United States Fidelity & Guaranty Co. v. Michigan Catastrophic Claims Ass'n

Rehearing) v MCCA & COMPANY v MICHIGAN UNITED STATES FIDELITY GUARANTY CLAIMS ASSOCIATION CATASTROPHIC (ON REHEARING) THE COMPANY OF MIDWEST HARTFORD INSURANCE CLAIMS ASSOCIATION v MICHIGAN CATASTROPHIC (ON REHEARING) (Calendar 1, Argued and 133468. October No. Docket Nos. 133466 5). July Decided 2009. (USF&G) Fidelity Guaranty Company & and Hartford United States (Hartford) separate Company of the Midwest filed Insurance declaratory seeking judg- in the Oakland Circuit Court actions 500.3104, that, Michigan Catastrophic MCL the ments under (MCCA) required to reimburse them for Association was Claims protection personal benefits above the payments of insurance catastrophic statutory to insureds who suffered threshold made injuries, regardless charges the were reasonable. With whether Andrews, USF&G, court, J., agreed respect the Steven to N. required indemnify USF&G for the actual the MCCA was to charges paid regardless the it of whether were amount had Hartford, appealed. case of In the reasonable. The Nichols, J., challenge court, Rudy that the MCCA could J. ruled charges as defense to claim for indem- reasonableness cases, nification, consolidating appealed. Hartford After and EJ., JJ., Appeals, and the Court of and White Hoekstra, Owens, respect respect to USF&G and reversed with affirmed with Hartford, unambiguously requires holding that MCL 500.3104 personal insurers for the full amount of MCCA reimburse statutory exceeding protection benefits threshold insurance insured, obligated pay regardless its that the insurer was (2007). App 274 Mich whether the amount was reasonable. (2008). Supreme granted appeal. leave to 481 Mich 862 The Court that, arguments, Supreme hearing Court held After oral when coverage only policy provides for reasonable a member insurer’s authority indemnify charges, the MCCA has the to refuse to that, charges policy provides if and broader unreasonable coverage, compliance for with the broader the MCCA must review indemnify coverage, may it coverage but claims within that (2008). coverage. reject 482 Mich 414 claims in excess l plaintiffs rehearing, Supreme filed motions which the granted. 483 Mich 918 joined by opinion by In an Justice Chief Justice Kelly Weaver, Cavanagh Supreme and Justices Court held: Hathaway, 500.3104(2) obligation The set in indemnification forth MCL incorporate does not the standard that reasonableness MCL requires 500.3107 between claimants and member insurers. The powers furthering purposes, the MCCA’s are limited to MCCA’s determining which do not include the reasonableness of claims. adjust Accordingly, power only practices the has the the MCCA to procedures insurers, payment of and its member not the amounts agreed. which and to claimants member insurers have 500.3104(2) interpretation requires 1. of The a MCL determina- provision tion of how that relates to MCL and of 500.3107 how both provisions correspond larger statutory within the scheme. MCL 500.3104(2) requires provide, the MCCA and each member accept, percent indemnification of the amount of ultimate loss protection personal coverages sustained under insurance in of excess 500.3107(l)(a), statutorily “per- a set amount. MCL which defines benefits,” protection personal requires pro- sonal insurance that all paid tection insurance benefits claimed and between the insurer and Legislature the must insured be reasonable. Because the the used “coverages” § § term in 3104 and the term can “benefits” it Legislature be inferred the intended those terms to have Therefore, meanings. “personal protection different the definition of 3107(l)(a) equivalent § insurance benefits” in is not the to definition 3104(2). “personal protection coverages” § insurance Legislature exceptions “coverages” 2. The limited the to nar- rowly, “coverages” which indicates the term is a broader term “coverages” given than “benefits.” Because is never a more statute, restrictive definition elsewhere in the the word must be ordinary, everyday meaning. afforded its Dictionaries define “cov- erage” protection by policy, as the extent of afforded an insurance protection against specified a as risk or risks insurance policy, scope policy, as the risks within the of an as insurance and the amount extent of risk covered an insurer. The term “coverages” positioned just in MCL 500.3104 is after “ultimate loss,” is as which defined the actual loss amounts is that member obligated pay paid payable by to and that are or the member. The obligation duty by honoring is fulfill insurer to its its coverages. duty perform contractual The to the contract relates back to the ultimate loss insofar as loss the ultimate includes i.e., payment obligation, of the the total contracted amount. REHEARING) V MCCA Consequently, the insurers for 100 the MCCA must reimburse loss, which percent reflects the amount to the ultimate which subject personal agreed, to the insurer and insured coverage. specifically loss refers protection ultimate insurance statutorily is not coverage, than benefits and to which broader payments. limited to reasonable relationship and its members is not between the MCCA 3. The requirements subject MCL 500.3107 the reasonableness to of its member is not a no-fault insurer because the MCCA injured companies persons are not companies and the member 500.3104(2) Instead, MCL entitled to no-fault indemnification. reinsure, indemnify, requires not to insure or to the MCCA protection payments personal that exceed insurance members for power statutory under MCL threshold. The MCCA has 500.3104(7) payments assess- protect against unreasonable practices ing procedures of members that adequacy anticipate needing has been indemnification before settlement reached. grants power limited 500.3104(8)(g) 4. MCL purpose prompt indemnification of its

further and efficient its declining indemnify power extend to members. That does not amounts. unreasonable Affirmed. joined by dissenting, dis- Corrigan, Justice Young, Justice only grant rehearing agreed to when the Court’s decision with facts, arguments, legal composition Court, and not the

