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Galien Township School District v. Departement of Education

Court of Appeals of Michigan

April 14, 2015

GALIEN TOWNSHIP SCHOOL DISTRICT and DELTON-KELLOGG SCHOOLS, Plaintiffs-Appellees,
v.
DEPARTMENT OF EDUCATION and SUPERINTENDENT OF PUBLIC INSTRUCTION, Defendants-Appellants

Page 383

Ingham Circuit Court. LC No. 13-000367-AA.

Before: SAAD, P.J., and OWENS and K.F. KELLY, JJ.

OPINION

Page 384

[310 Mich.App. 240] ON REMAND

Per Curiam.

In lieu of granting leave to appeal our decision in Galien Twp Sch Dist v Dep't of Ed, 306 Mich.App. 410; 857 N.W.2d 659 (2014), the Supreme Court vacated our remand of the case to the Ingham Circuit Court for reinstatement of the Superintendent of Public Instruction's March 14, 2013 final decision and remanded the case for us " to expressly address plaintiff Galien Township School District's alternative arguments for overturning the Superintendent's decision," which we did not address during our initial review of the case. Galien Twp Sch Dist v Dep't of Ed, 497 Mich. 951; 858 N.W.2d 438 (2015). Our Supreme Court denied leave to appeal in all other respects. Id. For the reasons discussed in this opinion, we reject Galien's alternative arguments for overturning the superintendent's decision, and we remand this matter to the circuit court for reinstatement of the superintendent's March 14, 2013 final decision.

Initially, we take this opportunity to correct a factual error in our previous opinion, in which we stated, " After plaintiffs admitted teacher misconduct in reporting student attendance, defendants claimed authority under the State School Aid Act (SSAA), MCL 388.1601 et seq., and audited prior years' attendance records." Galien Twp Sch Dist, 306 Mich.App. at 414. While plaintiff Delton-Kellogg Schools admitted staff misconduct in altering pupil membership counts, which led to its audit, Galien was audited following an [310 Mich.App. 241] anonymous tip to the Michigan Department of Education (MDE) alleging that Galien intentionally overstated its pupil membership counts of alternative education students for September 2010 and February 2011. Galien did not acknowledge teacher misconduct in its reporting. Contrary to Galien's assertion, however, this factual error had no bearing on our analysis of the MDE's statutory authority to conduct a retroactive audit.

We now turn to Galien's alternative arguments for overturning the superintendent's decision. First, Galien asserts due process violations, arguing that Kathleen Weller, in her capacity as the director of the MDE's Office of Audits, failed to provide Galien with notice and an opportunity to be heard before deducting state aid, and was not an unbiased decisionmaker.

Procedural due process requirements have been extended to administrative decisions. See, e.g., Bundo v Walled Lake, 395 Mich. 679, 688, 695-696; 238 N.W.2d 154 (1976); Hinky Dinky Supermarket, Inc v Dep't of Community Health, 261 Mich.App. 604, 605-606; 683 N.W.2d 759 (2004). As this Court discussed in Hinky Dinky Supermarket,

The United States and Michigan constitutions preclude the government from depriving a person of life, liberty, or property without due process of law. U.S. Const, Am XIV; Const 1963, art 1, § 17. " A procedural due process analysis

Page 385

requires a dual inquiry: (1) whether a liberty or property interest exists which the state has interfered with, and (2) whether the procedures attendant upon the deprivation were constitutionally sufficient." Jordan v Jarvis, 200 Mich.App. 445, 448; 505 N.W.2d 279 (1993). [ Hinky Dinky Supermarket, 261 Mich.App. at 605-606.]

Thus, procedural due process requirements apply only if there is a liberty or property interest at stake. [310 Mich.App. 242] Id. at 606. See also Livonia v Dep't of Social Servs, 423 Mich. 466, 507; 378 N.W.2d 402 (1985). MCL 388.1613 directs the MDE to pay school districts the apportioned state aid upon submission of certified and audited attendance data in accordance with MCL 388.1701. Although state aid is conditioned upon these eligibility requirements, a school district can reasonably assume that once the requirements are met, there is a great likelihood that they will receive the apportioned state aid each year, thereby creating a property interest. See Bundo, 395 Mich. at 693, 695 (finding that " [a] holder of a liquor license in Michigan can reasonably assume . . . that there was a great likelihood that his license would be renewed" each year, thereby creating a property interest and entitling the license holder to procedural due process protections). Indeed, history would seem to indicate that, upon submission of certified and audited attendance data, school districts legitimately rely on the apportioned state aid in determining their yearly budgets. Seeid. at 690, 693 (discussing Perry v ...


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