Associated Builders & Contractors v. Department of Consumer & Industry Services Director

Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:

Opinion Clifford W. Taylor Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman

FILED MARCH 9, 2005

ASSOCIATED BUILDERS AND CONTRACTORS,
SAGINAW VALLEY AREA CHAPTER,

Plaintiff-Appellant,

v o. 124835
N

KATHLEEN M. WILBUR, DIRECTOR OF THE MICHIGAN
DEPARTMENT OF CONSUMER & INDUSTRY SERVICES AND
PROSECUTING ATTORNEY,

Defendants-Appellees,

and

MICHIGAN STATE BUILDING & CONSTRUCTION
TRADES COUNCIL,

Intervenor/Defendant/Appellee,

and

MICHIGAN CHAPTER OF THE NATIONAL ELECTRICAL
CONTRACTORS ASSOCIATION, INC., a Michigan
Corporation, MICHIGAN MECHANICAL CONTRACTORS
ASSOCIATION, a Michigan Corporation, and
MICHIGAN CHAPTER OF SHEET METAL AIR CONDITIONING
CONTRACTORS NATIONAL ASSOCIATION, a Michigan Corporation

Intervenors/Defendants/Appellees,

and
MICHAEL D. THOMAS, Saginaw County
Prosecuting Attorney,

Intervenor/Appellee.
_______________________________
BEFORE THE ENTIRE BENCH

WEAVER, J.

Plaintiff, the Saginaw Valley Area Chapter of

Associated Builders and Contractors, brought this action

for declaratory and injunctive relief, challenging the

constitutionality of the prevailing wage act (PWA).1

Plaintiff argues that the PWA is unconstitutionally vague

and constitutes an unconstitutional delegation of

legislative authority to unions and union contractors.

The circuit court denied defendants’ motions for

summary disposition regarding the plaintiff’s claim that

the PWA constitutes an unconstitutional delegation of

legislative authority and dismissed plaintiff’s vagueness

claim. Defendants appealed and plaintiff cross-appealed.

The Court of Appeals reversed in part and affirmed in part,

holding that plaintiff could not seek declaratory relief

because plaintiff had alleged no “actual controversy” under

the Michigan court rule governing declaratory judgments,

MCR 2.605.

1
MCL 408.551 et seq.

We reverse the decision of the Court of Appeals and

hold that plaintiff has presented an “actual controversy”

so that plaintiff can seek declaratory relief under MCR

2.605. We do not address the substantive issue regarding

the constitutionality of the PWA; instead, we remand to the

Court of Appeals for reconsideration and resolution of the

defendants’ appeal and plaintiff’s cross-appeal on the

merits.

Plaintiff is the Saginaw Valley Area Chapter of

Associated Builders and Contractors. Associated Builders

and Contractors is a nonunion trade association with over

two hundred members in the construction industry in

thirteen Michigan counties.

Plaintiff’s members—contractors, subcontractors, and

builders among others—are required by the PWA to pay their

workers not less than the wage and benefits prevailing in

the locality on projects sponsored or financed by the

state. The PWA provides in relevant part:

Every contract executed between a
contracting agent and a successful bidder as
contractor and entered into pursuant to
advertisement and invitation to bid for a state
project which requires or involves the employment
of construction mechanics . . . and which is
sponsored or financed in whole or in part by the
state shall contain an express term that the
rates of wages and fringe benefits to be paid to

each class of mechanics by the bidder and all of
his subcontractors, shall be not less than the
wage and fringe benefit rates prevailing in the
locality in which the work is to be performed.
[MCL 408.552.]

The PWA provides further that “[a]ny person, firm or

corporation or combination thereof, including the officers

of any contracting agent, violating the provisions of this

act is guilty of a misdemeanor.” MCL 408.557.

On July 12, 2000, plaintiff brought this declaratory

action challenging the constitutionality of the PWA.

