Sign In

154117-9 - AFT Michigan v State of Michigan

AFT Michigan et al.,
 
Mark H. Cousens
 
Plaintiffs-Appellees,
 
v
(Appeal from Ct of Appeals)
 
 
(Ct of Claims – Canady, C.)
 
State of Michigan,
 
Gary P. Gordon
 
Defendant-Appellant,
 
____________________________
 
 
Timothy L. Johnson et al.,
 
Robert D. Fetter
 
Plaintiffs-Appellees,
 
v
(Appeal from Ct of Appeals)
(Ct of Claims – Canady, C.)
 
Public School Employees Retirement System et al.,
Defendants-Appellants,
Gary P. Gordon
_____________________________
 
 
Deborah McMillan et al.,
 
Timothy J. Dlugos
 
Plaintiffs-Appellees,
 
v
(Appeal from Ct of Appeals)
(Ct of Claims – Canady, C.)
 
Public School Employees Retirement System et al.,
 
Gary P. Gordon
 
 
Defendants-Appellants.
 

Summary

In response to a budget shortfall in the public school system, the Legislature enacted 2010 PA 75, which modified retirement benefits for public school employees. One statute, MCL 38.1343e, required all current public school employees to contribute 3% of their salaries to a retirement system to assist in funding retiree healthcare benefits. Plaintiffs, a large group of public school employee unions, challenged the constitutionality of this act and the approximately $550 million in withheld wages. After the Court of Claims ruled that 2010 PA 75 was unconstitutional, the Court of Appeals affirmed in a split opinion, holding that MCL 38.1343e violated the Contract Clause, Takings Clause, and Due Process Clause. The Legislature then enacted 2012 PA 300 in an apparent effort to fix any constitutional infirmities with 2010 PA 75. Notably, MCL 38.1391a(5) enabled public school employees to opt out of retiree healthcare and avoid paying the 3% retiree healthcare contribution. Also, MCL 39.1391a(8) established a retirement allowance that allowed employees who paid the contributions but subsequently failed to qualify for benefits to be reimbursed. The Court of Appeals upheld 2012 PA 300 against a constitutional challenge, and the Supreme Court affirmed. Thereafter, the Supreme Court vacated the Court of Appeals opinion interpreting 2010 PA 75 and remanded for that court to consider "what issues presented in these cases have been superseded by the enactment of 2012 PA 300 and this Court’s decision upholding that Act, and it shall only address any outstanding issues the parties may raise regarding 2010 PA 75 that were not superseded or otherwise rendered moot by that enactment and decision." 498 Mich 851 (2015). On remand, the Court of Appeals held, in a split opinion, that 2010 PA 75 was unconstitutional and that 2012 PA 300 did not supersede or render those constitutional issues moot. The Supreme Court has granted leave to appeal to address the issue of the constitutionality of 2010 PA 75.