rationale, changed original opinion was He had since the issued. rehearing grant these stated the decision to under circumstances century ignored precedent more than a old. Consistent with 500.3104(2), original opinion and based on the text of MCL he would policy only provides coverage for hold that when a member insurer’s authority charges,” to to the MCCA has the refuse “reasonable majority’s charges. indemnify He because the unreasonable dissented majori- controlling nor statute decision was based neither Moreover, holding ty’s “coverages.” its would have own definitions giving make the effect of insurers an incentive to unreasonable Michigan pass onto the the enormous costs of those settlements and purchase no-fault insurance. He also citizens who must automobile statutorily disagreed majority’s statement that the MCCA with procedures adjust practices not and but authorized to member’s claims. fully dissenting, concurred with the discus- Justice Markman, Young’s dissenting opinion, part which sets sion in IV of Justice that, analysis supporting the under the text of forth an conclusion 484 Mich 1 500.3104(2), policy provides only MCL when a member insurer’s coverage charges,” authority for “reasonable the MCCAhas the indemnify charges.” refuse to “unreasonable — — — 1. Insurance No-Fault Personal Protection Insurance Benefits Charges. — — Catastrophic Claims Indemnification Unreasonable Michigan Catastrophic may The Claims Association refuse to not charges indemnify personal protection for unreasonable insurance statutory provision setting benefits because the forth its indemni- obligation fication does not contain a standard reasonableness (MCL 500.3104[2]). — — 2. Insurance — No-Fault Personal Protection Insurance Benefits Michigan — — Catastrophic Claims Indemnification Powers of the Catastrophic Claims Association. statutory powers adjust practices of the MCCA to procedures encompass adjusting of member insurers do not payment amount to which a claimant and member insurer have (MCL500.3104[7]). agreed — — — 3. Insurance No-Fault Personal Protection Insurance Benefits Charges — — Catastrophic — Claims Indemnification Unreasonable Michigan Catastrophic Powers of the Claims Association. statutory power The limited purpose MCCA further its prompt efficient its indemnification of members does not (MCL declining indemnify extend charges unreasonable 500.3104[8][g]). Cooney (by Plunkett Jeffrey C. Gerish and Gregory Gromek) for United Fidelity States & Com- Guaranty pany. Ortner),

Stark P.C. Ava Reagan, (by K. and Dykema (by Erhardt, Wheaton, Gossett PLLC K. Jill Joseph M. Miller) and K. J. Michigan for the Catastrophic Claims Association. Tischler,

Miller & (by P.C. M. Milea Vislosky), Michael Migdal.

Secrest (by Wardle Janet Callahan Barnes and John Jr.) for Cowley, H. Hartford Company Insurance Midwest. Rehearing) v MCCA Opinion of the Court Curiae:

Amici and Firm, R. (by Speaker), PLLC Liisa Law Speaker McIntyre (by PC & Boughton Brake Dramis Sinas Hicks) for the Coalition A. and Steven T. Sinas George Auto No-Fault. Protecting Bean, P. Grover, (by PLC John & Hoover

Hackney, Insurance Farm Mutual Automobile Lewis), for State Company. Restuccia, General, Eric B. Cox, Attorney

Michael A. Chenoweth, Assistant A. General, and William Solicitor of the Office General, for the Commissioner Attorney Regulation. Financial and Insurance Michi- Institute of for the Insurance Lydick A. John gan. REHEARING

ON leave to granted originally J. This Court WEAVER, 500.3104(2) obligates MCL consider whether appeal (MCCA) Association Catastrophic Claims Michigan protection personal member insurer for to reimburse a (PIP) to a claimant without paid benefits insurance the member insurer’s the reasonableness of regard to an opinion Court issued of PIP benefits. This payments remanding for Appeals the Court of reversing a mem- holding that “when while proceedings, further coverage for ‘reason- only policy provides insurer’s ber authority to refuse to the MCCA has charges,’ able Subsequently, plain- charges.”1 indemnify unreasonable Guaranty Company Fidelity States & tiffs United Midwest filed mo- Company Hartford Insurance Catastrophic Guaranty Michigan Fidelity Ins & Co United States Ass’n, 414, 417; 759 NW2d Claims 484 Mich 1 Opinion op the Court granted plaintiffs’ We motions for rehearing.

tions rehearing, and cases for deci- these were resubmitted oral briefing argument.2 sion without further obligation now hold that the indemnification set We 500.3104(2) in MCL incorporate forth does not rea- requires sonableness standard MCL 500.3107 be- Furthermore, tween claimants and member insurers. 3104(7) § powers granted to the MCCA in are limited to adjusting the and “practices procedures” member and encompass adjustment insurers do not the pay- agreed ment amount to between claimants and member Moreover, we power granted insurers. hold that the to the MCCAunder MCL 500.3104(8)(g) furthering limited to purposes determining of the MCCA and that reason- ableness is not one its purposes. Finally, although the MCCA has no right directly challenge the reasonable- claim, ness of a the no-fault statute does provide the MCCA with safeguards against negligent actions of mem- Accordingly, ber insurers. we affirm the judgment of the Court of Appeals.

