parens patriae - turtle talk...e. defendants grano and sproull are entitled to summary judgment of...

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN

NORTHERN DIVISION

KEWEENAW BAY INDIAN COMMUNITY, a federally-recognized Indian tribe, on its own behalf and as parens patriae for its members, Plaintiff, v NICK A. KHOURI, Treasurer of the State of Michigan; WALTER FRATZKE, Native American Affairs Specialist of the Michigan Department of Treasury; RUTH JOHNSON, Secretary of State of Michigan; and CHRISTOPHER CROLEY, Detective/Sergeant of the Michigan State Police; DANIEL C. GRANO, Assistant Attorney General for the State of Michigan; and, TIMOTHY SPROULL, Detective of the Michigan State Police, Defendants.

No. 2:16-cv-00121 HON. PAUL L. MALONEY ORAL ARGUMENT REQUESTED

BRIEF IN SUPPORT OF DEFENDANTS’ MOTION CONCERNING STATE PROSECUTIONS

Case 2:16-cv-00121-PLM-TPG ECF No. 99 filed 09/28/17 PageID.1251 of 34

Bill Schuette Attorney General Jaclyn Shoshana Levine (P58938) Kelly M. Drake (P59071) Assistant Attorneys General Attorneys for Defendants Environment, Natural Resources and Agriculture Division P.O. Box 30755 Lansing, Michigan 48909 (517) 373-7540 [email protected] [email protected]

Dated: September 28, 2017


i

TABLE OF CONTENTS

Page Table of Contents ............................................................................................................ i

Index of Authorities ...................................................................................................... iii

Concise Statement of Issues Presented ...................................................................... vii

Controlling or Most Appropriate Authority ................................................................ vii

Introduction ................................................................................................................... 1

Statement of Facts ......................................................................................................... 3

A. The seizure on December 11, 2015 .......................................................... 3

B. The criminal charges against Mr. Davis and Mr. Magnant. .................. 4

C. The seizures on February 9, 2016, and the sales and use tax claims ........................................................................................................ 6

Argument ....................................................................................................................... 8

I. Defendants Grano and Sproull are entitled to summary judgment of the tobacco claims against them under 42 U.S.C. §§ 1983 and 1988 because they each have absolute immunity and are not subject to vicarious liability. ................................................................................................ 8

A. Legal standard .......................................................................................... 9

B. Defendant Grano is entitled to summary judgment due to his absolute immunity as a prosecutor........................................................ 10

C. Defendant Sproull is entitled to summary judgment due to his absolute immunity as a testifying witness ............................................ 13

D. Defendants Grano and Sproull are entitled to summary judgment for the Community’s vicarious liability theory ..................... 16

E. Defendants Grano and Sproull are entitled to summary judgment of the claim under 42 U.S.C. § 1988 against them ............... 18


ii

II. This Court should abstain from deciding the remaining legal claims under 42 U.S.C. §§ 1983 and 1988 concerning the state criminal prosecutions and enter an order addressing all the claims it will abstain from deciding........................................................................................ 19

A. Legal standard ........................................................................................ 19

B. Younger requires this Court to abstain from deciding the §§ 1983 and 1988 claims concerning the state prosecutions .............................. 20

C. The court should enter an order addressing the claims it will abstain from deciding at this time. ........................................................ 23

Statement Concerning Oral Argument ....................................................................... 24

Conclusion and Relief Requested ................................................................................ 25


iii

INDEX OF AUTHORITIES

Page

Cases

Adams v. Hanson, 656 F.3d 397 (6th Cir. 2011) .............................................................................. 11, 12

Am. Family Prepaid Legal Corp. v. Columbus Bar Ass’n, 498 F.3d 328 (6th Cir. 2007) .................................................................................... 20

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) .................................................................................................. 10

Ashcroft v. Iqbal, 556 U.S. 662 (2009) .................................................................................................. 17

Briscoe v. LaHue, 460 U.S. 325 (1983) .................................................................................................. 14

Buchanan v. Metz, 647 F. App’x 659 (6th Cir. 2016) .............................................................................. 12

Burns v. Reed, 500 U.S. 478 (1991) .................................................................................................. 10

Cacevic v. City of Hazel Park, 226 F.3d 483 (6th Cir. 2000) ...................................................................................... 9

Carroll v. City of Mount Clemens, 139 F.3d 1072 (6th Cir. 1998) .................................................................................. 19

Doe v. Univ. of Kentucky, 860 F.3d 365 (6th Cir. 2017) .................................................................................... 20

Farrar v. Hobby, 506 U.S. 103 (1992) .................................................................................................. 18

Franks v. Delaware, 438 U.S. 154 (1978) .................................................................................................. 15

Grant v. Hollenbach, 870 F.2d 1135 (6th Cir. 1989) ............................................................................ 10, 11

Heck v. Humphrey, 512 U.S. 477 (1994) .................................................................................................. 23


iv

Horn by Parks v. Madison Cty. Fiscal Court, 22 F.3d 653 (6th Cir. 1994) ...................................................................................... 17

Idaho v. Coeur d’Alene Tribe of Idaho, 521 U.S. 261 (1997). ................................................................................................. 22

Imbler v. Pachtman, 424 U.S. 409 (1976) .............................................................................................. 9, 10

Ireland v. Tunis, 113 F.3d 1435 (6th Cir. 1997) ............................................................................ 11, 12

Kalina v. Fletcher, 522 U.S. 118 (1997)) ................................................................................................. 14

Keweenaw Bay Indian Cmty. v. Rising, 477 F.3d 881 (6th Cir. 2007) .................................................................................... 21

Lockridge v. Curtin, No. 09-10145, 2014 WL 4536926, at *6 (E.D. Mich., Sept. 11, 2014)..................... 15

Malley v. Briggs, 475 U.S. 335 (1986) .................................................................................................. 14

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) .................................................................................................. 10

Meyers v. Franklin Cty. Court of Common Pleas, 23 F. App’x 201 (6th Cir. 2001) ................................................................................ 24

