
enactment,
that
the
MCL
claims
failed either as a matter of law under C(8) or as a matter
of fact under C(10) because plaintiffs did not sufficiently
allege the type or the extent of the necessary increased
costs of new activities.
See Oakland Co, 456 Mich 166.
Plaintiffs responded that res judicata did not apply
because Durant I resolved only issues relating to the first
sentence of art 9, § 29, whereas this action concerns the
second
sentence.
Furthermore,
they
asserted
that
res
judicata was inapplicable because the relief they sought
(continued…)
Education
.
.
.
[the
“record-keeping”
obligation];
and
(15)
the
provision
of
compensation to school bus drivers for time spent
attending various training and tests.
[250 Mich
App 699-701.]
11
was prospective and covered a different period than that
covered by Durant I.
With regard to those plaintiffs who
signed the statutory release, they claimed they should not
have
lesser
rights
than
the
actual
litigants
and
that
furthermore the release permits claims arising after the
release
date.
Regarding
the
C(10)
factual
issues,
plaintiffs asserted that their proofs would show sufficient
factual support for their claims.
The Court of Appeals majority ruled for defendants on
all counts.
250 Mich App 715.
It found that, under MCR
2.116(C)(7), all the plaintiffs who were also plaintiffs in
Durant I were barred by res judicata because the present
claims, except for one activity alleged in count III, could
have been raised in the earlier suit.
250 Mich App 706.
Reinforcing this point, the Court found that because some
plaintiffs
barred
had
raised
because
those
POUM
claims,
raising
all
POUM
issues
represented the interests of the others.
found
that
the
districts
that
had
plaintiffs
were
effectively
The majority also
signed
releases
were
similarly barred under C(7) because the release expressly
applied to “any claim or potential claim . . . similar to
the claims asserted by the plaintiffs in [Durant I],” and
the alleged underfunding predated the releases.
App
708,
710.
Thus,
the
majority
250 Mich
reasoned,
these
plaintiffs had no more rights than the parties who had
12
actually litigated Durant I, and all claims, with the one
exception discussed below, were disposed of pursuant to MCR
2.116(C)(7).
The
remaining
claim,
that
the
record-keeping
requirements found in MCL 388.1752 and EO 2000-9 imposed a
new or increased mandate, was found by the Court of Appeals
not
to
violate
concluded
that
the
these
Headlee
Amendment.
requirements
The
predated
thus could have been raised in Durant I.
majority
Durant
I
and
In considering
MCL 388.1752, it pointed out that the obligations imposed
by the statute already existed in 1978.
Further, any later
amendments of the statute simply renumbered it11 and defined
the
scope
of
the
obligation.12
250
Mich
App
712.
Accordingly, it was the Court’s view that the amendment did
not
violate
changes
in
Headlee
an
because
earlier,
“[c]larifying
existing
state
nonsubstantive
law
does
not
constitute a new activity or service or increase in the
level of an existing activity or service.
Id.
MCL 21.233(7).”
With regard to EO 2000-9 and its standards for uniform
reporting of information, the majority found that they were
merely designed to streamline a process that had existed
before Headlee and thus did not mandate new activity.
11
1979 PA 94, § 512.
12
1989 PA 197, § 152.
13
250
Mich App 713-714, citing Judicial Attorneys Ass’n, supra at
605.
Therefore,
with
regard
to
these
record-keeping
requirement issues, the Court granted defendants’ motion
for summary disposition pursuant to MCR 2.116(C)(10).
Reinforcing this last holding, the Court of Appeals
noted
that
the
record-keeping
activities
were
administrative functions that “constitute the essence of
the
state’s
constitutional
obligation
to
‘maintain
and
support a system of free public education and secondary
schools . . . .’
Const 1963, art 8, § 2,” and accordingly
fell
restrictions
outside
the
of
the
Headlee
Amendment.
250 Mich App 714.
Plaintiffs
sought
leave
to
appeal
to
this
Court,
raising the same arguments they brought in the Court of
Appeals
to
disposition.
challenge
defendants’
We granted leave.
motion
for
summary
467 Mich 919 (2002).
III. STANDARD OF REVIEW
The question whether res judicata bars a subsequent
action is reviewed de novo by this Court.
Pierson Sand &
Gravel, Inc v Keller Brass Co, 460 Mich 372, 379; 596 NW2d
153
(1999).
Whether
the
Court
of
Appeals
properly
determined that release barred those plaintiffs pursuant to
MCR 2.116(C)(7) is likewise reviewed de novo.
Maskery v
Univ of Michigan Bd of Regents, 468 Mich 609, 613; 664 NW2d
165 (2003).
14
We also review de novo the Court’s decision to grant
or deny summary disposition.
109,
118;
597
NW2d
817
Maiden v Rozwood, 461 Mich
(1999).
“A
motion
under
MCR
2.116(C)(8) tests the legal sufficiency of the complaint.
All well-pleaded factual allegations are accepted as true
and construed in a light most favorable to the nonmovant.”
Maiden, supra at 119.
The motion “may be granted only
where the claims alleged are ‘so clearly unenforceable as a
matter of law that no factual development could possibly
justify recovery.’”
Id. (citation omitted).
We discussed
this pleading requirement as it pertains to Headlee claims
in Oakland Co, supra at 166 (opinion by Kelly, J.):
Under Durant [I], future plaintiffs must
allege the type and extent of the harm so that
the court may determine if a § 29 violation
occurred for purposes of making a declaratory
judgment.
In that way, the state will be aware
of the financial adjustment necessary to allow
for future compliance.[13]
In a C(10) motion, testing the factual sufficiency of
the complaint, we consider “the substantively admissible
evidence actually proffered in opposition to the motion.”
Maiden, supra at 121.
Thus, when such a motion is properly
brought, the nonmovant must, under MCR 2.116(G)(3)(b) and
13
Although Oakland Co dealt with MOS claims, as we
noted in Judicial Attorneys Ass’n, supra at 598 n 2, that
does not make it “inapplicable to an analysis of the second
sentence of § 29.”
Thus, the requirements of POUM claims
are, in this respect, similar to MOS claims.
15
2.116(G)(4), produce admissible support for its opposition
in order to defeat the motion.
IV. ANALYSIS
A. Res judicata
In discussing res judicata in the context of a Headlee
claim,
it
is
important
to
begin
by
constitutional
ratifiers
of
Headlee,
asking
the
how
citizens
the
of
Michigan, would have envisioned the handling of repeated
relitigation of the same issue.
We ask this because it is
their understanding that must control.
As we have observed
many times:
A constitution is made for the people and by
the people. The interpretation that should be
given it is that which reasonable minds, the
great mass of the people themselves, would give
it. “For as the Constitution does not derive its
force from the convention which framed, but from
the people who ratified it, the intent to be
arrived at is that of the people, and it is not
to be supposed that they have looked for any dark
or abstruse meaning in the words employed, but
rather that they have accepted them in the sense
most obvious to the common understanding, and
ratified the instrument in the belief that that
was
the
sense
designed
to
be
conveyed.”
[American Axle & Mfg, Inc, v Hamtramck, 461 Mich
352, 363; 604 NW2d 330 (2000), quoting 1 Cooley,
Constitutional Limitations (8th ed), p 143.]
We consider it apparent that the people would have
thought,
as
traditional
with
rules
all
that
litigation,
would
there
preclude
would
be
relitigation
the
of
similar issues by similar parties: that is, the area of law
we describe formally as encompassed by the doctrine of res
16
judicata.
We must then consider res judicata and apply it
to this unique Headlee situation.
The doctrine of res judicata is employed to prevent
multiple suits litigating the same cause of action.
The
doctrine
the
bars
a
second,
subsequent
action
when
(1)
prior action was decided on the merits, (2) both actions
involve the same parties or their privies, and (3) the
matter in the second case was, or could have been, resolved
in the first.
Sewell v Clean Cut Mgmt, Inc, 463 Mich 569,
575; 621 NW2d 222 (2001).
