Exclusive Capital Partners LLC v City of Royal Oak
Key claim: The Michigan Supreme Court held that a city manager ranking recreational marijuana retail license applicants under independent city-ordinance authority is not a public body subject to the Open Meetings Act.
Abstract
Michigan Supreme Court opinion decided 2026-07-23. Michigan Supreme Court Lansing, Michigan
Syllabus Chief Justice: Justices: Megan K. Cavanagh Brian K. Zahra Richard H. Bernstein Elizabeth M. Welch Kyra H. Bolden Kimberly A. Thomas Noah P. Hood
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions: prepared by the Reporter of Decisions for the convenience of the reader. Kimberly K. Muschong
EXCLUSIVE CAPITAL PARTNERS LLC v CITY OF ROYAL OAK
Docket Nos. 168243 and 168244. Argued on application for leave to appeal March 12,
2026. Decided July 23, 2026.
At issue in these consolidated appeals is whether the marijuana retail licensing process of
the city of Royal Oak complied with the Open Meetings Act (OMA), MCL 15.261 et seq. The
city’s ordinance regulating recreational marijuana establishments grants the city manager the
power to implement and administer the license application process. Applicants are reviewed in a
competitive process under which the city manager “or his or her designee” ranks the applicants
according to criteria set forth in the ordinance. Plaintiffs, Quality Roots, Inc., and Exclusive
Capital Partners LLC, were among 21 applicants for two available licenses, and the city manager
convened a workgroup to review the applications. The city manager ultimately selected two
applicants other than plaintiffs. Quality Roots filed a complaint against the city in the Oakland
Circuit Court, challenging the city’s issuance of the licenses and alleging, among other things,
violations of the Michigan Regulation and Taxation of Marihuana Act (MRTMA), MCL
333.27951 et seq., and the OMA. Exclusive Capital Partners subsequently filed a complaint
against the city in the Oakland Circuit Court making similar claims. The city moved for summary
disposition of both complaints under MCR 2.116(C)(8) and (C)(10), and the trial court, Rae Lee
Chabot, J., granted the city’s motions.
Both plaintiffs appealed, and the Court of Appeals, BOONSTRA, P.J., and JANSEN and N. P.
HOOD, JJ., affirmed the trial court’s orders granting summary disposition with respect to plaintiffs’
MRTMA claims, but reversed with respect to plaintiffs’ OMA claims and remanded to the trial
court to determine the appropriate remedy for the OMA violation. ___ Mich App ___
(December 4, 2024) (Docket Nos. 366247 and 366257). The panel concluded that the city
manager met the definition of a “governing body” under the OMA and was therefore subject to
the requirements of the OMA; accordingly, the meetings between the city manager and the
workgroup appointed by the city manager should have been held publicly. Quality Roots and the
city both applied for leave to appeal in the Supreme Court. The Supreme Court denied Quality
Roots’s application but ordered oral argument on the city’s applications, directing the parties to
address whether the city manager was a “public body” as defined by MCL 15.262(a). ___ Mich
___; 26 NW3d 427 (2025).
In a unanimous opinion by Justice ZAHRA, the Supreme Court, in lieu of granting leave to appeal, held:
The city manager was not required to comply with the OMA in conducting the marijuana
retail license selection process. The city manager was acting in accordance with ordinance-based authority when ranking marijuana retail license applicants to receive license slots, and the marijuana ordinance does not itself qualify as a delegation of authority subject to the OMA. Accordingly, Part VI of the judgment of the Court of Appeals is reversed.
The city manager does not qualify as a “public body” as defined by the OMA. A
governmental entity can qualify as a public body under the OMA by one of two pathways: (1) by satisfying the statutory definition of “public body” in its own right, or (2) by being delegated authority from another public body. The city manager here does not qualify as a public body under the first pathway. As this Court held in Herald Co v Bay City, 463 Mich 111 (2000), “public body” as used in the OMA connotes a collective entity and does not encompass individuals. The city manager also does not qualify as a public body under the second pathway. In concluding otherwise, the Court of Appeals presumed that the city commission held original authority under the ordinance to decide among license applicants, but that the city manager was the de facto decision-maker in determining which applicants received licenses. However, the ordinance gives the city manager the power to decide among applicants, and the city commission has no role under the ordinance in ranking applicants. The Court of Appeals erred by concluding that the city commission delegated its authority under the marijuana ordinance to the city manager, thereby rendering him a “public body”; instead, the city manager was acting alone in his official work capacity pursuant to an independent grant of authority and, therefore, was not subject to the OMA.
Plaintiffs’ alternative argument that the ordinance itself constitutes a delegation of the city
commission’s general licensing authority given to it in the city charter conflicts with this Court’s prior holdings in this context. The OMA contemplates that some entities empowered by ordinance will be subject to the OMA. However, the text of the OMA does not support plaintiffs’ broad argument that every ordinance-based delegation of authority, to any entity, by a charter- empowered legislative public body with generalized authority automatically constitutes a delegation of authority subject to the OMA. The OMA accommodates at least some entities empowered by ordinance that do not meet the definition of “public body” subject to the OMA. Moreover, most municipal governments are empowered by charter, and the vast majority of ordinances are enacted by such municipalities. Under plaintiffs’ interpretation, every ordinance- based grant of authority would import the requirements of the OMA; the OMA should not be interpreted so broadly. While a delegation by ordinance might in some circumstances qualify as an OMA-subject delegation under the second pathway, according to Booth Newspapers, Inc v Univ of Mich Bd of Regents, 444 Mich 211 (1993), courts must analyze an empowering ordinance in the context of the OMA by asking whether the primary government entity has delegated any functions that it is required by law to do, whether the primary government entity’s actions have the primary purpose of permitting that entity to evade the requirements of the OMA, and whether the public body has provided authority to a subquorum of its own members; further, under Pinebrook Warren, LLC v City of Warren, 515 Mich 438 (2024), when applying the pathways to OMA obligations, a court must consider how the relevant public body functions and must not confine its analysis to the public body’s enabling provisions. Part VI of the Court of Appeals judgment reversed; case remanded to the trial court for entry of summary disposition in favor of the city.
Justice HOOD did not participate because he was on the Court of Appeals panel that
Why this matters
Municipalities that cap the number of recreational marijuana retailers must rank competing applicants, and this ruling clarifies that a city manager doing that ranking under a local ordinance operates outside the Open Meetings Act. For applicants and the public, that means less transparency around how scarce retail licenses are awarded; for cities, it reduces procedural OMA risk in designing selection processes.