DTE and Consumers Energy File Federal Lawsuit to Halt Michigan's New Spending Rules

DTE Energy and Consumers Energy filed a federal lawsuit on Thursday to block the implementation of Proposal 2, a new Michigan law restricting political donations by major utilities and large state contractors. The state's biggest energy providers argue that the measure, which voters approved with more than 80 percent support on Tuesday, infringes on their First and Fourteenth Amendment rights. The companies are asking a federal judge to order the state to stop enforcing the new rules.

The legal battle began immediately after the election results were confirmed. Voters passed Proposal 2 on Tuesday. The Mackinac Center for Public Policy announced its own legal challenge that same night. DTE and Consumers Energy followed suit on Thursday by filing a complaint with the US District Court for the Western District of Michigan. The suit names Michigan Bureau of Elections Director Jonathan Brater, Attorney General Dana Nessel, and Secretary of State Jocelyn Benson, the governor-elect, as defendants.

The law prohibits direct or indirect contributions to Michigan politicians by utilities and companies holding state government contracts valued at more than $250,000. It extends these bans to immediate family members, company officers, board members, and individuals with substantial ownership stakes. The restriction covers donations to state and local party committees, candidates for office, and members of the Michigan Public Service Commission. It also limits spending on travel, meals, and conference fees for officials and their families.

Attorneys for the utilities argue the law is too vague and creates an equal protection violation by targeting a specific business sector. They claim that without an injunction, the companies face a choice between giving up their right to political association or risking heavy penalties for exercising it. The complaint notes that one plaintiff is the 86-year-old mother of DTE's treasurer. The suit states she would be barred from donating to candidates despite having no role at any utility.

Maura Cowley, manager of the Michiganders for Money Out of Politics campaign, said the lawsuit was expected. She stated that the corporations opposing the measure had prepared for legal action since the proposal first qualified for the ballot. Cowley expressed confidence that the law would withstand scrutiny. The group aims to end what it calls pay-to-play politics in Lansing.

Katie Carey, a spokesperson for Consumers Energy, said the law unfairly targets Michigan businesses and their employees. She noted in a statement that residents should not lose their First Amendment rights based on their employment. The proposal also requires disclosure from groups that reference candidates or ballot issues in issue ads, a change aimed at reducing undisclosed spending through nonprofits.

The proposal includes a severability clause stating that if any part is found void, the remaining sections stay in effect. Courts have generally protected corporate political spending under Citizens United, though they have allowed narrowly tailored laws aimed at preventing corruption. The next step is for the federal court to review the complaint and determine whether to issue an injunction preventing the state from enforcing the new restrictions.