This Court has taken a broad
approach to the doctrine of res judicata, holding that it
bars
not
only
claims
already
litigated,
but
also
every
claim arising from the same transaction that the parties,
exercising reasonable diligence, could have raised but did
not.
Dart v Dart, 460 Mich 573, 586; 597 NW2d 82 (1999).
Examining
the
Sewell
factors,
we
note
that
it
uncontested that Durant I was decided on its merits.
is
In
Durant I we resolved the question of the state’s ability
under Headlee to reduce funding, in the circumstances there
presented, for existing programs.
With respect to the second res judicata requirement,
that the parties in the later suit be the same or be those
in privity with them, plaintiffs acknowledge that there is
some overlap among the school districts, but assert it is
not
complete
and
the
individual
17
taxpayers
are
also
not
identical.
This
defense
implicates
the
scope
of
the
concept of “privity.”
To be in privity is to be so identified in interest
with another party that the first litigant represents the
same
legal
assert.
645
right
that
the
later
litigant
is
trying
to
Baraga Co v State Tax Comm, 466 Mich 264, 269-270;
NW2d
13
traditionally
(2002).
The
requires
both
outer
a
limit
of
“substantial
the
doctrine
identity
of
interests” and a “working functional relationship” in which
the interests of the nonparty are presented and protected
by the party in the litigation.
Id., quoting Baraga Co v
State Tax Comm, 243 Mich App 452, 456; 622 NW2d 109 (2000),
citing Phinisee v Rogers, 229 Mich App 547, 553-554; 582
NW2d 852 (1998).
In litigation concerning the MOS or POUM
provisions of the Headlee Amendment, Const 1963, art 9, §
29, where a taxpayer or a local unit of government is suing
the state, the issue is whether the Legislature’s act is
unconstitutional as it applies not just to a single local
unit of government, but to all local units affected by the
legislation.
In such cases, the interests of all similar
local units of government and taxpayers will almost always
be identical.
If the relief sought by one plaintiff to
remedy a challenged action is indistinguishable from that
sought
by
another,
such
as
when
declaratory
relief
is
sought concerning an act of the Legislature establishing
18
the proportion of state funding for local government units,
the interests are identical.
Thus, for the purposes of the second Sewell factor, a
perfect identity of the parties is not required, only a
“substantial
identity
of
interests”
that
are
adequately
presented and protected by the first litigant.
that
the
interests
of
the
current
plaintiffs
We find
were,
for
Headlee purposes, adequately represented by the plaintiffs
in
Durant
I.
The
taxpayer
parties
all
have
the
same
interest: that mandated activities are funded as they are
required
to
be
under
the
Headlee
Amendment.
These
interests were presented and protected by the extensive and
thorough litigation that occurred in Durant I.14
Thus, we
find the current taxpayer plaintiffs are in privity with
the Durant I plaintiffs.15
14
We find Justice Kelly’s implication (post at 4 n 2)
that any taxpayer moving to the state after 1997 could
relitigate any Durant I claim unreasonable not merely
because it would be burdensome to the parties and the
courts but also because it would preclude ever having a
final answer upon which state and local governments could
confidently act.
It is indeed such concerns that have
animated the judicial utilization of the doctrine of res
judicata. As we said in In re MCI, 460 Mich 396, 431 n 7;
596 NW2d 164 (1999), “The doctrine of res judicata was
judicially created in order to ‘relieve parties of the cost
and vexation of multiple lawsuits . . . .’”
15
This is not to say, as Justice Weaver suggests (post
at 6), that these plaintiffs lack standing.
Any taxpayer
may bring a claim—that is, any taxpayer has standing.
If
(continued…)
19
We
find
the
school
districts,
again
for
Headlee
purposes, also have the same legal interest protected by
the Durant I plaintiffs and are similarly in privity.
In
this case, particularly because only declaratory relief,
not damages, was sought, it is evident that all school
districts have the same interest.
Finally, concerning the last element of res judicata,
we must decide whether the matter in the second case was or
could have been resolved in the first.
every
claim
arising
from
the
same
Res judicata bars
transaction
that
the
parties, exercising reasonable diligence, could have raised
but did not.
Sewell, supra at 575-576.
This Court has
noted that “[r]es judicata bars a subsequent action between
the same parties when the evidence or essential facts are
identical.”
Dart, supra at 586.
This statement refers to
what is generally called the “same evidence” test.
there
appears
to
be
some
confusion
Because
regarding
the
relationship between the “same transaction” test and the
“same evidence” test, we take this opportunity to provide
clarification.
The “same transaction” test and the “same evidence”
test
are
alternative
approaches
used
in
determining
the
(continued…)
the claim concerns an issue that has already been the
subject of litigation, it is subject to the doctrine of res
judicata.
20
applicability of res judicata.
As stated by the Illinois
Supreme Court in River Park, Inc v Highland Park, 184 Ill
2d 290, 307-309, 703 NE2d 883 (1998) (citations omitted):
Under the "same evidence" test, a second
suit is barred "if the evidence needed to sustain
the second suit would have sustained the first,
or if the same facts were essential to maintain
both actions." The "transactional" test provides
that “the assertion of different kinds or
theories of relief still constitutes a single
cause of action if a single group of operative
facts give rise to the assertion of relief.”
* * *
[U]nder
the
same
evidence
test
the
definition of what constitutes a cause of action
is narrower than under the transactional test.
As explained in the Restatement (Second) of
Judgments, the same evidence test is tied to the
theories of relief asserted by a plaintiff, the
result of which is that two claims may be part of
the same transaction, yet be considered separate
causes of action because the evidence needed to
support the theories on which they are based
differs. By contrast, the transactional approach
is more pragmatic. Under this approach, a claim
is viewed in “factual terms” and considered
“coterminous with the transaction, regardless of
the number of substantive theories, or variant
forms of relief flowing from those theories, that
may be available to the plaintiff; * * * and
regardless of the variations in the evidence
needed to support the theories or rights.”
Because this Court has accepted the validity of the
broader
transactional
consider
as
test
dispositive
in
Michigan,
plaintiffs’
we
assertions
need
not
that
the
evidence needed to prove this case is different than was
needed
in
Durant
I.
Although
that
fact
may
have
some
relevance, the determinative question is whether the claims
21
in the instant case arose as part of the same transaction
as did the claims in Durant I.
“Whether a factual grouping
constitutes a ‘transaction’ for purposes of res judicata is
to be determined pragmatically, by considering whether the
facts are related in time, space, origin or motivation,
[and] whether they form a convenient trial unit . . . .”
46 Am Jur 2d, Judgments § 533, p 801 (emphasis added).
With the limited exception of several count III claims
discussed below, the statutory and regulatory requirements
complained of in this case, and alleged to be “new” or
“increased” activities since Headlee was enacted, existed
during
the
pendency
of
Durant
I.
Moreover,
requirements, like those in Durant I, have been imposed
the
Legislature
and
executive
bodies
on
local
the
by
school
districts for the purpose of providing public education.
Thus, they are related to one another in “time, space [and]
origin.”
Further, because the allegations in both this
case and Durant I concern the Headlee Amendment, the claims
are related by “motivation” as well.
As pleaded, we find
no indication that plaintiffs, with due diligence, could
not
have
asserted
these
claims
22
during
the
pendency
of
Durant I.
Indeed, some of the claims in this case were
actually claimed in Durant I.16
Therefore,
with
the
several
count
III
exceptions
discussed below, we agree with the Court of Appeals that
plaintiffs’
transactions
claims
as
in
did
this
the
case
arose
Durant
I
from
claims
the
same
and
that
plaintiffs, exercising due diligence, could have filed them
during the pendency of Durant I.17
Thus, plaintiffs’ claims
are barred by res judicata.
Moreover, we note that, were this Court to adopt the
approach
removes
of
Justice
Headlee
Kelly’s
declaratory
dissent,
which
judgment
actions
essentially
from
the
general rules of res judicata, we would be subjecting the
state
to
barrage
litigate
of
and
repetitive
relitigate
claims
with
a
potentially
only
the
endless
plaintiffs
16
Although plaintiffs’ brief to this Court asserts
that their complaint specifically claimed that the state
failed to meet its funding obligation “by operation of the
2000 amendment to the Act, 2000 PA 297,” no such claim or
enactment was alleged in the complaint.
