2024 • The Year in Michigan Politics

Here is our annual breakdown of top political stories impacting our region and our state in 2024.

Federalism and the Fight Against Enbridge Line 5

The Line 5 pipeline is 645-miles-long and 30 inches in diameter that has operated since 1953 and now transports 545,000 barrels a day of oil and natural gas liquids from western Canada through Wisconsin and Michigan and back into eastern Canada. Pipeline owner Enbridge Energy, headquartered in Calgary, Canada, is North America's largest pipeline company and operates the pipeline by virtue of an easement from the State of Michigan.

The controversy kicked off in 2013, when divers reported violations of the easement based on inadequate support systems. After Governor Whitmer took office the Michigan Attorney General Dana Nessel commenced a suit in a Michigan court to shut down the pipeline. That case was still in court when, in November 2020, Michigan governor Whitmer took steps to revoke that easement due to safety concerns that the aging pipeline lacks structural integrity to ensure that it won’t leak into the straits of Mackinac and pollute the Great Lakes, which contains 21% of the world’s fresh surface water and supplies drinking water for 48 million people, saying “ Transporting millions of gallons of petroleum products each day through two 67-year old pipelines that lie exposed along the entire span of a busy shipping channel presents an extraordinary and unacceptable risk. The dual pipelines are vulnerable to anchor strikes, similar dangerous impacts, and the inherent risks of pipeline operations.”

Enbridge countered the state with a federal lawsuit of its own with Enbridge v. Whitmer. Enbridge claims that pipeline safety is exclusively regulated by the Pipeline and Hazardous Materials Safety Administration (PHMSA). PHMSA reviews the safety compliance of Line 5 across the Straits of Mackinac annually. Line 5’s unimpeded operation is also protected by the bi-lateral 1977 Transit Treaty entered between the United States and Canada, according to Enbridge.

So far, the Nessel litigation has been restricted to determining only which court should decide this case: does it belong in Michigan state court (where the Attorney General filed it in 2019) or in federal court (to where Enbridge removed it over two years later)? 

Enbridge waited 2 years before it filed a motion to remove the case to federal court, which it did about the same time it started the Enbridge v Whitmer federal case, when it felt a federal court would be better positioned to rule on whether federal laws and international treaties ultimately control the matter. 

In 2022 the trial court judge originally ruled that the matter should be decided in federal court, giving Enbridge a clear upper hand to the extent that Michigan’s PSC even started issuing permits for the proposed construction of an underwater utility corridor buried deep beneath the bottom lands. 

This corridor has been offered by Enbridge as a way to mitigate risks far into the future by encasing the pipeline in a sealed and hardened tunnel that would be stable and would allow for inspection and maintenance. Enbridge is focusing its efforts on building the Great Lakes Tunnel which “will make a safe pipeline safer and protect the waters of the Great Lakes, the environment, and people while assuring long term energy security and reliability and supporting Michigan jobs and the economy.”

In  July, a few weeks after the Nessel case was remanded back to the state courts, the Enbridge case came up for a hearing in July to determine whether it was properly before the federal court in the first place.

The state posits that such a lawsuit is in violation of the Sovereign Immunity guaranteed by the 11^th Amendment to the US Constitution, which prevents private parties from suing states. Enbridge is a private company even though it is a public utility. This assumes state law courts to be competent in determining federal law questions, but there are exceptions.

Enbridge claims that a forced shutdown would violate the Supremacy Clause of the US constitution because the federal Pipeline Safety Act expressly preempts state regulation of pipeline safety,  it would violate the Interstate Commerce Clause as an unreasonable and discriminatory burden on interstate commerce, and that Defendants’ shutdown would violate the Foreign Commerce Clause and Foreign Affairs Doctrine because it intrudes on the federal government’s exclusive right to conduct foreign relations and interferes with treaty obligations of the United States.

The Federal trial court relied on such an exception when it ruled against the state, stating “Enbridge seeks an order prohibiting state officials from shutting down the Line 5 pipeline in violation of federal statutory and constitutional law. Enbridge is neither asserting ownership over state lands nor seeking to compel performance of a state contract. This case falls squarely under the Ex parte Young exception to sovereign immunity.”

Enbridge has hoped that a summary judgment on Enbridge v Whitmer would end the matter before the Nessel v Enbridge case resolved in state court after the June remand, but the state immediately appealed the ruling, and so that case, which had been set for a summary judgment showdown, has been put on hold until the appeals court can rule on whether Sovereign Immunity applies.

