Opinion
Docket Nos. 152615 152616 152617 152618 152619 152620 152621 152622 152623 152624 152625 152626 152627 152628 152629 152630 152631 152632 152633 152634 152635 152636 152637 152638 152639 152640 152641 152642 152643 152644 152645 152646 152647 152648. COA Nos. 325475 325476 325477 325478 325479 325480 325481 325482 325483 325485 325486 325487 325488 325489 325490 325491 325492 325515 325516 325517 325518 325520 325522 325523 325525 325526 325528 325529 325532 325533 325534 325535 325972 325974.
06-24-2016
YASKAWA AMERICA, INC., Plaintiff–Appellant, v. DEPARTMENT OF TREASURY, Defendant–Appellee. Rainier Investment Management, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Rainier Investment Management, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Rainier Investment Management, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Rainier Investment Management, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Hansen Beverage Company, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Coventry Health Care, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Yaskawa America, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Yaskawa America, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Paperweight Development Corporation, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Paperweight Development Corporation, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Dollar Tree, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Ball Corporation, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Commercial Metals Company, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Commercial Metals Company, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Dollar Tree, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. BIORX, LLC, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. United Stationers Supply Company, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Rodale, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Circor Energy Products, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Crown Holdings, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Michelin Corporation, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Interstate Gas Supply, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Interstate Gas Supply, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Sapa Extrusions, Inc., formerly known as Alcoa Extrusions, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Raven Industries, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Cargill, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Watts Regulator Company, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Watts Regulator Company, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Watts Regulator Company, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Lord Corporation, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Teradyne, Inc., Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Goodyear Tire & Rubber Company, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee. Hallmark Marketing Company, LLC, Plaintiff–Appellant, v. Department of Treasury, Defendant–Appellee.
On order of the Court, the application for leave to appeal the September 29, 2015 judgment of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court.
MARKMAN, J. (dissenting).
I respectfully dissent from this Court's order denying leave to appeal. Because the issues raised here are, in my judgment, of considerable constitutional significance as to matters affecting the tax policy and procedures, the fiscal and business environments, and the jurisprudence of this state, I believe they ought to be heard by the highest court of this state, and would thus grant leave to appeal.
In 1970, Michigan joined the Multistate Tax Compact (the Compact) when the Legislature enacted MCL 205.581. See 1969 PA 243, effective July 1, 1970. Article III(1) of the Compact provided that certain multistate taxpayers may elect to apportion income to Michigan for tax purposes “in the manner provided by the laws of such state,” i.e., the laws of Michigan, or else “in accordance with Article IV.” MCL 205.581, art. III(1). Article IV provided for an apportionment formula based on property, payroll, and sales factors. MCL 205.581, art. IV(9). Effective January 1, 2008, the Legislature enacted the Michigan Business Tax Act (BTA), MCL 208.1101 et seq. , 2007 PA 36, which provided that “each tax base established under this act shall be apportioned in accordance with this chapter.” MCL 208.1301(1). Finally, MCL 208.1301(2) of the BTA provided for an apportionment formula based solely on a sales factor.
