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Michigan Supreme Court Sets Limits on Emergency Powers of Governor: Impacts on Residents and Businesses

On October 2, 2020, the Michigan Supreme Court issued a landmark opinion (the “Opinion”) limiting Governor Gretchen Whitmer’s authority to issue and renew executive orders relating to the COVID-19 pandemic.  The Court answered two questions of law posed to it by a federal court in Michigan, which was reviewing the authority relied upon by Governor Whitmer to issue executive orders related to the COVID-19 pandemic. The case is Midwest Institute of Health, PLLC v. Whitmer, pending in the United States District Court for the Western District of Michigan. In the much-anticipated Opinion, the Court held that:

  1. Governor Whitmer did not have authority to issue or renew any executive orders related to the COVID-19 pandemic under the Emergency Management Act of 1976 (“EMA”) (MCL § 30.401, et seq.) after April 30, 2020 – the date through which the Legislature extended Governor Whitmer’s state-of-emergency and state-of-disaster declarations; and
     
  2. Governor Whitmer did not possess authority to exercise emergency powers under the Emergency Powers of the Governor Act of 1945 (“EPGA”) because the EPGA unlawfully delegates legislative power to the executive branch in violation of the Michigan Constitution. 

As a result, businesses and individuals in Michigan need to know the impact of the Opinion on the Governor’s executive orders, including requirements for face masks, business operations, and other actions. This Client Alert provides a brief summary of the Opinion and an initial commentary on its effect, as well as what to expect next.

Midwest Institute of Health, PLLC v. Whitmer et al.

Plaintiff medical providers and patient brought suit against Governor Whitmer and others, challenging Executive Order (“EO”) 2020-17, which prohibited healthcare providers from performing nonessential medical procedures. EO 2020-17 was issued by the Governor as part of a series of executive orders in response to the COVID-19 pandemic.1

Governor Whitmer's EO 2020-04, issued on March 10, 2020, declared a “state of emergency” pursuant to both the EPGA and EMA. On April 1, 2020, the Governor issued EO 2020-33, which declared a “state of emergency” under the EPGA and a “state of emergency” and “state of disaster” under the EMA. Governor Whitmer then requested that the Legislature extend the state-of-emergency and state-of-disaster declarations by 70 days.  In response, the Legislature adopted Senate Concurrent Resolution No. 2020-24, extending the state of emergency and state of disaster only through April 30, 2020. 

Next, on April 30, 2020, Governor Whitmer issued EO 2020-66, which terminated the declaration of a state of emergency and state of disaster under the EMA.  However, the Governor also issued EO 2020-67, ordering that a state of emergency remained under the EPGA. At the same time, the Governor also issued EO 2020-68, which re-declared a state of emergency and state of disaster under the EMA.

Recognizing that Midwest Institute of Health, PLLC presents extremely important issues of Michigan state law, the federal district court “certified” two questions to the Michigan Supreme Court to determine whether the Governor was lawfully authorized to issue the emergency orders, which the Michigan Supreme Court answered in the negative.

Emergency Management Act of 1976

In the 48-page majority opinion, Justice Stephen Markman, writing for a unanimous Court, explained that the Governor’s decision to re-declare renewed states of emergency and disaster every 28 days effectively nullified requirements for legislative approval set out in the EMA, and was therefore unlawful. Interpreting the statute, the Court concluded that the “Governor’s declaration of a state of emergency or state of disaster may only endure for 28 days absent legislative approval for an extension.”   

Emergency Powers of the Governor Act of 1945

Regarding the second basis relied upon by Governor Whitmer for her authority – the EPGA – in a 4-3 split, the Michigan Supreme Court held that the EPGA is an impermissible delegation of power, which violates the Michigan Constitution, including because the only standards governing the exercise of the Governor’s emergency powers were the words “reasonable” and “necessary,” neither of which meaningfully constrained the Governor’s actions. Chief Justice Bridget Mary McCormack, writing for the dissent, agreed with Justice Markaman's view of the EMA, but concluded that the EPGA did not violate the nondelegation doctrine insofar as its standards were as reasonably precise as the statute’s subject matter permitted.

What Does this Mean for Michigan Residents and Businesses?