Plaintiff alleges that the manner in which the prevailing

wage is determined under MCL 408.554 of the PWA constitutes

an unconstitutional delegation of legislative authority to

unions and union contractors.2 Moreover, plaintiff alleges

2
MCL 408.554 provides:

The commissioner [the Department of Consumer
and Industry Services, now the Department of
Labor and Economic Growth] shall establish
prevailing wages and fringe benefits at the same
rate that prevails on projects of a similar
character in the locality under collective
agreements or understandings between bona fide
organizations of construction mechanics and their
employers. Such agreements and understandings, to
meet the requirements of this section, shall not
be controlled in any way by either an employee or
employer organization. If the prevailing rates of
wages and fringe benefits cannot reasonably and
fairly be applied in any locality because no such
agreements or understandings exist, the
commissioner shall determine the rates and fringe
benefits for the same or most similar employment
in the nearest and most similar neighboring

that the resulting determination is unconstitutionally

vague because it does not provide an individual of ordinary

intelligence notice of the conduct that, if undertaken,

would violate the statute.

Plaintiff named as a defendant, Kathleen Wilbur,

former Director of the Department of Consumer and Industry

Services (CIS), now the Department of Labor and Economic

Growth, which oversees the implementation of the PWA.

Because the PWA is a criminal statute, plaintiff also named

Midland County's prosecuting attorney, who is charged with

the enforcement and prosecution of the PWA in Midland

County, Michigan.

The Saginaw County prosecutor and the Michigan State

Building & Construction Trades Council (MSBCTC) intervened

by stipulation as defendants. Three union contractor

associations, the Michigan Chapter of the National

Electrical Contractors Association, Inc. (NECA), the

Michigan Mechanical Contractors Association (MCA), and the

locality in which such agreements or
understandings do exist. The commissioner may
hold public hearings in the locality in which the
work is to be performed to determine the
prevailing wage and fringe benefit rates. All
prevailing wage and fringe benefit rates
determined under this section shall be filed in
the office of the commissioner of labor and made
available to the public.

Michigan Chapter of Sheet Metal & Air Conditioning

Contractors National Association (SMACNA), also intervened

by motion as defendants.

The Midland County prosecutor and defendant-intervenor

MSBCTC filed motions under MCR 2.116(C)(4), (8), and (10),

arguing that the circuit court lacked jurisdiction under

MCR 2.605(A) because plaintiff's complaint did not present

an “actual controversy” as required by the court rule. The

several defendants also moved for summary disposition on

the merits.

On December 15, 2000, the circuit court denied the

motions for summary disposition that argued that plaintiff

had not met the actual controversy requirement of MCR

2.605(A). Then, on March 20, 2001, the circuit court ruled

on the motions for summary disposition on the merits. The

court granted the motions regarding plaintiff's vagueness

challenge to the PWA. However, the circuit court denied

the motions regarding plaintiff's challenge to the PWA as

an unconstitutional delegation of legislative authority,

thus allowing that claim to proceed.

Defendants appealed by leave granted and plaintiffs

cross-appealed from the circuit court’s orders. The Court

of Appeals concluded that plaintiff had alleged no “actual

controversy” under MCR 2.605(A). Accordingly, the Court of

Appeals reversed the circuit court's denial of defendants’

motion for summary disposition of the claim of

unconstitutional delegation of legislative authority and,

in plaintiff’s cross-appeal, affirmed the dismissal of

plaintiff’s vagueness claim.3

This Court ordered that oral argument be held with

regard to plaintiff’s application for leave to appeal.4

This case is before us on appeals from orders

regarding motions for summary disposition, which we review

de novo. Maiden v Rozwood, 461 Mich 109; 597 NW2d 817

(1999). The interpretation and application of court rules

and statutes present a question of law that is also

reviewed de novo. Cardinal Mooney High School v Michigan

High School Athletic Ass’n, 437 Mich 75, 80; 467 NW2d 21

(1991).

III

Plaintiff seeks a declaratory judgment regarding the

constitutionality of the PWA. A declaratory judgment is

“[a] binding adjudication of the rights and status of

litigants . . . [which] is conclusive in a subsequent

3
Unpublished opinion per curiam of the Court of
Appeals, issued August 5, 2003 (Docket No. 234037).
4
471 Mich 877 (2004).

action between the parties as to the matters declared . . .

.”5 Declaratory judgments are procedural remedies. They

allow

parties to avoid multiple litigation by enabling
litigants to seek a determination of questions
formerly not amenable to judicial determination .
. . . [6]

The availability of declaratory judgments in Michigan

is governed by MCR 2.605. The court rule provides in

pertinent part:

(A) Power to Enter Declaratory Judgment.

(1) In a case of actual controversy within
its jurisdiction, a Michigan court of record may
declare the rights and other legal relations of
an interested party seeking a declaratory
judgment, whether or not other relief is or could
be sought or granted.

