Platt Convenience Inc v. City of Ann Arbor, 359013

Platt Convenience, Inc. brought an original action against the City of Ann Arbor, challenging the legality of its stormwater charges as disguised taxes under the Michigan Constitution's Headlee Amendment (Art 9, § 31).
Platt sought class certification for all persons or entities paying Ann Arbor's stormwater charges between October 2020 and October 2021, or during the lawsuit's pendency.
Ann Arbor's stormwater system is mandated by federal law and charges properties based on impervious surface; the city asserts charges are based on system use and regulatory compliance.
The case was referred to a Special Master for factual development, followed by competing motions for summary disposition (akin to summary judgment).
The City of Ann Arbor argued the charges are lawful user fees used solely to operate and maintain the stormwater system, not taxes; Platt argued the charges functioned as taxes because they were compulsory, disproportionate, and used for revenue-raising.
The Court denied class certification and granted summary disposition in favor of the City, concluding the charges were valid user fees, not unlawful taxes under the Headlee Amendment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Stormwater charge: tax or user fee?	Charges are disguised taxes requiring voter approval under Headlee § 31	Charges fund federally mandated system; are user fees, not taxes	Not a tax; charges are valid user fees, primarily regulatory in purpose
Class certification	Platt adequately represents all affected by the charge	Conflicts within proposed class; interests of subgroups diverge	Denied; class rep is inadequate due to intra-class conflicts
Proportionality to costs (Bolt factor 2)	Charges are disproportionate; City's profits show it's a revenue-raising tax	Fees reflect actual costs, with presumption of reasonableness/constitutionality	Plaintiff failed to provide evidence of disproportionality; presumption unrebutted
Compulsoriness of charge (Bolt factor 3)	Charges compulsory, not voluntary; thus a tax	Credits available for runoff reduction; compliance can be avoided	Charges effectively compulsory; but not dispositive given other factors

Bolt v. City of Lansing, 459 Mich 152 (Mich. 1998) (establishes three-part test to distinguish user fees from taxes under Headlee Amendment)
Shaw v. City of Dearborn, 329 Mich App 640 (Mich. Ct. App. 2019) (applies Bolt test to utility rates)
Jackson Co. v. City of Jackson, 302 Mich App 90 (Mich. Ct. App. 2013) (challenges to stormwater charges as taxes; evidence burden on challenger)
Youmans v. Charter Twp of Bloomfield, 336 Mich App 161 (Mich. Ct. App. 2021) (burden on plaintiff to show charge is tax; utility rate reasonableness presumption)
Merrelli v. St Clair Shores, 355 Mich 575 (Mich. 1959) (distinguishes municipal taxes from police power regulatory fees)
Westlake Transp., Inc. v. Pub Serv Comm, 255 Mich App 589 (Mich. Ct. App. 2003) (totality of circumstances determine whether fee is tax or regulatory)