Contrary to
Justice Cavanagh’s assertion, we do not create here a “new
requirement” for pleading.
Post at 5.
We simply note
that, as pleaded (including plaintiffs’ response to
defendant’s motions to dismiss), plaintiffs’ claims were
indistinguishable from those of Durant I.
17
Plaintiffs offer no evidence that, during the
pendency of Durant I, they made any effort to add these
claims under MCR 2.118(E). We thus find no basis for their
assertion that they could not have litigated the claims in
the earlier suit.
23
changing.18
Justice Kelly would address this problem using
stare decisis rather than res judicata.
While she does not
explain how this would work,19 we deduce that she prefers an
outcome where only those issues actually litigated would be
barred, because stare decisis would not apply to claims
that could have been brought in the first suit, but were
not.
See Brown v Manistee Co Rd Comm, 452 Mich 354, 365-
366; 550 NW2d 215 (1996).
Her approach using stare decisis
would allow each individual taxpayer in the state a chance
to
bring
a
separate
identical, claims.
suit
alleging
similar,
but
not
It is, in short, an invitation to a
total paralysis of government, both state and local, as it
would
deprive
state
and
local
officials,
as
well
as
citizens, of the ability to know with finality what the law
is.
Such
an
approach
would
surely
bring
the
Headlee
protections into disrepute and thus jeopardize them.
We
18
For example, under the approach of Justice Kelly’s
dissent, an individual taxpayer from the Saginaw School
District could file a particular claim on Monday that is
resolved, then a taxpayer from the Bay City School District
could file an identical claim on Tuesday that is resolved,
and a taxpayer from the Midland School District could file
an identical claim on Wednesday that is resolved, and so
on.
19
Indeed, stare decisis
here, as can be seen by Justice
the claims of the non-Durant I
be allowed by that doctrine,
barred by res judicata.
24
apparently would not work
Kelly’s conclusion that all
individual litigants would
where we would find them
decline
to
convert
Headlee
into
such
a
Frankensteinian
monster because we see nothing in the Headlee Amendment
that
suggests
Amendment,
to
also
us
that
planned
the
to
people,
in
effectively
passing
sabotage
it
the
by
disregarding well-established rules of res judicata that
could make it workable.
B. Release and waiver
In enacting MCL 388.1611f, the Legislature created a
contract and a release with the local units of government.
The release states that the school district
waives any right or interest it may have in any
claim or potential claim through September 30,
1997 relating to the amount of funding the
district or intermediate district is, or may have
been, entitled to receive under the state school
aid act of 1979, 1979 PA 94, MCL 388.1601 to
388.1772, or any other source of state funding,
by reason of the application of section 29 of
article IX of the state constitution of 1963,
which claims or potential claims are or were
similar to the claims asserted by the plaintiffs
in the consolidated cases known as
[Durant I].
[MCL 388.1611f(8).]
The scope of a release is controlled by the language
of
the
release,
and
where,
as
here,
unambiguous, we construe it as written.
Gen
Contractors,
Inc,
463
Mich
646,
the
language
is
Batshon v Mar-Que
650;
624
NW2d
903
(2001).
After Durant I was finally resolved, the Legislature
wanted to produce an outcome relating to the nonlitigating
districts equivalent to those that litigated. Thus, funds
25
were appropriated, conditioned on the recipient executing a
release,
which
would
place
the
recipient
in
comparable to that of the Durant I litigants.
the
recipients,
having
executed
the
a
position
Accordingly,
release,
are
also
barred from raising not only claims actually asserted in
Durant I, but also all claims or potential claims through
September 30, 1997, that are similar to those that were
asserted.
That being the case, we agree with the Court of
Appeals that, pursuant to MCR 2.116(C)(7), those districts
agreeing to the release are barred from raising the claims
of counts I and II, and all but three claims of count III,
because those claims existed before September 30, 1997, and
they are similar to the claims asserted in Durant I.
C. Claims arising after 1997
Of
all
plaintiffs’
claims
concerning
the
seven
administrative rules, thirteen statutes, and one executive
order, only a few involve post-Durant I mandates.
Of the
seven administrative rules identified in count I, six were
promulgated in 1987 and one in 1983.
Thus, none postdates
Durant I, and the analysis in the res judicata and release
sections
of
this
opinion
applies
to
bar
these
claims.
Regarding count II, it concerns MCL 380.1284, for which the
last
amendment
making
substantive
activities was 1995 PA 289.
changes
to
mandated
Thus, it similarly is barred.
With regard to count III, one claim was withdrawn and one
26
of the identified statutes was repealed.20
Of the remaining
ten statutes,21 only two, MCL 380.1277 and 380.1282, include
changes regarding activities added after Durant I.
The
executive order also postdates Durant I, having been issued
in 2000.
This leaves, then, these three claims that arguably
are based on post-Durant I mandates.
is
the
record-keeping
activity
The first we turn to
claimed
by
plaintiffs
to
result from the interaction of MCL 388.1752 and EO 2000-9.
We determine that the Court of Appeals erred in concluding
that
the
statute
and
the
order
do
not
mandate
activities within the meaning of the Headlee Amendment.
the
time
the
Headlee
Amendment
became
effective,
new
At
the
statute required the school districts to “furnish to the
department [of education] those reports as the department
considers necessary for the determination of the allotment
of funds under this act.”22
1977 PA 90, § 152.
This
provision was further amended by 1989 PA 197, § 152, which
20
The claim concerning MCL 380.622 was withdrawn, and
MCL 380.1282a was repealed.
21
These are: MCL 380.1169, 380.1272a, 380.1277,
380.1278, 380.1279, 380.1280, 380.1282, 380.1527, 388.1752,
and 257.1851.
22
As noted above, this provision was, in 1978,
codified at MCL 388.1552, and renumbered by 1979 PA 94, §
152, and amended by 1989 PA 197, § 152.
27
required schools to provide information “necessary for the
administration of this act and for the provision of reports
of educational progress . . . .”
Thus, during the pendency
of
already
Durant
I,
plaintiffs
were
under
a
broad
obligation to report to the state whatever information it
required pursuant to its statutory duties.
Amendment
is
not
necessarily
implicated
The Headlee
when
the
state
increases or changes what information it requires because
the
schools’
obligation
to
provide
that
information
existed since before the time Headlee was effective.
has
See
Judicial Attorneys Ass’n, 460 Mich 599-600.
However, the executive order, which established the
Center
for
Educational
empowered
the
statewide
databases:
System
and
Center
the
Information.
Performance
incorporate
to
the
Database
and
or
Michigan
for
Information,
implement
Education
Educational
two
Information
Performance
and
Plaintiffs alleged that this requires school
districts to create and maintain student data on an ongoing
basis
following
state-specified
data-gathering
procedures
and to transmit those data over the Internet to the state.
The
allegation
requiring
also
different
requiring
maintaining
purposes.
here
the
data
is
that
the
state
is
data
from
the
school
districts,
but
participate
in
districts
that
the
to
state
actively
requires
not
for
merely
its
own
An off-loading of state funding responsibilities
28
onto local units of government without the provision of
funds
presents
Judicial
colorable
Attorneys
plaintiffs
here
funded at all.
we
a
find,
at
claim
Ass’n,
alleged
supra
new
under
at
Headlee.
603.
requirements
In
that
See
short,
were
not
Accepting plaintiffs’ allegations as true,
this
stage
in
the
proceedings,
they
have
sufficiently stated a claim on which relief can be granted
and thus this POUM claim survives defendants’ C(8) motion.
Oakland Co, supra, at 166.23
Furthermore, we note that,
while the Court of Appeals granted summary disposition on
this claim pursuant to MCR 2.116(C)(10), defendants’ motion
actually sought only C(7) and C(8) dismissal with regard to
count III.
