BOARD OF TRUSTEES OF THE CITY OF PONTIAC POLICE AND FIRE RETIREE PREFUNDED GROUP HEALTH AND INSURANCE TRUST, Plaintiff-Appellee,
CITY OF PONTIAC, Defendant-Appellant.
Oakland CC: 2012-128625-CZ
Stephen J. Markman, Chief Justice. Brian K. Zahra Bridget M.
McCormack David F. Viviano Richard H. Bernstein Kurtis T.
Wilder Elizabeth T. Clement, Justices.
January 10, 2018, the Court heard oral argument on the
application for leave to appeal the October 25, 2016 judgment
of the Court of Appeals. On order of the Court, the
application is again considered, and it is DENIED, because we
are not persuaded that the questions presented should be
reviewed by this Court.
McCormack, J. (concurring).
laws are often unfair. They upset settled expectations,
impose new burdens, and disrupt old agreements. And so we
presume laws are prospective unless they say otherwise in
very clear terms. The Court of Appeals reaffirmed this
foundational principle, and we rightly leave its work in
Pontiac Police and Fire Retiree Prefunded Group Health and
Insurance Trust (the Trust) was organized to pay the
healthcare benefits of retired police and firefighters. Under
the agreement, the city of Pontiac made retirement benefit
payments. But in 2012, the city came under the control of an
emergency manager, and after following the necessary steps,
the emergency manager issued Executive Order 225 on August 1,
2012. Order 225 read in relevant part:
Article III of the Trust Agreement, Section 1, subsections
(a) and (b) are amended to remove Article III obligations of
the City to continue to make contributions to the Trust as
determined by the Trustees through actuarial evaluations.
The Order shall have immediate effect.
result, the city stopped contributing to the retirement trust
fund, and the Trust sued. The only question for us is whether
Order 225 has retroactive effect. If the order is
retroactive, the city would not need to make contributions
for the period from 2011 to the date the order issued, August
1, 2012. If the order is not retroactive, the city must make
the contributions that accrued up until that date. Several
million dollars hang in the balance.
a lengthy procedural journey, the Court of Appeals held that
LaFontaine Saline, Inc v Chrysler Group, LLC, 496
Mich. 26 (2014), in which we clarified the test for
determining the retroactivity of statutes, governs the
analysis of whether an executive order has retroactive
effect. Applying that framework, the panel held that Order
225 should not be given retroactive effect. I see no flaw in
the panel's work; our decision today to deny leave is
rules of statutory interpretation about retroactivity are
settled and sound. When determining whether a statute should
be given retroactive effect we look first to legislative
intent, Frank W Lynch & Co v Flex Technologies,
Inc, 463 Mich. 578, 583 (2001), and the plain text of
the statute is our starting place, Madugula v Taub,
496 Mich. 685, 696 (2014). LaFontaine created a four-part
framework to determine the retroactivity of statutes, and two
parts are particularly salient: we must consider whether (1)
there is specific language providing for retroactive
application, and whether (2) retroactivity would impair
vested rights or create new obligations. LaFontaine,
496 Mich. at 38-39. Although LaFontaine's
four-part framework was new, its requirement that the
Legislature must speak with clarity to make a law retroactive
is a traditional rule of statutory interpretation.
Harrison v Metz, 17 Mich. 377, 382 (1868)
("[I]t is a sound rule of statutory construction that
legislation is to have a prospective operation only, except
where the contrary intent is expressly declared or is
necessarily to be implied from the terms employed.").
See also Murray v Gibson, 56 U.S. 421, 423 (1853).
is no compelling reason to treat executive orders differently
for retroactivity analysis. An executive order is
quasi-legislative and should be interpreted with the same
approach used to interpret a statute. Soap &
Detergent Ass'n v Natural Resources Comm, 415 Mich.
728, 756-757 (1982); Aguirre v Dep't of
Corrections, 307 Mich.App. 315, 321 (2014). And
emergency managers derive their power from the Legislature,
which further supports the conclusion that the same rules
should apply to determine whether their orders are
retroactive. See former MCL 141.1519, as enacted by 2011 PA
4. The United States Supreme Court has held that the
heightened clarity required for retroactivity applies to
statutes and administrative rules alike. Bowen v
Georgetown Univ Hosp, 488 U.S. 204, 208 (1988).
about this conclusion is groundbreaking, as "[c]ourts
have long used the same set of tools to interpret both
executive orders and statutes." Newland, Note,
Executive Orders in Court, 124 Yale L J 2026, 2069
(2015). The dissent agrees that the rules for interpreting
statutes apply to interpreting executive orders. ("There
is no doubt that courts must interpret an executive order
using the ordinary means of statutory interpretation.").