I. AND FACTS PROCEDURAL HISTORY UNITED STATES FIDELITY & GUARANTY CO v MCCA In the first case in these appeals, consolidated Daniel was Migdal injured a 1981 car accident in which he sustained injuries. injuries His included catastrophic traumatic brain injury with cerebral spastic quadriple- gia, apraxia, severe oral dysphasia. motor Because injuries, of the extent of the Daniel was prescribed, received, 24-hour-a-day 1988, care. In nursing Michael (Mr. Migdal Migdal), Daniel’s father and the conserva- estate, tor of Daniel’s sued the no-fault insurance Claims United States Ass’n, 483 Mich 918 Fidelity Ins & Guaranty Co v Michigan Catastrophic Reheaking) v MCCA USF&G Opinion of the Court Fidelity Guaranty Company & United States provider, care. In for Daniel’s (USF&G), expenses paid to recover judgment. a consent entered into parties Migdal Mr. paid USF&G judgment, to the Pursuant all contractual for a release from $35,000 exchange 10, 1989. May before nursing provided care liability for an hour for Additionally, agreed pay $17.50 following year.3 care for the nursing home Daniel’s of whether regardless made would be payments care or a third nursing the parents provided Daniel’s hourly care. The in to the brought provide was party judgment, the was rate, year for the first after fixed percent. of 8.5 annual increase subject to an the based on compounded rate would be increased rate. year’s previous Mr. judgment, paid consent USF&G

Pursuant to the the amount hourly wage.4 *6Once the consented-to Migdal threshold statutory had reached the Migdal to Mr. paid $250,000,5 began MCCA to reimburse amount company manage Migdal company Daniel’s care. This created a to Mr. intermediary payments from USF&G to that used the benefit acted as an pay Migdal for his pay for Daniel and to Mr. the hired nurses who cared stating judgment provision that care. The contained a efforts in Daniel’s jurisdic substantially changed, retained the court if Daniel’s condition pay in the whether a reduction or increase tion and could determine ments was “warranted.” reading papers Migdal included concern Mr. testified that his duties advances, checking providing management ing business and medical hooks, keeping paying equipment, of Daniel’s maintenance nurses, shopping necessary Daniel’s care. for items for 500.3104(2)reads, pertinent part: MCL accept provide and each member shall [T]he association shall of ultimate loss sustained

indemnification for 100%of the amount under following protection coverages personal in excess insurance .... amounts in each loss occurrence appeals, the in these consolidated At the time of both accidents involved $250,000. threshold amount was Opinion of the Court payments for to Mr. Migdal USF&G made that exceeded However, hourly the threshold. after rate had time, significantly increased with passage eventually MCCA refused to USF&G reimburse for that Mr. paid Migdal amounts USF&G under the con sent judgment, ground that the amounts were complaint unreasonable. USF&G filed a Oakland Circuit Court a declaratory judgment the MCCA must reimburse USF&G for total amount paid Migdal USF&G Mr. under the judgment, regardless consent of the reasonableness of time, the amount. At the USF&G was paying $54.84 hour Mr. Migdal for Daniel’s nursing care.6 The sought only required be to reimburse USF&G hour, at a rate of arguing $22.05 an the agreed- upon and, rate an hour was $54.84 unreasonable therefore, the MCCA should not have to reimburse Meanwhile, for the USF&G total amount. sought to have judgment the consent Mr. Migdal with revised, arguing that changed circumstances had when Mr. hired Migdal a third party for Daniel instead c.are providing the nursing Migdal care himself. Mr. filed a for summary motion disposition for failure to state a claim which upon relief could be granted. The court granted Mr. Migdal’s motion.7

Likewise, the MCCA for summary disposition. moved It contended that no question there was of material fact by that the payments Migdal made USF&G to Mr. were Moreover, unreasonable. the MCCA argued that only no-fault act required payments reimbursement of paid Migdal $32 Mr. (including hour of amount to the nurses benefits) kept compensation the rest as for his work. appeal opinion USP&G did not express that decision. We no therefore judgment subject judicial on whether consent would have been ground payment modification that the amount it called for had passage become unreasonable with the of time. Reheaking) v MCCA USF&G Opinion summary In a countermotion for that are reasonable. argued that the no-fault act re- USF&G disposition, reimburse it for the full amount the MCCA to quired unreasonableness re- Migdal, despite any to Mr. paid argued paid. Alternatively, amount garding the concerning a of material fact question there was judgment. “unreasonableness” of the consent motion for sum- granted The trial court USF&G’s the MCCA must reim- mary disposition, ruling loss,”8 including its burse USF&G for “ultimate pay Migdal, USF&G had to Mr. entire amount was reasonable. regardless paid of whether the amount summary MCCA’s motion for The trial court denied the disposition. judgment requir- The trial court entered in the amount of ing the MCCA to reimburse USF&G $1,725,072 holding under the no-fault act and payments MCCA liable for future consistent with the stay the en- judgment. parties agreed consent forcement of the order while the MCCA appealed right Appeals. the Court of

HARTFORD INS CO v MCCA case of these consolidated appeals, the second Robert Allen in a 2001 car accident injured was catastrophic injuries. injuries which he sustained His effusion, right-sided pleuritic injuries, included brain shoulder, quadriparesis, cardiopa- bilateral frozen injuries, extent of the Allen was thy. Because of the li- received, 24-hour-a-day care prescribed, and of the Mid- Company censed nurse. Hartford Insurance (Hartford), insurer, initially paid Allen’s no-fault west agreed the nurse. In Hartford an hour for $20 rate of an hour for Allen’s care. pay an increased $30 500.3104(2). 8 MCL 484 Mich l Opinion of the Court payments thereafter,