At issue in IBM v. Dep't of Treasury, 496 Mich. 642, 852 N.W.2d 865 (2014), was whether the plaintiff multistate taxpayer could elect to use the Compact's three-factor apportionment formula for its 2008 Michigan taxes or whether, as the defendant Department of Treasury argued, it was required to use the BTA's sales-factor-only apportionment formula. This Court ruled in IBM that the taxpayer could elect to use the Compact's apportionment formula. The lead opinion stated that “the Legislature had [not] repealed the Compact's election provision by implication when it enacted the BTA,” id. at 645, 852 N.W.2d 865 (opinion by Viviano, J.), while the concurring opinion left that question open, id. at 668, 852 N.W.2d 865 (Zahra, J., concurring). In response, the Legislature enacted 2014 PA 282, which repealed the Compact “retroactively and effective beginning January 1, 2008.” 2014 PA 282, enacting § 1. As a consequence, 2014 PA 282 retroactively repealed the Compact election provision beginning that date as well. Several multistate taxpayers challenged the constitutionality of 2014 PA 282, but the Court of Claims and the Court of Appeals upheld the statute against those challenges. Gillette Commercial Operations North America & Subsidiaries v. Dep't of Treasury, 312 Mich.App. 394, 401, 878 N.W.2d 891 (2015). In my judgment, the following four constitutional questions that are raised in the taxpayers' various applications for leave to appeal warrant thorough consideration by this Court by a grant of leave to appeal:
First, is 2014 PA 282 consistent with federal due-process protections, U.S. Const., Ams. V and XIV, given that the retroactivity period here of six years and nine months arguably exceeds “a modest period of retroactivity,” United States v. Carlton, 512 U.S. 26, 32, 114 S.Ct. 2018, 129 L.Ed.2d 22 (1994), and that one justice has observed in this same regard in a frequently cited statement that “[a] period of retroactivity longer than the year preceding the legislative session in which the law was enacted would raise ... serious constitutional questions,” id. at 38, 114 S.Ct. 2018 (O'Connor, J., concurring in the judgment)?
Second, is 2014 PA 282 consistent with the Michigan Due Process Clause, Const. 1963, art. 1, § 17, when that clause is worded differently than the federal Due Process Clause and we have held that the state provision may afford heightened protections, Charter Twp. of Delta v. Dinolfo, 419 Mich. 253, 276 n. 7, 351 N.W.2d 831 (1984), because “while the Federal supreme court is the final judge of violations of the Federal Constitution, the decision of the Supreme Court of this State is final on the question of whether or not a State statute conflicts with the State Constitution,” People v. Victor, 287 Mich. 506, 514, 283 N.W. 666 (1939) ?
Third, does 2014 PA 282 violate either the federal or state prohibitions against the impairment of contracts, U.S. Const., art. I, § 10, cl. 1; Const. 1963, art. 1, § 10, because the Compact is a reciprocal and binding interstate compact between the signatory states with respect to which a retroactive withdrawal from the Compact amounts to an unconstitutional impairment of that contract, see Gillette Co. v. Franchise Tax Bd., 62 Cal.4th 468, 477–479, 196 Cal.Rptr.3d 486, 363 P.3d 94 (2015) ?
Fourth, does 2014 PA 282 violate the Separation of Powers Clause, Const. 1963, art. 3, § 2, because by prescribing the outcomes of those cases that were held in abeyance pending IBM, as well as IBM itself, the Legislature has impinged on the judicial power, Const. 1963, art. 6, § 1, and contravened the principle that “the Legislature cannot dictate to the courts what their judgments shall be, or set aside or alter such judgments after they have been rendered,” People ex rel Sutherland v. Governor, 29 Mich. 320, 325–326 (1874) ; cf. Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 217–218, 115 S.Ct. 1447, 131 L.Ed.2d 328 (1995) (“Congress has exceeded its authority by requiring the federal courts to exercise ‘[t]he judicial Power of the United States,’ U.S. Const., Art. III, § 1, in a manner repugnant to the text, structure, and traditions of Article III.”)?
As the United States Supreme Court has recognized, “[T]he power to tax involves the power to destroy[.]” M'Culloch v. Maryland, 17 U.S. (4 Wheat) 316, 431, 4 L.Ed. 579 (1819). This power must be kept subject to proper constitutional limits, particularly when, as here, a heightened tax burden has been imposed not on future business activities, but on business activities planned and undertaken many years ago. While I do not yet have any firm belief regarding the constitutionality of 2014 PA 282, I do have a firm belief that before retroactive tax burdens such as those set forth in this law are imposed, the arguments of affected taxpayers deserve consideration by the highest court of this state. Accordingly, I respectfully dissent and would grant leave to appeal.
VIVIANO, J., joins the statement of MARKMAN, J.