ASSOCIATED BUILDERS AND CONTRACTORS v CITY OF LANSING
Docket No. 149622
Supreme Court of Michigan
Decided May 17, 2016
499 Mich 177
Argued October 15, 2015 (Calendar No. 8).
Associated Builders and Contractors brought an action in the Ingham Circuit Court against the city of Lansing, alleging that the city exceeded its authority by enacting an ordinance that established a prevailing wage for contracts, agreements, or other arrangements for construction on behalf of the city. The court, Clinton Canady III, J., granted plaintiffs motion for summary disposition on the basis of Attorney General ex rel Lennane v Detroit, 225 Mich 631 (1923), which held that, under Michigan‘s 1908 Constitution, the setting of wage rates was a matter of state concern into which a city could not intrude. The Court of Appeals, BECKERING and SHAPIRO, JJ. (SAWYER, P.J., dissenting), reversed and remanded, stating that changes in the legal landscape had rendered Lennane obsolete and inapplicable. 305 Mich App 395 (2014). The Supreme Court granted defendant‘s application for leave to appeal. 497 Mich 920 (2014).
In an оpinion by Chief Justice YOUNG, joined by Justices MARKMAN, MCCORMACK, VIVIANO, BERNSTEIN, and LARSEN, the Supreme Court held:
The Court of Appeals correctly concluded that the city of Lansing had the authority under
1. Lennane was decided under the 1908 Constitution, a provision of which stated that the electors of each city and village had the power to frame, adopt, and amend its charter and to pass all laws and ordinances relating to its municipal concerns, subject to the Constitution and general laws of the state. Interpreting this provision, the Lennane Court held that the regulation of wages paid to third-party employees working on municipal construction contracts was exclusively a matter of state, not municipal, concern. In concluding that a municipality‘s powers did not include the power to enact such laws, the Lennane Court appears to have concluded that municipalities have only the powers relating to local concerns that were not expressly denied and could wield only those powers expressly and explicitly granted. This conclusion found no support in the 1963 Constitution.
2. The Court of Appeals erred by failing to follow Lennane. While developments over the past century undercut the foundation on which Lennane stood, its holding was never explicitly superseded by the ratifiers of the 1963 Constitution or by the Legislature, nor was it overruled by the Supreme Court. The Court of Appeals was bound to follow decisions of the Supreme Court except when those decisions have clearly been overruled or supersеded, and it was not authorized to anticipatorily ignore a Supreme Court decision if it determined that the foundations of the decision had been undermined. While the Court of Appeals decision reached the correct result, it erred by usurping the Supreme Court‘s role under the Constitution.
Court of Appeals judgment vacated; result affirmed; case remanded to the Ingham Circuit Court for further proceedings.
Justice ZAHRA, concurring in the result, agreed that the prevailing-wage ordinance was a valid exercise of the city‘s authority under
MUNICIPAL CORPORATIONS — CONSTITUTIONAL LAW — PREVAILING-WAGE ORDINANCES.
A municipal corporation has the power under
Masud Labor Law Group (by Kraig M. Schutter) for plaintiff.
Plunkett Cooney (by Michael S. Bogren) for defendant.
Amici Curiae:
Lipson, Neilson, Cole, Seltzer & Garin, PC (by C. Thomas Ludden and Samantha K. Heraud), for the National Federation of Independent Business Small Business Legal Center.
Miller, Canfield, Paddock & Stone, PLC (by Clifford W. Taylor, Paul D. Hudson, and James D. Boufides), for the Michigan Municipal League.
Bauckham, Sparks, Lohrstorfer, Thall & Seeber, PC (by Robert E. Thall), for the Michigan Townships Association.
McKnight, McClow, Canzano, Smith & Radtke, PC (by John R. Canzano), for the Michigan Building and Construction Trades Council.
Sachs Waldman, PC (by Andrew Nickelhoff), for the Michigan State AFL-CIO.
YOUNG, C.J. Plaintiff appeals by leave the Court of Appeals’ opinion in Associated Builders & Contractors v City of Lansing.1 Plaintiff claims that the city of Lansing‘s Ordinance 206.18(a) is unconstitutional under this Court‘s 1923 decision Attorney General ex rel Lennane v Detroit2 and is an unlawful usurpation of state power. The Court of Appeals majority disagreed and ruled that subsequent changes to state law had caused Lennane to be “superseded.” The Court of Appeals erred by exceeding its powers for refusing to follow a decision from this Court that both applied and had not been overruled. Even so, we now take this opportunity to overrule Lennane because subsequent constitutional changes3 have undercut its viability. We therefore vacate the Court of Appeals’ decision but affirm the result for the reasons stated below.