Nimer v. Litchfield Twp. Bd. of Trustees, 707 F.3d 699 (6th Cir. 2013) .............................................................................. 19, 24

Nouri v. Cty. of Oakland, 615 F. App’x 291 (6th Cir. 2015) .............................................................................. 12

O’Neill v. Coughlan, 511 F.3d 638 (6th Cir. 2008) .................................................................................... 19

People v. MacLeod, No. 326950, 2016 WL 3767496, at *2 (Mich. Ct. App. July 14, 2016), appeal denied 500 Mich. 946 (2017) .................................................................................... 22

Rehberg v. Paulk, 566 U.S. 356 (2012) ............................................................................................ 14, 15


v

Smith v. Thornburg, 136 F.3d 1070 (6th Cir. 1998). ................................................................................. 12

Spurlock v. Satterfield, 167 F.3d 995 (6th Cir. 1999) ................................................................................ 9, 13

Todd v. Weltman, Weinberg & Reis Co., L.P.A., 434 F.3d 432 (6th Cir. 2006) .................................................................................... 13

Younger v. Harris, 401 U.S. 37 (1971) .......................................................................................... 1, 19, 20

Statutes

42 U.S.C. § 1983 ................................................................................................... passim

42 U.S.C. § 1988 ................................................................................................... passim

Mich. Comp. Laws § 205.421 ......................................................................................... 1

Mich. Comp. Laws § 205.426(6) ................................................................................ 4, 5

Mich. Comp. Laws § 205.426(a)(2)-(4) and (11) ............................................................ 4

Mich. Comp. Laws § 205.426c ..................................................................................... 21

Mich. Comp. Laws § 205.426c(8) ................................................................................... 3

Mich. Comp. Laws § 205.428(3) .......................................................................... 1, 5, 20

Mich. Comp. Laws § 205.429 ......................................................................................... 4

Mich. Comp. Laws § 205.432 ....................................................................................... 21

Mich. Comp. Laws § 445.2051(f) ................................................................................. 21

Mich. Comp. Laws § 761.1(l) ....................................................................................... 13

Mich. Comp. Laws § 764.1a ......................................................................................... 13

Mich. Comp. Laws § 764.1a(1) .................................................................................... 14

Mich. Comp. Laws § 764.1a(3) .................................................................................... 15

Other Authorities

Mich. Const. art. VI, § 13 ............................................................................................. 22


vi

Rules

Fed. R. Civ. P. 56 ..................................................................................................... 8, 10

Fed. R. Civ. P. 7(b) ....................................................................................................... 19

Fed. R. Civ. P. 7(b)(1) ................................................................................................... 20

Mich. Ct. R. 6.001(D) ................................................................................................... 23

Mich. Ct. R. 6.201 ........................................................................................................ 23

Mich. Ct. R. 6.202. ....................................................................................................... 23

Treatises

1842 Treaty .................................................................................................................... 8

Treaty of LaPointe, 7 Stat. 591 (Oct. 4, 1842) .............................................................. 8


vii

CONCISE STATEMENT OF ISSUES PRESENTED

1. Are Defendants Grano and Sproull entitled to summary judgment of the tobacco claims against them under 42 U.S.C. §§ 1983 and 1988 because they each have absolute immunity and are not subject to vicarious liability?

2. Should this Court abstain from deciding the legal claims under 42 U.S.C. §§ 1983 and 1988 concerning the state criminal prosecutions and enter an order addressing all the claims it will abstain from deciding?

CONTROLLING OR MOST APPROPRIATE AUTHORITY

Authority:

Ashcroft v. Iqbal, 556 U.S. 662 (2009). Imbler v. Pachtman, 424 U.S. 409 (1976). Younger v. Harris, 401 U.S. 37 (1971). Spurlock v. Satterfield, 167 F.3d 995 (6th Cir. 1999).


1

INTRODUCTION

This lawsuit seeks, in relevant part, to prevent the State of Michigan from

enforcing the Michigan Tobacco Products Tax Act (TPTA), Mich. Comp. Laws

§ 205.421 et seq., against the Keweenaw Bay Indian Community (Community), its

employees, tribal members, and business associates. The third amended complaint

added Assistant Attorney General Daniel C. Grano and Detective/Specialist/Trooper

(D/Tpr.) Timothy Sproull as defendants. The third amended complaint also

expanded the existing claims for declaratory relief, injunctive relief, and money

damages to include allegations concerning the state prosecutions of John Davis and

Gerald Magnant, the Community employees stopped while transporting fifty-six

cases of untaxed, unstamped cigarettes in violation of the TPTA on December 11,

2015, which is a felony under Mich. Comp. Laws § 205.428(3).

With this case and the state prosecutions proceeding concurrently, this Court

has held that it will abstain from issuing declaratory or injunctive relief concerning

the prosecutions under the doctrine recognized in Younger v. Harris, 401 U.S. 37

(1971). (PageID.1184.) That ruling did not dismiss any claim in their entirety. But

it effectively set aside the portions of all the remaining tobacco tax claims that seek

equitable relief concerning the state prosecutions while state criminal proceedings

are ongoing. Those claims appear in the following counts: the Bracker balancing

test (Count IX); infringement of tribal self-government (Count X); Indian Commerce

Clause (Count XI); Interstate Commerce Clause (Count XII); and 42 U.S.C. § 1983

(Count XVI). The court has not yet addressed whether it will abstain from deciding

any claims for legal relief or attorney’s fees related to the state prosecutions.


2

Defendants bring this motion to raise issues and defenses that are necessary to

ensure that this lawsuit does not interfere with the state prosecutions.

First, Defendants Grano and Sproull move for summary judgment of the

claim against them under 42 U.S.C. § 1983 (Count XVI) and the related claim for

costs and attorney’s fees under 42 U.S.C. § 1988 (Count XVIII), because they each

have absolute immunity and the claims are impermissibly based on a vicarious

liability theory. If granted, this motion will fully resolve the Community’s claims

under 42 U.S.C. §§ 1983 and 1988 for any form of relief (legal or equitable) against

Defendants Grano or Sproull. Because absolute immunity is a defense from the

burdens litigating a claim, not merely from liability, Defendants Grano and Sproull

ask the court to rule on these issues now rather than waiting for the state criminal

proceedings to conclude.

