Order                                                                      Michigan Supreme Court
                                                                                 Lansing, Michigan

  January 12, 2018                                                                 Stephen J. Markman,
                                                                                              Chief Justice

  153893                                                                                 Brian K. Zahra
                                                                                 Bridget M. McCormack
  JULIE A. PUCCI,                                                                      David F. Viviano
                                                                                   Richard H. Bernstein
             Plaintiff-Appellant,                                                       Kurtis T. Wilder
  v                                                      SC: 153893               Elizabeth T. Clement,
                                                         COA: 325052                               Justices
                                                         Wayne CC: 13-014644-CZ
  NINETEENTH JUDICIAL DISTRICT COURT,
           Garnishee Defendant-Appellee,
  and
  CHIEF JUDGE MARK W. SOMERS and
  COMERICA BANK,
             Defendants.
  _________________________________________/

         On order of the Court, leave to appeal having been granted and the briefs and oral
  arguments of the parties having been considered by the Court, we VACATE our order of
  April 28, 2017. The application for leave to appeal the March 17, 2016 judgment of the
  Court of Appeals is DENIED, because we are no longer persuaded that the questions
  presented should be reviewed by this Court.

        MARKMAN, C.J.

         I would respectfully not deny leave to appeal, but would offer at least some
  guidance concerning what I view as the threshold issue in this case. While I reach the
  same result as the Court of Appeals, as well as that produced by this Court’s denial of
  leave, the analysis of the Court of Appeals, in my judgment, is both flawed and
  incomplete while the issue presented is one of considerable significance for the financial
  management of Michigan’s judicial system, deserving some greater clarification.

        Plaintiff filed a federal action under 42 USC 1983 (“§ 1983”) against Judge Mark
  Somers, the former chief judge of the 19th District Court in Dearborn, alleging that he
  had wrongfully terminated her court employment in violation of the First and Fourteenth
  Amendments.1 Eight days before trial, Judge Somers, in his capacity as chief judge,


  1
    42 USC 1983 sets forth a cause of action “to redress deprivations of civil rights by
  persons acting ‘under color of any [state] statute, ordinance, regulation, custom, or
                                                                                          2

instituted a policy that the district court would indemnify court employees for suits
arising from discretionary administrative decisions made within the scope of their
authority. A judgment was eventually entered against Judge Somers in his personal
capacity in excess of $1 million. Following the judgment, Judge Richard Wygonik, the
successor chief judge of the district court, continued the indemnification policy that
Judge Somers had implemented and submitted an affidavit attesting that the court would
indemnify Judge Somers for the judgment entered against him.

        Plaintiff subsequently brought suit in state court seeking to recover on the
judgment from the district court in accordance with the indemnification policy. The trial
court held that the court was required to indemnify Judge Somers, but the Court of
Appeals reversed. Pucci v Nineteenth Judicial Dist Court, unpublished per curiam
opinion of the Court of Appeals, issued March 17, 2016 (Docket No. 325052). The Court
held that a chief judge possesses the authority to indemnify court employees, but only for
liability incurred in their official capacity, not in their personal capacity. Id. at 8.
Plaintiff appealed, and this Court granted leave, requesting the parties to “include among
the issues to be briefed:”

       (1) whether the chief judge of a district court possesses the authority to
       adopt an employee indemnification policy on behalf of the district court,
       MCL 691.1408(1); MCR 8.110(C); (2) if a chief judge possesses such
       authority, whether the judge may adopt a policy that indemnifies employees
       for liability incurred in their individual capacities; and (3) whether the
       conduct of Judge Somers that gave rise to the judgment against him in the
       federal district court occurred “while in the course of employment and
       while acting within the scope of his . . . authority.” MCL 691.1408(1).
       [Pucci v Nineteenth Judicial Dist Court, 500 Mich 979 (2017).]

        In my judgment, the Court of Appeals erred when it conditioned a district court’s
authority to indemnify an employee on whether the employee incurred liability in an
official or in a personal capacity. MCL 691.1408(1) contains no such distinction, stating
only that a “governmental agency,” which is defined to encompass a court, 2 may
indemnify an employee for liability incurred “while in the course of employment and
while acting within the scope of his or her authority.” Further, an employee who is found
liable under § 1983 in his or her personal capacity can incur liability “while in the course
of employment and while acting within the scope of his or her authority . . . .” MCL
691.1408(1); see, e.g., Shrader v Employers Mut Cas Co, 907 So 2d 1026, 1033 (Ala,
2005) (“[Section 1983] imposes liability on state officials for conduct taken within, as

usage.’ ” Hafer v Melo, 502 US 21, 27 (1991), quoting 42 USC 1983 (alteration in
original).
2
  MCL 691.1401(a) defines a “governmental agency” as “this state or a political
subdivision,” and MCL 691.1401(e) defines “political subdivision” to include a “court.”
                                                                                          3

well as without, the scope of their authority.”) (alterations omitted); Ritchie v Donnelly,
324 Md 344, 364 (1991) (“Most actions taken by a government officer or employee
‘under color of’ law, governmental custom or usage will be actions in the scope of
employment.”). Moreover, a per se rule that a district court cannot indemnify an
employee for liability incurred in his or her personal capacity would effectively preclude
a court, without any legal warrant, from indemnifying an employee for liability incurred
under § 1983. The United States Supreme Court has explained “the distinction between
personal and official-capacity suits” under § 1983:

