Background
The City of Royal Oak enacted an ordinance to regulate and license two recreational marijuana retail establishments. The ordinance established a competitive process to select applicants and granted the city manager the power to “implement and administer the municipal license application process.” This included ranking applicants to determine who was “best suited to operate” and would receive the limited license slots. The city commission’s role was confined to later stages, such as approving special land use permits and site plans for the selected applicants.
Plaintiffs Exclusive Capital Partners LLC and Quality Roots, Inc., were among 21 applicants for the two available licenses. The city manager convened an internal workgroup of city officials to review the applications and ultimately selected two other applicants. Plaintiffs sued the city, arguing among other things that the selection process violated Michigan’s Open Meetings Act (OMA) because the meetings between the city manager and the workgroup were not held publicly.
The trial court ruled in favor of the city, but the Michigan Court of Appeals reversed. The appellate court concluded that the city manager was effectively exercising the city commission’s decision-making authority, making him a “public body” subject to the OMA. The city then appealed to the Michigan Supreme Court.
The Court’s Holding
The Michigan Supreme Court unanimously reversed the Court of Appeals, holding that the city manager was not a “public body” under the Open Meetings Act and therefore did not have to conduct the license-ranking process in public. The Court explained there are two ways an entity can be considered a “public body” subject to the OMA: by its own nature or by a delegation of authority from another public body.
First, the Court determined the city manager did not qualify on his own. Citing its precedent in Herald Co v Bay City, the Court reaffirmed that the term “public body” in the OMA refers to a collective entity—like a board, commission, or council—and does not encompass an individual official acting in an executive capacity. Second, the Court rejected the idea that the city manager was acting under delegated authority. It found that the Court of Appeals had incorrectly assumed the city commission held the original authority to rank applicants. Instead, the ordinance explicitly and independently granted that power directly to the city manager. The city commission had no role in the ranking, only in later land-use approvals.
Because the city manager was an individual acting alone pursuant to a direct grant of authority from the ordinance, not from the city commission, he was not functioning as a “public body.” Consequently, his meetings with the advisory workgroup were not subject to the OMA’s requirements for public access.
Key Takeaways
- An individual government official, such as a city manager, is not a “public body” as defined by Michigan’s Open Meetings Act (OMA) and is not required to hold public meetings when acting in their individual executive capacity.
- Authority granted directly to an individual official by a city ordinance is not considered a “delegation” from a public body like a city commission. Therefore, the official does not become subject to the OMA through the delegation pathway in such circumstances.
- Municipalities can design multi-stage licensing processes where an individual administrator handles an initial competitive ranking, while a public body (like a city commission) handles separate, later-stage approvals (like zoning permits) without making the administrator’s initial review subject to the OMA.
Why It Matters
This decision provides significant clarity on the scope of Michigan’s Open Meetings Act, confirming that its requirements for transparency apply to collective governing bodies, not to individual officials performing duties assigned to them by law. It reinforces a key distinction between the deliberative actions of a board or commission and the executive functions of a single administrator.
For municipalities, the ruling offers a clear legal framework for structuring competitive licensing for industries like cannabis. It allows cities to create efficient, streamlined selection processes administered by a single official like a city manager, avoiding the procedural complexities of the OMA during the initial ranking phase. This administrative efficiency is permissible as long as the authority is granted directly to the official via ordinance and does not usurp a function legally reserved for a public body. The decision preserves the public’s role in later stages, such as land use and zoning decisions, which remain under the purview of public bodies like planning and city commissions.