Enbridge may be anxious that this stay of federal proceedings could allow the state court to make a ruling before the federal case is resolved, but while state judges are typically appointed by a governor of one party or the other, lending to fears of partiality, Judge Jamo was originally elected to office in a non-partisan election; his judicial career was not launched by a political appointment. 

Public interest groups and industry leaders must now wait for this legal-political chess game to play out to determine whether the public will need to endure the unthinkable albeit low risk of an oil spill in the Great Lakes in subservience to preemptive federal regulations and international treaties, or whether Ingham County Circuit Judge James Jamo could rule the state has unilateral power to stop the underwater pipeline.   Stay tuned….

Clean Energy Law Takes Away Local Control for Big  Solar & Wind Farms

When the Democrat party took control of all three branches of state government in 2022, it promptly passed the Clean Energy Projects laws: House Bill 5120 and House Bill 5121 authorized the Michigan Public Service Commission to streamline the permitting of utility-scale clean energy in the same way they’re currently allowed to do for pipelines and other sources of energy. The law was enacted to deal with issues of so-called “exclusionary zoning” that unduly prevented solar and wind projects from getting off the ground. The 2023 renewables siting law went into effect Nov. 29, 2024.

75 communities filed a joint legal challenge to the Public Service Commission (MPSC) rules for implementing the new law in the Court of Appeals. These communities lost effective control of their zoning authority when the new law took effect and are jealous that the rules take away their ability to have the final say on the development of wind parks or solar farms in their own backyards.

Local government proponents claim a longstanding and unique responsibility to ensure that developments align with their community priorities, but that they no longer have the authority to carry out that responsibility in the face of large-scale renewable energy projects.  Clean energy advocates claim the legal patchwork over a thousand different local zoning laws across the make solar and wind development too difficult to meet the state’s new-found clean energy mandates and avoid the effects of climate change while eliminating coal-fired power plants.

Loss of local control and centralization of decision-making power at the state level is driving the municipalities to try to prevent the new law from being over-extended by the PSC rulemaking, moving the process entirely out of the hands of local government. The law paid some lip service to local government controls but is silent on many matters.  Municipalities say the PSC rulemaking is filling in too many blanks that should have been clarified by the elected lawmakers when they passed the law, so the public could know the real consequences of this historic shift of power away from local government.  

The process still starts at the local level, unless there is a current ban in place. However, developers can appeal to the state when local authorities deny projects or fail to approve them within 120 days, or if the local zoning is too restrictive. Municipalities still get to review the project and stay in the loop, so long as their zoning is not incompatible with the state standards. Municipalities will spend money on these projects, but will lack any effective say.

The new state rules say local zoning cannot add regulations not specifically spelled out in the state statute, which the municipalities claim eliminates the relevancy of local input on renewable energy regulation. The rules further restrict rural municipalities that now take part in a cost-saving county-wide zoning administration scheme, and allow hybrid facilities that combine wind, solar and battery storage technologies to manipulate their eligibility for state-only approval by meeting the size thresholds of the law, since the clean energy law only ostensibly  applies to large scale projects.

These and other policy issues will stay in the public’s attention for the foreseeable future as the never-ending battle for power between the state and its bureaucracy and the 276 cities, 257 villages, and 1,240 townships in the state of Michigan.

Gotion Battery Plant – Xenophobia or National Security

In 2023 a little town called Green Charter Township quietly became the prospective site of a large battery factory to be owned by Gotion High-Tech Inc., founded in China in 2006, by its U.S. subsidiary Gotion, Inc., founded in 2014 in California. The township board of trustees passed a 30-year tax break for the project; one of the township trustees even got a $2 million contract to sell the land Gotion needed.

Community members discovered the project and questioned its potential environmental impact as well as Gotion’s ties to China, which requires Chinese-owned companies like  Gotion High-Tech Inc. to stipulate obedience to the Chinese Communist Party in their company bylaws. This raised concerns of national security threats in the future over company bylaws that say the company will “set up a Party organization and carry out Party activities in accordance with the Constitution of the Communist Party of China.”

Enraged by the dismissive attitude of the Township Supervisor and other board members, Green Township residents petitioned to recall the entire board. Before the election, the township board had entered a sweetheart agreement with Gotion that required the board to “execute necessary easement documents to provide access to the property for any public infrastructure improvements,” but shortly after the agreement was signed, the board was recalled by the community residents and an entirely new board was put in place.

The new board revoked the resolution the previous board passed to either route a water main directly from the Big Rapids system to the Gotion site or to construct a new city well and water plant on or near Gotion's property. The new  board also adopted an ordinance to establish its own planning commission shortly after Gotion submitted a site plan to the Mecosta County planning commission, and created an interim township zoning ordinance to take effect before the county commission cold approve the company’s site plan, which since that time supersedes the County’s planning commission.