              Personal-capacity suits seek to impose personal liability upon a
       government official for actions he takes under color of state law. Official-
       capacity suits, in contrast, generally represent only another way of pleading
       an action against an entity of which an officer is an agent. . . . Thus, while
       an award of damages against an official in his personal capacity can be
       executed only against the official’s personal assets, a plaintiff seeking to
       recover on a damages judgment in an official-capacity suit must look to the
       government entity itself.” Kentucky v Graham, 473 US 159, 165-166
       (1985) (quotation marks and citations omitted).

That is, a government employee only incurs liability under § 1983 if a judgment is
entered against that employee in his or her personal capacity. Accordingly, under the
Court of Appeals’ reasoning, a court would never be permitted to indemnify an employee
who incurs liability under § 1983. While a district court’s authority to indemnify an
employee might be otherwise statutorily or constitutionally limited, there is no basis to
conclude that a district court is categorically prohibited from indemnifying an employee
for liability incurred in his or her personal capacity under § 1983. Because the Court of
Appeals’ reasoning here is in error and precludes without warrant a district court from
indemnifying employees for liability incurred under § 1983, I would not sustain it.

        Rather than denying leave, however, I would also address the threshold issue in
this case, one that that has only been perfunctorily addressed by the parties: assuming that
Judge Somers had the authority to unilaterally adopt an indemnification policy on behalf
of the 19th District Court—i.e., without the approval of that court’s funding authority, the
city of Dearborn—whether and to what extent that court now remains bound by that
policy. Neither Judge Somers nor Judge Wygonik is the current chief judge of the district
court, and obviously the court no longer wishes to indemnify Judge Somers; otherwise,
presumably, it would not be challenging the instant lawsuit. If the court is no longer
bound to indemnify Judge Somers, without regard to whether Judge Somers had the
authority to adopt the indemnification policy in the first place, then it would be
unnecessary to reach the additional questions posed in this Court’s grant order.

      In the Court of Appeals, plaintiff argued passingly as the only basis for the
proposition that the indemnification policy remains enforceable, notwithstanding the
                                                                                                               4

district court’s present opposition to the policy, this Court’s decision in Toussaint v Blue
Cross & Blue Shield of Mich, 408 Mich 579 (1980), in which we held that an agreement
not to discharge an employee except for cause may effectively become part of an
employment contract “as a result of an employee’s legitimate expectations grounded in
an employer’s policy statements.” Id. at 598. In the 37 years since, Toussaint has been
limited to the wrongful-discharge context, see, e.g., Fischhaber v Gen Motors Corp, 174
Mich App 450, 455 (1988), and a plurality opinion of this Court has expressly concluded
that Toussaint is properly limited to such cases. Dumas v Auto Club Ins Ass’n, 437 Mich
521, 531 (1991) (opinion by RILEY, J.). Whatever the merits of Dumas, or of any other
decision among Toussaint’s progeny, plaintiff here has barely undertaken to explain why
the district court (or the city) should be required to retain an indemnification policy of
which it has come to disapprove or why this should not be a matter of concern
exclusively to the beneficiary of the policy, the employee being indemnified. In
particular, plaintiff has not explained why Toussaint should now be understood for the
first time to apply in any context outside the wrongful-discharge context, much less in the
specific context of the instant case. Why, for example, is the Dumas plurality incorrect in
asserting that “it is difficult to imagine the scope of difficulties and mischief that would
be encountered if Toussaint were to be extended beyond wrongful discharge into every
facet of the employment relationship”? Id. at 532 (quotation marks and citation omitted).
That is not addressed by the plaintiff. Why, for example, is the Dumas plurality incorrect
in concluding that the “fear of courting litigation [under an expansion of Toussaint]
would result in a substantial impairment of a company’s operations and its ability to
formulate policy,” in this case the policymaker being a public body beholden to
taxpayers? Id. at 531. Again, there is not even a pretense of an argument offered by
plaintiff in support of the proposition that an indemnification policy once adopted cannot
be withdrawn.

       In my judgment, the district court here is not bound by the indemnification policy
to indemnify Judge Somers because it has chosen not to be so bound. Rather than
allowing to remain undisturbed what I view as the erroneous reasoning of the Court of
Appeals, I would affirm its judgment on the alternative ground that, even if Judge Somers
had the authority to enact an indemnification policy on behalf of the court, the court
equally had the authority to unbind itself from that policy. Moreover, if Toussaint or
some other legal grounding should be understood to sustain a contrary result, I look
forward to an actual argument being made on behalf of that proposition.

       CLEMENT, J., did not participate.




                         I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
                   foregoing is a true and complete copy of the order entered at the direction of the Court.
                         January 12, 2018
       t0109
                                                                             Clerk