FACTS AND PROCEDURAL HISTORY
Defendant, city of Lansing, enacted an ordinance requiring contractors working on city construction contracts tо pay employees a prevailing wage. The ordinance states in relevant part:
No contract, agreement or other arrangement for construction on behalf of the City and involving mechanics and laborers, including truck drivers of the contractor and/or subcontractors, employed directly upon the site of the work, shall be approved and executed by the City unless the contractor and his or her subcontractors furnish proof and agree that such mechanics and laborers so employed shall receive at least the prevailing wages and fringe benefits for corresponding classes of mechanics and laborers, as determined by statistics compiled by the United States Department
of Labor and related to the Greater Lansing area by such Department.4
Plaintiff, a trade association, filed suit against Lansing, arguing that the ordinance is unconstitutional because municipalities do not have the authority to adopt laws regulating the wages paid by third parties, even where the relevant work is done on municipal contracts paid for with municipal funds. Plaintiff relies primarily on this Court‘s 1923 Lennane decision, which held that, under this state‘s 1908 Constitution, the city of Detroit could not enact an essentially analogous ordinance and related city charter provision.5 In response, defendant argued that the legal landscape, particularly the ratification of a new constitution in 1963, had changed so radically that Lennane was no longer rеlevant in determining the question at hand. The trial court granted summary disposition to plaintiff, ruling that Lennane made it clear that the regu-
lation of wages was a matter of state, not municipal, concern under the Michigan Constitution6 and the Home Rule Act,7 though it did take note of Lennane‘s “archaic nature.”
The Court of Appeals panel reversed the lower court in a published, split decision.8 Although the panel majority stated that its opinion “neither overrule[s] Lennane nor deviate[s] from the rule of stare decisis,”9 the majority nevertheless ruled that changes in the legal landscape had, in fact, rendered Lennane obsolete and inapplicable. The panel stated that “the founda-
tion upon which Lennane stood has been rejected by our Supreme Court.”10 One judge dissented, arguing that the majority was unlawfully striking down a decision by this Court because Lennane had never been overruled — either implicitly or explicitly — or rendered inapplicable. The dissenting opinion stated:
[T]he Court‘s conclusion in Lennane that this is a mattеr of state concern has never been overruled. Therefore ... defendant‘s powers ... do not extend to this ordinance until and unless the Supreme Court revisits its conclusion in
Lennane, or the Legislature explicitly grants cities the power to adopt prevailing wage ordinances.11
This appeal followed.
STANDARD OF REVIEW
This Court reviews de novo both questions of constitutional law and a trial court‘s decision on a motion for summary disposition.12
ANALYSIS
We take this opportunity to overrule Lennane. Lennane‘s conception of municipal power may or may not have been well-grounded in Michigan‘s 1908 Constitution and the legal landscape of the time, but it is certainly incongruent with the state of our law as reflected in our current Constitution. We therefore conclude that Lennane has no continuing viability in light of the adoption of our 1963 Constitution.
The 1908 Constitution read in relevant part:
Under such genеral laws, the electors of each city and village shall have power to frame, adopt, and amend its charter, ... and, through its regularly constituted authority, to pass all laws and ordinances relating to its municipal concerns, subject to the Constitution and general laws of this state.13
Interpreting this constitutional provision, the Lennane Court held that the regulation of wages paid to third-party employees working on municipal construction contracts was exclusively a matter of “state,” not “municipal,” concern.14 Quoting liberally from a 1919 case, Kalamazoo v Titus,15 the Lennane Court stated:
“The charter provision, the ordinance, the argument made for the city, indeed, the suit itself, reflect a popular interest in, and, we conceive, a popular misunderstanding about, the subject of home rule, so-called, in cities. There is apparent a widely spread notion that lately, in some way, cities have become possessed of greatly enlarged powers, the right to exercise which may come from mere assertion of their existence and the purpose to exercise them. Whether these powers are really inherent in the community, but their exercise formerly was restrained, or are derived from a new grant of power by the State, or may be properly ascribed to both inherent right and to a new grant, are questions which do not seem to bother very much the advocates of the doctrine that they in any event exist. On the other hand, there is expression of grave doubt whether, in the view of the law, there has been any
enlargement or extensiоn of the subjects of municipal legislation and control or of the powers of cities except as those subjects and powers are specifically enumerated and designated in the Constitution itself and in the home rule act.”16
This conclusion finds no support in the 1963 Constitution.
