Article courtesy of MIRS for SBAM’s Lansing Watchdog newsletter
Mackinac Island’s city government told a three-judge U.S. Sixth Circuit Court of Appeals panel Thursday morning that it has the authority to set ferry rates, parking rates and other fees.
The city’s attorney, Joel C. Bryant, with Detroit-based Miller Canfield law firm, argued the district court’s preliminary injunction blocking the city from enforcing its 2025 ordinance to ensure reasonable ferry prices was incorrect because there is no evidence of irreparable harm to the ferry companies, and the city is likely to prevail on the merits.
“I am here, your honors, to ask you to allow the city to exercise its regulatory authority and make sure those residents, businesses and visitors pay reasonable prices to travel to the island by ferry, just as the Michigan Legislature intended,” he said.
Dykema attorney, Mark John Magyar, who represents the ferry companies, countered that the city’s 2025 ordinance is unconstitutional and the lower court’s irreparable harm finding was justified.
Magyar argued that the possibility of disruption in ferry service and loss of goodwill in the community satisfy the irreparable harm standard.
The city council adopted Ordinance 629 in May 2025, giving the city broad authority over ferry boat services, including fares, parking rates and ancillary fees.
The ordinance was set to go into effect July 1, 2025, but U.S. District Judge Robert Jonker granted the ferry operators’ request for a preliminary injunction, holding that neither party has the unilateral authority to determine when competition has ceased under the agreement.
Shepler’s Inc. and the Mackinac Island Ferry Company, who are owned by the Hoffmann Family of Companies, allege the city council lacks the power to reject a 2024 proposed $2 rate increase for ferry services and parking, while the city believes that the parent company has created a monopoly, which gives the city jurisdiction over schedules and fares based on a franchise agreement.
The judges questioned the city’s irreparable harm if the ferry rates increase, and Bryant replied that the U.S. Supreme Court recognized that “when a state is denied the ability by a federal court to enforce its laws, the state suffers irreparable harm.”
The judges also questioned the ambiguity of the term “competition” in the franchise agreement and the city’s regulatory authority over parking.
Senior Circuit Judge David McKeague noted at one point, “We have subsidiaries. They have different rates and different levels of service. … We kind of have to get down to the question of – does competition, under Section 9 of the franchise agreement, mean, that, if there is common ownership, there is no competition?”
Jonker didn’t address that question, and Magyar told McKeague that the lower court is addressing “only the contract issue.”
Magyar also argued that he believes a third party is to decide whether competition exists – not the city nor the ferry operators.
Bryant argued that the word “competition” is unambiguous, and he noted that although there are two ferry companies, they are owned by the same company.
Circuit Judge Richard Griffin noted that using a dictionary definition of the word means there has to be a contest between rivals or parties acting independently, but this case has “no rivals, no parties acting independently.”
Magyar disagreed, saying the companies do act independently.
“You gotta be kidding me,” Griffin replied. “Who do they answer to? Who does the president of Arnold Ferry answer to? Who does the president of Shepler’s answer to? … That’s false competition, if I’ve ever seen it.”
Arnold ferry is a reference to Mackinac Island Ferry Company, who does business as Arnold Transit Company.
After the lawsuits were filed, the state Senate approved 30-6 legislation that would allow Mackinac Island to regulate fees charged for ferry boats on the island. However, SB 304 has sat since July in the House’s Committee on Government Operations.
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