Soon Hartford’s for Allen’s care statutory $250,000 exceededthe threshold. any

The MCCArefused to reimburse Hartford for payments above an hour for the services ren- $20 complaint declaratory dered. Hartford filed a for a judgment require pay that would the MCCAto Hart- payments $571,847.21 ford as reimbursement exceeding Additionally, the no-fault threshold. Hart- sought ford a declaration that the MCCAmust reim- payments burse Hartford for the total above the regardless $250,000 threshold, of the reasonableness payments. filing, After the initial Hartford summary disposition, arguing moved for required no-fault act the MCCA to reimburse Hart- paid ford for the entire amount to Allen that exceeded regardless threshold, of the reasonableness of argued only that amount. The MCCA that it had to payments reimburse Hartford for reasonable discovery concerning that there was insufficient payments. reasonableness of the amount of the circuit court ruled that reasonableness was an ele- determining ment in how much the MCCA must reimburse Hartford and that there was insufficient discovery payments to determine if the were reason- immediately appealed able. Hartford the trial court’s holding requiring the element of reasonableness to be considered.

THE COURT OF APPEALS’ DECISION Appeals The Court of consolidated the USF&G and Hartford cases held that “MCL500.3104 does not incorporate requirement a ‘reasonableness’ and re- quires the MCCAto reimburse insurers for the actual paid statutory amount of PIP benefits in excess of the Rehearing) v MCCA op Opinion the Court The MCCA original.) (Emphasis threshold.”9 Court, Court in and this this appeal leave to sought reversing an opinion This Court issued leave.10 granted pro further remanding for Appeals the of Court a member insurer’s that “when ceedings, holding while charges,’ ‘reasonable only coverage for policy provides indemnify unrea to to authority has refuse the MCCA 11 United Subsequently, plaintiffs charges.”* sonable and Hartford Guaranty Company Fidelity & States for filed motions of the Midwest Company Insurance rehearing motions for rehearing. granted plaintiffs’ We for decision without resubmitted and this case was 918 483 Mich or oral briefing argument. further (2009).12 9 Michigan Catastrophic Fidelity Guaranty v & Co United States Ins (2007). 192; Ass’n, 184, App Mich 731 NW2d 481 Claims 274 10 (2008). Mich 862 481 11 Michigan Catastrophic Fidelity Guaranty Co v Ins & United States (2008). 417; Ass’n, 154 Mich 759 NW2d Claims 482 denying simply the Young as Corrigan were shown Justices However, joined rehearing. in his dissent motions for Justice Young, opportunity for well after the motions now takes the

Justice Corrigan, remaining justices rehearing who did not have decided to attack the been vote retain this Court’s earlier decision. justices voting grant erroneously asserts that the The dissent Ass’n, 11, 21; rehearing Peoples Evening erred v News Mich because granting (1883), precluded held this from 16 NW 185 Court changed, any composition rehearing has absent when the of the Court However, contrary parties arguments in new from the the cases. change assertions, merely Peoples in that a stated dissent’s Court granting composition be the for of this Court cannot basis rehearing. compo- composition changes, Accordingly, of and the if the the Court grant majority reason Court sees a sition becomes such that granting precluded Peoples rehearing, majority is under from not If, instance, newly composed justices rehearing. Court four erroneous, justices challenged opinion can those concluded that the was deciding grant rehearing. vote same holds true whether vote to challenged justice joined opinion was is a new who after Mich 1 op Opinion the Court II. STANDARDOF REVIEW law, Statutory question is a interpretation which this Court Investigation reviews de novo. re March Pastor), 1999 Riots East Lansing (People v (2000). 378, 383; 617 NW2d 310 This Court reviews de novo trial court’s regarding decision a motion for summary disposition. Herald Bay City, Co Mich 111, 117; 614 NW2d 873

III. ANALYSIS The issue before this Court how much involves of a member insurer’s coverages the MCCA must indemnify the event a catastrophic injury. Specifically, is the MCCA liable for reimbursement PIP payments based on potentially unreasonable claims?

The depends outcome of these cases on this Court’s interpretation of language the in MCL 500.3104. An rule overarching statutory of construction is “that this Court must enforce clear and unambiguous statutory provisions (Pre- as written.” In re Question Certified Risk Mut Co v Michigan Ins Catastrophic Claims ferred Ass’n), (1989) 710, 721; 449 NW2d 660 deciding justice signed released or whether the vote comes from a who the challenged opinion changed and his or her mind after further consider- ation. practice 2.119(F)(3), This is consistent with MCR which creates “palpable rehearing up moving error” standard for cases. It is to the party palpable disposition show error would lead to a different majority the case. If a moving party, of the Court is convinced the grant rehearing. Furthermore, Court has the discretion to while MCR 2.119(F)(3) rehearing generally states that motion for will not be granted only presents if arguments the motion the same decided in the 2.119(F)(3) original disposition case, explicitly MCR refrains from “restricting grant rehearing. discretion the court” to Accordingly, persuaded by attempts we are not the dissent’s granted rehearing discredit this Court’s order that in this case. 13 Rehearing) v USF&G MCCA Opinion op the Court omitted). language “If of [a] marks (quotation Legislature must have unambiguous, statute is and the statute meaning clearly expressed, intended the Valley Foods Co v as written.” Sun must be enforced (1999). How 230, 236; NW2d 119 Mich 596 Ward, 460 unambiguous’ depends often ever, is and ‘plain “what Gibraltar School frame v on one’s of reference.” Shiffer (1974). Ed, 190, 194; 224 NW2d 255 Mich Dist Bd con reference, this frame In order ascertain to the statute must be read relation tested provisions In re agreement. in mutual as a and work whole State 433 Mich at 722. See also Question, Certified 138, 144; Wilson, 423 Mich 377 NW2d 703 Treasurer (1985). deep shares a