(2) For the purpose of this rule, an action
is considered within the jurisdiction of a court
if the court would have jurisdiction of an action
on the same claim or claims in which the
plaintiff sought relief other than a declaratory
judgment.

The plain text of the declaratory judgment rule makes

clear that the power to enter declaratory judgments neither

limits nor expands the subject-matter jurisdiction of the

court.7 The court must have “jurisdiction of an action on

5
Black’s Law Dictionary (6th ed), p 409.
6
Allstate Ins Co v Hayes, 442 Mich 56, 65; 499
NW2d 743 (1993)(citations omitted).
7
Id. at 65 n 9.

the same claim or claims in which the plaintiff sought

relief . . . .”8 Moreover, the rule requires that there

be “a case of actual controversy” and that a party seeking

a declaratory judgment be an “interested party,” thereby

incorporating traditional restrictions on justiciability

such as standing, ripeness, and mootness.9

This Court has described the “actual controversy”

requirement of MCR 2.605(A)(1) as “a summary of

justiciability as the necessary condition for judicial

relief.”10 Thus,

if a court would not otherwise have subject
matter jurisdiction over the issue before it or,
if the issue is not justiciable because it does
not involve a genuine, live controversy between
interested persons asserting adverse claims, the
decision of which can definitively affect
existing legal relations, a court may not declare

8
MCR 2.605(A)(2).
9
The United States Supreme Court has recognized that

[j]usticiability is of course not a legal concept
with a fixed content or susceptible of scientific
verification. Its utilization is the resultant
of many subtle pressures, including the
appropriateness of the issues for decision by
this Court and the actual hardship to the
litigants of denying them the relief sought.”
[Poe v Ullman, 367 US 497, 508-509; 81 S Ct 1752;
6 L Ed 2d 989 (1961).]
10
Allstate, supra at 66.

the rights and obligations of the parties before
it.[11]

The requirement that a party demonstrate an interest in the

outcome that will ensure sincere and vigorous advocacy is

expressly subsumed in the declaratory judgment rule, which

allows the declaration of rights of an “interested party .

. . .”12

This Court has held that an “actual controversy” under

MCR 2.605(A)(1) exists

where a declaratory judgment or decree is
necessary to guide a plaintiff’s future conduct
in order to preserve his legal rights. . . .

This requirement . . . prevents a court from
deciding hypothetical issues.[13]

This Court has emphasized that although the actual

controversy requirement precludes a court from deciding

hypothetical issues, “a court is not precluded from

reaching issues before actual injuries or losses have

occurred.”14 The essential requirement of the term “actual

controversy” under the rule is that plaintiffs “plead and

11
Id. (citations omitted).

12
Id. at 68.

13
Shavers v Attorney General, 402 Mich 554, 588-589;

267 NW2d 72 (1978).
14
Id. at 589.

prove facts which indicate an adverse interest

necessitating the sharpening of the issues raised.”15

The “actual controversy” and the “interested party”

requirements of MCR 2.605(A)(1) subsume the limitations on

litigants’ access to the courts imposed by this Court’s

standing doctrine. To have standing:

“First, the plaintiff must have suffered an
‘injury in fact’ — an invasion of a legally
protected interest which is (a) concrete and
particularized, and (b) ‘actual or imminent, not
“conjectural” or “hypothetical.”’ Second, there
must be a causal connection between the injury
and the conduct complained of — the injury has to
be ‘fairly . . . trace[able] to the challenged
action of the defendant, and not . . . th[e]
result [of] the independent action of some third
party not before the court.’ Third, it must be
‘likely,’ as opposed to merely ‘speculative,’
that the injury will be ‘redressed by a favorable
decision.’” [16]

Yet without analysis of plaintiff’s standing under Lee

v Macomb Co Bd of Comm’rs, 464 Mich 726; 629 NW2d 900

(2001), the Court of Appeals panel below concluded that

plaintiff was not eligible for declaratory relief because

15
Id.
16
Lee v Macomb Co Bd of Comm’rs, 464 Mich 726, 739;
629 NW2d 900 (2001), quoting Lujan v Defenders of Wildlife,
504 US 555, 560-561; 112 S Ct 2130; 119 L Ed 2d 351 (1992).
This Court has declined to consider whether the Legislature
can confer standing more broadly than Lee’s test. See
Nat’l Wildlife Federation v Cleveland Cliffs Iron Co, 471
Mich 608, 632; 684 NW2d 800 (2004). Because the PWA does
not confer standing by its own terms, plaintiff’s standing
in this case is governed by the test adopted in Lee, supra.

