Michigan Association of Home Builders v. City of Troy
497 Mich. 281
Mich.2015Background
- The City of Troy privatized its building department in 2010, contracting with SafeBuilt to perform inspection services; SafeBuilt received 80% of fees and the city retained the remainder.
- Plaintiffs (Michigan Association of Home Builders; Associated Builders and Contractors of Michigan; Michigan Plumbing and Mechanical Contractors Association) sued the City seeking declaratory and injunctive relief, alleging the City’s use of building-fee surpluses violated MCL 125.1522(1) and the Headlee Amendment.
- Plaintiffs alleged fees exceeded the reasonable relation to enforcement costs and were used to augment the City’s general fund in violation of the Single State Construction Code Act (CCA) and the State Constitution.
- The circuit court granted summary disposition for the City under the theory plaintiffs had failed to exhaust administrative remedies under MCL 125.1509b, which provides for performance evaluations of an enforcing agency and an appeal procedure if the State Construction Code Commission issues a notice of intent to withdraw enforcement responsibility.
- The Court of Appeals affirmed, but the Michigan Supreme Court granted review to decide whether exhaustion of the administrative process in § 9b was required when the challenged action was taken by the municipal legislative body (the city council) setting fees under MCL 125.1522(1).
- The Supreme Court reversed the Court of Appeals and remanded, holding § 9b’s administrative procedures apply to the enforcing agency (the building inspection department) and not to the governmental subdivision’s legislative body that establishes fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs were required to exhaust administrative remedies under MCL 125.1509b before filing in circuit court | Plaintiffs argued § 9b does not provide an administrative remedy for actions by the legislative body setting fees, so exhaustion was not required | City argued § 9b provided an administrative path (performance evaluation/appeal) applicable to the city and thus exhaustion was required | The Court held § 9b applies only to the enforcing agency, not the legislative body that sets fees, so plaintiffs need not exhaust § 9b remedies |
| Whether § 125.1509b authorizes review of a governmental subdivision’s legislative body (fee-setting) | Plaintiffs: § 9b’s plain language limits evaluations to the enforcing agency; it does not authorize review of the legislative body | City: § 9b should reach actions of the city as a whole (including fee decisions) | The Court held the statutory definitions distinguish “enforcing agency” from “governmental subdivision/legislative body,” and § 9b does not cover fee-setting by the legislative body |
Key Cases Cited
- Maiden v. Rozwood, 461 Mich. 109 (1999) (standard of review for summary disposition)
- Travelers Ins. Co. v. Detroit Edison Co., 465 Mich. 185 (2001) (questions of subject-matter jurisdiction reviewed de novo)
- Pohutski v. City of Allen Park, 465 Mich. 675 (2002) (statutory interpretation reviewed de novo)
- Lash v. Traverse City, 479 Mich. 180 (2007) (courts must give effect to the Legislature’s chosen statutory language)