Gotion filed a federal lawsuit in March claiming the township broke the development agreement that requires the township to assist the company in obtaining “governmental authorizations necessary to advance and support the project.” So far the court has ruled that the township cannot impede Gotion Inc. from making progress on the  battery plant, pending how the outcome of Gotion’s  lawsuit against the township proceeds.

The new township board claims the actions of the prior board were hopelessly corrupt, and their actions should be invalidated. The supervisor had a cozy relationship with Chuck Thelen, vice president of Gotion Inc., and as the two negotiated the terms of the development agreement over beers at the local bar Thelen praised the supervisor and even funneled a large campaign donation through his wife, thanking him for his support.

Thelen admitted in his recent deposition that he sent the supervisor Chapman  a text saying” “Hi Jim Tracey and I would like to donate to your defense fund. Do u take Venmo? I think I heard u say also that [sic] the limit is $1200 that u can accept from a single donor is that correct?”

Chapman had previously shared the QR code to his campaign fund with Thelen on July 12, 2023, but Thelen did not elect to make a donation until it was understood that Chapman held final negotiation and signatory authority on the development agreement. 

Chapman never disclosed this donation to the Board, nor did he reveal the quid pro quo revealed by Thelen’s comment that “You [Jim] have had my back now it’s my turn to help.” Later that day, Thelen invited Chapman to a golf foursome in Oakland County.  On August 16, a revised draft of the development agreement was sent from the Township to Gotion. On August 17, Thelen requested that Chapman provided him a “1 day notice before you send the contract to the FOIA requesters,” to which Chapman responded: “We want to work with you on news release etc. My hard date for the FOIA response is the 22nd.” Then, Supervisor Chapman and Clerk Janet Clark signed the Development Agreement—without obtaining approval of the final version from the Township Board—on August 22, 2023.

The controversy caught wind in the run up to the presidential election, with Trump saying he was “100% opposed to Gotion” and JD  Vance criticizing the Michigan government for its huge subsidy of the project, “I think the most important thing is we have to stop paying Chinese manufacturers to manufacture, whether it’s here or overseas, We want to build an American manufacturing industry and an American middle class.

The state under Governor Whitmer pledged $175 million in taxpayer money for grants and tax incentives worth $540 million. The job and economic predictions seem overly optimistic given the industry decline in the EV sector, and some view the whole scheme as providing the Chinese government financing and land to take over America battery industry with obsolete battery technology that will keep American EV producers stuck in the mud while China gains a competitive advantage.

Gotion was recently cited by the Department of Homeland Security’s (DHS) Forced Labor Enforcement Task Force and blacklisted their major suppliers for ties to forced labor in the Xinjiang region of China. Inclusion on this list means that goods produced by these entities are presumed to be made with forced labor and are prohibited from entering the United States. 

Trump wins Saginaw County  as “Back The Blue” Ballot Proposal Overwhelmingly Approved in the City of Saginaw

On November 5^th, 104,576 Saginaw residents cast their votes for President. 65% of registered voters took to the polls and elected Donald Trump president with 52,912 votes to Kamala Harris’s 49,515 votes.

In the same election Saginaw city voters overwhelmingly approved a ballot question to prioritize public safety by adopting programs to help attract law enforcement and fire persons by “backing cops not criminals.” The vote was 70% in favor of this measure, which was described as a response to the “defund the police” movement. The city still elected liberal councilpersons, and city residents voted overwhelmingly against Trump, but the measure approved by the voters puts the new council on notice of the citizen’s demand  to  focus their attention on public safety while showing would-be-cops that the city will have their backs.

Republican Tim Kelly won a landslide victory over his democrat opponent, as did Republican Brian Bigole. Kelly rejoins the legislature after having been term limited out a few years ago. Now the newly changed constitutional term limits allow him to serve another 6 years in the House of Representatives. Democrat Kristen McDonald Rivet narrowly defeated Paul Junge for the 8^th Congressional District seat, and the democrat Elissa Slotkin beat out Mike Rogers in a close race.

Republican-nominated candidates lost both Supreme Court seats and put the Michigan Supreme Court overwhelmingly in the hands of liberals. Democrats lost the State House of Representatives, but the Republican Majority won’t be able to reverse any Whitmer policies. 

The state is in gridlock for the next two years (not complaining). 

Paid Sick Leave and Minimum Wage Laws Take Effect in February 2025.