If defendants had argued under a C(10) motion,
plaintiffs would have been obliged to provide evidentiary
support for their claims.
However, under a C(8) motion, no
such support is required.
Thus, concerning the record-
keeping activity, we find plaintiffs sufficiently stated a
claim on which relief could be granted, and we reverse the
Court of Appeals dismissal of this claim.
parties
may
explore
the
factual
23
support
On remand, the
for
plaintiffs’
The dissenting opinion in the Court of Appeals urges
the taking of testimony and fact-finding by a special
master before a decision is made on defendants’ motion.
250 Mich App 715-716. We find that unauthorized because a
C(8) motion is based on the pleadings alone.
MCR
2.116(G)(5).
29
allegations that this constitutes a new, unfunded mandate
in violation of the Headlee Amendment.
The
second
post-Durant
I
activity
involves
special
assistance to students having academic difficulty and is
embodied in MCL 380.1282, last amended by 1997 PA 181.
The
amendment, added to the existing statute after Durant I,
was permissive.
a
school
academic
expressly
That is, it identified special assistance
district
“may”
difficulties.
excluded
provide
to
pupils
experiencing
Such
from
optional
programs
being
“requirements”
by
are
MCL
21.234(5)(h), and thus are beyond the scope of the Headlee
POUM clause as a matter of law.24
Similarly, the statute setting forth the third “new”
activity, MCL 380.1277, was amended in 1997 to change the
elements
plan.
that
must
be
included
in
a
school
improvement
That amendment added some elements and removed some,
but the changes in essence simply reworded the criteria
24
Justice Kelly’s dissent, correctly pointing out that
MCL 380.1282 includes a “meeting” activity that is merely
permissive in that statute but mandated in MCL 380.1279,
asserts that when these two statutes are read together, the
result is a new, mandatory activity.
Post at 5.
We
disagree.
The mandate of MCL 380.1279 was effective in
1993 and thus any claim that the meeting is a new mandate
is barred for the same reasons as the other pre-Durant I
claims.
The meeting guidelines set forth in MCL 380.1282
are, indeed, new to that statute, but they existed verbatim
in the pre-Durant I version of MCL 380.1279.
They,
therefore, are not new.
30
that existed before 1997.25
We therefore find that these
changes
any
did
not
impose
“new”
or
“increased”
requirements on the schools as a matter of law.
25
For
example,
before
the
amendment,
school
improvement plans had to include:
(a) Identification of the adult roles for
which graduates need to be prepared.
(b) Identification of
skills that are needed to
fulfill those adult roles.
the education and
allow graduates to
(c) A determination of whether or not the
existing school curriculum is providing pupils
with the education and skills needed to fulfill
those adult roles.
(d) Identification of changes that must be
made in order to provide graduates with the
necessary education and skills and specific
recommendations for implementing those changes.
(e) Development of alternative measures of
assessment that will provide authentic assessment
of
pupils'
achievements,
skills,
and
competencies.
(f) Methods for effective use of technology
as a way of improving learning and delivery of
services
and
for
integration
of
evolving
technology in the curriculum.
(g) Ways to make available in as many fields
as practicable opportunities for structured onthe-job learning, such as apprenticeships and
internships, combined with classroom instruction.
The 1997 amendment changed these to include:
(a) Goals centered on improving student
academic learning.
(b) Strategies to accomplish the goals.
(c) Evaluation of the plan.
(continued…)
31
In sum, we find plaintiffs sufficiently stated a cause
of
action
that
regarding
neither
of
the
the
record-keeping
other
two
requirement,
post-Durant
I
but
mandates
identified by plaintiffs imposes POUM requirements on the
schools. These two requirements are either not “new” or are
permissive and thus not “mandates.”
Thus, neither runs
afoul of the POUM funding requirement.
VI. CONCLUSION
Except
for
the
record-keeping
claim,
we
affirm
the
decision of the Court of Appeals, concluding that, except
for three activities, the claims presented in the present
action are barred by res judicata or release.
Regarding
the
not
three
post-Durant
I
activities,
two
are
“new
unfunded mandates” because, as pleaded, the activities are
simply not new or are merely permissive.
With regard to
the record-keeping requirement set forth in MCL 388.1752
(continued…)
(d) Development of alternative measures of
assessment that will provide authentic assessment
of
pupils'
achievements,
skills,
and
competencies.
(e) Methods for effective use of technology
as a way of improving learning and delivery of
services
and
for
integration
of
evolving
technology in the curriculum.
(f) Ways to make available in as many fields
as practicable opportunities for structured onthe-job learning, such as apprenticeships and
internships, combined with classroom instruction.
32
and EO 2000-9, we find plaintiffs have sufficiently stated
a claim on which relief may be granted.
Court
of
Appeals
grant
of
summary
We reverse the
disposition
regarding
this claim, and remand the case to that Court for further
proceedings consistent with this opinion.
Clifford W. Taylor
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
33
S T A T E
O F
M I C H I G A N
SUPREME COURT
DANIEL ADAIR, a taxpayer of the
Fitzgerald Public Schools, and
FITZGERALD PUBLIC SCHOOLS, et al.,
Plaintiffs-Appellants,
v
No. 121536
STATE OF MICHIGAN, DEPARTMENT
OF EDUCATION, DEPARTMENT OF
MANAGEMENT AND BUDGET, and
TREASURER OF THE STATE OF MICHIGAN,
Defendants-Appellees.
_______________________________
KELLY, J. (concurring in part and dissenting in part).
I agree with the reasoning of the majority in part
IV(C) of its opinion as it relates to:
(1) the analysis of
the record-keeping activity resulting from the interaction
of MCL 388.1752 and Executive Order No. 2000-9 and (2) the
claims
regarding
what
must
be
included
in
school
improvement plans under MCL 380.1277.
I further agree with the conclusion of part IV(B) of
the majority opinion.
The releases signed by the plaintiff
school districts not involved in Durant I1 in 1997 were
designed to place those districts in a position similar to
that of the Durant I plaintiffs.
1
Durant v Michigan, 456 Mich 175; 366 NW2d 272 (1997).
However,
I
cannot
agree
that
the
"post-Durant
I"
activities involving special assistance to students having
academic difficulty were solely permissive activities in
MCL 380.1282 as amended by 1997 PA 181.
I respectfully
dissent from the majority’s holding and would remand the
case for further factual development of the claim involving
those activities.
Moreover,
majority’s
claims,
because
I
cannot
agree
concerning
respectfully
I
analysis
dissent
with
much
plaintiffs'
from
the
of
the
remaining
conclusion
that
those claims were barred by res judicata. I would remand
the remainder of plaintiffs' claims to the Court of Appeals
for further substantive review.
I. Plaintiffs' "Post-Durant I Claims"
Involving Special Assistance.
The
majority
has
chosen
to
find
all
but
three
of
plaintiffs' claims barred by res judicata. I will discuss
the three before proceeding to the remaining claims.
As
stated above, I agree with the majority's treatment of the
alleged obligations under MCL 388.1752 and EO 2000-9, and
those under MCL 380.1277.
However,
I
cannot
join
the
majority's
decision
regarding the activities required by the 1997 changes to
MCL 380.1282, 1997 PA 181. The majority maintains that a
substantial
number
of
the
activities
2
mandated
in
the
amendment are permissive activities, not included as "state
requirements" as described in MCL 21.234(5)(h).
However,
MCL 380.1279, the statute outlining the requirements for
state
endorsed
diplomas
mentioned
in
MCL
380.1282(2),
contains language that affects the review of the meeting
discussed
by
Specifically,
380.1279
is
the
one
the
majority
of
the
meeting
concerning
mandated
that
the
becomes
in
found
to
MCL
be
Ante at 30. See MCL
When the two statutes are read together, it
clear
activities
380.1282.
activities
majority
merely permissive in MCL 380.1282.
380.1279(4).
