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Using Incarceration to Solve a Contract Dispute in Michigan?

| February 20, 2012

Eight years ago, the transportation department for the state of Michigan contracted with a bridge and construction company called Ambassador Bridge to work on a throughway between Michigan and Canada. The two parties interpreted parts of the agreement differently, and the state sued Ambassador Bridge for breach of contract.

Two years after the trial—which, naturally, was a civil trial—had concluded, and Michigan had won, the trial judge threw the 84-year-old owner of Ambassador Bridge, Matty Moroun, and the company’s president, Dan Stamper, into jail for contempt of court because Ambassador Bridge had not complied with the court’s order to complete the work on the bridge.

The construction executives, who spent one night in jail with the threat of more to come, had been under the impression that they were in complete compliance with judicial orders.

Jail time—even one night—should not be used to force the hand of a party to a contract dispute. Ordering specific performance on a contract and then jailing a party for failing to perform is akin to putting a person in debtor’s prison. Such criminal sanctions for otherwise civil disputes are unnecessary and needlessly wasteful of several state resources including the courts that are forced to hear the appeal, the jail space occupied by the non-criminal business owners, the jailers who monitor that jail space, and the sheriff deputies called upon to arrest and transport the offenders.

Furthermore, the use of criminal sanctions in otherwise ordinary business disputes does not exactly encourage growth in Michigan, a state with dismal employment rates where the expansion of business, construction, and innovation are sorely needed.

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