plaintiff had not established “that there was an actual or

imminently threatened prosecution of any of its members,

nor has plaintiff shown that a declaratory judgment or

decree is necessary to guide its future conduct in order to

preserve its legal rights with respect to any particular

contract or bid.” On this basis, the Court of Appeals held

that the circuit court lacked jurisdiction to enter a

declaratory judgment. The Court of Appeals analysis

regarding the availability of declaratory relief under MCR

2.605 was too restrictive.

It has been conceded by the defendant prosecutor that

it must enforce the PWA.17 But regardless, neither Lee,

supra, nor the plain text of MCR 2.605 requires a plaintiff

regulated by a criminal statute to submit evidence of a

threat of imminent prosecution in order to establish

standing. It is sufficient to establish standing under

Lee, supra, that the members of plaintiff business

association are directly regulated by the PWA and must

conform their pay and benefit practices to that of union

contractors on state-funded projects under the statute.18

17
Thus, this case is distinguishable from Poe, supra
at 508, where the United States Supreme Court held that
declaratory relief was improper because there was no
realistic fear of prosecution.
18
MCL 408.552 and MCL 408.554.

Plaintiff’s members suffer a concrete, rather than a

hypothetical, injury because they either face criminal

prosecution for a violation of the statute or must avoid

state-funded work entirely.19 Such evidence establishes the

existence of a legally protected interest, causation, and

redressibility as required by Lee, supra.

Moreover, as a previous Court of Appeals decision

addressing declaratory relief recognized:

“A declaratory action is a proper remedy to
test the validity of a criminal statute where it
affects one in his trade, business or
occupation.” To afford a businessman relief in
such a situation without having first to be
arrested is one of the functions of the
[20]
declaratory judgment procedure.

We agree with the circuit court that the affidavits

submitted by plaintiff articulate

concrete risks of violations of the PWA as a
result of allegedly random changes to PWA rates,
the lack of definition of PWA projects and the
absence of PWA statutory definitions for
statutory language that may be material to
enforcement of the criminal sanctions.

Further, we agree with the circuit court’s conclusion that

“the risks of enforcement of the statute together with the

19
MCL 408.557.
20
Strager v Wayne Co Prosecuting Attorney, 10 Mich App
166, 171; 159 NW2d 175 (1968)(citations omitted).

asserted character of the potential for violations of the

PWA, present a justiciable controversy.

Plaintiff’s affidavits establish precisely the kind of

controversy that the declaratory judgment rule was intended

to cover.

Conclusion

We reverse the Court of Appeals denial of declaratory

relief and remand to the Court of Appeals for

reconsideration and resolution of defendants’ appeal and

plaintiff’s cross-appeal on the merits.

Elizabeth A. Weaver
Clifford W. Taylor
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman

S T A T E O F M I C H I G A N

SUPREME COURT

ASSOCIATED BUILDERS AND CONTRACTORS,
SAGINAW VALLEY AREA CHAPTER,

Plaintiff-Appellant,

v No. 124835

KATHLEEN M. WILBUR, DIRECTOR OF THE MICHIGAN
DEPARTMENT OF CONSUMER & INDUSTRY SERVICES AND
PROSECUTING ATTORNEY,

Defendants-Appellees,

and

MICHIGAN STATE BUILDING & CONSTRUCTION
TRADES COUNCIL,

Intervenor/Defendant/Appellee,

and

Intervenors/Defendants/Appellees,

and

MICHAEL D. THOMAS, Saginaw County
Prosecuting Attorney,

Intervenor/Appellee.
_______________________________

CAVANAGH, J. (dissenting).
I prefer to grant leave to appeal in this case;

therefore, I must respectfully dissent. Determining that

plaintiff may bring an action for declaratory judgment may

have ramifications far beyond the prevailing wage act, MCL

408.551 et seq., and I believe that deciding this case

without full briefing from the parties and interested amici

is not prudent. Therefore, I would prefer the opportunity

to fully explore the consequences of today’s decision

before issuing an opinion.

Michael F. Cavanagh
Marilyn Kelly

Associated Builders & Contractors v. Department of Consumer & Industry Services Director

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