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Michigan Supreme Court Goes on Liability Spree

A new, if short-lived, majority on the Michigan Supreme Court made its presence known on July 31, 2010. The Court that day unleashed three rulings that were aptly characterized by the headline of an August 4 Detroit News editorial: “State Supreme Court’s rulings will invite more lawsuits, create more costs.”

The rulings were a culmination of a 2008 shift on the high court when former Wayne County Circuit Court Judge Diane Hathaway was elected to replace Chief Justice Clifford Taylor, who had held the line against unprincipled expansions of liability. After her election, incoming Justice Hathaway vowed that the new majority would “undo a great deal of the damage” of the prior court — discarding prior law in favor of new liability expanding rulings.

The first July decision, written by Justice Hathaway, reduced the proof needed for a patient to show a doctor was negligent in causing injury. Justice Stephen J. Markman, in a separate opinion in which he agreed with the result but not the reasoning of the court’s lead opinion, characterized the ruling as an example of the “adoption of whatever formula best serves the plaintiff.” Justice Robert Young, Jr., dissenting, noted that the court’s splintered ruling “destroy[s] the doctrinal integrity of medical malpractice law and would result in “[c]haos and confusion in the law [that] only promote[s] more litigation.” The new majority’s decision will “benefit only those who profit from litigating medical malpractice cases,” Justice Young observed.

As the court abandoned established principles in medical malpractice cases, it did so with respect to the state’s no-fault automobile compensation system, too. In the no-fault auto insurance case, the court’s new majority overturned an earlier decision that allowed damages for pain and suffering only in cases in which the plaintiff had suffered a major impairment of a bodily function. The lower courts had found such damages unwarranted because the plaintiff, who had injured his ankle in a work-related accident, had recovered, returned to work at the same rate of pay, and was able to continue his hobbies. Justice Markman, along with two other justices, dissented from the majority’s ruling, finding that it interfered with the balance struck by the legislature — no-fault compensation in return for limiting difficult-to-measure pain and suffering damages.

Finally, in a case involving members of the Lansing teachers union, the court’s majority broadened the concept of standing, which determines whether plaintiffs have experienced a tangible injury permitting them to sue.

The 4-3 decision held that teachers who were allegedly physically assaulted by students can sue the school board, claiming that it should have, pursuant to state law, expelled, not just suspended, those students. Again, the court abandoned a prior decision that, in accordance with the federal courts, required plaintiffs to demonstrate an actual injury. Instead, the new majority adopted a broader concept of standing that allows anyone with a significant interest distinct from that of the general public to sue for the enforcement of a statute.

As the Detroit News editorialized, “These rulings will serve the interests of plaintiffs’ attorneys well. But they will result in businesses having to devote more resources to legal issues, which will impose higher costs for the state’s economy,” including one of the highest state unemployment rates in the country.

In the November 2010 elections, the Michigan electorate voted to restore stability to the civil justice system. In January the majority of the court will shift back, and that may put the brakes on future liability-expanding decisions.