Adair v. State of Michigan
894 N.W.2d 665
Mich. Ct. App.2016Background
- 930 plaintiffs (465 Michigan school districts and a taxpayer rep for each) sued under the Headlee Amendment, alleging the Legislature underfunded reimbursement for costs of CEPI data collection/recordkeeping for school years 2012–13 through 2014–15 and improperly funded those appropriations.
- Prior litigation (Adair I and Adair II) concerned earlier CEPI mandates and resulted in Supreme Court rulings finding the state violated the POUM (prohibition on unfunded mandates) provision; the Legislature then appropriated roughly $34 million to reimburse districts.
- Adair II concluded with an involuntary dismissal deemed an adjudication on the merits; that litigation addressed adequacy of appropriations for 2010–11 and 2011–12 and several related Headlee claims.
- Plaintiffs’ Adair III complaint sought to relitigate the adequacy of base funding (seeking a higher figure for subsequent years) and reiterated challenges to the funding method and to statutory amendments (teacher evaluation/tenure) as unfunded mandates.
- A special master recommended dismissal of the underfunding claim on res judicata/collateral estoppel grounds and rejection of declaratory relief on the remaining claims based on prior appellate holdings; the Court of Appeals adopted that recommendation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars plaintiffs’ underfunding claim challenging 2012–15 appropriations | Adair seeks judicial determination that appropriations for 2012–15 are insufficient and may relitigate the base funding figure | Defendants say Adair II decided the appropriate base and involuntary dismissal operated as adjudication on the merits, so relitigation is barred | Held: Res judicata applies; underfunding claim dismissed (MCR 2.116(C)(7)/(C)(10)) |
| Whether plaintiffs alleged a new or increased mandate (triggering POUM relief) after Adair II | Adair contends new underfunding exists for later years and methodology is flawed | Defendants say no new CEPI mandates or increased activities were alleged since Adair II, so POUM not implicated anew | Held: Plaintiffs did not allege a new mandate/increase; res judicata bars the underfunding claim |
| Whether Headlee challenges to the Legislature’s funding method and teacher-evaluation amendments survive | Adair seeks declaratory relief that the funding scheme is an unconstitutional shell game and evaluation/tenure changes are unfunded mandates | Defendants rely on Adair II and related rulings rejecting those constitutional challenges and finding evaluation changes not state-mandated services | Held: Denied—stare decisis binds the court to prior Adair II/Appellate rulings; declaratory relief denied |
| Whether applying res judicata nullifies the Headlee Amendment’s 1978 base-year protection | Adair argues res judicata would eviscerate the 1978 base-year measure required by §29 | Defendants/ court: res judicata does not affect the 1978 base-year concept—which is a threshold test for new mandates, not a method for calculating funding amounts | Held: Rejected plaintiff’s argument; res judicata application is consistent with Headlee and prior precedent |
Key Cases Cited
- Adair v. Michigan, 486 Mich 468 (2010) (Supreme Court ruling that state violated POUM by requiring CEPI reporting without reimbursement)
- Adair v. Michigan, 497 Mich 89 (2014) (Supreme Court reinstating involuntary dismissal in Adair II and discussing res judicata implications)
- Adair v. Michigan, 302 Mich App 305 (2013) (Court of Appeals decision addressing adequacy of CEPI funding, funding method, and teacher-evaluation/tenure claims)
- Adair v. Michigan, 470 Mich 105 (2004) (Supreme Court ruling that res judicata applies to Headlee POUM litigation and guidance on relitigation limits)
- Judicial Attorneys Ass’n v. Michigan, 460 Mich 590 (1999) (describing §29 as requiring funding for newly mandated activities measured from 1978 base year)
- Washington v. Sinai Hosp. of Greater Detroit, 478 Mich 412 (2007) (involuntary dismissal treated as adjudication on the merits)