Author(s): Jami E. Leach, John J. Gillooly, Thomas R. Paxton, Michael W. Edmunds

From the Editor by
John J. Gillooly

Public Purchasing Pitfalls In recent months, there have been several high profile indictments and subsequent convictions of those who purchase goods and services for public entities. The most widely reported case involved Darleen Druyun, an Air Force official known as the “Dragon Lady”. For many years, Ms. Druyun was in charge of purchasing for the Air Force and was widely regarded as one of the most powerful women in Washington. And now, she is off to prison for her role in violating several criminal statutes by illegally steering business to a military contractor.

Undoubtedly, there are more federal and state prosecutions to come. To avoid similar problems in your public entity, keep your purchasing agents aware of these fundamental rules:

• It is illegal to offer or accept “anything of value” for being influenced in an official act. 18 USC §201.

• You may not accept any gratuities (gifts or entertainment) in exchange for favorable treatment. 10 USC §2207.

• A person may not be given proprietary information (bidding information, account status) of other contractors. 41 USC §423.

• A conflict of interest exists if you are seeking employment with a bidding contractor. 18 USC §208.

• Government employees may not make contracting decisions if they, their spouses or dependent children have any type of financial interest in the bidding company.

• Finally, government employees may not make decisions on contracts if they have worked for the bidding company in the past year.

BREAKING NEWS!!

Generally, in conversations between municipal officials and the municipality’s counsel, the municipality and not any individual officer, is the client. This does not mean that an individual can never hold the privilege based on communications with corporate counsel. To do so, however, the individual officer must indicate to the lawyer that he seeks advice in his individual capacity. In Ross v City of Memphis, 6th Circuit Court of Appeals No. 04-5298, issued September 14, 2005, the police chief, in a civil suit, argued he was immune because he had sought and relied upon legal advice from the City’s attorney. The City objected to disclosing the legal advice based upon the attorney-client privilege. The Court held that the City itself holds the privilege and the police chief could not, himself, waive that privilege in order to assert his defense in the civil suit.

Look for a more detailed discussion of this interesting opinion in next month’s issue of Gov Law.

Can Municipalities Collect Money for Providing Emergency Services? by Jami Leach

The Michigan Constitution gives Michigan cities the power to adopt charters and ordinances. The Michigan Home Rule City Act, MCLA 117.1 et seq., authorizes charter cities to exercise any power, enumerated or not, that advances the interests of the city. MCLA 117.4j(3). The statute provides:

  • (3) Municipal powers. For the exercise of all municipal powers in the management and control of municipal property and in the administration of municipal government, whether such powers be expressly enumerated or not; for any act to advance the interests of the city, the good government and prosperity of the municipality and its inhabitants and through its regularly constituted authority to pass all laws and ordinances relating to its municipal concerns subject to the constitution and general laws of this state.

With regard to townships, there is a specific statute which provides authority to enact ordinances which permit them to collect fees for providing emergency services. MCLA 41.806a.

There is a general statute in the Penal Code which authorizes cost recovery as part of the sentence for several enumerated crimes such as drunk driving, filing false reports, and violation of various portions of the environmental protection act. MCLA 769.1f. This statute, however, provides that the charges are to be “part of the sentence” and therefore the debt of the convicted person. Various other statutes have similar provisions and are generally found in the criminal statutes and with regard to costs for clean-up of hazardous materials. Some cities and townships have ordinances for cost recovery of emergency services for hazardous waste clean-up, specific types of fires, and drunk driving arrests or accidents. The majority of these ordinances are called “cost recovery for emergency services” or “recovery of certain emergency response costs”. Such cost recovery ordinances give municipalities the authority to collect fees from the person whose business, vehicle or conduct necessitated the emergency response.

If your municipality does not have a cost recovery ordinance, you should discuss the desirability and possibility of enacting one with your leaders and attorneys. In this time of economic uncertainty, the ability of a municipality to recover moneys for providing certain emergency services could go a long way toward financial stability.