MCL
in
that
MCL
the
allegedly
380.1282
are
new
mandatory,
or
increased
despite
the
permissive language in MCL 380.1282.2
2
The particularities of MCL 380.1279 also provide an
example of the problem created by the majority's decision
to use the issuance date of Durant I as the cutoff date for
preclusion under res judicata. The first 1997 revision of
MCL 380.1279 made a number of changes to the language of
the state-endorsed high school diploma provision. However,
they did not become effective until June 16, 1997, which
was after Durant I was argued, but before the opinion was
issued.
A litigant should not be expected to amend a
complaint after oral argument while this Court's decision
is pending at the risk of having his claim barred by res
judicata.
Moreover,
only
a
mandate
coupled
with
underfunding will give rise to a Const 1963, art 9, § 29
claim.
Therefore, a cause of action concerning these
particular 1997 changes could arguably not accrue until at
least the 1997-1998 school year when the state failed to
fund the mandated activities.
3
II.
I
Plaintiffs' Remaining "Pre-Durant I" Claims
next
address
plaintiffs'
claims
that
involve
activities mandated by statute or otherwise in existence
before this Court's Durant I decision on July 31, 1997.
first
question
whether
res
judicata
can
be
I
properly
applicable to these claims under the circumstances.
In
order to invoke res judicata, a court must find that the
parties
were
in
nonparticipating
privity.
school
In
concluding
districts
were
in
here
that
the
privity,
the
majority focuses on the nature of the declaratory relief
sought in Durant I.3
3
The majority concludes that a taxpayer in a non-Durant
I school district stands in privity with Durant I school
district or nonschool district plaintiffs for res judicata
purposes. I disagree. As the majority notes, ante at 1718, the outermost limit of the doctrine requires both a
"'substantial identity of interests'" and a "'working
functional relationship,'" quoting Baraga Co v State Tax
Comm, 466 Mich 264, 269-270; 645 NW2d 13 (2002).
The
taxpayer plaintiffs who were not involved in Durant I may
have interests similar to those of the other plaintiffs.
But I fail to see how they have a working functional
relationship with the Durant I plaintiffs. Moreover, some
of the taxpayers may not have been in the school districts
during the years preceding the majority's 1997 cutoff date.
Could they be bound by the actions of either set of school
district plaintiffs? Accordingly, given that the taxpayers
are the real parties in interest here, I particularly
question the application of res judicata to the non-Durant
I
taxpayers.
The
majority
expresses
concern
that
recognizing the lack of privity here will open the
floodgates to repeated litigation of exactly the same claim
with different plaintiffs.
I acknowledge these concerns.
However, rather than rely on a strained application of
privity and res judicata, I would address them using the
(continued…)
4
However,
I
believe
that
the
majority
fails
to
adequately discuss the proper application of res judicata
to declaratory judgments. I would find that our judgment in
Durant
I
does
not
preclude
the
claims
that
plaintiffs
allegedly "failed" to raise in that case.
I reach this conclusion in part through the language
of
Durant
judgment
I
to
itself.
The
plaintiffs.
majority
But
all
there
gave
justices
a
money
agreed
that
relief in future cases should be solely of a declaratory
nature.
clearly
See Durant I, 205-206.
anticipated
declaratory
relief
the
in
continuing
light
of
In fact, the majority
need
the
for
fact
review
that
and
school
mandates and funding are ever changing:
[Const 1963, art 9, § 32] authorizes
taxpayers to file suit in the Court of Appeals to
enforce the provisions of § 29. As arduous as the
proceedings in this case have been, we have
succeeded in deciding many points of law that
will guide future decisions. Thus, there is every
reason to hope that future cases will be much
more straightforward. We anticipate that taxpayer
cases filed in the Court of Appeals will proceed
to rapid decision on the issue whether the state
has an obligation under art 9, § 29 to fund an
activity or service. The Court of Appeals would
give declaratory judgment on the obligation of
the state. If there was such an obligation, we
anticipate that the state would either comply
with that obligation no later than the next
ensuing fiscal year, unless it could obtain a
(continued…)
principle of stare decisis, along with possible sanctions
pursuant to MCR 2.114.
5
stay from this Court, or remove
[Durant I, 456 Mich 205-206.]
the
mandate.
The Durant I majority correctly recognized that, because of
the nature of the relief sought, res judicata would not bar
future claims concerning alleged mandates similar to those
actually reviewed in Durant I.
Also pertinent here is the discussion in Restatement
2nd, Judgments, § 33, p 332:
A valid and final judgment in an action
brought
to
declare
rights
or
other
legal
relations of the parties is conclusive in a
subsequent action between them as to the matters
declared, and, in accordance with the rules of
issue preclusion, as to any issues actually
litigated by them and determined in the action.
[Emphasis added.]
Thus,
the
general
rule
concerning
declaratory
relief
is
that res judicata applies only to "matters declared” and
“any issues actually litigated . . . and determined in the
action.”
A comment to the Restatement, § 33 continues:
c. Effects as to matters not declared.
When a plaintiff seeks solely declaratory relief,
the weight of authority does not view him as
seeking to enforce a claim against the defendant.
Instead, he is seen as merely requesting a
judicial declaration as to the existence and
nature of a relation between himself and the
defendant. The effect of such a declaration,
under this approach, is not to merge a claim in
the
judgment
or
to
bar
it.
Accordingly,
regardless of outcome, the plaintiff or defendant
may pursue further declaratory or coercive relief
in a subsequent action. [Id., § 33, comment c, p
335.]
6
Hence, a declaration coupled with no other relief does not
bar a later claim or merge with it.
The
problem
with
trying
to
apply
a
doctrine
to
circumstances outside the norm is well illustrated by the
troublesome application of res judicata to the facts of
this case.
Here, the majority concludes that all the "pre-
Durant I" mandates could have been raised in the earlier
Durant I litigation.
Ante at 22-23.
I disagree that the claims here arose out of the same
"transaction" for the purpose of applying res judicata.4
The
majority
contends
that
a
decision
whether
factual
grouping constitutes a "transaction" for the purposes of
res judicata involves a consideration of whether the facts
are
related
in
"'time,
space,
origin,
or
motivation.'"
Ante at 22 (citation omitted; emphasis added in majority
opinion).
As the majority recognizes, a number of the
claims in this case involve statutorily mandated activities
that came into existence only while the Durant I litigation
4
Although it is tangential to my analysis of the issues
here, I disagree with the majority's holding that "this
Court
has
accepted
the
validity
of
the
broader
transactional test in Michigan . . . ."
Ante at 21.
It
cites Sewell v Clean Cut Mgmt, Inc, 463 Mich 569, 575-576;
621 NW2d 222 (2001), and Dart v Dart, 460 Mich 573, 586;
597 NW2d 82 (1999), for this proposition. However, in both
Sewell and Dart, we applied the "transactional" test and
the "same elements" test simultaneously. Id.
7
was pending.
Yet the majority finds that these claims are
related in time, space, and origin.
I disagree.
The statutory language at issue in a number of these
claims did not exist when plaintiffs filed suit in Durant
I.
This fact is an illustration of the unfortunate snail’s
pace of much appellate process.
the
appellate
courts'
lack
of
However, I would not tie
speed
to
a
finding
that
claims arising from later statutory enactments were part of
the original "transaction."5
The
new
claims
may
be
related
"motivation" and perhaps in "origin".
to
each
other
in
But a finding that
they are related in "time" essentially requires the use of
the courts' lengthy Durant I deliberations as a vehicle for
time
travel.
Although
interesting
from
a
quantum
mechanic's perspective, I would not find that res judicata
can be applied to claims by the Durant I plaintiffs that
5
I think a more simple analogy may be useful. In year
one, plaintiff is involved in a vehicle accident with
defendant.
Plaintiff files suit and defendant responds
that he was not negligent.
That claim begins working its
way through our court system. It takes a year to reach the
appellate stage.
Ironically, in year two, while the
appellate court ponders the initial question of negligence,
plaintiff and defendant are involved in a second accident.
The same cars, now repaired and on the roadway, are
involved. The first case is decided in favor of plaintiff.
