Requests for declaratory rulings by state agencies; MCL 24.263 & 24.264; Challenge to a decision declining to issue a declaratory ruling; Petition for review under the Administrative Procedures Act (APA) or filing a new declaratory judgment action in circuit court; Human Rights Party v Michigan Corr Comm’n; School funding dispute; The State School Aid Act (SSAA); MCL 388.1606(6); Michigan Department of Education (MDE)

The court held that the lower courts erred in ruling that plaintiff-Warren Consolidated School District “was required to appeal the MDE State Superintendent’s decision declining to issue a declaratory ruling” in this school funding dispute through the APA’s petition-for-review process. It concluded that the MDE’s decision did “not preclude Warren from seeking a declaratory judgment in circuit court.” The court overruled “Human Rights Party and subsequent Court of Appeals cases that relied on its holding that an agency’s decision to decline to issue a declaratory ruling must be challenged through the APA’s petition-for-review process.” It reversed the Court of Appeals judgment that had upheld summary disposition for defendant-Hazel Park Schools, and remanded the case to the trial court. Warren alleged “that Hazel Park violated the SSAA, and specifically MCL 388.1606(6), by enrolling pupils that would have otherwise attended Warren’s schools.” The court concluded that “neither MCL 24.263 nor MCL 24.264 required Warren to appeal the MDE’s decision not to issue a declaratory ruling through a petition for review under the APA. Warren was entitled to seek declaratory relief directly in circuit court. Specifically, the State Superintendent declined Warren’s request to issue a declaratory ruling in his [1/8/20] letter. Under MCL 24.263, Warren was never required to appeal the MDE’s denial of its request for a declaratory ruling. And under MCL 24.264, Warren requested a declaratory ruling and had that request denied; thus, it satisfied that provision’s exhaustion requirement. Hazel Park might well have other defenses against Warren’s claims” but the court rejected the trial court’s stated reason for granting it summary disposition. “MCL 24.263 creates an optional procedure for regulated parties to seek declaratory rulings from administrative agencies regarding the application of a statute, rule, or order to specific facts. MCL 24.264 requires a party challenging or questioning the application of an agency rule to first seek a declaratory ruling from the agency. In either case, if the agency issues a declaratory ruling, the regulated party may appeal it through an APA petition for review. However, if the agency declines to issue a declaratory ruling, no appeal is required or available. The requesting party is free to file a declaratory judgment action in circuit court or pursue any other remedy to which they may be entitled.” As a result, the court overruled “Human Rights Party and other Court of Appeals decisions inconsistent with this holding . . . .”