Given that, I see no principled way to exempt retroactivity
analysis. The settled precedent that governs courts'
interpretations of statutes provides a readily understandable
set of expectations for interpreting executive orders. If we
were to announce some new, yet-unspecified, set of rules to
discern retroactive application of executive orders, we would
be sending parties off to sea without a compass, and inviting
a host of new litigation. Underlying concerns about
unfairness do not change, and neither should our rules:
emergency managers must clearly demonstrate their intent that
an order be retroactive.
these same rules apply, precedent stacks the deck against
finding retroactivity here. The " 'general rule is
that a statute is to be construed as having a prospective
operation only, unless its terms show clearly a legislative
intention that its terms should operate retroactively.'
" Barber v Barber, 327 Mich. 5, 12 (1950)
(collecting cases; citation omitted). This presumption of
prospectivity "is deeply rooted in our jurisprudence,
and embodies a legal doctrine centuries older than our
Republic." Landgraf v USI Film Prod, 511 U.S.
244, 265 (1994). And it applies even if "the words of
the statute are broad enough in their literal extent to
comprehend existing cases . . . unless a contrary intention
is unequivocally expressed . . . ." Todd v Boards of
Election Comm'rs, 104 Mich. 474, 478-479 (1895)
(quotation marks and citation omitted).
this backdrop, LaFontaine instructs courts to
consider whether there is specific language providing for
retroactive application. The expression of retroactive intent
must be "clear, direct, and unequivocal . . . ."
Davis v State Employees' Retirement Bd, 272
Mich.App. 151, 156 (2006). The expression here is not; there
is no express language signaling retroactive effect. The
absence of such language is important to concluding that the
order should not be retroactive. See Frank W Lynch &
Co, 463 Mich. at 583-584; White v Gen Motors
Corp, 431 Mich. 387, 398 (1988); Van Fleet v Van
Fleet, 49 Mich. 610, 613 (1883). And the order contains
a telltale forward-looking phrase: "The Order shall have
immediate effect." When the Legislature provides that a
law will take immediate effect, that supports a finding of
textual prospectivity. LaFontaine, 496 Mich. at 40.
See also Pohutski v City of Allen Park, 465 Mich.
675, 698 (2002); Davis, 272 Mich.App. at 157.
Legislature, moreover, knows full well how to make laws
retroactive, and the emergency manager could have used
similar language if retroactivity was the goal. See, e.g.,
MCL 141.1157 ("This act shall be applied retroactively .
. . ."); MCL 324.21301a(2) ("The liability
provisions that are provided for in this part shall be given
retroactive application."); MCL 224.19(2) ("The
authority and powers granted in this section relative to
bridges over navigable streams and the grant of that
authority are retroactive . . . ."). See also
LaFontaine, 496 Mich. at 40 n 30 (noting that MCL
445.1567(1)-(2), MCL 445.1568, and MCL 445.1570 each begin
with the preface "Notwithstanding any agreement" as
a sign they were retroactive). Any of these phrases would
show retroactive intent, but none were used. Nor does the
language of Order 225 give rise to a "necessary,
unequivocal and unavoidable implication" that the
manager intended it to apply retroactively. Briggs v
Campbell, Wyant & Cannon Foundry Co, 379 Mich. 160,
165 (1967) (cleaned up). As a result, Order 225 fails to
overcome the heavy presumption against retroactivity.
the Legislature was clear in its grant of authority
to the emergency manager to devise retroactive orders, as the
dissent emphasizes, is beside the point. Our focus must be on
the text of the executive order that abrogated the contract,
not the authority to issue the order. The question is not whether
the emergency manager could have issued a
retroactive order, it is whether he did.
expectations matter too. Retroactive application of the order
would upend the rights and obligations of those affected by
it. The presumption of prospectivity is therefore especially
strong "if retroactive application of a statute would
impair vested rights, create a new obligation and impose a
new duty, or attach a disability with respect to past
transactions." Frank W Lynch & Co, 463
Mich. at 583. See also Johnson v Pastoriza, 491
Mich. 417, 429 (2012); Hansen-Snyder Co v Gen Motors
Corp, 371 Mich. 480, 484 (1963).
concern is significant here. Pontiac's police and
firefighters may have spent years-or entire careers-expecting
that benefits would be paid out upon retirement. The
city's financial distress may support the need for
drastic action, but it does not weaken the plaintiff's
reliance interests. Even assuming the emergency manager had
the authority to invalidate contracts (a constitutional
question not before us here), the plaintiff's reliance
interests would still stand. There is a crucial difference
between affecting a future source of income and taking
are central principles in our jurisprudence. "All laws
should be therefore made to commence in futuro . . .
." 1 Blackstone, Commentaries on the Laws of
England, p *46. Our own Justice Cooley said that
"[r]etrospective legislation . . . is commonly
objectionable in principle, and apt to result in injustice .
. . ." Cooley, Constitutional Limitations (1868), pp
62-63. Without clear language to the contrary, these
critiques apply with equal force to executive orders. The
Court of Appeals got this right, and for that reason, I
support this Court's denial of the defendant's
application for leave to appeal.
Viviano and Bernstein, JJ., join the statement ...