However, plaintiff then brings a second suit for negligence
arising from the second accident. I doubt the majority
would find that the second claim is barred by res judicata.
Yet that is essentially what it decides here regarding the
Durant I plaintiffs.
8
involve statutory enactments effective after Durant I was
filed.
Res
judicata
should
not
be
ruled
to
bar
these
"later" causes of action.
It
took
our
courts
seventeen
years
to
decide
limited issues actually before them in Durant I.
the
In light
of that fact, I question that the piecemeal amalgamation of
claims
suggested
by
the
majority
would
created a "'convenient trial unit.'"
Id.
have
actually
The majority
faults plaintiffs for failing to move to add claims under
MCR 2.118(E),6 to an ongoing declaratory judgment action
begun
seventeen
years
before
this
Court's
ultimate
decision. I do not. It would serve no useful purpose to
require plaintiffs to try to add these claims solely to
preserve their right to bring them later.
Plaintiffs raise an argument against ever applying res
judicata to claims arising from statutes in existence at
the time the Durant I complaint was filed.
They assert
that a new "transaction" arises whenever the Legislature
amends statutory funding vehicles, such as 2000 PA 297, and
fails to include adequate funding to meet its obligations
under § 29.
I find the argument persuasive.
Two requirements must be met in a § 29 action:
mandate and a failure to fund.
6
Ante at 23 n 17.
9
a
The proposal of a mandate
alone does not form the basis of a claim.
It is only when
the mandate is unfunded, or underfunded, that the state has
violated § 29.
It is inappropriate to preclude the litigation of all
claims relating to changes over time in the funding levels
of a mandated program.
.
Such a preclusion would have
required the Durant I plaintiffs to become mind-readers and
to have anticipated all future funding decisions concerning
"pre-Durant I" mandates.
The majority fails to recognize that a § 29 claim
involves both a mandate and a funding decision.
In so
doing, it focuses too narrowly on the specific language
pleaded in the complaint, rather than on the substance of
the underlying claims.
The
counsel
majority
in
fact
effectively
made
such
an
concedes
that
assertion.
plaintiffs'
During
oral
arguments and in his appellate brief, counsel argued that
the state decreased its proportion of funding levels of a
mandated program after Durant I. Ante at 23 n 16. However,
the majority relegates this actual claim to a footnote,
10
without even a discussion of why plaintiffs were required
to plead with more specificity.7
I question what the purpose of plaintiffs' claims in
this
declaratory
declaration
that
action
the
funding obligations.
in
plaintiffs’
complaint.
is
that
would
state
be,
failed
if
to
not
to
meet
its
gain
a
current
Language to this effect is included
prayer
for
relief
in
the
second
amended
The only logical conclusion from the pleadings
plaintiffs
sought
relief
because
the
state
decreased the funding levels of a mandated program from
that required under § 29.
In addition, the majority intimates that plaintiffs
could amend their pleadings to include such a claim.
rather
than
simply
recognizing
the
actual
substance
But
of
plaintiffs' claims, the majority forces plaintiffs to jump
through yet another hoop.
It requires plaintiffs to make a
motion on remand under MCR 2.118(A)(2) or (E) to add the
claims to those that this Court has already directed the
Court of Appeals to entertain.
I find this action contrary
to the purpose of res judicata generally and of no service
to the parties in this dispute.
7
I am not aware of any declaration by this Court that
there are pleading requirements particular to an action
claiming relief pursuant to the Headlee Amendment.
11
III. Conclusion
In conclusion, I agree with the majority's ruling that
the school district plaintiffs who were not involved in
Durant
I
agreed
participated in
to
be
treated
Durant I.
similarly
to
those
who
However, I dissent from the
majority's disposition of plaintiffs' "pre-Durant I" claims
for the reasons stated. I would not hold that these claims
were barred by res judicata. Instead, I would remand them
to the Court of Appeals for review on the merits.
To
the
extent
that
the
majority
has
reviewed
plaintiff's three "post-Durant I" claims, I agree with the
result reached regarding the alleged mandatory activities
under MCL 388.1752, EO 2000-9, and MCL 380.1277.
dissent
from
the
majority's
analysis
of
the
However I
activities
required under MCL 380.1282. I would instead remand this
claim to the Court of Appeals for further factual findings.
Marilyn Kelly
12
S T A T E
O F
M I C H I G A N
SUPREME COURT
DANIEL ADAIR, a taxpayer of
the Fitzgerald Public
Schools, and FITZGERALD
PUBLIC SCHOOLS, et al.,
Plaintiffs-Appellants,
v
No. 121536
STATE OF MICHIGAN, DEPARTMENT
OF EDUCATION, DEPARTMENT OF
MANAGEMENT AND BUDGET, and
TREASURER OF THE STATE OF
MICHIGAN,
Defendants-Appellees.
_______________________________
WEAVER, J. (dissenting in part and concurring in part).
I respectfully dissent from the majority’s conclusion
that plaintiffs’ claims are barred by res judicata.
majority’s
arising
broad
under
application
the
Headlee
of
res
judicata
Amendment1
to
eviscerates
The
cases
the
standing granted to taxpayers under art 9, § 32 of the
constitutional amendment and precludes suits in subsequent
years for subsequent funding violations of art 9, § 29.
Additionally, I dissent from the majority’s conclusion
that
the
1
release
bars
claims
by
Const 1963, art 9, §§ 25-32.
those
plaintiffs
that
signed releases after Durant I2 to receive a portion of the
money damages.
More fact-finding is required to determine
which claims might be barred by the release.
While I disagree with the majority’s analysis of res
judicata
and
the
release,
I
concur
with
the
majority’s
conclusion that plaintiffs’ claim based on record-keeping
activities, MCL 388.1752 and Executive Order No. 2000-9,
should not be dismissed because plaintiffs have alleged new
activities that were not funded as Const 1963, art 9, § 29
requires.
For these reasons, I would reverse the decision of the
Court of Appeals and remand this case to that Court for
proceedings consistent with this opinion.
I.
The Headlee Amendment and Res Judicata
Const 1963, art 9, § 29 provides in part:
The state is hereby prohibited from
reducing the state financed proportion of the
necessary costs of any existing activity or
service required of units of Local Government by
state law.
A new activity or service or an
increase in the [level] of any activity or
service beyond that required by existing law
shall not be required by the legislature or any
state agency of units of Local Government, unless
a state appropriation is made and disbursed to
pay the unit of Local Government for any
necessary increased costs.
2
Durant v Michigan, 456 Mich 175; 566 NW2d 272 (1997).
2
Standing to pursue violations of this section, as well as
other sections of the Headlee Amendment, is given to all
taxpayers in the state.
Const 1963, art 9, § 32 provides:
Any taxpayer of the state shall have
standing to bring suit in the Michigan State
Court of Appeals to enforce the provisions of
Sections 25 through 31, inclusive, of the
Article, and, if the suit is sustained, shall
receive from the applicable unit of government
his costs incurred in maintaining such suit.
[Emphasis added.]
Constitutional
provisions,
including
those
that
comprise the Headlee Amendment, are interpreted according
to the “common understanding” that the people would give
the provision.
As explained by Justice Cooley:
“A constitution is made for the people
and by the people.
The interpretation that
should be given it is that which reasonable
minds, the great mass of people themselves, would
give it.
‘For as the Constitution does not
derive its force from the convention which
framed, but from the people who ratified it, the
intent to be arrived at is that of the people,
and it is not to be supposed that they have
looked for any dark or abstruse meaning in the
words employed,
but rather that they have
accepted them in the sense most obvious to the
common understanding, and ratified the instrument
in the belief that that was the sense designed to
be conveyed.’”
[Traverse City School Dist v
Attorney General, 384 Mich 390, 405; 185 NW2d 9
(1971), quoting Cooley’s Const Limitations, p 81
(emphasis in original).]
Additionally,
courts
may
consider
the
circumstances
surrounding the adoption of the provision and the purpose
sought to be accomplished.
Id.