The impact of the Opinion on Michigan residents and businesses is not yet entirely clear.  According to the Governor’s office, the Opinion does not take effect for 21 days, although some in state government reportedly dispute that. The Governor may seek reconsideration or clarification of the Opinion, which could also possibly delay its effect.  But this much is clear: the Michigan Supreme Court has ruled that neither the EMA nor the EPGA provides legal basis for the Governor’s executive orders. It is widely expected that the Governor will review existing executive orders to determine which, if any, may be reissued under different or narrower authority – for example under the Public Health Code. So for example, whether the Governor may issue an executive order pursuant to the Public Health Code mandating face masks, limiting business operations and imposing social distancing rules, or requiring employees whose work can be done remotely to work remotely, still remains to be seen. At the same time, we anticipate that the Governor and Legislative leadership will attempt to agree on an appropriate scope for the State’s continuing response to the COVID-19 health crisis. And finally, local units of government (e.g., counties and cities or townships) may yet impose their own requirements in the wake of the Opinion. For example, Oakland County's Health Officer has already announced an order requiring the use of face masks while in public, and has signaled that additional orders may be issued to cover capacity at restaurants, bars, employee health screenings and other public health concerns.

In the meantime, businesses should begin reviewing the scope of their policies adopted in response to the COVID-19 epidemic and the Governor’s prior executive orders, including to determine whether adjustments can or should be made in case existing executive orders are not reinstated or are replaced. On the whole, businesses may be well-served to remain cautious in implementing immediate changes, especially if existing processes are not impeding operations, until additional clarification is forthcoming on the “new” regulatory landscape following the Michigan Supreme Court’s decision.  Another case before the Michigan Supreme Court, brought by the Legislature challenging the Governor’s authority to issue the executive orders, may shed additional light on the process and play into the ongoing negotiations.  And finally, all of this is happening against the backdrop of an election, which may also impact future developments (including the makeup of the Michigan Supreme Court, with two seats on the ballot). Foley will continue to monitor all of these developments and update this report as developments occur.

 

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1 Although EO 2020-17 has been rescinded, the federal district court held that the case is not moot since subsequent executive orders have imposed restrictions on healthcare providers.

© 2020 Foley & Lardner LLPNational Law Review, Volume X, Number 279
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Steven H. Hilfinger, Foley Lardner, Senior Lender Counsel, Global Finance Lawyer
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Steve Hilfinger is a partner and business lawyer with Foley & Lardner LLP. He has more than 25 years of transactional and finance experience, including representing private and public companies, senior lenders, mezzanine lenders and borrowers, venture capital funds and private equity funds, automotive suppliers and other manufacturers. Mr. Hilfinger focuses his practice in corporate and securities law matters, including mergers and acquisitions, corporate restructurings, private equity and venture capital transactions, debt and equity finance transactions, business...

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RobNederhood, business lawyer
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Robert Nederhood is a senior counsel and business lawyer with Foley & Lardner LLP where he focuses his practice on mergers and acquisitions, and represents public and private companies in connection with transactions, corporate restructurings, and commercial contracting. He also has experience representing both debtors and purchasers in connection with the sale of companies in bankruptcy, and assists clients with a variety of Michigan state government matters.

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Ann Marie Uetz, Foley Lardner, Debtor Representation, Bankruptcy Lawyer
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Ann Marie Uetz is a partner and trial attorney with Foley & Lardner LLP, where she represents clients in a variety of industries in all aspects of their contracts and business disputes. She also represents debtors, creditors and secured and unsecured lenders in all facets of restructuring. Ms. Uetz focuses her practice on business litigation and bankruptcy, two of Foley’s practice areas recently ranked by U.S. News—Best Lawyers® as “national First-Tier” practices in recognition of excellence in client service.

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Nicholas Ellis, Foley Lardner Law Firm, Litigation Attorney
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Nicholas Ellis is an associate and litigator with Foley & Lardner LLP. Mr. Ellis’ practice focuses on automotive supplier disputes, the Uniform Commercial Code (UCC), warranty claims, contract law and business tort law. He is a member of the Business Litigation & Dispute Resolution Practice and the Automotive Industry Team.

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Christopher A. DeGennaro Litigation Attorney Foley & Lardner New York, NY
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Christopher DeGennaro is an associate and litigation lawyer with Foley & Lardner LLP in New York. He is also a member of the firm’s Business Litigation & Dispute Resolution Practice. Chris has significant trial and alternative dispute resolution experience, having tried civil and criminal cases to verdict and represented corporations in mediations and arbitrations.

Prior to joining Foley, Chris served as a law clerk to the Honorable A. Kathleen Tomlinson in the U.S. District Court for the Eastern District of New York. Before his clerkship, Chris worked at a national law firm...

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