Under general laws the electors of each city and village shall have the power and authority to frame, adopt and amend its charter, and to amend an existing charter of the city or village heretofore granted or enacted by the legislature for the government of the city or village. Each such city and village shall have power to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law. No enumeration of powers granted to cities and villages in this constitution shall limit or restrict the general grant of authority conferred by this section.17
Explaining these highlighted changes, the Address to the People statеs:
This is a revision of Sec. 21, Article VIII, of the present [1908] constitution and reflects Michigan‘s successful experience with home rule. The new language is a more positive statement of municipal powers, giving home rule cities and villages full power over their own property and government, subject to this constitution and law.18
The 1963 Constitution also contained a new provision,
The provisions of this constitution and law concerning counties, townships, cities and villages shall be liberally construed in their favor. Powers granted to counties and townships by this constitution and by law shall include those fairly implied and not prohibited by this constitution.19
If it was ever the case, we conclude that, given the newly added language that expresses the people‘s will to give municipalities even greater latitudе to conduct their business, there is simply no way to read our current constitutional provisions and reach the conclusion that “there is... grave doubt whether... there has been any enlargement or extension of the subjects of municipal legislation and control or of the powers of cities except as those subjects and powers are specifically enumerated and designated in the Constitution
itself and in the home rule act.”20 Under our current Constitution, there is simply no room for doubt about the expanded scope of authority of Michigan‘s
But the wages paid to employees of contractors working on municipal contracts have a self-evident relationship to “municipal concerns, property, and government” if those words are even reasonably, if not liberally, construed. Those wage rates сoncern how a municipality acts as a market participant, spending its own money on its own projects.23 If a municipality has
broad powers over local concerns, it certainly has the power to set terms for the contracts it enters into with third parties for its own municipal projects — including provisions relating to the wages paid to third-party employees. This way, the municipality controls its own money and presumably expresses its citizens’ preference as to what those who work on public projects should be paid. We see nothing in these municipal aims that falls outside the ambit of
Furthermore, Lennane‘s holding appears to rest on an implicit dichotomy: if something is a matter of “state concern,” it cannot also be a matter of “loсal concern.”25 But this binary understanding does not comport with the plain language of the 1963 Constitution, which grants cities and villages broad powers over “municipal concerns, property and government” whether those powers are enumerated or not. The relevant constitutional language does not state that a matter cannot be a “municipal concern” if the state might also have an interest in it.26 While a binary
property, things that it clearly “owns or possesses“; and a municipality certainly has “authoritative direction or control” over its own public-works projects.
understanding of
Thus, if Lennane‘s holding was ever on firm constitutional ground, it no longer had sound footing after the people ratified the 1963 Constitution. We agree with the Court of Appeals majority that subsequent changes in the law have undercut Lennane‘s foundations.29 Accordingly, we conclude that “changes in the
local role for setting wage rates on municipal contracts. At the very least, there is no evidence that the Legislature intended to preempt municipal authority in this area.
law... no longer justify the questioned decision.”30 Nor do we believe that any reliance
(1997) (“Home rule cites have broad powers to enact ordinances for the benefit of municipal concerns under the Michigan Constitution.... The home rule cities act is intended to give cities a large measure of home rule. It grants general rights and powers subject to enumerated restrictions.“) (citations omitted), Detroit v Walker, 445 Mich 682, 690; 520 NW2d 135 (1994) (“[I]t is clear that home rule cities enjoy not only those powers specifically granted, but they may also exercise all powers not expressly denied. Home rule cities are empowered to form for themselves a plan of government suited to their unique needs and, upon local matters, exercise the treasured right of self-governance.“) (citation omitted), and AFSCME v Detroit, 468 Mich 388, 410; 662 NW2d 695 (2003), quoting Walker, 445 Mich at 690 (“We havе held that ‘home rule cities enjoy not only those powers specifically granted, but they may also exercise all powers not expressly denied.’ “). While all of these cases use clear language acknowledging the broad grants of municipal authority in the 1963 Constitution and the Home Rule Act, none of them relate directly to the problem at issue in this case or purport to overrule Lennane. These cases support the point made by the panel. However, rather than rely primarily on the gloss in some of our past cases, we take this opportunity to overrule Lennane anchoring our decision on the text of the 1963 Constitution itself.