Second, Defendants Khouri, Fratzke, Croley, Grano, and Sproull ask this

Court to abstain from deciding any claims for money damages or attorney’s fees

under §§ 1983 and 1988 related to the state prosecutions while those proceedings

are ongoing. Allowing discovery or awarding the Community legal relief under

those claims will necessarily interfere with those proceedings. To implement this

Court’s abstention decision from June 30, 2017, and under this motion and to

prevent confusion, Defendants ask that it enter an order disposing of all the claims

it will abstain from deciding. Under Sixth Circuit abstention precedent, claims for

equitable relief are subject to dismissal without prejudice and claims for legal relief

are stayed.


3

STATEMENT OF FACTS

A. The seizure on December 11, 2015.

On December 11, 2015, Michigan State Police (MSP) trooper Chris

Lajimodiere stopped a pickup truck with an attached utility trailer as it was

traveling east on U.S.-41 in Ely Township, Marquette County. (PageID.812, ¶ 71.)

John Davis was driving the pickup truck/trailer combination, and Gerald Magnant

was his passenger. (PageID.812, ¶ 69.) As the Community explained when it

challenged the seizure in state court, Trooper Lajimodiere “asked [Mr.] Davis

permission to inspect the trailer. [Mr.] Davis agreed.” (Ex. A, ¶ 18.)

The MSP discovered that Mr. Davis and Mr. Magnant were transporting

fifty-six cases (3,360 cartons or 33,600 individual packs) of Seneca brand cigarettes

for the Community. (PageID.812, ¶ 69; Ex. B.) Grand River Enterprises (GRE)

manufactures Seneca brand. (Ex. B, photograph 3.) Before the traffic stop, the

Michigan Department of Treasury (Treasury) had removed GRE tobacco products

from the list of nonparticipating manufacturers with products eligible for

stamping.1 (Ex. C.) See Mich. Comp. Laws § 205.426c(8) (requiring Treasury to

maintain list of eligible manufacturers). As a result, the state tax on the

Community’s Seneca brand cigarettes could not be prepaid and they could not be

acquired for resale in Michigan or otherwise sold for consumption in Michigan. See

1 Seneca brand cigarettes manufactured by Grand River Enterprises should not be confused with Seneca Manufacturing, which produces cigarettes under different brand names, like Heron and Sands. (Ex. C.)


4

Mich. Comp. Laws § 205.426(a)(2)-(4) and (11) (stamping process and prohibition of

sale of unstamped cigarettes).

Under the TPTA, the Community’s unstamped Seneca cigarettes were

presumed to be “kept in violation” of the TPTA. Mich. Comp. Laws § 205.426(6) and

§ 205.429. Accordingly, the MSP seized the pickup truck with the attached utility

trailer, the cigarettes, as well as a red notebook and other paperwork in the pickup

truck as contraband under the TPTA. (Ex. D.) See Mich. Comp. Laws § 205.429.

Neither Defendant Grano nor Defendant Sproull participated in the traffic stop or

seizure on December 11, 2015. (Ex. E, ¶ 9; Ex. F, ¶ 8.) Nor did either man plan or

authorize the traffic stop or seizure. (Ex. E, ¶ 9; Ex. F, ¶ 8.)

B. The criminal charges against Mr. Davis and Mr. Magnant.

In 2016, MSP Detective/Sergeant Christopher Croley sent a referral to the

Michigan Department of Attorney General seeking criminal charges against Mr.

Davis and Mr. Magnant. (Ex. E, ¶ 11.) Defendant Grano, an Assistant Attorney

General in the Criminal Division, was assigned the referral. (Ex. E, ¶¶ 2, 11.) He

reviewed the referral, the video taken during the traffic stop, photographs of the

property seized, and the police reports with the seizure paperwork. (Ex. E, ¶ 8.) He

also spoke with members of the MSP who had been involved in the seizure to gather

more information. (Ex. E, ¶¶ 8, 12.)

Based on the evidence he had reviewed and his discussions with members of

the MSP, Defendant Grano believed that sufficient evidence existed to support

felony charges against Mr. Davis and Mr. Magnant under Mich. Comp. Laws


5

§ 205.428(3), for transporting cigarettes in violation of the TPTA. (Ex. E, ¶ 12.) See

Mich. Comp. Laws § 205.426(6) (presumption that unstamped cigarettes are “kept

in violation” of TPTA). Defendant Grano prepared requests for warrants and

complaints against both men and received the internal approvals required to

proceed with the prosecutions. (Ex. E, ¶ 12.)

Defendant Grano filed the criminal complaints and warrant requests in the

54A District Court for the City of Lansing, which is where Treasury’s principal

offices are located. (Ex. E, ¶ 13.) The complaint inadvertently used the court code

for the 54B District Court for the City of East Lansing. (Ex. E, ¶ 13.) As a result,

Defendant Grano dismissed and then refiled the warrant requests and complaints

with the correct code for the 54A District Court. (Ex. E, ¶ 14.)

Defendant Sproull is a Detective/Specialist/Trooper (D/Tpr.) assigned to the

MSP’s First District, which covers the southern, central portion of the Lower

Peninsula. (Ex. F, ¶ 3.) The traffic stop and seizure leading to the felony charges

against Mr. Davis and Mr. Magnant occurred in the MSP’s Eighth District, which

covers the Upper Peninsula. (Ex. F, ¶ 4.) Defendant Sproull, however, works closer

to Lansing where Defendant Grano intended to file the criminal complaints, and so

Defendant Grano asked him to testify rather than a member of the MSP from the

Upper Peninsula. (Ex. E, ¶ 15; Ex. F, ¶ 3.)

