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Tag: Michigan Court of Appeals

  • Michigan cannabis group urges appeals court to intervene before 24% tax takes effect – Detroit Metro Times

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    Michigan’s leading cannabis trade group is urging the Michigan Court of Appeals to immediately take up its legal challenge to a new 24% wholesale tax on marijuana, arguing the tax is unconstitutional and should be blocked before it takes effect on Jan. 1.

    The Michigan Cannabis Industry Association (MiCIA) filed an application for leave to appeal this week, seeking to overturn a Dec. 8 ruling by the Michigan Court of Claims that declined to stop the Legislature’s wholesale tax from going into effect while the case continues.

    “We stand by our belief that the Court of Claims did not make the right call when it issued an opinion that declined to block the Michigan Legislature’s unconstitutional 24% wholesale tax on cannabis from going into effect on New Year’s Day,” MiCIA spokesperson Rose Tantraphol said. “Our filing requests that the Court of Appeals take up our lawsuit, which we continue to believe is an exceptionally strong case on the merits.”

    The lawsuit argues lawmakers need a three-quarters supermajority to change voter-approved cannabis laws under the Michigan Constitution. When voters legalized recreational marijuana in 2018, they approved a 10% excise tax and 6% sales tax on retail cannabis sales. Any new or higher tax amounts to an amendment of that ballot measure and therefore needs a supermajority vote, MiCIA contends.

    The association sued in early October, seeking to eradicate the tax entirely and alleging lawmakers pushed it through using a “shell bill,” changing the measure’s purpose late in the legislative process in violation of the Michigan Constitution. 

    MiCIA is represented by attorneys from Honigman LLP and Dykema.

    In its Dec. 8 ruling, the Court of Claims rejected two of MiCIA’s constitutional arguments related to change of purpose and amendment by reference, but left a third issue unresolved. A hearing on that remaining issue is scheduled for Jan. 13.

    Because the case has not been fully resolved at the trial court level, MiCIA filed an application for leave to appeal, asking the Court of Appeals to intervene now.

    MiCIA argues the trial court erred by ruling against two of its claims and by declining to rule on the third, noting that all parties had agreed there were no factual disputes requiring further proceedings.

    The legislation, approved by a slim majority of Republican and Democratic lawmakers, was signed by Gov. Gretchen Whitmer, who supports the tax to pay for long-promised road repairs. 

    The state’s cannabis market has already been struggling from oversupply, falling prices, and shrinking profit margins. In November, the average retail price of recreational flower dropped to a record low of $59.79 an ounce, which is down from $512 when legal sales began in 2020. Total sales also began falling for the first time this year. 

    Industry leaders warn that adding a 24% wholesale tax will push Michigan’s legal cannabis prices close to those in California, where high taxes eroded parts of the legal market and drove consumers back underground.

    Tantraphol said delaying an appellate review would cause unnecessary harm to an industry already under financial strain.

    “The stakes are incredibly high,” she said. “The Michigan cannabis industry has been an economic engine for our state since voters legalized marijuana in 2018. Our industry has created 47,000 new jobs, pumped $331 million annually to schools, roads, and other public priorities through the 10% excise tax we collect, and generated $188 million in annual sales taxes. This unconstitutional move by the Legislature jeopardizes all of that.”

    Although the wholesale tax has not yet taken effect, Tantraphol said its impact is already being felt. One cannabis operation in Webberville has announced it will close, another business has told MiCIA it plans to shut down soon, and a company in the Upper Peninsula permanently laid off 61 workers last week.

    “Businesses will close and neighbors will lose jobs,” she said. “Cannabis businesses operate on thin margins, so allowing the 24% wholesale tax to go into effect will mean a lower volume of sales. The state’s own Senate Fiscal Agency predicts that due to market elasticity, total sales will decrease by about 14%.”

    MiCIA also warned the tax could drive consumers back to the illicit market.

    “The last thing the state should be doing is pushing Michiganders who are already feeling stretched financially into the illicit market,” Tantraphol said. “Let’s get this case to the Court of Appeals so that we can start to right this wrong.”

    In the same week the Michigan House approved the wholesale tax, California Gov. Gavin Newsom signed a bill to roll back a 25% tax increase on recreational cannabis. He approved the measure because the state’s high tax rates have forced thousands of legal businesses to shut down and drove residents to the unregulated market.


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    Steve Neavling

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  • Court of Appeals sides with ShotSpotter critics in Detroit, finding city ‘repeatedly’ violated transparency law – Detroit Metro Times

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    A state appeals court handed a partial victory to critics of Detroit’s controversial ShotSpotter surveillance system, ruling that city officials violated a transparency ordinance when they approved contracts for the gunshot detection technology without properly notifying the public.

    In a published decision released Thursday, a divided Michigan Court of Appeals panel found that the Detroit Police Department failed to comply with the city’s Community Input Over Government Surveillance (CIOGS) ordinance, which requires the public release of a detailed report on surveillance technology at least 14 days before it is discussed by the City Council. The court reversed part of a lower court ruling that had dismissed the case and sent it back for further proceedings.

    “The City of Detroit uses surveillance technology to identify the location of gunshots in certain precincts,” Judge Brock Swartzle wrote for the majority. “Given the inherent invasiveness of surveillance technology, the City adopted specific procedural requirements that must be met when procuring such technology. These requirements were not met here.”

    Critics argue ShotSpotter, which relies on a network of sensors to detect gunshots, is unproven, invasive, and racially discriminatory. The city counters that it saves lives and helps police find suspects more quickly.

