United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO
Bernard A. Friedman Senior United States District Judge.
matter is presently before the Court on defendant's
motion to dismiss [docket entry 30]. Plaintiffs have filed a
response in opposition, and defendant has filed a reply.
Pursuant to E.D. Mich. LR 7.1(f)(2), the Court shall decide
the motion without a hearing.
action challenges defendant Wayne County's notice of
intent to issue bonds to finance a capital improvement
project referred to as the “Criminal Justice
Center.” The notice was published on April 17, 2018, in
the printed edition of the Detroit Free Press and
the Detroit News. Am. Compl. ¶¶ 39, 46,
56. Plaintiffs are “residents, registered voters, and
taxpayers in Wayne County, Michigan, ” id.
¶ 7, who allege that the notice failed to comply with
Mich. Comp. Laws § 141.2517 and that defendant violated
their due process rights under the Fourteenth Amendment and
the Michigan Constitution. Plaintiffs seek a declaratory
judgment that the notice violated their due process rights.
Id. at 20. They also seek an order requiring
defendant to re-issue the notice and to ensure that future
bond notices provide adequate due process protections.
initiated this action on July 17, 2018. On July 20, 2018,
they filed a motion for a temporary restraining order and
preliminary injunction in an effort to stop the sale of the
bonds by defendant. This request for injunctive relief was
denied by the Court at the conclusion of a hearing on July
25, 2018, and by the Sixth Circuit on appeal. See Buni v.
Wayne Cty., No. 18-1881 (6th Cir. Aug. 16, 2018).
Defendant sold the bonds at issue on August 8, 2018, and the
sale closed on August 16, 2018. Def.'s Br. at 4. On
September 12, 2018, plaintiffs filed an amended complaint.
Defendant now seeks dismissal under Fed.R.Civ.P. 12(b)(6).
Count I, plaintiffs argue that defendant's notice of
intent failed to comply with the requirements in Mich. Comp.
Law § 141.2517 that it “state the maximum amount
of municipal securities to be issued, the purpose of the
municipal securities, [and] the source of payment . . .
.” Defendants argue that Count I should be dismissed
because the notice did meet these requirements. In denying
plaintiffs' motion for a temporary restraining order and
preliminary injunction, the Court determined that “the
notice of the intended bond sale published by defendant in
the two newspapers complied with the applicable Michigan
statute” [docket entry 17 at 1]. The Sixth Circuit
considered this finding when it affirmed the Court's
denial of preliminary injunctive relief, and the Court stands
by its conclusion regarding the notice's compliance with
Count II, plaintiffs allege that defendant violated their
state and federal due process rights because the notice
failed to inform them of the nature of the project and
“the amount to be paid, ” and because the notice
was published “in a manner calculated to minimize
actual notice.” Am. Compl. ¶ 80. The Court finds
that plaintiffs have not shown that a due process violation
resulted from these aspects of the notice because the notice
complied with Mich. Comp. Law § 141.2517, as noted
above. The Michigan Supreme Court has held that a statute
must be presumed to be constitutional and must be construed
as such, “unless the only proper construction renders
the statute unconstitutional.” In re Treasurer of
Wayne Cty. for Foreclosure, 732 N.W.2d 458, 462 (Mich.
2007). Applying this presumption to the relevant statute in
the present case, there is no reason to find that Mich. Comp.
Laws § 141.2517 is unconstitutional or to conclude that
compliance with its provisions would result in the
deprivation of a constitutional right.
Karkoukli's, Inc. v. Dohany, 409 F.3d 279, 283
(6th Cir. 2005), the Sixth Circuit determined that notice
“reasonably calculated to reach interested
parties” is the standard “now widely accepted as
the benchmark for resolving questions about the
constitutionality of notice procedures.” Id.
(quoting Mullane v. Cent. Hanover Bank & Tr.
Co., 339 U.S. 306, 318 (1950)). In Harter v. City of
Swartz Creek, 242 N.W.2d 792, 794 (Mich. Ct. App. 1976),
the Michigan Court of Appeals concluded that this standard
was met where a notice was published in a city's
newspaper in compliance with Mich. Comp. Laws § 46.175b
because the notice was “calculated to give reasonable
notice to the taxpayers involved.” In that case, the
notice was for the issuance of municipal bonds that were to
be redeemed by ad valorem taxation. Id. at 793. To
determine what form of notice would be appropriate, the court
weighed the plaintiff's right to notice “against
the factors of economy and practicability.”
Id. In deciding that notice by publication was
sufficient, the court stated that “the property right
to be free from an increase in general ad valorem taxation is
qualitatively less compelling” than the rights at issue
in cases involving special assessment districts where
“publication of notice in a local newspaper would
always be constitutionally deficient as to known
parties.” Id. at 794.
the reasoning in Harter and the circumstances of
this particular case, such as that the “the subject
bonds do not impose any new costs on County taxpayers,
” Def.'s Br. at 24, and that defendant surpassed
the statute's publication requirement by publishing the
notice in two newspapers, as opposed to one, the Court
concludes that defendant's notice by publication was
“reasonably calculated to reach interested
parties.” Karkoukli's, Inc., 409 F.3d at
283; see Karpenko v. City of Southfield, 254 N.W.2d
839, 842-43 (Mich. Ct. App. 1977) (holding that notice by
publication of proposed zoning amendments, as provided by the
zoning enabling act, is sufficient based on Harter
and the finding that “[c]ourts in other jurisdictions
have uniformly held that notice by publication is sufficient
. . . .” (internal citations omitted)).
in Karkoukli's, Inc., the Sixth Circuit quoted
the Michigan Supreme Court's conclusion that “[f]or
due process purposes, the focus must be on the constitutional
adequacy of the statutory procedure and not on whether some
additional effort in a particular case would have in fact led
to a more certain means of notice.”
Karkoukli's, Inc., 409 F.3d at 284 (quoting
Smith v. Cliffs on the Bay Condominium Ass'n,
617 N.W.2d 536, 542 (Mich. 2000)). Thus, plaintiffs'
assertions that the notice in this case should have been