Wednesday, June 20, 2012

Both Sides Seem To Expect A Court Battle Over Detroit Bridge Construction

Michigan Governor Rick Snyder wants a new international bridge between Detroit and Windsor, despite failure of the Michigan legislature to pass a bill funding the project. Grosse Pointe billionaire Manuel Moroun wants any new span across the Detroit River to be part of his current monopoly on bridge traffic and toll collections, and has spent $1.6 million just this year lobbying against Governor Snyder’s plans for the New International Trade Crossing. Governor Snyder has enlisted the Canadian national government as an ally in contracting for construction of his planned new bridge, while Moroun mounts a petition drive to add to November’s ballot an amendment to the Michigan Constitution prohibiting Governor Snyder’s project without voter approval in a referendum. Both sides have carefully worded their initiatives with an eye on a future court battle involving Article 1 Section 10 of the United States Constitution.

Moroun’s ballot initiative would require referendum approval of any international bridge “which is not open to the public and serving traffic as of January 1, 2012.” The intergovernmental agreement signed last Friday between Michigan and Canada for construction of the New International Trade Crossing says, on the other hand, “Any reference to any Michigan Law … shall be deemed to be reference to such Law … in effect as of the date the Michigan Party became a Party…” Since the international agreement is now signed, that language is intended to foreclose a November ballot initiative seeking to render the agreement unenforceable.

Now to the United States Constitution. Article 1 Section 10 of that document provides that “No state shall … pass … any law impairing the obligation of contracts.” Whoa, why is that even in there? Well after the revolutionary war, during the time the United States operated under the Articles of Confederation before ratification of the current Constitution, several states were in the habit of adopting legislation freeing powerful citizens of their debt obligations to people and governments who were on the “wrong” side of that war. Recognizing that such behavior would inhibit the new nation's full participation in international trade, the founding fathers inserted the “contract clause” into Article 1 Section 10 of their new Constitution, and there it remains to this day.

Mr. Moroun and his private bridge monopoly are quite likely to lose this battle, even if his ballot initiative should pass. The government of Canada now has a contract with State of Michigan, executed under Governor Snyder’s existing authority to make agreements for international cooperation, for construction and operation of the bridge. Article 1 Section 10 of the U. S. Constitution now prohibits Michigan from enacting any law – including an amendment to the Michigan Constitution – impairing the obligation of that contract.

In an effort to counter the U. S. Constitutional argument, Moroun has already hired Wayne State University law professor Robert Sedler as a consultant to plant a law review article arguing his side of the issue. Gubernatorial spokesperson Sara Wurfel has already announced the State of Michigan position that an amendment to the Michigan Constitution passed in November could not undo a contract signed in June.

While an ordinary court dispute of this nature could take years to wind its way to the U. S. Supreme Court, this one involves the government of Canada, and could have the U. S. Supreme Court as its very first stop, should the State of Michigan or the Canadians elect to send it directly there in the event Moroun’s ballot initiative succeeds. The U. S. Supreme Court has original jurisdiction over cases “between a State, … and foreign States…”

There are even more defenses against Moroun and his allies in the Michigan/Canada agreement. Canada is paying for the customs plaza on the Canadian side of the river, and the U. S. federal government is paying for construction of the customs plaza on the American side. Canada is fronting the full cost of construction of the bridge, and collecting the Michigan share of that cost from Michigan’s share of auto and truck tolls, all of which will be collected on the Canadian side of the bridge. If Moroun loses his ballot initiative, or loses in the U. S. Supreme Court, there aren’t any other points of attack for him and his allies, and the U. S. Constitution doesn’t bode very well for the Moroun monopoly. In fact, the more design and construction contracts for the project which get signed before initiation of any court battle, the worse it looks for the billionaire.

Meanwhile, going forward with the bridge construction project will put a lot of Canadian and American skilled tradespeople back to work. The Ann Arbor Center for Automotive Research released a study concurrently with the signing of the international agreement which projects that the $2 billion project could put 6,000 American tradespeople to work in each of the first two years, and 5,100 in the third and fourth years. Another 6,600 jobs would be leveraged in the United States each of the four years due to freeing up of $2.2 billion in federal road funds for other Michigan located projects since the Canadians are fronting Michigan’s $550 million share of bridge construction additional 1,400 permanent American jobs would be created for operation of the bridge. Finally, the study projects, 6,800 permanent American private sector jobs will be created by new economic activity in the area of the new bridge and as a result of enhancement of the $70 billion annual cross-border trade flowing between Detroit and Windsor. At the very top of this employment totem pole should be about 125 Wayne County ironworkers earning $58/per hour. Canada expects its side of the river to supply rebar and steel plate for the bridge construction, while American steel mills will provide structural members.

Though Moroun and his political allies will undoubtedly continue their fierce opposition to the project in court and at the ballot box, Michigan House Speaker Jase Bolger seems to be throwing in the towel. “It appears Governor Snyder’s plan does not involve any action by the Legislature, so it seems he has found a way to accomplish his goal of a new bridge while addressing our chief concern of protecting taxpayers,” the Marshall, Michigan Republican said in a prepared statement.

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