Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

CITY OF DETROIT v. CITY OF HIGHLAND PARK

February 28, 1995

CITY OF DETROIT, a Michigan Municipal Corporation, and the DETROIT WATER AND SEWERAGE DEPARTMENT, Plaintiff,
v.
CITY OF HIGHLAND PARK, Defendant, -v- CHRYSLER CORPORATION, a Delaware Corporation, Intervenor Herein.



The opinion of the court was delivered by: JOHN FEIKENS

 I. Background

 This case is the latest in a line of waste water rate-making disputes in the City of Detroit (Detroit) metropolitan area. I first confronted this matter in 1979 when I issued an order placing all rate-making challenges under this court's continuing jurisdiction. Order Regarding Rate Challenges, October 4, 1979 United States v. State of Michigan, Civil Action 77-77100. I entered that Order after receiving the Report and Recommendation of the Masters that I appointed to weigh the propriety and fairness of rate-making procedures in the Detroit metropolitan area. Report and Recommendation of the Masters, May 1, 1978 77-77100. These actions were necessary to insure that the parties complied with the Clean Water Act, 33 United States Code (U.S.C.) § 1251 et seq. I now oversee Detroit's provision of waste water treatment services to over one hundred communities in Southeastern Michigan.

 Some of the communities serviced by Detroit have significant bad debt problems. Detroit's procedure for handling this bad debt is closely scrutinized. Currently, this Court is attempting to resolve a dispute between Detroit and Wayne, Macomb and Oakland Counties over Detroit's practice of spreading bad debt over the entire waste water system. Although that matter is still pending, it is likely that Detroit will have to reimburse communities that were forced to pay for the bad debt of others. In light of this, Detroit is under pressure to improve its collection methods and pursue the collection of bad debts.

 At the core of the present dispute is Detroit's furnishing of vital waste water services to the City of Highland Park (Highland Park) pursuant to a June 8, 1983 contract. Highland Park has failed to pay for these benefits on a regular basis, despite the fact that it bills and collects from its residents for these services. Due to this failure, Detroit sued Highland Park in order to compel payment of this bad debt. Highland Park did not respond to this action. In view of the large amount of money involved, I met with the Highland Park attorneys and asked if they had any objections to the entry of judgment against Highland Park. None were forthcoming, so on June 28, 1993 I entered a default judgment against defendant in the amount of eight million, ninety-three thousand, eight hundred sixty-five dollars and two cents ($ 8,093,865.02). That judgment remains unsatisfied. Subsequent to the entry of that judgment, I entered a consent judgment against defendant for additional monies owed plaintiff for provision of waste water services in the amount of two million, five hundred five thousand, two hundred ten dollars and forty-four cents ($ 2,505,210.44) on February 21, 1995. City of Detroit v. City of Highland Park, Civil Action No. 94-73135. Neither defendant nor Chrysler Corporation (Chrysler), intervenor herein, contest the validity of these judgments. Thus, it is beyond dispute that Highland Park currently owes Detroit ten million, five hundred ninety-nine thousand, seventy-five dollars and forty-six cents ($ 10,599,075.46)

 II. Analysis

 A. Writ of Mandamus

 Chrysler, in its motion to intervene, argued that the writ of mandamus issued in this case violated art. 9 § 25 of the Michigan Constitution. That section states:

 
Sec. 25 Property taxes and other local taxes and state taxation and spending may not be increased above the limitations specified herein without direct voter approval.

 Const. 1963, art. 9, § 25. This provision is commonly referred to as the Headlee Amendment. Sections 26-34 of the Michigan Constitution implement the Amendment. The key section is section 31 which reads as follows:

 
Units of Local Government are hereby prohibited from levying any tax not authorized by law or charter when this section is ratified or from increasing the rate of an existing tax above the rate authorized by law or charter when this section is ratified, without the approval of a majority of the qualified electors of that unit of Local Government voting thereon.

 Const. 1963, art. 9, § 31 (emphasis added).

 Chrysler states that under this provision the writ of mandamus is unconstitutional because it would force defendant to levy taxes in excess of 20 mills without voter approval.

 Chrysler's position is inaccurate. The Headlee Amendment does not prevent imposition of a tax or tax increase that was authorized prior to the time the Headlee Amendment took effect. Taxpayers United v. City of Detroit, 196 Mich. App. 463, 493 N.W.2d 463 (1992). M.C.L. 600.6093 was enacted prior to the Headlee Amendment. *fn2" Therefore, a tax increase necessitated by a valid court judgment is not within the prohibitions of the Headlee Amendment. In addition, as is shown below, state law cannot prevent a federal judge from enforcing his judgments.

 B. Motion to Satisfy Judgment

 This is a motion for an order to compel Chrysler to pay monies owing Highland Park directly to Detroit. Defendant and Chrysler contend that Michigan state law prohibits appropriating funds owed to a city in order to satisfy judgments. Therefore, according to Chrysler and Highland Park, such an action ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.