Defendant Sproull reviewed the police reports and seizure paperwork

concerning the traffic stop and seizure that occurred on December 11, 2015. (Ex. F,

¶ 11.) He spoke by telephone with members of the MSP who had been involved in


6

the traffic stop and seizure to obtain additional information. (Ex. F, ¶ 11.) He

spoke by telephone with and met once with Defendant Grano to prepare for the

hearing. (Ex. E, ¶ 15; Ex. F, ¶ 13.) Based on his review of the evidence and his

discussion with other members of the MSP, Defendant Sproull testified before

Judge Hugh Clarke, Jr., in the 54A District Court on November 30, 2016, to his

information and belief that Mr. Davis and Mr. Magnant had violated the TPTA as

described in the complaints. (Ex. F, ¶ 14.) That testimony constitutes Defendant

Sproull’s only involvement in this matter. (Ex. F, ¶ 18.) After Defendant Grano

addressed the court’s venue questions, Judge Clarke accepted the complaint for

filing and issued the arrest warrants for Mr. Davis and Mr. Magnant. (Ex. E, ¶ 15.)

After conducting a preliminary examination at which Mr. Davis and Mr.

Magnant were represented by counsel, the Hon. Louise Alderson bound over both

men for trial in the court for the 30th Judicial Circuit (Ingham County) on April 24,

2017. (Ex. E, ¶ 16.) Both cases, which are consolidated, are currently assigned to

the Hon. Rosemarie Aquilina. (Ex. E, ¶ 17.) The prosecutions are moving forward,

with defense motions due on September 25, 2017, and a hearing on the motions

scheduled one month later. (Ex. E, ¶ 17.) Trial in the criminal cases is expected to

occur in or after January 2018. (Ex. E, ¶ 18.)

C. The seizures on February 9, 2016, and the sales and use tax claims.

Neither Defendant Grano nor Defendant Sproull were physically present

during – or played a role in – the traffic stops and seizures that occurred on


7

February 9, 2016, that led to the seizure of an additional 184 cases (11,040 cartons

or 110,400 individual packs) of untaxed, unstamped cigarettes. (Ex. E, ¶¶ 19-20;

Ex. F, ¶ 16.) They are unaware of any state prosecutions arising from those

February 2016 seizures. (Ex. E, ¶ 19; Ex. F, ¶ 16.) Further, the third amended

complaint does not plead any claims against Defendant Grano or Defendant Sproull

concerning the sales tax or use tax, and they have no connection to the sales tax or

use tax claims in this case. (Ex. E, ¶ 21; Ex. F, ¶ 17.) Their respective involvement

in this case is limited to the facts surrounding the state court prosecutions of Mr.

Davis and Mr. Magnant for the traffic stop and seizure that occurred on December

11, 2015.


8

ARGUMENT

I. Defendants Grano and Sproull are entitled to summary judgment of the tobacco claims against them under 42 U.S.C. §§ 1983 and 1988 because they each have absolute immunity and are not subject to vicarious liability.

Defendants Grano and Sproull move under Fed. R. Civ. P. 56 for summary

judgment of Counts XVI and XVIII in their favor. Count XVI alleges:

The actions of Defendants Khouri, Fratzke, Croley, Grano, and Sproull, in planning, authorizing, and conducting the seizures of the Community’s truck, trailer, and cigarettes on December 11, 2015, the seizures of the Community’s cigarettes on February 9, 2016, and the criminal prosecutions of Community members Davis and Magnant, have deprived the Community of clearly established federal rights of which a reasonable person would have known . . . .

(PageID.848, ¶ 179.) Count XVI asserts that those federal rights include: (1) rights

to purchase, acquire, possess, transport, and sell tobacco on the Community’s

reservation and trust lands, and in the Ceded Area, “as secured by the 1842 Treaty,

the Indian Commerce Clause of the States Constitution, and other federal law”; and

(2) “the right to possess and transport cigarettes in interstate commerce free of state

taxation and regulation under the Interstate Commerce Clause of the United States

Constitution.”2 (PageID.849, ¶ 179(a) and (b).) The Community adds, “Upon

information and belief, the deprivation of the Community’s rights occurred by or at

the direction of Defendants Khouri, Fratzke, Croley, Grano, and Sproull, or with the

2 Paragraph 179(b) also asserted the Community’s alleged federal right under the Treaty of LaPointe, 7 Stat. 591 (Oct. 4, 1842), to be free from seizures in the Ceded Area. (PageID.849, ¶ 179(b).) But the court rejected the claimed right when dismissing Count XIV. (PageID.1182-83.)


9

knowledge and consent of these Defendants.” (PageID.849, ¶ 180.) Count XVIII is

a claim for attorney’s fees under 42 U.S.C. § 1988. (PageID.852.)

The only factual allegations in the third amended complaint concerning

Defendant Grano are the paragraphs stating that he filed the criminal complaints

against Mr. Davis and Mr. Magnant and sought warrants for their arrest.

(PageID.795, ¶ 11; 820, ¶ 104.) Accordingly, Defendant Grano is clearly entitled to

absolute prosecutorial immunity from these claims under Imbler v. Pachtman,

424 U.S. 409 (1976), and precedent applying Imbler. The Community makes

similarly barebones allegations that seek to hold Defendant Sproull personally

liable for testifying at the “swear to” hearing in 54A District Court concerning the

criminal complaints and requests for warrants. (PageID.795, ¶ 12; 820, ¶ 105.)

Defendant Sproull is entitled to absolute testimonial immunity for his testimony

under Spurlock v. Satterfield, 167 F.3d 995, 1001 (6th Cir. 1999).

Additionally, Defendants Grano and Sproull are entitled to summary

judgment to the extent that the Community seeks to impose vicarious liability on

them. Further, without a meritorious claim against them under 42 U.S.C. § 1983,

Defendants Grano and Sproull are also entitled to summary judgment of the claim

for costs and attorney’s fees under 42 U.S.C. § 1988.

