Tiger Stadium Fan Club, Inc v. Governor

553 N.W.2d 7, 217 Mich. App. 439
CourtMichigan Court of Appeals
DecidedSeptember 4, 1996
DocketDocket 194133
StatusPublished
Cited by22 cases

This text of 553 N.W.2d 7 (Tiger Stadium Fan Club, Inc v. Governor) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tiger Stadium Fan Club, Inc v. Governor, 553 N.W.2d 7, 217 Mich. App. 439 (Mich. Ct. App. 1996).

Opinion

White, J.

Plaintiff Tiger Stadium Fan Club, Inc., appeals from the circuit court’s order denying its motion for summary disposition, granting motions for summary disposition by defendants Governor John Engler and the Michigan Strategic Fund and intervening defendant the City of Detroit Downtown Development Authority (dda), and dismissing the complaint with prejudice. We affirm.

The questions presented are (1) whether funds generated under a consent judgment entered into by Governor Engler and several Native American tribes in settlement of an action brought under the Indian Gaming Regulatory Act (igra), 25 USC 2701 el seq., and deposited into the Michigan Strategic Fund (msf) pursuant to the terms of the settlement agreement, are, under the Appropriations Clause, Const 1963, art 9, § 17, and the Separation of Powers Clause, Const 1963, art 3, § 2, subject to the Legislature’s power of appropriation, and (2) whether the msf has the *442 authority to distribute those funds in the form of a grant to the dda for use in the construction of a stadium for the Detroit Tigers baseball team.

We conclude that the revenues involved are not subject to the Appropriations Clause, that the Governor did not violate the Separation of Powers Clause, and that the MSF had the authority to make the grant to the dda for the designated purposes.

i

The MSF is a public corporation established by the Michigan Strategic Fund Act, 1984 PA 270, as amended, MCL 125.2001 et seq.; MSA 3.541(201) el seq.

The igra is a federal statute that regulates the circumstances and procedures under which gaming is conducted on tribal lands. The igra allows certain gaming activities to occur only pursuant to a compact negotiated between the tribes and the state in which the tribal lands are located. When requested to do so by a tribe, a state must negotiate in good faith to enter into a compact. The IGRA provides that if a state fails to negotiate or fails to negotiate in good faith, a tribe seeking a compact may bring suit in federal court to enforce the state’s obligation to negotiate. 1

*443 In 1990, several tribes filed suit under the IGRA against the State of Michigan in the United States District Court for the Western District of Michigan. In 1992, the federal court dismissed the action on the ground that the igra’s grant of federal jurisdiction violated the state’s sovereign immunity under the Eleventh Amendment. US Const, Am XI. Sault Ste Marie Tribe of Chippewa Indians v Michigan, 800 F Supp 1484 (WD Mich, 1992). The tribes then filed a first amended complaint naming Governor Engler as the sole defendant. The suit sought an order compelling Governor Engler to conclude a compact.

Before trial, the parties stipulated to the entry of a consent judgment. The consent judgment provided that the tribes would make semiannual payments of eight percent of certain gaming revenues to the MSF as long as a compact remained in effect, and as long as the tribes hold the exclusive right to conduct specified gaming activities in the state. In addition, the judgment provided that the tribes would make payments of two percent of certain gaming revenues to local units of government in the immediate vicinity of each tribal casino. The consent judgment was to become effective upon execution of compacts between the tribes and the Governor and approval of the compacts by resolution of the Legislature. The federal court entered the consent judgment on August *444 20, 1993, and on the same day Governor Engler entered into compacts with the various tribes.

In September 1993, the Legislature approved the compacts by resolution. The resolution did not specifically mention the consent judgment or the payments to the msf. The legislative history, however, makes clear that the Legislature was aware of the terms of the agreement, including that it provided for regular payments directly to the msf. See n 5, post at 455.

In March 1994, the tribes began making payments to the msf. The funds were deposited by the msf into an account designated as the Indian Casino Account. As of September 21, 1995, the msf had received $25,737,614.26 from the tribes, and those funds had generated $360,936.92 in interest.

On September 20, 1995, the Board of Directors of the msf adopted a resolution creating the Center for Community Redevelopment (ccr), pursuant to MCL 125.2007(q); MSA 3.541(207)(q), to “make grants to municipalities to assist in the financing of public infrastructure including land acquisition and site development for utility extensions, highway and road improvements, and other public improvements which are related to a specific identifiable project.” Resolution 1995-154, ¶ 3, p 2. The creation of the OCR enabled the msf to consider the dda’s grant request. The msf then adopted a resolution agreeing to grant assistance to the dda in an amount not to exceed $55 million.

On September 21, 1995, the MSF segregated $55,668,262.15, in the form of cash and securities, for the benefit of the dda, including $26,098,551.18 taken from the Indian Casino Account. On September 28, 1995, the MSF and the dda executed a grant agreement *445 providing funds to assist with costs associated with infrastructure, land development, and site development necessary to the construction of a new stadium for the Detroit Tigers. The MSF funds are part of a financing package totaling $230 million. The remaining funds are to come from the dda itself and from the Detroit Tigers.

On November 2, 1995, State Senator George Z. Hart and the Tiger Stadium Fan Club filed this action seeking declaratory and injunctive relief, asserting that the gaming revenues are state funds within the meaning of the Appropriations Clause of the state constitution and as such cannot be directed to or spent by the msf without an appropriation by the Legislature, and that efforts to spend the funds without a legislative appropriation violated the Separation of Powers Clause of the state constitution. Plaintiffs also asserted that the msf lacked the statutory authority to make a grant to the dda. The dda intervened as a defendant.

All parties filed motions for summary disposition. Plaintiffs argued that because the gaming revenues arise from the actions and operations of the government and are payments made in exchange for government concessions, they constitute state funds under Pokorny v Wayne Co, 322 Mich 10, 15; 33 NW2d 641 (1948), and cannot be spent except pursuant to a legislative appropriation; that the gaming revenues do not qualify as custodial funds, i.e., funds received by a third party and held for an already-determined spending purpose, because they were obtained by Governor Engler during the exercise of his official duties and the Governor determined their use; and that the Governor’s attempt to raise and spend revenue absent a legislative appropriation violates the Separation of *446 Powers Clause.

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Bluebook (online)
553 N.W.2d 7, 217 Mich. App. 439, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tiger-stadium-fan-club-inc-v-governor-michctapp-1996.