Western District of Michigan Rejects Challenge to Local Government Management Decisions

CMDA Law is pleased to recognize Partner Matt Cross for recently obtaining dismissal of a substantive due process claim filed in the federal court for the Western District of Michigan against a county in the Upper Peninsula.

The dispute began when a county-owned regional airport decided to terminate its at-will agreement with a private Fixed Base Operator (FBO) services provider and take operations in-house to generate additional revenue for the benefit of taxpayers. A local resident and pilot filed suit, claiming this transition violated his Fourteenth Amendment substantive due process rights.

The plaintiff argued that the county’s decision violated substantive due process by being arbitrary, capricious, and conscience-shocking. The court rejected those arguments, finding that the plaintiff failed to establish a constitutionally protected liberty or property interest. The court noted that routine, state-created contracts are not protected by substantive due process, the plaintiff did not own the airport, and any inconvenience to his private piloting activities did not infringe upon his constitutional right to travel.

The court further concluded that the county’s decision was supported by a rational financial objective and was neither arbitrary nor conscience-shocking. As a result, the court granted the county’s Motion to Dismiss.

For municipalities and other public entities, the decision highlights an important principle: not every disagreement with a government policy decision rises to the level of a constitutional claim. Courts generally afford local governments substantial discretion when making operational, financial, and management decisions, provided those decisions are supported by a rational basis and do not infringe upon a protected constitutional right.

The ruling also serves as a practical reminder that significant management decisions should be supported by a clear record demonstrating the legitimate governmental, operational, and financial objectives behind the action. Thoughtful documentation and decision-making processes can help position public entities to defend against challenges when policy decisions are later scrutinized.

Key Takeaways for Public Entities

Public entities should consider the following when making significant operational or financial decisions:

• Document the financial and operational rationale behind the decision. Courts will generally not second-guess that rationale.
• Ensure meeting minutes, resolutions, reports, and internal records reflect the legitimate governmental objectives supporting the action.
• Evaluate potential constitutional claims early, particularly where a claimant may allege a protected liberty or property interest.
• Recognize that disagreement with a policy decision does not necessarily create constitutional liability.

Ultimately, the decision reinforces a longstanding principle of constitutional law: federal courts are generally not tasked with second-guessing routine local government management decisions. For counties, cities, townships, and other public entities, the case provides useful guidance that rational decisions made in the public interest will typically receive substantial judicial deference.