Additionally, frame of reference “The Legislature. primary the intent of the nexus with effect to the interpretation give goal statutory Inc v Buren Office, Title Van Legislature.” intent of the Treasurer, 519; (2004), 516, Mich 676 NW2d 207 Co 396, Complaint, In re Mich MCI Telecom quoting task 411; Fundamentally, “[t]his 596 NW2d 164 the statute itself. begins by examining language of evi of a statute the most reliable provide words Sun Valley, intent.. . .” Legislature’s] [the dence of omitted). (citation quotation Mich at 236 marks meaning of plain This “consider both the Court must placement ‘its phrase the critical word or as well as ” 237, at statutory quoting Id. purpose scheme.’ States, 145; 501; US 116 S Ct Bailey v United possible, as effect should 133 L Ed 2d 472 “Asfar clause, and word given every phrase, be statutory must be read and language The statute. context, it is clear unless grammatical understood its Valley, was intended.” Sun something different Mich at 237. 484 Mich Opinion of the Court § interpreting 3104, In this Court first must deter- 3104(2) § corresponds § mine with how 3107 and how correspond these two provisions within the entire statu- 3104(2) tory requires scheme. Section that the MCCA provide “shall and each shall accept member indemni- fication for 100% of the amount of ultimate loss sus- tained under personal protection insurance coverages in excess of the following amounts each loss occur- ”13 3107(l)(a) rence .... Section “personal defines pro- tection insurance expenses “[allowable as benefits” consisting of all charges reasonable incurred for reason- ably necessary products, services and accommodations injured care, for an person’s recovery or rehabilitation.” provision This requires that all PIP benefits claimed paid between the insurer and the insured must be reasonable. The MCCA argues that this Court should incorporate § 3107 definition of “benefits” into 3104(2) 3104(2) § § where refers to “coverages.” How- ever, we decline to do so because the phrase “personal protection insurance has a distinct meaning benefits” from the phrase “personal protection insurance cover- 3104(2). ages” that is in § found Legislature When the words, uses different the words generally are intended to connote different meanings. Simply put, “the use of different terms within similar statutes generally implies that meanings different were 2A Singer intended.” & Singer, Sutherland Statutory (7th ed), 46:6, § Construction 252. If p the Legislature had intended meaning the same in both statutory provisions, it would have used the same word. There- fore, disagree we with the MCCA and hold definition of personal protection insurance benefits statutorily are amounts set increase over time. At the time of accidents, $250,000. both the threshold amount was the thresh 500.3104(2)(a) (k). $440,000. old amount was See MCL Rehearing) v MCCA

Opinion of the Court 3107(l)(a) the reasonableness (including §in found standard) personal the definition of equivalent is not 3104(2). §in coverages insurance protection impor- is “coverages” term use of the The distinctive Co, Ins Mich Mut Auto v State Farm tant. LeBlanc (1981) (“ a word 204; ‘Coverage’, NW2d 775 industry, insurance refers meaning in the precise the or sum policy, an insurance protection afforded insurance.”). Although policy a risks assumed be- “coverages” and are related terms “benefits” statute,14 proximity in cause of their close they not terms does mean that proximity of these two synonymous. are from the definition of “allow- 3107 excludes

Section charges “coverage” hospital within PIP expenses” able customary semi-private in and excess reasonable in expenses and funeral burial charges room a (subject range in specified policy amounts section). charges This leaves all other specified in that Legislature The fact that the open “coverage.” to PIP indi- narrowly so exceptions “coverage” limited the “coverage” term a broader term than cates is Moreover, because is never “coverages” “benefits.” definition elsewhere given more restrictive 500.3107(1) provides, pertinent part: MCL (2), protection Except personal provided insur- as in subsection payable following: are for the ance benefits (a) consisting charges expenses of all reasonable Allowable reasonably necessary products, services and accom- incurred for care, recovery, injured person’s or rehabilitation. for an modations coverage personal protection expenses insurance Allowable within hospital charges room in excess of a not include shall customary semiprivate charge for accommoda- reasonable and expenses set in the amount forth tions ... for funeral and burial $1,750.00 policy not than or more than which shall be less $5,000.00. [Emphasis added.] 484 Mich 1

Opinion of the Court statutes, the word must be its ordinary, every- afforded (“The day meaning. Valley, Sun 460 Mich at 237 statu- tory language must be read understood its grammatical context, it is that something unless clear intended.”). context, different was grammatical In the meaning “coverages” common meaning, its only by statutory limited the specific exceptions. “Coverage” defined in is dictionaries as the “[e]xtent by of an protection afforded insurance policy [or the] liabilities,”15 amount funds to reserved meet as “protection against a risk or specified risks an policy,”16 insurance as “the risks the scope within of an policy,”17 “amount, insurance and as the and extent of risk covered insurer.”18 Under the common meaning “coverage,” the liability contractual amount that an agrees pay insurer to part insured is considered a insurer’s coverage. the and paid Hartford pursuant funds to a judgment consent and a settlement agreement respective with the insureds. This contrac- liability, coverage, tual or owed each is insurer the total amount agreed original to between the contracting parties. The reasonableness of the agreed payment amount is not a factor. The meaning in MCL “coverages” 500.3104 be- “ comes clearer considering after ‘its placement and ”