A. Legal standard.

“Summary judgment is appropriate when there are no genuine issues of

material fact in dispute and the moving party is entitled to judgment as a matter of

law.” Cacevic v. City of Hazel Park, 226 F.3d 483, 491 (6th Cir. 2000). “By its very


10

terms, this standard provides that the mere existence of some alleged factual

dispute between the parties will not defeat an otherwise properly supported motion

for summary judgment; the requirement is that there be no genuine issue of

material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); see also

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (non-

moving party must “do more than simply show that there is some metaphysical

doubt as to the material facts”). Rather, the non-moving party must demonstrate

that there is a fact that is “genuinely disputed” under the procedures specified in

the rule. See Fed. R. Civ. P. 56(c).

B. Defendant Grano is entitled to summary judgment due to his absolute immunity as a prosecutor.

The Community simply alleges that Defendant Grano is liable under 42

U.S.C. § 1983 for filing criminal complaints against Mr. Davis and Mr. Magnant

and seeking warrants for their arrest. (PageID.795, ¶ 11; 820, ¶ 104.) However,

state prosecutors have absolute immunity from suit under § 1983 for “initiating a

prosecution and in presenting the State’s case” if the activities at issue are

“intimately associated with the judicial phase of the criminal process[.]” Imbler, 424

U.S. at 430, 431; see also Burns v. Reed, 500 U.S. 478, 492 (1991) (prosecutors have

absolute immunity for steps that initiate and support prosecution). This type of

immunity “protects a prosecutor from exposure to lawsuits, not just liability[.]”

Grant v. Hollenbach, 870 F.2d 1135, 1137 (6th Cir. 1989). The “rationale for

granting absolute immunity is as much to protect the relevant persons from a trial


11

on their actions as it is to protect them from the outcome of the trial.” Id. (internal

quote marks and citation omitted).

Courts in the Sixth Circuit use a functional analysis that “focuses on the role

of the prosecutor at the time he engages in the challenged conduct” to determine

whether absolute immunity applies. Grant, 870 F.2d at 1138. The Community’s

allegations that Defendant Grano filed criminal complaints and sought arrest

warrants are functionally part of the judicial process protected by absolute

immunity. See Adams v. Hanson, 656 F.3d 397, 402-03 (6th Cir. 2011) (examples of

wide range of prosecutorial acts entitled to absolute immunity).

In Ireland v. Tunis, 113 F.3d 1435, 1439 (6th Cir. 1997), the Sixth Circuit

unambiguously held that filing a “criminal complaint,” seeking an “arrest warrant,”

and “the presentation of these materials to a judicial officer fall squarely within the

aegis of absolute prosecutorial immunity.” Id. at 1446. When engaging in these

acts, not only is a prosecutor “unquestionably functioning as an advocate for the

state in the judicial process,” but “absolute immunity is fully justified because the

integrity of the judicial system depends in large part upon a prosecutor’s ability to

exercise independent judgment in deciding whether and against whom to bring

criminal charges.” Id. Further, “[p]resenting the charging documents to a judicial

officer and procuring an arrest warrant must be considered part of the formal

process of initiating a prosecution and securing the presence of the accused at trial.”

Id. at 1446-47. Prosecutors also have absolute immunity for any “administrative or


12

investigative acts necessary . . . to initiate or maintain the criminal prosecution.”

Id. at 1447.

Ireland clearly demonstrates that Defendant Grano has absolute immunity

for filing the criminal complaints, seeking the arrest warrants, and other related

actions. The cases decided since Ireland consider the issue to be conclusively

decided in favor of extending absolute immunity to prosecutors like Defendant

Grano carrying out their duties as advocates for the state in the judicial process.3

See, e.g., Buchanan v. Metz, 647 F. App’x 659, 667-68 (6th Cir. 2016) (state assistant

attorney general had absolute immunity for evaluating evidence, seeking approval

to file criminal charges that were subsequently dismissed); Nouri v. Cty. of

Oakland, 615 F. App’x 291, 301 (6th Cir. 2015) (recognizing a prosecutor’s absolute

immunity and rejecting theory that a prosecutor’s motive is relevant to the

immunity analysis); Adams, 656 F.3d at 404 (absolute immunity applied to

prosecutor’s statements to the court as an “advocate for the State of Michigan”).

Absolute immunity protects Defendant Grano from suit under § 1983. Thus, he is

entitled to have summary judgment entered in his favor on this claim.

3 Nor could the Community use this § 1983 claim to relitigate whether there was probable cause to bind over Mr. Davis and Mr. Magnant for trial after they contested probable cause at the preliminary examination. See Smith v. Thornburg, 136 F.3d 1070, 1077 (6th Cir. 1998).


13

C. Defendant Sproull is entitled to summary judgment due to his absolute immunity as a testifying witness.

Defendant Sproull is entitled to summary judgment because the

Community’s claim under § 1983 against him rests solely on testimony that he gave

at the “swear to” hearing in 54A District Court. (PageID.795, ¶ 12; 820, ¶ 105.) “It

is well-settled that witnesses are granted absolute immunity from suit for all

testimony provided in judicial proceedings.” Spurlock v. Satterfield, 167 F.3d 995,

1001 (6th Cir. 1999). Witnesses have absolute immunity for their testimony even

for ex parte judicial proceedings, like the “swear to” hearing in front of a magistrate

that occurred in this case. See Todd v. Weltman, Weinberg & Reis Co., L.P.A., 434

F.3d 432, 441-42 (6th Cir. 2006) (rejecting argument that absolute immunity applies

only to testimony in adversarial proceedings); see also Mich. Comp. Laws § 764.1a

(hearing on reasonable cause); Mich. Comp. Laws § 761.1(l) (defining magistrate).

Police officers like Defendant Sproull are entitled to absolute immunity for

their in-court testimony. As the Supreme Court has explained, the common law

would extend that immunity because, when

a police officer appears as a witness, he may reasonably be viewed as acting like any other witness sworn to tell the truth — in which event he can make a strong claim to witness immunity; alternatively, he may be regarded as an official performing a critical role in the judicial process, in which event he may seek the benefit afforded to other governmental participants in the same proceeding. Nothing in the language of the statute [42 U.S.C. § 1983] suggests that such a witness belongs in a narrow, special category lacking protection against damages suits.


