Lawsuit to End DHS Practice of Diverting Funds From Child Care Subsidies Should Move Forward on Merits, Argues Mackinac Center Legal Foundation Director

Home-based day care owners from Brighton and Flint seek to join the case

For Immediate Release
Thursday, Oct. 29, 2009
Contact: Patrick J. Wright
Senior Legal Analyst

MIDLAND - The Mackinac Center Legal Foundation late yesterday filed a document explaining why its lawsuit against the Michigan Department of Human Services and its director, Ishmael Ahmed, should proceed to the merits and not be stopped due to purported procedural issues. Legal Foundation Director Patrick Wright filed the brief with the Court of Appeals in the case of Loar v. DHS.

"Disappointingly, they simply chose to throw up a lot of procedural flak," said Wright. "They tried to argue that we needed to more carefully enumerate each element of our complaint; that in effect, the Court of Appeals does not have the ability to stop this illegal government action without first requiring costly and prolonged hearings in the lower courts; and that the Court of Appeals should drop the case because we should have also sued other people who aren't in the government."

Wright added: "They had a final objection that was particularly puzzling: The DHS argued the case should actually be tried by a government employee agency. But this is essentially assuming what the DHS is supposed to prove - that is, that my client is somehow a government employee belonging to a public-employee union, even though she is in fact a private businesswoman serving private clients. If DHS is right, why doesn't it just cite the law that shows my client to be a government worker? It wouldn't be hard if it were true."

Mackinac Center Communications Director Michael Jahr observed: "It has been six weeks since this case was filed, and DHS and its director still have not defended either in the courts or to the public the decision to shanghai home-based day care providers into government-employee unions and divert child care subsidies into so-called 'union dues.' If their actions were proper and lawful, why haven't they defended them?"

Wright expressed confidence that the DHS' procedural objections would not prevent the Court of Appeals from hearing the case. "The defendants' arguments, taken to their logical ends, would prevent the Court of Appeals from stopping even the most egregious government actions, and we expect the court will reject that."

The lawsuit was originally filed on behalf of two Petoskey home-based day care providers: Sherry Loar and Dawn Ives. Their claim is that the DHS should stop taking "union dues" from state subsidy checks that provide day care assistance to low-income families. Due to the tough economy, Ives had to close her day care and now works for Loar. Wright noted that the fact that this change in employment required Ives to dismiss her claim against the DHS highlights the capricious nature of the employment relationship at issue in this case.

"DHS in effect claims that to be an employee eligible to participate in an employees' union, you have to be an employer, like Sherry," said Wright. "If you're a home day care employee, like Dawn now is, you won't be considered an employee by the union. Does this make sense to anyone? This would be too ridiculous for even '1984' or 'Catch-22.'

"We think it's clear that our client and other private child care providers are not government employees," Wright added. "But if government officials think otherwise, they still need to obey the law and make these private workers into government employees through an act of the Legislature. An executive agency like the DHS can't simply write an agreement with a community college that sweeps my client into a union and then pretend it's got the force of law."

When this case was originally filed, the Mackinac Center Legal Foundation received a number of calls from other interested day care providers. Wright has filed a motion with the Court of Appeals to replace Ives with two of them: Paulette Silverson from Brighton and Michelle Berry from Flint. Their stories are captured in this brief video.