purpose statutory the Valley, scheme.’ Sun 460 Mich at quoting 516 US Bailey, at 145. the statute, “coverages” positioned is just after “ultimate loss.” “Ultimate statutorily loss” is defined as the “actual loss amounts that a obligated member is to pay and that paid payable by are the member . .. .” MCL 15 (1995). Dictionary College II Webster’s New College Dictionary Random House Webster’s (7th ed). Dictionary Black’s Law (5th ed). Dictionary Black’s Law (On Rehearing) USF&G Opinion op the Court added). 500.3104(25)(c) the obligation The (emphasis honoring its contractual duty by is fulfill its insurer to relates perform the contract duty The to coverages. loss loss insofar as the ultimate to ultimate back i.e., total con- obligation, payment of includes must reim- Consequently, the MCCA amount. tracted loss, of the ultimate percent the insurers for burse the insurer and the amount to which which reflects PIP The ulti- subject coverage. agreed, insured which coverage, refers specifically mate loss statutorily not limited and is broader than benefits payments.19 reasonable its not a insurer of

Moreover, the MCCA is no-fault not are companies, companies member member injured persons entitled to no-fault indemnification. its Thus, relationship the MCCA and between require- the reasonableness subject members is not Rather, Legislature ments found MCL 500.3107. 3104(2) the MCCA “indem- §in would provided for PIP nify” payments. members insuring “insure” did not state that the MCCA would Legislature than greater the members for amounts or “reinsure” (5th ed) defines Dictionary Law threshold. Black’s loss, in a “indemnify” as restore the victim of “[t]o against loss ; or in to secure part, by payment... whole contingent .. .” Indemnification is not a damage. Instead, security it a set plan. like an insurance plan 19 argues a for it to if is not reasonableness factor The MCCA that there enforce, have no incentive to make reasonable the member insurers will statutory amount because do not threshold settlements that exceed beyond pay anything the threshold the insurers will not be hable to paid However, higher premiums to one incentive comes from amount. 500.3104(7)(d) (requiring its the MCCA assess See MCCA. MCL premium policies companies no-fault an annual each of their member Michigan). If act in a manner all the individual members written settlements, regard then of their insurance does not the reasonableness greatly. premiums will increase

18 484 Mich l Opinion of the Court against Here, meant to assist certain circumstances. those circumstances arise when the PIP amount con- statutory tracted the insurer exceeds the threshold. 3401(1) Section states that MCCA is “not subject any Thus, laws with respect .. . insurers.” insurer, MCCA is not a no-fault consequently and it is also not a reinsurer. Because the MCCA is not no-fault insurer, but, rather, an indemnitor no-fault insurers statutory § for benefits in excess threshold, 3107 directly MCCA; does only not bind the it binds the insurer members and the insured. Section “makes both reasonableness necessity and explicit neces- sary elements of a claimant’s . recovery [insured’s] . ..” Ass’n, 33, Nasser v Auto Club Ins 49; 435 Mich (1990) added). NW2d (emphasis Specifically, it is the insurance company that has right deny (or claim) part claim aof for unreasonableness under § 3107. insured then prove has the burden to charges See, are in fact reasonable. generally, Nasser, Manley Mich at v Detroit Automobile Exch, 140; Inter-Ins 425 Mich (1986), 388 NW2d 216 Ass’n, LaMothe Auto Club Ins 577; App 543 NW2d Given that the established burden is on proof insured, it is counterintuitive conclude that the member insurance company would benefit from having not the burden of proof one against instance an insured, but having the burden in against another instance the MCCA.

The MCCA maintains that the foregoing statutory constructions will lead to higher costs to insureds and will be a disincentive for member insurers to keep payments reasonable. These fears are unfounded. The an unincorporated MCCA is nonprofit association, whose purpose provide is to insurers with indemnifica- for policies tion PIP that exceed a certain threshold. See (On Reheaking) MCCA USF&G

Opinion of the Court 500.3104(1). MCCA created the Legislature The MCL Michigan’s no-fault law that “in to concerns response placed great too a benefits [PIP] for unlimited provision insurers, insurers, small particularly burden on In re injury claims.” ‘catastrophic’ event of Certified maintains that it Question, 433 Mich at 714. The unilaterally stop making to ability should have it deter- to member when payments a indemnification Yet, are unreasonable. payments mines claim member can take the acknowledges that a the MCCA which dispute, a reasonableness MCCA to court over authority of fact as the ultimate would leave a finder are reasonable. payments over whether outcome, essence, preferred In the MCCA’s under with an agreement makes an when a member insurer (often it be setting, whether litigation insured a declaratory judgment, consent hearing, arbitration if must sue the MCCA the judgment), the member then If this is unreasonable. payment MCCA finds logical argument, the MCCA’s accept Court were to insurers would be would be member consequence insurers to settle the claimant. Member reluctant with every might catastrophically force a trial with jury then verdict with a injured claimant in order secure goes This on the result. outcome stamp “reasonable” efficient and ensuring against legislative purpose system. claimants in the no-fault quick recovery for 578-579; General, Attorney Shavers v (1978) (“The insurance goal of the no-fault NW2d 72 of motor vehicle acci- system provide victims was assured, adequate, prompt reparation dents losses.”). certain economic concerns, it should be MCCA’s response safeguard that the MCCA is not without out

pointed Legis- payments. unreasonable protect against 484 Mich í op Opinion the Court laid specifically powers lature out the MCCA can guard against exercise to unreasonable settlements of 500.3104(7)(b) catastrophic claims. MCL states that the MCCA shall procedures by promptly

