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A Better Partnership
June 01, 2015

COA determines that agencies may amend rules after public comment stage has ended

In Michigan Charitable Gaming Association v State of Michigan, No. 323410, the Court of Appeals held that state agencies are free, after the public comment stage, to withdraw a proposed rule set from the legislative Joint Committee on Administrative Rules (JCAR), amend the rule set, and resubmit it without opening the amended rules to public comment for a second time. The only limitation in such a circumstance is that the rules do not conflict with the agency’s earlier submitted regulatory impact and small business impact statements, and that the agency must inform JCAR of the respective amendments made upon resubmission.
Plaintiff Michigan Charitable Gaming Association filed a complaint against Defendants State of Michigan and the Gaming Control Board regarding the agency’s recently published rules governing “millionaire parties,” a type of charitable gambling. Plaintiff claimed the rules were invalid because they did not follow the proper rulemaking process stipulated in the Administrative Procedures Act, MCL 24.201. Prior to an initial submission to JCAR, an agency must open its proposed rules to public comment. Here, Plaintiff argued that Defendants were not free to withdraw proposed rules from JCAR, amend them, and resubmit them without opening the amended rules to public comment a second time. The Court of Claims granted Plaintiff’s motion for summary disposition and granted an injunction enjoining enforcement of the newly promulgated rules.
The Court of Appeals held that Plaintiff’s reading of the Administrative Procedures Act’s rulemaking process was overly narrow and not harmonious with the Act as a whole. The Court found no reason to limit an agency’s power to amend its proposed rules so long as the amendments were consistent with prior submitted impact statements and did not infringe upon JCAR’s role in the rulemaking process. To hold otherwise would render MCL 24.245a(7), providing for the withdrawal of a proposed rule, a hollow provision with little meaning. The Court also cited the legislative intent of giving agencies the power to amend rules in the course of the rulemaking process. Therefore, the Court of Appeals reversed the Court of Claims’ order granting Plaintiff summary disposition, vacated the injunction, and remanded back for further proceedings.

Judge Meter dissented.  He wrote that the “Legislature did not intend to allow for a rule to be submitted to . . . [JCAR,] withdrawn, altered, and then resubmitted without its having gone again through the rule making process.”  Judge Meter believed that this reading was required by the plain meaning of the statute.  At the same time, he wrote that even if the statute was ambiguous, the legislative history supported this reading.  Accordingly, he would have affirmed the judgment of the Court of Claims

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