    The ruling means the Wayne County Circuit Court must revisit whether the city’s ShotSpotter contracts are valid and whether the plaintiffs — five Detroiters and the James and Grace Lee Boggs Center to Nurture Community Leadership — are entitled to any relief.

    The appeals court found that the Detroit Police Department did not post the legally required Surveillance Technology Specification Report (STSR) until September 28, 2022 after several key council committee meetings had already taken place and just one day after the council voted to renew an existing $1.5 million contract with ShotSpotter. The council later approved a $7 million expansion two weeks later.

    “Thus, the record confirms that defendants repeatedly violated the requirement under § 17-5-452(c) that the STSR ‘be made available on the City’s website at least 14 days prior to holding any of the hearings or meetings,’” the court wrote. “The trial court erred in concluding otherwise when it granted summary disposition in favor of defendants.”

    The panel also rejected the city’s argument that it was exempt from the ordinance because ShotSpotter had already been in use before the law took effect in 2021. The court ruled that the so-called “grandfather clause” only applies to surveillance technology that was previously approved under the ordinance, and the ShotSpotter system was not.

    The lawsuit was filed in 2022 by the Detroit Justice Center, Sugar Law Center for Economic and Social Justice, and attorney Jack Schulz. They argued that the city violated its own ordinance by failing to be transparent and involve the community in approving the technology.

    “Much congrats to each of our clients for standing up in this case on behalf of all residents of the city,” John Philo, executive and legal director for Sugar Law Center, said. “While more limited in scope than hoped for, the court’s decision is an important recognition that citizens’ oversight and input ordinances matter and cannot simply be ignored by government officials.”

    ShotSpotter operates through a network of microphones that detect loud noises and notify police of suspected gunfire. Detroit police have praised it as a tool that helps officers respond to shootings faster.

    “ShotSpotter has been an invaluable investigative tool that is helping to make our city safer,” Detroit Police Department Assistant Chief Franklin Hayes said in a statement to Metro Times. “In areas where ShotSpotter is deployed, we have seen significant reductions in gunfire. So far this year, we have recovered 244 firearms and made 131 arrests as a result of ShotSpotter cases.”

    Hayes said the technology also “helps save lives.”

    “Just this week, DPD responded to a ShotSpotter alert of multiple shots fired, for which no 911 calls were placed,” Hayes said. “When officers arrived, they found a critically injured victim who likely would have succumbed to his injuries at the scene had ShotSpotter technology not alerted DPD to the incident and to its location.” 

    Community advocates and civil rights groups argue that the system sends officers charging into predominantly Black neighborhoods on high alert, even though the majority of alerts turn out to be false alarms. An analysis by Chicago’s Office of Inspector General found that ShotSpotter alerts “rarely produce evidence of a gun-related crime” and led police to increase stop-and-frisk encounters in areas already over-policed. About 89% of ShotSpotter alerts in Chicago resulted in no evidence of gunfire or any crime.

    Opponents also note that several cities — including San Antonio, Charlotte, Trenton, Troy, and Grand Rapids — have canceled or rejected ShotSpotter contracts amid concerns about its reliability and cost.

    The appeals court remanded the Detroit case to Wayne County Circuit Court to determine potential remedies and address the city’s defenses, including claims that the lawsuit is moot because the contracts have already been implemented.

    “With surveillance and similar technology ever encroaching into every recess of modern life, procedural safeguards cannot be ignored or downplayed by government actors as mere technicalities,” the court wrote. “To ensure that technology serves the people, and not the other way around, strict compliance with procedural safeguards like the CIOGS Ordinance may well be needed. And, unfortunately, such compliance was lacking here.”

    In a statement, Detroit Corporation Counsel Conrad Mallett noted that the court’s opinion does not impact the use of ShotSpotter in the city.

    “The Court of Appeals opinion does not void the use of this technology, which is still in place,” Mallett said. “In its opinion the Court of Appeals recognized the City of Detroit’s defenses to the lawsuit that may result in another dismissal by the trial court.”


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    Steve Neavling

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  • Elderly Detroit man freed after he was sentenced to life in prison at the age of 18

    Elderly Detroit man freed after he was sentenced to life in prison at the age of 18

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    Michigan Department of Corrections

    Ivory Thomas was sentenced to life without parole after he was convicted of murder in 1965.

    An elderly man who has been in prison since fatally stabbing a Detroit man in the chest during a 1965 robbery is being released as the result of a Michigan court ruling that changes how the state treats 18-year-olds convicted of murder.

    Ivory Thomas was resentenced Tuesday to 40 to 60 years in prison, which means he has served his maximum penalty.

    Thomas was the oldest Wayne County man still in prison after being sentenced as an 18-year-old.

    In 2022, the Michigan Court of Appeals ruled in People v. Poole that 18-year-olds sentenced to life without the possibility of parole are entitled to resentencing. A mandatory life sentence for an 18-year-old violates the state constitutional prohibition on cruel and unusual punishment, the court ruled.

    Wayne County Prosecutor Kym Worthy said she supported Thomas’s release because he’s “very ill” and has made a positive transformation in prison. She said the family of the victim also supported his release.

    “Mr. Thomas is 77 years old and has served 60 years in prison for taking the life of Michael Railsback since he was 18 years old,” Worthy said. “He is very ill and has accepted full responsibility for his actions. We have examined this case and believe in these facts, as well as Mr. Ivory’s transformation in prison, that the family of Mr. Railsback and I can fully support Mr. Ivory’s release.”

    Railsback was 18 years old when he was killed at Dueweke Park.

    Thomas was serving his time at the Thumb Correctional Facility in Lapeer.

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    Steve Neavling

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