Latest Case: Honigman Miller Schwartz & Cohn, LLP v. City of Detroit (Government & Administrative Law)

The Things That Are Caesar’s

SHERRY F. COLB

Cornell law professor Sherry F. Colb comments on the recent oral argument before the U.S. Supreme Court in Our Lady of Gaudalupe School v. Morrissey-Berru, which raises the question how broadly to construe the word “minister” within the ministerial exception to anti-discrimination law required by the First Amendment. Colb explains where the ministerial exception doctrine might be headed and suggests that an exemption even for criminal misconduct against ministers might be within the existing doctrine.

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Honigman Miller Schwartz & Cohn, LLP v. City of Detroit

Docket: 157522

Opinion Date: May 18, 2020

Judge: Stephen J. Markman

Areas of Law: Government & Administrative Law, Tax Law

Honigman Miller Schwartz and Cohn LLP filed a petition in the Tax Tribunal, challenging the income tax assessments issued by the city of Detroit for the tax years 2010 through 2014. The firm argued that under MCL 141.623 of the Uniform City Income Tax Ordinance (UCITO), payment for services performed by attorneys working in the city on behalf of clients located outside the city constituted out-of-city revenue for the purpose of calculating income taxes, not in-city revenue as asserted by the City. The tribunal granted partial summary judgment in favor of the City, reasoning that the relevant consideration for calculating gross revenue under MCL 141.623 was where the work was performed, not where the client received the services. The Court of Appeals reversed, concluding that under MCL 141.623, the relevant consideration for determining the percentage of gross revenue from services rendered in the city was where the service itself was delivered to the client, not where the attorney performed the service. In reaching that result, the Court attributed different meanings to the term “rendered” in MCL 141.623 and the term “performed” in MCL 141.622, reasoning that because the Legislature used different words within the same act, it intended the terms to have distinct meanings. The Michigan Supreme Court reversed: when calculating the percentage of gross revenue from services rendered in the city, the focus was on where the service was performed, not on where it was delivered.