3
The majority cites the rule of common understanding
and
opines
expected
that
that
under
the
the
broad
rule,
the
people
principles
of
would
res
have
judicata
articulated in the majority opinion apply to cases seeking
enforcement
of
the
provisions
of
the
Headlee
Amendment.
But the majority’s application of the rule is disingenuous
and
its
conclusion
is
unsupported
by
the
language
or
purpose of the amendment.
Art 9, § 32 gives “any taxpayer of the state” standing
to enforce the provisions of the Headlee Amendment.
grant
of
standing
is
consistent
with
the
This
amendment’s
purpose, which, as explained by this Court, is to limit the
expansion
of
legislative
requirements
placed
on
local
governments:
The Headlee Amendment was “part of a
nationwide ‘taxpayers revolt’ . . . to limit
legislative expansion of requirements placed on
local government, to put a freeze on what they
perceived was excessive government spending, and
to lower their taxes both at the local and state
level.”
[Airlines Parking, Inc v Wayne Co, 452
Mich 527, 532; 550 NW2d 490 (1996), quoting
Durant v State Bd of Ed, 424 Mich 364, 378; 381
NW2d 662 (1985).]
Consequently, it is extremely doubtful that the people of
this state would have expected their ability to enforce the
Headlee Amendment to be hampered by the broad application
of res judicata that the majority imposes.
4
Rather, as
explained
would
below,
a
suggest
“common
the
understanding”
opposite
of
the
people
conclusion—that
the
Constitution’s grant of standing under art 9, § 32 to “any
taxpayer”
is
just
that—a
broad
grant
of
standing
that
permits any taxpayer to pursue actions necessary to enforce
the provisions of the Headlee Amendment.
Traditionally,
three elements:
res
judicata
requires
establishing
“(1) the first action was decided on the
merits, (2) the matter contested in the second action was
or could have been resolved in the first, and (3) both
actions involve the same parties or their privies.”
Sewell
v Clean Cut Mgmt, Inc, 463 Mich 569, 575; 621 NW2d 222
(2001), quoting Dart v Dart, 460 Mich 573, 586; 597 NW2d 82
(1999).
The majority applies this doctrine so broadly as
to eviscerate the standing that art 9, § 32 provides to
“any taxpayer” to pursue Headlee violations.
First, the majority’s analysis of “privity” is overly
broad when applied to Headlee cases.
Privity examines the
interests of the parties and considers whether there is a
substantial identity of interests between the parties such
that
the
interests
of
the
current
plaintiffs
were
adequately represented by parties in a prior suit—in this
case, the plaintiffs in Durant I.
that
the
interest
of
one
taxpayer
5
The majority reasons
or
local
unit
of
government
interests
“will
of
almost
similar
all
always
be
local
identical”
units
of
to
“the
government
and
taxpayers,” ante at 19; consequently, the majority finds
privity
between
the
plaintiffs
plaintiffs in this case.
in
Durant
I
and
the
Under the majority’s analysis,
any time that a school district or a taxpayer in a school
district
raises
a
Headlee
claim,
there
will
be
privity
between that plaintiff and all other school districts in
the state and taxpayers in those school districts.
one
taxpayer’s
decision
to
pursue
a
particular
Thus,
Headlee
claim may foreclose suit by any other taxpayer who wishes
to
bring
suit
to
enforce
the
Headlee
Amendment.
This
erodes the standing granted to any taxpayer in art 9, § 32
of the Headlee Amendment.
Second, when examining whether the claims raised in
this case could have been raised in Durant I, the majority
opines
that
almost
all
the
claims
could
have,
consequently should have, been raised in Durant I.
conclusion is problematic for at least two reasons.
and
This
First,
it is unrealistic to expect the plaintiffs in Durant I to
add new Headlee claims that arose as Durant I dragged its
way through the court system for seventeen years.
as
Justice
Cavanagh
notes
in
his
dissent,
the
Second,
majority
focuses solely on one question when addressing this element
6
of res judicata:
enacted.
when the mandate being challenged was
However,
in
addition
to
considering
when
the
mandate was enacted, one must also consider when the lack
of funding occurred because, as Justice Cavanagh explains,
the lack of funding may not occur until some time after the
mandate was created .
By
applying
overly
broad
privity
analysis
and
by
failing to consider when the lack of funding occurred, the
majority will bar suits by plaintiffs that seek to raise
yet
unchallenged
violations
Headlee
occurring
in
violations
or
subsequent
to
raise
years.
Headlee
This
is
inconsistent with art 9, §§ 29 and 32 and contrary to the
people’s
standing
understanding
to
enforce
that
the
any
Headlee
taxpayer
would
Amendment.
have
While
the
people may have understood that a specific taxpayer who
raised a specific claim and received a decision on that
specific claim could not pursue that claim a second time
once that claim had been decided by the courts, the people
could not have understood the broad grant of standing to
“any
taxpayer”
pursue
a
to
specific
mean
that
claim
one
precludes
taxpayer’s
another
decision
taxpayer
to
from
pursuing another Headlee violation that may have existed,
but was not raised, in the suit by the first taxpayer.
Moreover,
the
people
could
7
not
have
understood
that
subsequent suits for funding violations under art 9, § 29
would be barred if the mandate existed at the time another
Headlee
violation
was
challenged
because
this
would
be
contrary to the very intent of that provision, which is to
prevent the Legislature in subsequent years from reducing
funding or from adding new activities or increasing the
level of activities without providing funding.
The majority surmises that its broad application of
res judicata is necessary to prevent a “total paralysis of
government,” ante at 25, and to provide finality in the
law.
However, the majority fails to consider other facts
that
will
suits.
provide
finality
and
discourage
frivolous
law
First, as Justice Kelly notes in her dissent, if a
second claim by a different taxpayer raises an issue that
has already been decided by the Court of Appeals or this
Court in a previous suit, courts will be bound or guided by
stare decisis to apply the previous decision to the current
claim, and the case will quickly be resolved.3
Second, as
we all know, litigation is expensive, and plaintiffs only
have an opportunity to recover their costs if they prevail
3
Moreover, it seems unlikely that attorneys will
pursue a Headlee claim that has already been clearly
resolved by prior case law, unless they are arguing that a
change in the law is warranted.
8
on the merits of their suit.
Thus, the cost of litigation
will discourage frivolous suits.
Third, there is a one-
year statutory period of limitations on Headlee cases.
600.308a(3).4
“workable”
Thus,
without
the
Headlee
the
Amendment
majority’s
is
MCL
already
imposition
of
an
overbroad application of res judicata.
II.
Release
A school district that was not a party to the Durant I
suit
was
damages
permitted
awarded
in
to
that
receive
suit,
a
portion
provided
of
that
the
the
money
school
district signed a release that stated that the district
waive[d] any right or interest it may have in any
claim or potential claim through September 30,
1997 relating to the amount of funding the
district or intermediate district [was], or may
have been, entitled to receive under the state
school aid act of 1979, 1979 PA 94, MCL 388.1601
to 388.1772, or any other source of state
funding, by reason of the application of section
29 of article IX of the state constitution of
1963, which claims or potential claims are or
were similar to the claims asserted by the
plaintiffs in the consolidated cases known as
[Durant I]. [MCL 388.1611f(8).]
4
MCL 600.308a(3) provides:
A taxpayer shall not bring or maintain
an action under this section [Const 1963, art 9,
§ 32] unless the action is commenced within 1
year after the cause of action accrued.
9
Thus,
the
release
issue
after
regarding
Durant
I
any
is
district
whether
any
that
of
signed
the
a
claims
asserted by that district in this case are barred by the
release.
As the majority notes, the scope of the release is
controlled by the language of the release, ante at 26.
The
language of the release in the present case is very broad.
By it, the district waives “any right or interest it may
have in any claim or potential claim through September 30,
1997,” MCL 388.1611f(8), relating to the amount of funding
it may have been entitled to receive under the school aid
act of 1979 or any other source of state funding.
Thus,
under the language of the release, there may be claims that
are barred by the release.
any
claims
at
this
However, I would not dismiss
time.