constitutions. We therefore declare that Lennane has no continuing viability and repudiate its conception of municipal authority in light of the ratification of the 1963 Constitution. The rule in Lennane — that city and village governments may not enact ordinances or charter provisions governing the wages paid to third-party employees working on municipal construction contracts — is overruled.
Nonetheless, we also agree with Court of Appeals dissent‘s following assessment of the binding nature of Lennane before the instant decision:
[T]he Court‘s conclusion in Lennane that this is a matter of state concern has never been overruled. Therefore, even if we apply a “liberal construction” to defendant‘s powers, they do not extend to this ordinance until and unless the Supreme Court revisits its conclusion in Lennane, or the Legislature explicitly grants cities the power to adopt prevailing wage ordinances.31
While it is inarguable that developments over the past century have undercut the foundation upon which Lennane stood, its holding was never explicitly superseded by the ratifiers of the 1963 Constitution or by the Legislature, nor was it overruled by this Court. The Court of Appeals is bound to follow decisions by this Court except where those decisions have clearly been overruled or superseded32 and is not authorized to
anticipatorily ignore our decisions where it determines that the foundations of a Supreme Court decision have been undermined.33 Thus, while we agree with the result of the Court of Appeals’
CONCLUSION
Lennane, whatever its merits when it was decided, has been undercut by the adoption of the 1963 Constitution. We therefore overrule Lennane. Under our Constitution, cities and villages may enact ordinances relating to “municipal concerns, property and government,” including ordinances and charter provisions regulating the wages paid to third-party employees working on municipal construction contracts, “subject to the constitution and law.”34
The Court of Appeals erred, however, by disregarding precedent from this Court that has not been clearly overruled by the Court or superseded by subsequent legislation or constitutional amendment. “[I]t is the Supreme Court‘s obligation to overrule or modify case law if it becomes obsolete, and until this Court takes such action, the Court of Appeals and all lower courts
to this case, because both the 1908 Constitution and the 1963 Constitution contain the phrase at issue in Lennane — “relating to its municipal concerns” — Lennane had not been clearly supersedеd, and the Court of Appeals was bound by it.
are bound by that authority.”35 Because of this error, we vacate the Court of Appeals’ decision but affirm the result, for the reasons stated above.
MARKMAN, MCCORMACK, VIVIANO, BERNSTEIN, and LARSEN, JJ., concurred with YOUNG, C.J.
ZAHRA, J. (concurring in the result). I agree with the majority‘s ultimate conclusion that the prevailing-wage ordinance is expressly authorized by
Municipalities have never possessed inherent authority not expressly granted by the Constitution or laws of Michigan and do not have it today. It was not until the 1908 Constitution that municipalities were granted the power of self-governance, a concept known as “home rule.”
The 1908 Constitution required the Legislature to enact a general law for the incorporation of cities and villages:
The legislature shall provide by a general law for the incorporation of cities, and by a general law for the incorporation of villages; such general laws shall limit their rate of taxation for municipal purposes, and restrict their powers of borrowing money and contracting debts.1
Section 21 of the 1908 Constitution also provided the first “charter” provision, vesting in municipalities the power of home rule. This provision allowed municipalities to frame, adopt, and amend their charters, and states:
Under such general laws, the electors of each city and village shall have power and authority to frame, adopt and amend its charter, and to amend an existing chartеr of the city or village heretofore granted or passed by the legislature for the government of the city or village and, through its regularly constituted authority, to pass all laws and ordinances relating to its municipal concerns, subject to the constitution and general laws of this state.2
The Address to the People accompanying the 1908 Constitution explained the addition of constitutional provisions pertaining to home rule — a concept not found in prior constitutions — in detail:
The provisions herein contained are designed to meet the modern conditions affecting municipal affairs; to authorize through appropriate legislation that which has heretofore been denominated “Home Rule.” These prоvisions constitute a marked advance from the present constitutional provisions relating to cities and villages by doing away with the principle of classification and with special charters, granted and subject to amendment only by the state legislature. The purpose is to invest the legislature with power to enact into law such broad general principles relative to organization and administration as are or may be common to all cities and all villages, each city being left to frame, adopt and amend those charter provisions which have reference to their local concerns. The most prominent reasons offered for this change are that each municipality is the best judge of its lоcal needs and the best able to provide for its local necessities; that inasmuch as special charters and their amendments are now of local origin, the state legislature will become much more efficient and its terms much shorter if the labor of passing upon the great mass of detail incident to municipal affairs is taken from that body and given into the hands of the people primarily interested.