14

Briscoe v. LaHue, 460 U.S. 325, 335-36 (1983) (footnote omitted). Further, Congress

did not abrogate that immunity for “police officers or any other witnesses” when

enacting § 1983 or its predecessor statute. Id. at 341.

The Community alleges that Defendant Sproull acted as a “complaining

witness” in this case. (PageID.795, ¶ 12; 820, ¶ 105.) In Malley v. Briggs, 475 U.S.

335, 343 (1986), the Supreme Court appeared to take a step back from Briscoe when

it held that a police officer who acts as a complaining witness may assert “qualified

rather than absolute immunity.” However, Congress intended that 42 U.S.C.

§ 1983 be “‘construed in the light of common-law principles’” when “determining the

scope of the immunities available in a §1983 action.” Rehberg v. Paulk, 566 U.S.

356, 362-63 (2012) (quoting Kalina v. Fletcher, 522 U.S. 118, 123 (1997)). At the

common law, the term “complaining witness” was “used to refer to a party who

procured an arrest and initiated a criminal prosecution.” Id. at 370. Succinctly put,

the complaining witness “make[s] the decision to press criminal charges,” but may

not actually testify. Id. at 370-71. Defendant Sproull did not make the decision to

press charges against Mr. Davis and Mr. Magnant and, therefore, is not limited to

asserting qualified immunity. (Ex. F, ¶ 9.)

Under a functional analysis, there is no dispute that Defendant Sproull acted

only as a testifying witness. See, generally, Kalina, 522 U.S. at 130 (“Testifying

about facts is the function of the witness[.]”). Michigan law requires sworn

testimony demonstrating “reasonable cause” in support of a criminal complaint and

arrest warrant. Mich. Comp. Laws § 764.1a(1). The statute permits the sworn


15

testimony to be “based upon personal knowledge, information and belief, or both.”

Mich. Comp. Laws § 764.1a(3); see also Lockridge v. Curtin, No. 09-10145, 2014 WL

4536926, at *6 (E.D. Mich., Sept. 11, 2014) (Michigan law does not require “that the

complaint be signed and sworn to by an eyewitness or person with personal

knowledge[.]”). Defendant Sproull’s testimony was based on his information and

belief, not personal knowledge. (Ex. F, ¶ 14.) See, generally, Franks v. Delaware,

438 U.S. 154, 165 (1978) (“probable cause may be founded on hearsay”).

While Rehberg addressed absolute immunity for testimony at a grand jury

proceeding, there are no contested facts concerning Defendant Sproull’s actions

requiring trial and no basis to withhold absolute immunity for his testimony at the

“swear to” hearing. Defendant Sproull had no personal involvement in the traffic

stop or seizure leading to the charges, exercises no authority over MSP personnel in

the Upper Peninsula, and did not refer the cases to the Department of Attorney

General to pursue charges against Mr. Davis and Mr. Magnant. (Ex. E, ¶ 11; Ex. F,

¶ 14.) His one-time involvement in this case was merely a question of geographic

convenience – he works closer to the 54A District Court than the MSP personnel in

the Upper Peninsula. (Ex. E, ¶ 15; Ex. F, ¶3.)

Notably, the Community does not allege that Defendant Sproull engaged in

any other acts that give rise to the claim against him under § 1983 outside of his

testimony. The Community does not even allege that he committed perjury or

falsified evidence concerning the undisputed fact that Mr. Davis and Mr. Magnant

were transporting untaxed, unstamped cigarettes outside of the Community’s


16

reservation and trust lands at the time of the traffic stop on December 11, 2015. To

allow an individual capacity claim under 42 U.S.C. § 1983 against Defendant

Sproull for his in-court testimony without even an allegation of wrongdoing on his

part will have a chilling effect on other witnesses who testify in court, regardless of

the stage of proceedings where the testimony occurs. Absolute immunity is the

required protection against this overreach by the Community. Therefore,

Defendant Sproull is entitled to summary judgment of the § 1983 claim against

him.

D. Defendants Grano and Sproull are entitled to summary judgment for the Community’s vicarious liability theory.

Count XVI does not identify which acts give rise to individual liability under

42 U.S.C. § 1983 for Defendants Khouri, Fratzke, Croley, Grano, or Sproull. Count

XVI simply refers to paragraphs 1 through 26 and 60 through 107 to supply facts

that the Community hopes might support the claim. (PageID.848-850, ¶¶ 178-184.)

The way the Community pleads this claim without distinguishing between each

defendant’s alleged conduct suggests these five defendants are equally liable for

allegedly “planning, authorizing, and conducting” all three seizures and for

prosecuting Mr. Davis and Mr. Magnant. (PageID.849, ¶ 179.) However, the facts

alleged in the third amended complaint do not demonstrate that they are all

individually involved in all the seizures and the prosecutions.


17

To prevail on this claim, the court would have to hold Defendants Grano and

Sproull vicariously liable for acts committed by other individuals.4 But 42 U.S.C. §

1983 does not impose vicarious liability. A plaintiff in an action under § 1983 must

plead and prove that “each Government-official defendant, through the official’s own

individual actions, has violated the Constitution.” Ashcroft v. Iqbal, 556 U.S. 662,

676 (2009) (emphasis added). Nor does § 1983 excuse the Community from

demonstrating that acts committed by Defendant Grano and Defendant Sproull as

individuals proximately caused its alleged injuries. See Horn by Parks v. Madison

Cty. Fiscal Court, 22 F.3d 653, 659 (6th Cir. 1994) (“[P]roximate causation is an

essential element of a § 1983 claim for damages.”).

Defendant Sproull has no personal connection to any of the allegations in the

§ 1983 claim. He did not plan, authorize, or conduct any of the three seizures; he

did not make the decision to pursue criminal charges against Mr. Davis and Mr.