In a stunning legal-political phenomenon almost 6 years in the making, this summer the Michigan Supreme Court this summer invalidated a previous adopt-and-amend scheme employed by the previous Republican dominated legislature to frustrate two separate ballot questions seeking to initiate legislation for minimum wage laws and impose minimum paid sick leave requirements for all full and part time employees  in Michigan.

Back in 2018 the legislature feared the proposed petition would be approved by voters, and that it would bring out more Democrat voters in tight partisan races. They devised a scheme that was considered devious but completely legal to keep the measure off the ballot by enacting the proposals word for word, as provided for by Article 2, Section of the Michigan constitution, even though they had no intention ever to put the adopted measure into actual effect. Once the election came and went the legislature revisited the law during their lame duck session and amended its seemingly radical terms to much softer more business friendly provisions.

The law was still harsh for business, but it was considered manageable. Democrats were extremely pissed off about this trick, and though it took several years in court the Michigan Supreme Court finally got the chance to vindicate the petition drives and invalidated all the Republican “adjustments” to the law. They ruled that the legislature did not have the authority to adopt the measure as law, and then amend the law in the same legislative session. They made that part up, but it is hard to blame them for correcting the anti-democratic tendencies of the legislature.

Changes to Minimum Wage Standards: 1) Acceleration of Minimum Wage Increases: Effective February 21, 2025, the minimum wage in Michigan will increase to $12.48 per hour.  Incremental increases: $13.29 in 2026, $14.16 in 2027, and $14.97 in 2028, thereafter adjusted annually for inflation. Increase to Minimum Wage for Tipped Employees: The minimum wage for tipped employees will also increase, with the ultimate goal of eliminating the tip credit by 2029. The current minimum wage for tipped employees is $3.93, but will be raised to $5.95 (or 48% of the minimum wage) in 2025.

Changes to Paid Sick Leave Standards: The Earned Sick Time Act (ESTA) expands the previous Paid Medical Leave Act (PMLA). PMLA applied only to employers with 50 or more employees, ESTA applies to all employers of any size. This means that small businesses, part-time workers, exempt employees (such as salaried employees), and nonprofit entities are all now covered under the new law.

These new laws take effect in February and are causing the Chamber of Commerce and general business community to go apoplectic over the prospects of businesses shutting down rather than being saddled with European style employment entitlements. Big businesses can absorb costs like this, but for small businesses it feels like they are being regulated out of existence and the government is pitting their employees against them with entitlements. 

Many can barely afford to stay in business in the first place. Just this past summer the federal Pregnant Workers Fairness Act (PWFA) took effect. Which requires a covered employer to provide a “reasonable accommodation” to a qualified employee’s or applicant’s known limitations related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an “undue hardship.”

The PWFA applies only to reasonable accommodations for pregnancy related conditions, which can include paid or unpaid time off work or temporary work reassignment, but only if the “accommodation” does not cause an undue hardship to the employer.

CTA Enforcement Suspended for Thousands of Michigan Businesses

In 2021 an unconstrained Democrat US Congress  passed the Corporate Transparency Act. This measure offered a solution to the money laundering schemes by international criminal organizations. Criminals use corporations and LLC’s registered under state laws to move funds without revealing their identities. Animosity is an accepted motivation for the use of the corporate veil, but the need seemed too great to resist a practical solution of imposing a federal registry of the beneficial owners of literally millions of LLC’s and Corporations that do business in America.

Since the law was enacted the general business community has worried about the misuse of the data collected by the feds and the fines to be imposed for not filing identity disclosures and drivers licenses for owners of at least 25% of any company. Lawsuits have been filed with mixed results, and American small business owners braced for impact as the Jan 1 deadline loomed.

Finally, a Texas federal district court has invalidated the Corporate Transparency Act with an injunction that prevents enforcement of the deadlines with an injunction that covers the entire nation and “approximately 32.6 million existing reporting companies.”

For now, at least, the anxiety over this federal law is suspended.  The law was invalidated on interstate commerce clause grounds. The court said the CTA represents “a Federal attempt to monitor companies created under state law—a matter our federalist system has left almost exclusively to the several States.

Second, the CTA ends a feature of corporate formation as designed by various States—anonymity. For good reason, Plaintiffs fear this flanking, quasi- Orwellian statute and its implications on our dual system of government.

The court reasoned that “because the CTA does not regulate the channels or instrumentalities of commerce, it may only be sustained under the third category of Congress’s commerce power. That is, it must regulate an activity, which, in the aggregate, substantially impacts interstate commerce. Simply put, legislation under the Commerce Clause must regulate an existing activity—not compel activity. 

This  case may be reversed on Appeal, but for now it relegates the CTA to the status of a scary prospect and cautionary tale for unconstrained government over-reach.