Detroit Arena Tax Hashed Out in Sixth Circuit

CINCINNATI (CN) – The use of $56 million of voter-approved school tax funds for the relocation of the Detroit Pistons basketball team was challenged in the Sixth Circuit on Thursday.

Robert Davis, who does not reside in Detroit, and D. Etta Wilcoxon, a Detroit resident, filed a federal lawsuit last year, and claim the city’s plan to reimburse Olympia Entertainment and Palace Sports for arena improvements necessary to move the Pistons NBA team from Auburn Hills to Detroit is unconstitutional.

Davis and Wilcoxon claim that Detroit voters consented to be taxed only for school purposes when they approved an operating millage in the city’s November 2012 general election.

The pair sued Detroit Public Schools Community District, Detroit Public Schools, the Detroit Public Schools Community District Board of Education and its president, Dr. Iris Taylor, and later added Olympia Entertainment Events Center, Palace Sports and Entertainment, and the National Basketball Association as intervener-defendants.

In addition to their challenge of the arena funding, Davis and Wilcoxon also said their constitutional rights had been violated when the Board of Education refused to put the funding scheme to a vote by those that voted for the millage.

U.S. District Judge Mark Goldsmith granted the defendants’ motion for summary judgment, and ruled that Davis and Wilcoxon lacked standing to bring their claims as they suffered no special injury and did not allege an interest separate from the interests of the public at large.

“The only possible allegation,” Goldsmith wrote, “that might be construed as a claim of specialized injury is their allegation that they are ‘the only electors who submitted a written demand on Detroit Public School, or DPS, defendants to place the … issue on the November 2017 ballot.’

“But having made a demand does not show any special injury. Any alleged injury traceable to DPS defendants would flow from the failure to place a proposal on the ballot – an injury, if it were one, that all Detroit voters would suffer, regardless of who made a demand on DPS defendants or whether any demand was made at all.” (Emphasis in original)

Goldsmith went a step further, however, and also ruled on the merits of the voters’ claims.

He ruled that because the public at large was made aware of the city’s intent to fund the relocation via the school tax revenue – which was “a modification to a tax increment financing plan that has been in place, and well-publicized, for years” – the voters could have challenged the project nearly four years ago.

Attorney Andrew Paterson Jr. argued on behalf of Davis and Wilcoxon at the Sixth Circuit on Thursday and claimed that a section of the Michigan Revised School Code requires the issue be put to a vote.

Circuit Judge Joan L. Larsen, appointed to the court in November 2017, questioned the nature of how such an issue would be placed on the ballot.

“The missing step here,” she said, “is who gets to place the issue on the ballot. How can your clients come into federal court and compel [us] to put the issue on the ballot?”

Circuit Judge Danny J. Boggs piggybacked on Larsen’s line of questioning and asked if a vote would really even matter.

“Would electors have any power even if they did vote?” He asked.

Paterson argued that voters would, citing his clients’ ability to gather over 7,000 signatures against the funding in two days as proof that residents are against the reimbursement.

Attorney Kevin Campbell argued briefly for the Detroit Public School defendants and stressed that the alleged injury suffered by the plaintiffs was not particularized and did not confer federal standing.

Campbell opposed Paterson’s argument that a vote would impact the funding allocation, and said, “Placing the issue on the ballot would accomplish nothing.”

He called the move of the Detroit Pistons and subsequent development a “special time in Detroit history” and said his clients are “instrumental in this [redevelopment] process.”

The majority of the defendants’ arguments were made by attorney David Fink, on behalf of the Detroit Brownfield Redevelopment Authority and the Detroit Downtown Development Authority.

Fink attacked Paterson and Davis and asked the court to rule on his motion to strike the plaintiffs’ supplemental brief, which he claimed was filed late.

“This is one more in a series of frivolous and vexatious lawsuits filed by Davis and this counsel,” Fink said. “The question is not whether plaintiffs should be barred from this courthouse … it is how.”

“They flout the federal court rules,” Fink continued, adding, “The court understands how frivolous this voters’ rights lawsuit is. It’s absurd.”

He concluded his arguments by reiterating that Davis and Wilcoxon lack standing under both federal and state requirements.

No timetable has been set for the court’s decision.

 

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