Robert Davis v. Detroit Pub. Sch. Cmty. Dist.

CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 9, 2018
Docket17-1909
StatusPublished

This text of Robert Davis v. Detroit Pub. Sch. Cmty. Dist. (Robert Davis v. Detroit Pub. Sch. Cmty. Dist.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robert Davis v. Detroit Pub. Sch. Cmty. Dist., (6th Cir. 2018).

Opinion

RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 18a0164p.06

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

ROBERT DAVIS; D. ETTA WILCOXON, ┐ Plaintiffs-Appellants, │ │ │ v. > No. 17-1909 │ │ DETROIT PUBLIC SCHOOLS COMMUNITY DISTRICT, et │ al., │ Defendants-Appellees, │ │ DETROIT DOWNTOWN DEVELOPMENT AUTHORITY, et │ al., │ │ Intervening Defendants-Appellees. │ ┘

Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 2:17-cv-12100—Mark A. Goldsmith, District Judge.

Argued: March 15, 2018

Decided and Filed: August 9, 2018

Before: BOGGS, CLAY, and LARSEN, Circuit Judges.

_________________

COUNSEL

ARGUED: Andrew A. Paterson, Ann Arbor, Michigan, for Appellants. Kevin J. Campbell, THE ALLEN LAW GROUP, P.C., Detroit, Michigan, for Detroit Public Schools Appellees. David H. Fink, FINK + ASSOCIATES LAW, Bloomfield Hills, Michigan, for Detroit Downtown Development Appellees. ON BRIEF: Andrew A. Paterson, Ann Arbor, Michigan, for Appellants. Kevin J. Campbell, Floyd E. Allen, Lawrence T. García, Amy M. Robertson, THE ALLEN LAW GROUP, P.C., Detroit, Michigan, for Detroit Public Schools Appellees. David H. Fink, Darryl Bressack, FINK + ASSOCIATES LAW, Bloomfield Hills, Michigan, No. 17-1909 Davis, et al. v. Detroit Pub. Sch. Cmty., et al. Page 2

Jeffrey M. Sangster, Dennis K. Egan, Anthony M. Sciara, Tyler P. Phillips, KOTZ SANGSTER WYSOCKI P.C., Detroit, Michigan, for Detroit Downtown Development Appellees.

CLAY, J., delivered the judgment and opinion of the court, in which BOGGS and LARSEN, JJ., joined, except as to the issue discussed in Part II.B. BOGGS, J. (pg. 12), delivered the opinion of the court on that issue, in which LARSEN, J., joined.

OPINION _________________

CLAY, Circuit Judge. Plaintiffs Robert Davis and D. Etta Wilcoxon seek a declaratory judgment and mandamus relief against Defendant Detroit Public Schools Community District Board of Education, arguing that the school board has the authority and obligation, under Mich. Comp. Laws §§ 380.11a(10), 380.1216, 168.312, and 168.641(4), to place on the next Detroit election ballot a question asking city voters to approve or disapprove of certain tax expenditures by Intervenor-Defendants Detroit Downtown Development Authority (“DDA”) and the Detroit Brownfield Redevelopment Authority (“DBRA”). The district court dismissed Plaintiffs’ claims and entered judgment under Rule 54(b) of the Federal Rules of Civil Procedure. For the reasons set forth below, we AFFIRM the judgment.

To the extent that Part II.B of this opinion is inconsistent with the concurring opinion, the concurring opinion constitutes the opinion of the Court.

STATUTORY BACKGROUND

The DDA and DBRA are tax increment finance entities created by the City of Detroit to facilitate economic development and to spur economic growth projects within the City. They operate according to the rules set forth in Mich. Comp. Laws § 125 et seq., using property tax revenue to finance construction projects in the City of Detroit. As relevant here, in 2016, the DDA and DBRA agreed to fund $56.5 million of construction projects related to the relocation of the Detroit Pistons professional basketball team from Auburn Hills, Michigan, to Little Caesars Arena in downtown Detroit. The construction projects included improvements to Little Caesars Arena, construction of a new basketball practice facility, and creation of a Pistons corporate headquarters. Plaintiffs oppose the projects and seek a city-wide referendum asking No. 17-1909 Davis, et al. v. Detroit Pub. Sch. Cmty., et al. Page 3

voters to approve or disapprove of these tax expenditures. Because Plaintiffs’ claims require an understanding of the law governing development authorities, we begin with an overview of the relevant Michigan law.

In Michigan, a municipality may create a “downtown development authority” to “halt property value deterioration and increase property tax valuation where possible in its business district, to eliminate the causes of that deterioration, and to promote economic growth[.]” Mich. Comp. Laws § 125.1653(1). A municipality may also create a “brownfield redevelopment authority,” which serves similar functions. See Mich. Comp. Laws § Ch. 125. Both types of authorities are funded through tax increment financing (“TIF”). The Michigan Supreme Court has explained how tax increment financing works:

[A] tax increment financing (TIF) plan allows a local government to finance public improvements in a designated area by capturing the property taxes levied on any increase in property values within the area. Under a TIF plan, a base year is established for the project area. In subsequent years, any increase in assessments above the base year level is referred to as the captured value. All, or a portion, of the property taxes levied on the captured value (SEV) is diverted to the area’s development plan. Tax increment financing is premised on the theory that, without the redevelopment project, property values would not increase, or that increases in land values and assessments in the project area are caused by the redevelopment authority’s own construction of economic activity in the district.

In re Request for Advisory Opinion on Constitutionality of 1986 PA 281, 422 N.W.2d 186, 189 (Mich. 1988) (emphasis in original) (quotation marks, citations, and footnotes omitted).

In the years since the TIF legislation was passed, numerous Michigan municipalities have established development authorities. As relevant here, the City of Detroit created the DDA in 1978 and the DBRA in 1996.

FACTUAL AND PROCEDURAL HISTORY

This particular dispute has its roots in a Detroit ballot proposal. Specifically, in 2012, Detroit residents voted to allow the school district of the City of Detroit to increase the amount of property taxes it could collect. The proposal specified that the revenue would be used “to provide funds for operating expenses of [the] School District.” (R. 12, complaint, ¶ 111.) No. 17-1909 Davis, et al. v. Detroit Pub. Sch. Cmty., et al. Page 4

Plaintiff Wilcoxon is a Detroit resident who voted on the proposal. Plaintiff Robert Davis is a resident of Highland Park, Michigan. Because he is not a Detroit resident, he could not vote on the proposal. Nonetheless, as a self-styled “community activist,” he asserts that he maintains a keen interest in the City’s affairs.1

In June 2013, the DDA announced its intent to begin capturing some of the tax revenue authorized by the ballot proposal to fund the construction of Little Caesars Arena in downtown Detroit. The DDA hoped to build a state of the art home for the Detroit Red Wings professional hockey team and predicted that the arena would also host a variety of other sports and entertainment events. In December 2016, the DDA revised its development plan, making changes that would allow the Detroit Pistons professional basketball team to relocate to Little Caesars Arena. The revised plan provided for additional improvements to the arena, construction of a new basketball practice facility, and creation of a Pistons corporate office and headquarters. In June 2017, the DBRA agreed to foot some of the bill. All told, the DDA and DBRA estimated that they would spend a combined $56.5 million on the project. Much of this money would go towards reimbursing construction costs that private developers had already advanced. Indeed, at this point, the development project is largely complete.

Plaintiffs, however, oppose the Little Caesars Arena project.

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