Under these provisions, cities and villages, as under the present [1850] constitution, will remain subject to the constitution and all the general laws of the state.3
Thus, under the 1908 Constitution, municipalities had for the first time the power to govern their own affairs. But this constitutional change did not grant municipalities inherent authority based solely on thе assertion of their existence. Instead, this was a specific but limited grant of the power of home rule that was “subject to the constitution and general laws of this state.”4 The grant of home rule expressly provides municipalities with greater control over local affairs, but it did not create any inherent authority in municipalities. The Court in Attorney General ex rel Lennane v Detroit recognized this when it dismissed the notion that municipalities have inherent authority. The powers are limited to those “specifically enumerated and designated in the Constitution itself and in the home rule act.”5
The 1963 Constitution contains a similar charter provision to that found in the 1908 Constitution that specifically grants the power of home rule. The 1963 Constitution also added a provision that states, “[n]o enumerаtion of powers granted to cities... in this constitution shall limit... the general grant of authority conferred by [
contains other enumerated powers granted to municipalities.7 As it plainly states, the last sentence of
“[Local governments] have no inherent jurisdiction to make laws or adopt regulations of government; they are governments of enumerated powers, acting by a delegated authority; so that while the State legislature may exercise such powers of government coming within a proper designation of legislative power as are not expressly or impliedly prohibited, the local authorities can exercise those only which are expressly or impliedly conferred, and subject to such regulations or restrictions as are annexed to the grant.”9
The 1963 Constitution provided another rule of construction not found in previous constitutions that proves helpful to the disposition of this case.
The provisions of this constitution and law concerning counties, townships, cities and villages shall be liberally construed in their favor. Powers granted to counties and townships by this constitution and by law shall include those fairly implied and not prohibited by this constitution.10
Applying this rule of construction to the present case, the city of Lansing‘s prevailing-wage ordinance survives constitutional challenge. This ordinance requires that private employers pay their employees the local prevailing wage when contracting with Lansing for municipal projects.11 This is strikingly similar to the ordinance at issue in Lennane. While the Lennane Court concluded that the prevailing-wage ordinance before it was a state concern outside the power of a municipality to regulate, the Court offered no reasoning to support its conсlusion. Significantly, Lennane was decided under the 1908 Constitution, which did not direct a liberal construction of home rule authority. And while we give Lennane deference, the 1963 Constitution directs us to interpret matters of home rule liberally. Following this direction, it is apparent that the prevailing-wage ordinance before us today is a matter of municipal concern.12
In sum, I agree with the majority that under the 1963 Constitution, the city of Lansing‘s prevailing-wage ordinance is a valid exercise of the specific grant
of authority found in
Notes
Under general laws the electors оf each city and village shall have the power and authority to frame, adopt and amend its charter, and to amend an existing charter of the city or village heretofore granted or enacted by the legislature for the government of the city or village. Each such city and village shall have power to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law. No enumeration of powers granted to cities and villages in this constitution shall limit or restrict the general grant of authority conferred by this section.
See, e.g.,Each city may in its charter provide:
* * *
For the exercise of all municipal powers in the management and control of municipal property and in the administration of the municipal government, whether such powers be expressly enumerated or not; for any act to advance the interests of the city, the good government and prosperity of the municipality and its inhabitants and through its regularly constituted authority to pass all laws and ordinances relating to its municipal concerns subject to the constitution and general laws of this state.
This is a new section intended to direct the courts to give a liberal or broad construction to statutes and constitutional provisions concerning all local governments. Home rule cities and villages already enjoy a broad construction of their powers and it is the intention here to extend to countiеs and townships within the powers granted to them equivalent latitude in the interpretation of the constitution and statutes. [2 Official Record, Constitutional Convention 1961, p 3395 (emphasis added).]