[establish which members shall report that, to the association each claim on the of the basis injuries sustained, may damages reasonably or be antici pated ultimately to involve the if association the member is legally injuries damages. Solely held liable for the or for the claims, purpose reporting of the in all member shall in legally injuries stances consider liable the or itself for damages. The member shall also advise the association of subsequent developments likely materially affect the interest of the [Emphasis association in the claim. added.][20] statutory

This language requires and empowers the procedures to establish to protect itself from unreasonable settlements all cases involving claims that may exceed the consequently threshold and affect the MCCA. plan of operation MCCA’s likewise echoes statutory requirements.21 these This language enables the MCCA to procedures establish that will enable it to exercise control appropriate over settle- ments whenever reasonably member anticipates claim will involve the MCCA. then,

Only after not the claimant and member in- settlement, surer have reached a can the MCCA exer- MCCA, Section 3104 includes numerous other rules for such as requirements, liability, membership “plan operation.” and creation of a of X, plan operation provides § part: Art of 10.01 report Members shall to the Association such information as (a) may require prescribed by the Board on forms the Board: As practicable occurrence, soon as report after the loss Members shall which, injuries each claim damages basis of the sus-

tained, may reasonably anticipated be to result in Reimbursable Loss, purposes reporting Ultimate and for shall Member legally injuries damages. consider itself liable for the (On REHEARING) V MCCA op Opinion the Court MCL Under process. the settlement cise control over 500.3104(7)(g), the MCCA must reviewing procedures and procedures claims for

[establish the claims of the association. practices of members If inad- are considered practices a member procedures or association, equate service the liabilities properly may an- may with undertake or contract the association member, adjust or assist including person, another other on claims adjustment claims the member may liability to association and potential create a [Empha- adjustment to the member. charge the cost added.] sis with conjunction is

Thus, 3104(7)(g) § read when 3104(7)(b), required is the MCCA is § outcome that the anticipate by members that reports to those review adequacy and the of indemnification to assess needing Upon the member.22 a practices of procedures the adjust prac- MCCA can the inadequacy, of the finding key One of the of the member.23 procedures tices or and power the MCCA has the here is that protections part 3104(7)(g) argued § the term because of uses The MCCA describing potential powers, “may” of the of “must” in some its instead directly to limit greater power in the statute than what follows MCCA has to conclude member insurers. The MCCA wishes or control the individual duty specific way act in a the does not set forth to that since section regarding it wants claims), (e.g., to act it allows the MCCA how review claims, including This questioning their is reasonableness. member indemnify purpose is premise of the MCCA to The and erroneous. amount, payments beyond so that insurance the threshold insurers for compete Michigan’s market fear no-fault without firms all sizes can of sustaining catastrophic disproportionate loss claims. of regard: plan operation echoes the statute in this of also timely Member refuses to submit If a Member or 3103

reports required pursuant 10.01 or of it to Section or information otherwise, reports and determine that the or if the Board should are unreli- a Member or 3103 Member information submitted may, expense, direct incomplete, at the the Board member’s able or (which may representative of Association that an authorized i op Opinion the Court duty adjust “procedures practices” to and of the only member produce payment unreasonable amount; the does not power power adjust include the to the amount after a has been settlement reached.24 The power MCCA has the to in before a step settlement has adjust anticipates been reached and situations that it might it to expose otherwise unreasonable indemnifica- By requiring tion costs. submission proposed settle- ment agreements approval, MCCA can protect having itself later against unreasonable claims pay from member insurers. The exercise these is powers against MCCA’s protection neglect member’s its duties. 3104(8)

Finally, § the MCCA argues (g) it gives power to question regardless reasonableness provisions. Specifically, 3104(8)(g) § statute’s other al- “[p]erform lows the MCCA to other acts specifically not enumerated in necessary this section that are or proper accomplish the purposes of the association and that member) inspect

be another shall audit and such member’s compile required X, records [Art information and data. 10.02.] § 24Although 3104(7)(g) may “adjust § states that the MCCA or assist in adjustment claims,” practical 3104(7)(g) § only effect of is that prescribe procedures practices by the MCCA able to which to agree pay ensure the reasonableness the amounts that members power adjust claimants. When the asserts MCCA its to assist adjustment claim, effectively steps of a the MCCA into the of shoes the adjustment member insurer. The claim that the MCCA for reviews purposes insurer, the is insured’s claim with the member not the member MCCA, Accordingly, insurer’s reimbursement claim with the MCCA. the standing insurer, the in shoes of the member to is limited the member power insurer’s to the for review insured’s claim as reasonableness spelled policy, agreement, out in the a member insurer’s settlement or a judgment. Thus, consent even when in the MCCA assists or assumes adjustment process, payable control over the claims the amount is still “obligated” pay the dictated amount that the member insurer is to to already

the insured when a settlement been has reached. Rehearing) MCCA

Opinion of the Court the of plan with this section or are not inconsistent give not the However, section does this operation.” insur- member simply carte blanche avoid The power it finds unreasonable. agreement er’s accomplishing 3104(8)(g) § under is limited granted importantly, association.” More “purposes with this be “inconsistent power of this cannot exercise The of plan Id. plan operation.” or the of section 3104(17) “con- § must be created operation pursuant section, objectives provisions and with the sistent economical, fair, non- for the and shall provide which and of the association discriminatory administration indemnity.” provision prompt efficient 500.3104(17) added). (emphasis MCL the MCCA to fulfill 3104(8)(g) allows Section Accordingly, statute. we specific requirements 3104(8) the lim- § as the MCCA (g) granting interpret prompt its efficient purpose ited to further power sec- interpret of its members. To indemnification power further such as granting any power, tion as of the reasonable- decline on the basis indemnification amount, indemnification would be inconsis- ness of Legislature’s intent. tent with the THE