Additional
fact-finding
is
required to determine which plaintiffs in the present suit
signed releases in Durant I and to determine which claims,
if any, arose before September 30, 1997.
When addressing
this latter question, one must consider not only when the
mandate being challenged was enacted, but also when the
failure to fund occurred.
While this may potentially lead to disparate results
between districts that were parties to the suit in Durant I
and
districts
that
were
not
10
parties
to
the
suit,
but,
instead, participated in the damages award by signing a
release, these disparate results can be tolerated in the
present case because the circumstances are highly unusual
in
two
regards.
First,
money
damages
were
awarded
in
Durant I despite the fact that damages are not provided for
in § 29 or § 32 of the Headlee Amendment.
See Durant I,
456 Mich 221-233 (opinions of Brickley, J., and Weaver, J.,
each concurring in part and dissenting in part).5
Second,
the school districts that signed releases were not actual
parties to the law suit, but were, nonetheless, allowed to
receive a portion of the damages if they signed a release.
Thus, they should be bound by the release that they signed.
III.
I
dissent
from
Conclusion
the
majority’s
conclusion
plaintiffs’ claims are barred by res judicata.
that
Such a
conclusion is contrary to the “common understanding” that
the
people
would
give
the
Headlee
Amendment,
as
well
contrary to the purpose or the language of the amendment.
The
majority’s
application
of
overbroad
res
judicata
principles to plaintiffs’ Headlee claims eviscerates the
standing granted to taxpayers under art 9, § 32 and will
5
I would have concluded that money damages were not
authorized
by
the
Headlee
Amendment
and
that
only
declaratory judgment was appropriate.
Durant I, 456 Mich
232-233.
11
preclude suits for subsequent funding violations of art 9,
§ 29.
Further, at this time, I would not conclude that the
claims of plaintiffs that signed the release are barred by
the release because more fact-finding is required before
that
determination
can
be
made.
Consequently,
I
would
reverse the decision of the Court of Appeals and remand
this case to that Court for proceedings consistent with
this opinion.
Elizabeth A. Weaver
12
S T A T E
O F
M I C H I G A N
SUPREME COURT
DANIEL ADAIR, a taxpayer of
the Fitzgerald Public
Schools, and FITZGERALD
PUBLIC SCHOOLS, et. al.,
Plaintiffs-Appellants,
v
No. 121536
STATE OF MICHIGAN, DEPARTMENT
OF EDUCATION, DEPARTMENT OF
MANAGEMENT AND BUDGET, and
TREASURER OF THE STATE OF
MICHIGAN,
Defendants-Appellees.
_______________________________
CAVANAGH, J. (dissenting).
Although I agree with the majority that Michigan uses
the same transaction test to determine whether claims are
barred
by
res
judicata,
I
disagree
with
the
majority’s
application of that test to the facts of this case.
The
majority holds that plaintiffs’ claims are barred by res
judicata because they arose from the same transaction as
the claims in Durant v Michigan, 456 Mich 175; 566 NW2d 272
(1997) (Durant I), and, thus, could have been filed while
that litigation was pending.
I disagree.
In Sewell v Clean Cut Mgmt, Inc, 463 Mich 569, 575;
621 NW2d 222 (2001), this Court held that res judicata bars
a second action when (1) the first action was decided on
its merits, (2) both actions involve the same parties or
their privies, and (3) the issue in the second case was, or
could have been, resolved in the first case.
I agree with
the majority that Durant I was decided on its merits and
that
both
privies.
actions
involve
the
same
parties
or
their
However, I do not agree that plaintiffs’ claims
could have been resolved in Durant I.
Plaintiffs’ claims are based on a lack of funding for
certain
activities
and
services.
The
majority
examines
each activity or service and focuses on when each activity
or service was mandated in order to determine whether the
claim regarding that service is barred by res judicata.
This
examination
misses
the
point.
Plaintiffs’
action
challenged funding under the second sentence of Const 1963,
art 9, § 29, frequently referred to as the “prohibition on
unfunded
mandates”
(POUM)
clause.
As
noted
by
the
majority, the POUM clause requires the state to fully fund
any new or increased activities or services mandated or
increased after 1978.
The POUM clause provides:
A new activity or service or an
increase in the [level] of any activity or
service beyond that required by existing law
shall not be required by the legislature or any
state agency of units of Local Government, unless
a state appropriation is made and disbursed to
pay the unit of Local Government for any
2
necessary increased costs.
29.]
[Const 1963, art 9, §
A challenge under the POUM clause is to the funding
for the mandate, not to the mandate itself.
Thus, when the
activity was mandated is important to determine whether it
was enacted after the 1978 base year, but it is not useful
in
determining
whether
barred by res judicata.
the
current
funding
challenge
is
The majority’s approach examines
whether each mandate existed while Durant I was pending;
that
is
not
the
operative
question.
The
controlling
question is whether the alleged funding deficiency relating
to that mandate existed while Durant I was pending.1
Plaintiffs’ claims could not have been raised while
Durant I was pending because the claims are based on the
funding established in 2000 PA 297, which was not enacted
1
Although not necessary to my analysis, I note that
the majority asserts that the Durant I plaintiffs could
have amended their pleadings at any time during the
seventeen-year pendency of their suit. While MCR 2.118(E)
provides for liberal amendment of pleadings, it is
nonsensical to suggest that parties should move for leave
to amend their pleadings because of a change in the law
after judgment has been entered.
Before today’s opinion,
this Court had not recognized the possibility that a trial
court may grant leave to amend pleadings after judgment has
been entered. Nor had this Court examined whether a party
may amend the pleadings while a case is pending on appeal.
I do not agree with the majority’s holding that a party may
amend its pleadings at any time before this Court issues a
final decision.
3
until three years after the resolution of Durant I.
The
majority fails to recognize that plaintiffs pleaded that
the state decreased its proportion of funding levels of a
mandated
program
after
Durant
I.
Because
the
funding
challenge arose after Durant I, plaintiffs’ claims are not
barred by res judicata.
Although it would have been helpful had plaintiffs’
complaint
directly
referred
to
2000
PA
297,
explicit
reference to the funding statute is not required in an
action in this state.
Plaintiffs’ second amended complaint
contained three counts, each alleging, “Defendant state has
failed to pay plaintiff school districts for the necessary
increased
costs
of
providing
[the/these/said]
activities
and services [set forth in subparagraphs 15 A-H, 19 A-G, or
22 A-L above].”
This is clearly sufficient to satisfy
Michigan’s fact-pleading requirements.
MCR
2.111(B)
requires
a
complaint
to
contain
the
following:
(1) A statement of the facts, without
repetition, on which the pleader relies in
stating the cause of action, with the specific
allegations necessary reasonably to inform the
adverse party of the nature of the claims the
adverse party is called on to defend . . . .
This
rule
required,
does
a
not
complaint
require,
to
nor
has
specifically
4
this
state
Court
the
ever
statute
under which the cause of action arises.
MCR 2.111(B) only
requires that the complainant provide the facts and “the
allegations
necessary
reasonably
to
inform
the
party of the nature of the claims . . . .”
amended
complaint
in
this
case
did
adverse
The second
exactly
that,
it
outlined activities and services that were mandated under
specific statutory sections and then alleged that the state
failed to fund these activities and services.
Further, there are no specific pleading requirements
for claims filed under the Headlee Amendment.
recently
examined
the
pleading
requirements
This Court
for
Headlee
Amendment cases and issued an order vacating the Court of
Appeals order and allowing the plaintiffs to amend their
pleadings.
Duverney v Big Creek-Mentor Utility Auth, 677
NW2d 886 (2004).
Because today’s majority opinion creates
a new requirement that complaints specifically refer to the
statute on which the claim is based, plaintiffs in this
case should certainly be allowed to amend their pleadings.
Because I do not agree that a party must specifically refer
to the funding statute in question, I would not dismiss
plaintiffs’
claims
on
this
technicality.
Therefore,
respectfully dissent.
Michael F. Cavanagh
5
I
6
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