## Facts

- Michigan’s Constitution grants the Regents of the University of Michigan “general supervision” of the institution and “control and direction of all expenditures” from university funds.  
- Michigan’s Civil Rights Act regulates, among other things, discrimination by “educational institutions,” expressly including public universities.  
- In 1982, the Legislature enacted Public Act 512, amending the Civil Rights Act to prohibit an educational institution from encouraging or condoning legally required racial discrimination by knowingly making or maintaining (after April 1, 1984) investments in organizations operating in South Africa.  
- The statute effectively required public universities to divest from corporations doing business in apartheid-era South Africa.  
- The Regents filed a declaratory judgment action asserting that the statute unconstitutionally intruded on their constitutional authority to manage and spend university funds, including through investment decisions.  
- The trial court granted summary judgment to the State, concluding the statute was a valid civil rights measure and regulated “investments,” not constitutionally protected “expenditures.”  
- The Regents appealed, and the State cross-appealed on standing-related points.

## Issues

1. Whether Public Act 512’s restriction on public-university investments in entities operating in South Africa violates the Regents’ constitutional autonomy under Mich. Const. 1963, art. 8, § 5, including their authority over the control and direction of expenditures of university funds.  
2. Whether the Regents had standing to pursue constitutional challenges beyond the autonomy claim.

## Decision

- The court reversed the trial court’s grant of summary judgment for the State.  
- The court held Public Act 512 unconstitutional as applied to the University of Michigan because it impermissibly interfered with the Regents’ constitutionally granted control over the university’s financial affairs under art. 8, § 5.  
- The court rejected the State’s attempt to cabin the constitutional protection to “expenditures” narrowly defined, concluding investment decisions fall within the Regents’ protected financial authority.  
- The court treated the Regents’ autonomy claim as justiciable and sufficient to resolve the case, without relying on broader constitutional theories.

## Legal Principles

- Constitutionally autonomous university governing boards are not ordinary state agencies; they possess constitutionally protected authority over internal governance and core financial decisions.  
- The Legislature may enact generally applicable laws, including civil rights measures, but may not directly dictate how a constitutional university must manage, invest, or direct the use of its funds when doing so conflicts with art. 8, § 5.  
- The constitutional power to control and direct “expenditures” of university funds includes decisions about investment and management of university assets.  
- A statute that targets and prescribes a specific investment policy for a constitutional university is an unconstitutional intrusion into the Regents’ financial discretion, even if the policy goal is otherwise lawful.

## Conclusion

The court held that Michigan’s anti-apartheid divestment mandate, as applied to the University of Michigan, violated the Regents’ constitutional autonomy by directing how the university must manage and invest its funds, and it reversed the trial court’s judgment upholding the statute.


Regents of the Univ. of Mich. v. State, 419 N.W.2d 773 (Mich. Ct. App. 1988)