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Michigan Claims Court Issues Split Ruling on State’s Public Accommodations Law

Posted on: December 13th, 2020 by Art Leonard No Comments

Michigan Court of Claims Judge Christopher M. Murray issued an opinion on December 7 in Rouch World v. Michigan Department of Civil Rights, Court of Claims Case No. 20-000145-MZ, holding that the state’s Elliot-Larsen Civil Rights Act (ELCRA), which, among other things, prohibits businesses from discriminating against customers because of their sex, cannot be interpreted by his court as banning sexual orientation discrimination, because the state’s Court of Appeals rejected the argument that sexual orientation discrimination is covered by the Act in a 1993 ruling.

On the other hand, finding that there is no Michigan court ruling on whether the ELCRA’s sex discrimination ban can be applied to discrimination against transgender people, Judge Murray followed the Supreme Court’s June 2020 ruling in Bostock v. Clayton County, 140 S. Ct. 1731, which interpreted the federal ban on sex discrimination in employment to apply to claims of discrimination based on transgender status.

Michigan Attorney General Dana Nessel announced that she would appeal Murray’s ruling as to sexual orientation discrimination, while the business that faces a gender identity discrimination claim announced that it would appeal that ruling.

Murray’s opinion concerned discrimination claims against two businesses.  Rouch World, an events venue that rents space for weddings and other celebrations, refused to book an event for a same-sex couple, citing the owners’ religious objections to same-sex marriages.  Uprooted Electrolysis, which provides permanent hair-removal treatment, turned down a transgender person seeking their service as part of her transition, also citing religious objections.

In both cases, the rejected customers filed complaints with MDCR, which began investigations pursuant to its Interpretative Statement 2018-1, which states that the ELCRA can be interpreted to cover such claims.  In both cases, the businesses subsequently filed suit in the Court of Claims, arguing that the Department does not have jurisdiction over sexual orientation and gender identity claims, and even if it did, that their religious objections privileged them to deny the services.  The plaintiffs asked the court to put an end to the investigations.

Judge Murray explained that the ELCRA does not define the word “sex” as used in the provision applicable to claims of discrimination by “a place of public accommodation,” which includes businesses selling goods or services to the public.  In 1993, the Michigan Court of Appeals ruled in Barbour v. Department of Social Services, 497 N.W. 2d 216, that “harassment or discrimination based on a person’s sexual orientation is not an activity proscribed by the Act.”  That decision is binding on trial courts in Michigan.  Judge Murray explained that “whether Barbour’s reasoning is no longer valid in light of Bostock v. Clayton County, and cases containing similar reasoning, is a matter for the Court of Appeals, not this court.”  Consequently, Attorney General Nessel, herself an out lesbian who helped persuade the Department to issue Interpretative Statement 2018-1, will appeal this part of the ruling to the Court of Appeals.

On the other hand, Murray found no prior opinion by a Michigan court addressing the question of whether gender identity discrimination claims are covered by the ELCRA.  Lacking such authority, Michigan courts will look to decisions concerning other statutes with similar language as well as federal rulings for interpretative guidance.  This brings the Bostock decision into play.

Significantly, the Michigan Supreme Court recently vacated a Michigan Court of Appeals ruling in a case under the ethnic intimidation statute for reconsideration in light of Bostock.  In that case, People v. Rogers, 331 Mich. App. 12, vacated, 950 N.W. 2d 48 (2020), the Court of Appeals ruled that the ethnic intimidation statute’s listing of sex does not cover hate crimes against transgender people.  The Michigan Supreme Court told the Court of Appeals to reconsider that ruling in light of Bostock, a clear signal that the Michigan court is prepared to treat the Bostock decision as a persuasive precedent for interpreting the state’s sex discrimination laws.

“Following the Bostock Court’s rationale,” wrote Murray, “if defendants determine that a  person treated someone who ‘identifies’ with a gender different than the gender that he or she was born as, then that is dissimilar treatment on the basis of sex, and they are entitled to redress that violation through the existing MDCR procedures.  Nothing in the ELCRA would preclude that action.”

The bottom line of Judge Murray’s decision is that the Department does not have jurisdiction of the sexual orientation discrimination claim against Rouch World unless the Michigan Court of Appeals decides to overrule its old Barbour decision, but that the Department does have jurisdiction to investigate Uprooted Electrolysis’s denial of service to a transgender client, at least so far as interpretation of the ELCRA goes.  Of course, the Supreme Court’s remand in the ethnic intimidation case is likely to persuade the Court of Appeals that it should also reconsider Barbour in light of Bostock.

The court refrained from ruling on the religious exemption claims, stating that issue “has not been sufficiently briefed to resolve at this juncture.”  The question of federal constitutional religious exemptions from compliance with state or local anti-discrimination laws is now before the U.S. Supreme Court in Fulton v. City of Philadelphia, which was argued on November 4 and will be decided sometime in 2021.  It is likely that many state agencies and courts dealing with religious exemption claims by civil rights defendants may delay ruling on such claims until the Supreme Court rules in Fulton.

Judge Murray ended his opinion by stating, “This is not a final order as it does not resolve all of the pending issues in this case.”  This cryptic remark implies that Uprooted Electrolysis may not immediately appeal the court’s determination that the ELCRA applies to the transgender discrimination claim, since its religious exemption claim has not yet been ruled upon.  However, the declaration that the MDCR does not have jurisdiction over the sexual orientation claim against Rouch World seems final as to that complaint, so Attorney General Nessel may be able to appeal that ruling.