Landmark Michigan Supreme Court Decision Puts Bounds on the Growing Power of State Agencies

Ruling will “make every Michigan resident freer,” legal analyst says

News Release
Thursday, July 24, 2008

Patrick J. Wright
Senior Legal Analyst

MIDLAND — Yesterday’s Michigan Supreme Court decision in SBC v. MPSC is a landmark case in curbing the growing power of state agencies, said Patrick J. Wright, senior legal analyst for the Mackinac Center for Public Policy. In the ruling, the court held that the Michigan Public Service Commission lacked the power to interpret statutes, including those that give state agencies their power, and rejected the federal approach to administrative law, which the court described as giving "unyielding deference" to federal agency decisions. The court’s decision was the one recommended in the Mackinac Center’s amicus brief in the case.

"Our country was founded on the theory of separation of powers, which prevents tyranny by diffusing authority among branches of government," said Wright, author of the Center’s "friend of the court" brief. "This decision prohibits administrative agencies from interpreting the very laws that are supposed to limit and guide their actions; it means the courts and the Legislature retain their ability to impose checks and balances on the unelected officials of the administrative state."

The ruling clarifies that an administrative agency still has a role in determining facts in a contested case and that these factual determinations will still receive deference from the courts. But, citing the federal case Marbury v. Madison, the Michigan Supreme Court clarified that it is the judiciary’s duty to say what the law is, and that an agency cannot perform this role.

Wright indicated, "The practical effect of this decision is that agency actions will be more closely scrutinized by the courts and will be held accountable to the laws written by the people’s elected representatives. The days where state officials appeared to act as the legislature, the executive and the judiciary in deciding state regulatory cases are over. As a result, every Michigan resident just became freer."