Detroit’s Little Caesars Arena Tax Challengers Face Sanctions

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By Alex Ebert

The home of Detroit’s Red Wings and Pistons is open. Challenges to its taxpayer funding are long dismissed. But retaliation for bringing those challenges rages in federal court ( Davis v. Detroit Downtown Dev. Auth. , E.D. Mich., No. 2:17-cv-11742, response to motion for sanctions filed 9/10/17 ).

Detroit economic developers, politicians, and the Detroit City Council have filed seven motions for sanctions against challengers to the Little Caesars Arena’s $34.5 million in public funding—despite only three full months of litigation. Four of those motions also came after the challengers, Robert Davis and D. Etta Wilcoxon, either withdrew their suit to refile in another case or lost their claims challenging the tax.

The push for sanctions is the latest move in a long battle between Detroit and Davis, who city attorneys say files frivolous lawsuits and doesn’t follow proper procedure. However, Davis, a former Highland Park school board member and federal prisoner, sees the matter as a crusade for good public policy—and he has promised not to let up.

‘Maximum Prejudicial Effect’

In two active cases, the city is alleging that Davis and Wilcoxon’s challenges to public funding of the stadium were frivolous and brought for improper purposes. The city wants more than an apology: it’s asking for all of its attorney’s fees and costs of defending against claims such as the Racketeer Influenced and Corrupt Organizations Act (RICO) claim and that the tax denied people the right to vote.

The city claims Davis’ suit and attempted restraining order were frivolous because the claims aren’t valid under the law and were brought only a few months before the stadium construction completed. The ballot language for the tax Davis challenged passed in 2012 and renewed in August of 2016, according to the latest motion for sanctions filed last week.

The city claims Davis and Wilcoxon waited more than four years to file a challenge in order to “fulfill their objectives of self-promotion” and “to achieve maximum prejudicial effect.” The city also argues that Davis and Wilcoxon’s behavior shows that these claims were “brinkmanship” and not a legitimate challenge.

After the court denied their request for a restraining order against the stadium’s tax in one case, Davis and Wilcoxon voluntarily withdrew their claims in that case and promptly filed similar claims in another suit. The city is also pursuing sanctions against Davis and Wilcoxon in that suit, even after the court dismissed challenges to the stadium tax.

In that case, the court held Davis and Wilcoxon didn’t have standing to challenge the tax because they filed their claims too late and didn’t demonstrate that they suffered a special injury different from any other taxpayers. But the court said they could challenge open meetings law abuses, which the parties continue to litigate.

“In more than ten briefs on the issues, Plaintiffs have not identified a valid legal theory for their claims, despite being confronted with controlling law, which contradicts their claims,” Detroit’s economic development authority and brownfield redevelopment authority argued in their Sept. 6 motion for sanctions.

“As the Court noted in the First Action, Plaintiffs were unable to find a single case supporting the proposition that the allocation of funds could deprive citizens of their right to vote.”

‘Absurd’

Online state court records show that Davis has filed up to 64 cases, and Wilcoxon may have filed up to 12. Some reports estimate that Davis has filed more than 100 lawsuits against public agencies and politicians in Michigan. And Davis must post a bond before filing suit in Wayne County state court.

This also isn’t the first time Davis has faced potential penalties.

However, Davis told Bloomberg BNA that the government’s arguments for sanctions are merely pressure tactics and said he is often successful. Courts have repeatedly agreed with his claims that Michigan governmental bodies violate open meetings laws, and Davis was integral in forcing Detroit Mayor Mike Duggan (D) to run as a write-in candidate after challenging his residency.

“The city’s motions are absurd, and they themselves are frivolous,” Davis told Bloomberg BNA. “They are using these motions to run up the bill for their public clients. The taxpayers shouldn’t have to pay for this.”

Davis said that after the court dismisses the city’s requests for sanctions, he is going to file state grievances against the city’s attorneys that tried to sanction him because he doesn’t want the taxpayers to have to pay for unnecessary litigation.

To contact the reporter on this story: Alex Ebert in Columbus, Ohio at aebert@bna.com

To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com

For More Information

Text of the response to the motion for sanctions is at http://src.bna.com/sqr.

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