Magnant or seek their arrest; and he knows of no prosecutions concerning the two

seizures that occurred on February 9, 2016. (Ex. F, ¶¶ 8, 9, 16.) He does not

employ or supervise any of the other defendants, and he does not set policy for their

conduct. (Ex. F, ¶ 5.) Thus, were he not entitled to absolute immunity from suit,

Defendant Sproull would still be entitled to summary judgment of the § 1983 claim

in its entirety because he has not engaged in the conduct that the Community

4 With the prosecutions the central focus of this motion, Defendants reserve their right to challenge the other portions of this § 1983 claim that rest on improper grounds or are otherwise barred.


18

claims is wrongful, cannot be held liable for acts allegedly committed by other

defendants, and has not caused the Community’s alleged injuries.

Likewise, Defendant Grano did not plan, authorize, or conduct any of the

three seizures and he is not prosecuting anyone for the two cigarette seizures that

occurred on February 9, 2016. (Ex. E, ¶¶ 9, 19.) He does not employ or supervise

any of the other defendants or set policy for them, either. (Ex. E, ¶ 4.) If he were

not already entitled to absolute immunity from suit, Defendant Grano would still be

entitled to summary judgment of all aspects of the § 1983 claim except the

allegation that he is prosecuting Mr. Davis and Mr. Magnant, for which he has

other defenses.

E. Defendants Grano and Sproull are entitled to summary judgment of the claim under 42 U.S.C. § 1988 against them.

A “prevailing party” in a lawsuit under 42 U.S.C. § 1983 “may” be awarded “a

reasonable attorney’s fee as part of the costs” of the case. 42 U.S.C. § 1988(b). A

“plaintiff ‘prevails’ when actual relief on the merits of his claim materially alters the

legal relationship between the parties by modifying the defendant’s behavior in a

way that directly benefits the plaintiff.” Farrar v. Hobby, 506 U.S. 103, 111-12

(1992). Here, however, the Community is not entitled to any judgment against

Defendants Grano and Sproull under § 1983 at all because both defendants are

entitled to summary judgment of that claim. Consequently, the Community is not a

“prevailing party” against Defendants Grano and Sproull under § 1988 and they are

entitled to have summary judgment entered in their favor.


19

II. This Court should abstain from deciding the remaining legal claims under 42 U.S.C. §§ 1983 and 1988 concerning the state criminal prosecutions and enter an order addressing all the claims it will abstain from deciding.

As this Court explained, “Younger abstention requires a federal court to

abstain from granting injunctive or declaratory relief that would interfere with

pending state judicial proceedings.” (PageID.1184.) See O’Neill v. Coughlan, 511

F.3d 638, 641 (6th Cir. 2008) (discussing Younger v. Harris, 401 U.S. 37 (1971)).

The Younger abstention doctrine also applies to legal claims, including claims for

money damages under 42 U.S.C. § 1983. See Nimer v. Litchfield Twp. Bd. of

Trustees, 707 F.3d 699, 700-01 (6th Cir. 2013) (citing Carroll v. City of Mount

Clemens, 139 F.3d 1072, 1075-76 (6th Cir. 1998)). Defendants Khouri, Fratzke,

Croley, Grano, and Sproull respectfully assert that this Court must also abstain

from granting any legal relief under Counts XVI and XVIII that would interfere

with the state prosecutions.

Defendants also ask the court to enter an order disposing of all the requests

for relief related to the prosecutions that it will abstain from deciding. Under Sixth

Circuit precedent, that order should dismiss without prejudice the claims for

injunctive and declaratory relief while staying the claims for money damages and

attorney’s fees.

A. Legal standard.

A party may seek an order of the court by filing a motion in accordance with

Fed. R. Civ. P. 7(b). A motion under Fed. R. Civ. P. 7(b) requires a pretrial motion

to be made “in writing”; “state with particularity the grounds for seeking the order”;


20

and “state the relief sought.” Fed. R. Civ. P. 7(b)(1). Defendants have combined

this motion with its motion for partial summary judgment for the sake of judicial

efficiency because both motions involve the same set of operative facts concerning

the state prosecutions and this court previously addressed Younger abstention when

deciding a dispositive motion. See, generally, Doe v. Univ. of Kentucky, 860 F.3d

365, 368 (6th Cir. 2017) (defendant moved for dismissal and abstention).

B. Younger requires this Court to abstain from deciding the §§ 1983 and 1988 claims concerning the state prosecutions.

The Sixth Circuit has “mandated three requirements for a district court to

properly invoke Younger abstention: 1) there must be on-going state judicial

proceedings; 2) those proceedings must implicate important state interests; and 3)

there must be an adequate opportunity in the state proceedings to raise

constitutional challenges.” Am. Family Prepaid Legal Corp. v. Columbus Bar Ass’n,

498 F.3d 328, 332 (6th Cir. 2007) (internal quote marks and citations omitted). The

claims for legal relief concerning the prosecutions meet all elements of the test.

First, the prosecutions of Mr. Davis and Mr. Magnant for transporting a

felony amount of unstamped, untaxed cigarettes in violation of Mich. Comp. Laws §

205.428(3) are continuing in state court. As Defendant Grano states in his

declaration, the parties in the prosecutions are entering a phase of active motion

practice and trial is expected during or after January 2018. (Ex. E, ¶ 17.)

Second, the State of Michigan has a significant interest in enforcing the

TPTA for a variety of reasons. For example, Michigan has a strong interest in


21

ensuring that it collects the tobacco tax from all those parties liable to pay it and

preventing tax fraud and avoidance. Michigan receives almost $1 billion in TPTA

revenue annually. (Ex. G, Tables 11 and 12.) The majority of that revenue from the

tax on cigarettes supports the School Aid Fund, Medicaid Benefits Trust, Healthy

Michigan Fund, all of which fund important state services. See Mich. Comp. Laws §

205.432 (statutory earmarks). Michigan also has a strong interest in diligently

enforcing the TPTA to comply with the multi-state “master settlement agreement”

with tobacco manufacturers. See Mich. Comp. Laws § 205.426c (incorporating

terms of master settlement agreement in the TPTA); see also Mich. Comp. Laws

§ 445.2051(f) (defining master settlement agreement in act implementing its escrow

requirements).