6th Circuit Relieves Municipalities and States from Portion of Family Medical Leave Act by Thomas R. Paxton

The 6th Circuit Court of Appeals has just relieved state and municipal employers from liability under an often used and less often understood portion of the Family Medical Leave Act (“FMLA”). Judge Danny J. Boggs was joined by Judges Amy Batchelder and Paul Gadola of the Eastern District of Michigan (sitting by designation as a 6th Circuit Court judge) in authoring an opinion in the case of Mary Touvell v Ohio Department of Mental Retardation and Developmental Disabilities (No. 04-4011 2005) which was released on September 9, 2005. The Court found that Congress did not specifically intend to abrogate the constitutional immunity States and their subordinate agencies have from individual lawsuits as it relates to the rights to unpaid leave for illness state and municipal employees suffer themselves (as opposed to leave to care for someone else.)

The FMLA was enacted in February of 1993. It provided that all employers, including federal, state, and local governments, had to provide up to 12 weeks of unpaid leave of absence to qualified employees. Three general reasons for the leave were identified: 1) birth or adoption of a child; 2) care for a sick relative or spouse; and 3) care for an illness incurred by the employee himself (self-care). The United States Supreme Court heard a challenge to the FMLA in the case of Nevada Department of Human Resources v Hibbs in 2003. There, the Court rebuked the state’s claim that the 11th Amendment immunity to states from civil liability had been abrogated by the language in the FMLA as to the first two reasons for leave under the Act. The 6th Crcuit in Touvell now has ruled that Congress did not clearly abrogate that immunity as to section 29 USC §2612(a)(1)(D); the self-care basis for FMLA leave.

This case has a dramatic impact for state and local human resources managers. The self-care leave provisions of the FMLA lacked defined parameters and is fraught with exceptions and conditions that make the possibility of being held liable for a violation of the FMLA an almost certainty. It is possibly the most misunderstood and misapplied provision of the Act. The exceptions to the notice provisions and designations employers were required to make led to many costly mistakes. At least until the United States Supreme Court has an opportunity to review this latest decision, there can be no liability for claims against state and municipal employers for failure to allow leave premised upon the employees own medical needs in the 6th Circuit states of Michigan, Ohio, Kentucky and Tennessee.

“Continuing Violations” Doctrine Discontinued by Michael Edmunds

On May 11, 2005, the Michigan Supreme Court issued an opinion in the case of Garg v Macomb County Community Mental Health Services (472 Mich 263). Garg overruled the 1986 decision in Sumner v Goodyear Tire & Rubber Co, 427 Mich 505 which established the “continuing violations” doctrine.

The “continuing violations” doctrine permitted a plaintiff to recover damages for acts which occurred outside of the statute of limitations under certain circumstances. In general, Sumner was concerned about the situation where acts occurred beyond the statute of limitations, but set in motion a chain of events which continued to perpetuate discrimination within the limitations period.

The Garg decision was written by Justice Markman and, consistent with many of his other opinions, Markman based his opinion on a statutory construction argument. He looked to the language of the statute of limitations, found no indication in the language of the statute that the legislature intended a claim outside the limitations period to be revived if it was sufficiently related to injuries occurring within the limitations, and struck down Sumner. Markman wrote “we presume that the legislature intended the meaning clearly expressed – no further judicial construction is required or permitted, and the statute must be enforced as written.”
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In addition to striking down the “continuing violations” doctrine, Markman criticized Sumner for relying so heavily on federal law. While recognizing that federal precedent is often useful as guidance in interpreting analogous laws, he reminded the trial courts that federal precedent “cannot be allowed to re-write Michigan law.”

This opinion should dramatically reduce the number of discrimination claims that are brought more than three years after the occurrence of the last allegedly discriminatory act, and hence should be considered a favorable opinion for employers.

Garan Lucow Miller, P.C. has nine offices throughout Michigan to serve all of your municipal needs:

Wayne County Office . . . . . . . . . .1-800-875-1530 
Washtenaw County Office . . . . . . 1-800-878-5600 
Ingham County Office . . . . . . . . . 1-888-910-0300 
St. Clair County Office . . . . . . . . .1-800-875-4400 
Oakland County Office . . . . . . . . .1-800-875-7600 
Genesee County Office . . . . . . . . 1-800-875-3700 
Kent County Office . . . . . . . . . . .1-800-494-6312 
Northern Michigan Office . . . . . . .1-888-923-1611 
Upper Peninsula Office . . . . . . . . 1-888-841-7772