Township of Hopkins v. State Boundary Commission, 355195

Background:

The State Boundary Commission (the Commission) rescinded its promulgated annexation rules in 2018 and posted nonbinding "informational guidelines" online describing its annexation process.
In Jan. 2020, property owners filed a petition to annex ~467 acres from Hopkins and Wayland Townships to the city of Wayland; the Commission found the petition legally sufficient at a June 4, 2020 meeting.
Plaintiffs (Hopkins and Wayland Townships) sued in the Court of Claims seeking injunctive relief, alleging the Commission violated MCL 123.1004 by processing annexation petitions without promulgated rules under the APA and that they were denied an opportunity to be heard at the legal-sufficiency review.
The Commission defended that it used statutory provisions plus nonbinding guidelines, plaintiffs suffered no prejudice, and any review belongs in circuit court after a final agency decision.
The Court of Claims granted summary disposition for the Commission, finding plaintiffs had standing and the dispute was ripe but that plaintiffs failed to show prejudice from the lack of formal rules; the Court of Appeals affirmed.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether MCL 123.1004 mandates promulgation of rules/procedures for annexation	MCL 123.1004's "shall make rules" is mandatory; Commission must promulgate rules under the APA	"Shall make" allows discretion to promulgate only when rules are necessary or desirable; guidelines suffice where statute is detailed	The statute requires promulgation when rules are "necessary," but here the SBCA's statutory scheme and nonbinding guidelines meant no necessary rule was missing; no violation found
Whether the Commission's online "informational guidelines" unlawfully substituted for APA-promulgated rules	Guidelines are not APA-compliant rules and thus cannot govern proceedings; their use prejudiced plaintiffs	Guidelines are explanatory, nonbinding, grounded in statute, and do not bind parties or replace the APA process	Guidelines are nonbinding, explanatory, and not rules-in-disguise; they did not render proceedings arbitrary
Whether plaintiffs suffered prejudice (entitling them to injunctive relief) from lack of promulgated rules	Absence of binding procedures foreclosed orderly presentation of evidence and caused irreparable harm	Plaintiffs received notice, submitted materials, counsel argued at the sufficiency meeting; plaintiffs identify only speculative or conjectural harms	Plaintiffs failed to show concrete prejudice or irreparable harm; injunction inappropriate
Ripeness/standing and need to exhaust administrative remedies	Challenge to agency procedure was ripe and plaintiffs had substantial interest; relief should be available prefinal decision	Plaintiffs must wait for a final administrative decision and seek circuit-court review; SBCA provides review after final order	Court of Claims and appellate court found plaintiffs had standing and ripeness for challenge, but lack of prejudice defeated injunctive relief; exhaustion not required here for procedural challenge

Key Cases Cited

Midland Twp v. Mich. State Boundary Comm., 64 Mich. App. 700 (1975) (agency failure to promulgate rules did not warrant relief absent showing of prejudice)
Midland Twp v. Mich. State Boundary Comm., 401 Mich. 641 (1977) (no vested boundary rights; limits on judicial relief in boundary disputes)
West Bloomfield Hosp. v. Certificate of Need Bd., 452 Mich. 515 (1996) (agency decisions made absent requisite rules are not automatically invalid; prejudice required)
In re Turner, 108 Mich. App. 583 (1981) (absence of procedural rules does not warrant reversal absent showing that lack of rules affected outcome)
Mich. State Chamber of Commerce v. Secretary of State, 122 Mich. App. 611 (1983) (court limited in reviewing nonbinding agency interpretations published as guidance)
State Employees Ass’n v. Dep’t of Mental Health, 421 Mich. 152 (1984) (four-factor test for injunctive relief/likelihood of success and irreparable harm)