The State’s interest in enforcing the TPTA is only heightened by the fact that

Treasury long-ago designed and implemented a refund process that gives effect to

the Community’s and its members’ federal tax immunities. See Keweenaw Bay

Indian Cmty. v. Rising, 477 F.3d 881, 884, 891-92 (6th Cir. 2007) (discussing and

upholding refund system). Yet, the Community continues to entice consumers

liable for the tobacco tax to travel to its reservation and trust lands to purchase

tobacco products sold at a “discount” because the Community refuses to collect and

remit the state tobacco tax on those sales. (Ex. H.)

Third, as this Court has already found, state criminal proceedings permit

defendants to raise their federal constitutional issues. (PageID.1185.) Mr. Davis

and Mr. Magnant raised constitutional issues at the preliminary examination and


22

may raise constitutional issues again in the state circuit court, a court of general

jurisdiction, where they are to be tried. See Mich. Const. art. VI, § 13 (“The circuit

court shall have original jurisdiction in all matters not prohibited by law[.]”); see,

generally, People v. MacLeod, No. 326950, 2016 WL 3767496, at *2 (Mich. Ct. App.

July 14, 2016), appeal denied 500 Mich. 946 (2017) (defendant in circuit court raised

arguments related to the location of Indian country and state jurisdiction over the

alleged crimes). As the Supreme Court explained in a case brought by a federally-

recognized Indian tribe and a number of its members, “Interpretation of federal law

is the proprietary concern of state, as well as federal, courts. It is the right and

duty of the States, within their own judiciaries, to interpret and to follow the

Constitution and all laws enacted pursuant to it, subject to a litigant’s right of

review in this Court in a proper case.” Idaho v. Coeur d’Alene Tribe of Idaho, 521

U.S. 261, 275 (1997).

Additionally, there can be no doubt that allowing the legal claim under

§ 1983 connected to the prosecutions to proceed now will interfere with the state

prosecutions as much as the claims for equitable relief related to the state

prosecutions. The third amended complaint states only a single set of factual

allegations in support of both legal and equitable relief related to the prosecutions.

If adjudicating claims for equitable relief in this lawsuit may interfere with the

state judicial proceedings, then the same likelihood for interference exists with

respect to the claims for legal relief. In effect, this suit would become a collateral

challenge to the state courts and, if the court granted the Community’s requested


23

legal relief, would imply that the actions in the state court were invalid. See,

generally, Heck v. Humphrey, 512 U.S. 477, 484-87 (1994) (declining to allow a

§ 1983 damages suit to act as a collateral challenge).

Discovery in this case is also as much a concern for the state prosecutions as

any relief that this Court might grant to the Community on its claims. For

instance, the Community has already served two sets of discovery requests on

Defendant Grano in this case. State criminal proceedings have their own discovery

process. See, e.g., Mich. Ct. R. 6.201 and 6.202. State court rules expressly prevent

using the broader state discovery rules for civil litigation to obtain evidence in

criminal cases. See Mich. Ct. R. 6.001(D). To allow the Community to use discovery

in this case – whether served on Defendant Grano or other parties – to skirt that

line between civil and criminal discovery in state court would directly affect the

procedure for state prosecutions. More concretely, using this case to attempt to

obtain the thoughts, strategy, and attorney work product of the prosecutor before

trial in the state court can only be intended to interfere with how he conducts the

prosecutions. Under all these circumstances, Younger requires abstention from

granting any legal relief related to the prosecutions.

C. The court should enter an order addressing the claims it will abstain from deciding at this time.

The court has already issued an opinion explaining that it will abstain from

deciding the claims for equitable relief concerning the prosecutions, but has not yet

entered an order addressing abstention. Defendants respectfully ask that the court


24

enter an order disposing of all claims related to the prosecutions to clarify how the

parties should proceed in the litigation.

“Whether the plaintiffs seek a legal versus an equitable remedy controls how

the district court disposes of the case after holding that the Younger doctrine

applies to it.” Nimer, 707 F.3d at 702. In the Sixth Circuit, courts may dismiss

claims for equitable relief without prejudice, while they should stay claims for legal

relief. See Meyers v. Franklin Cty. Court of Common Pleas, 23 F. App’x 201, 202

(6th Cir. 2001) (court properly dismissed without prejudice equitable claims and

should have stayed claims for legal relief). Defendants respectfully ask that the

court enter an order dismissing the claims for equitable relief related to the

prosecutions without prejudice, while staying the claims for legal relief related to

the prosecutions.

STATEMENT CONCERNING ORAL ARGUMENT

Defendants believe that this motion can be resolved without oral argument,

which is also likely to lead to a speedier decision that is desirable in light of the

ongoing prosecutions. But Defendants would certainly offer argument if it would be

of assistance to the court and asks to be afforded the opportunity to argue the

motion if the court grants argument to the Community.


25

CONCLUSION AND RELIEF REQUESTED

For all the foregoing reasons, Defendants Grano and Sproull respectfully ask

that the court grant summary judgment of Counts XVI and XVIII in their favor.

Defendants Khouri, Fratzke, Croley, Grano, and Sproull respectfully ask that the

court abstain from deciding any claims for legal relief related to the state court

prosecutions and enter an order addressing abstention of all claims.

Respectfully submitted, Bill Schuette Attorney General /s/ Jaclyn Shoshana Levine Jaclyn Shoshana Levine (P58938) Kelly M. Drake (P59071) Assistant Attorneys General Attorneys for Defendants Environment, Natural Resources and Agriculture Division P.O. Box 30755 Lansing, Michigan 48909 (517) 373-7540 [email protected] [email protected]

Dated: September 28, 2017 LF: KBIC v Treasury (SUT)/#2016-0139799-A-L/Brief in support of motion re criminal prosecutions 2017-9-28


parens patriae - turtle talk...e. defendants grano and sproull are entitled to summary judgment of...

Documents