IV RESPONSE TO DISSENT a decision in favor raises the concern that dissent in- substantially result plaintiffs this case will Certainly, insurance costs are a insurance costs. creased concern, belongs concern that they policy critical but are Nonetheless, Legislature. we observe that to the indeed, un- and, highly speculative appears concern engaged is evidence that insurers have founded. There no mentioning It in slack bears engage negotiations. or will that the settlements that there no indication here made. cases unreasonable when these were 484 Mich 1 Opinion of the Court The dissent bases its concern an on affidavit from defendant’s executive director in which she refers to an provided by estimate consultants to defendant. No basis given in the affidavit for the estimated increase in costs. And there is reason to wonder about this esti- mate, might at least inasmuch it as be based decision from anticipated this Court.

First, there is no evidence that defendant has rou- tinely occasionally challenged or even the reasonable- ness of insurers’ settlements with their insureds until very recently. It is difficult to understand it how will extravagant cost defendant give up practice sums to it recently only begun. Second, has it is unknown whether the actuarial assessment factored in the effect of defen- potential dant’s use of the cost-containment procedure actually provided by the Legislature in MCL 500.3104(7) (g). mentioned,

As Legislature provided has that “[i]f procedures the claims or practices of a member are inadequate considered properly service the liabilities association, the association may undertake ... adjust or adjustment assist of claims for the member on claims that create a potential liability to the . association . . .” MCL 500.3104(7)(g). There nois evi- dence that the actuarial assessment considered the effect of implementation defendant’s legisla- of this tively provided cost-savings mechanism.

The dissent additionally recognize fails to there is a compelling policy reject reason to defen- may dant’s claim that it review settlements for rea- sonableness: to limit namely, litigation promote settlements. This has long recognized goal of “[t]he the no-fault system insurance was to provide of motor victims vehicle assured, accidents adequate, and prompt reparation for certain eco- (On Rehearing) v MCCA Opinion the Court Services, Ins v Transamerica losses.” Nelson nomic (citation (1992) 508, 514; 495 NW2d 370 omitted). Additionally, quotation marks designed “[t]he to mini- act is has that stated disputes delays and factual mize administrative goal of of the achievement would interfere with damages compensation in expeditious suffered Farm Mut Miller v State motor vehicle accidents.” 538, 568; 302 NW2d Co, Mich Auto Ins ability settle claims of insurers to meeting goals. Yet, if can defendant to these essential long after reasonableness settlements of reexamine they very reluctant to made, insurers will be are then layer litigation Further, a new make settlements. assessments, such reasonableness after-the-fact There is no evidence one, be inevitable. as this would the dissent the assessment on which actuarial increase has for the substantial relies litigation accounted result if this Court allows costs that would question extrastatutory power to defendant they are made. after settlements for reasonableness policy again, addressed But, are concerns best these Legislature Legislature. appears has that the It provisions balanced these concerns indeed 500.3104, no for this Court and there is reason MCL apply to the statutes achieve a strained construction contrary purposes goal the no-fault act. to the milquetoast unlikely event that insurers become statutorily provided pro- negotiators, defendant has remedy the situation. tection

v CONCLUSION obligation forth set hold the indemnification We 3104(2) incorporate § the reasonableness does not § requires claimants and between standard that granted powers Furthermore, the insurers. member 484 Mich 1 Dissenting Opinion by Young, J. 3104(7) § adjusting are limited to “practices procedures” of the member insurers encompass adjustment payment do not to the amount agreed to claimants and between member insurers. Finally, power granted we hold that the to the MCCA § 3104(8)(g) furthering purposes under is limited to determining MCCA, and that reasonableness is purposes. not one of its

Accordingly, Appeals holding we affirm the Court of that the MCCAmust its reimburse member insurers percent exceeding statutory of the ultimate loss threshold for claims without reduction based on its unilateral assessment the reasonableness of the amount.

Affirmed.

Kelly, C.J., JJ., Cavanagh Hathaway, and and con- J. Weaver, curred with (dissenting).

YOUNG, J. I respectfully dissent. 29, On 2008, December this Court decided these Today,just majority2 cases.1 a later, few months a new reverses that decision and it does so without even affording parties opportunity argue an to brief and why Although this reversal is warranted. not relevant my analysis cases,3 substantive issue in these majority’s impose the costs that the decision will on Michigan assessing majority’s drivers is relevant to approach policy-based hurried reversal of this 1 Fidelity Guaranty Michigan Catastrophic United States & Ins Co Ass’n, I). (2008) (hereinafter 414; Claims USF&G 759 NW2d 154 majority I philosophically aligned note that the in this case the new majority: Justices Hathaway Cavanagh, and Chief Justice Weaver, Kelly. I, supra See at 432 n 32. USF&G v Rehearing) Dissenting Opinion Young, J. later, As discuss I will Court’s decision. prior every Michigan resi- will cause majority’s decision pay and insures an automobile dent owns who for man- surcharge premium annual higher percent majori- cost coverage. The datory catastrophic insured automobiles will to those with ty’s decision coming more for the million be estimated $693.8 year alone.4

I. WHAT CHANGED? changed. The text of the statute facts have not The have changed. parties’ arguments at has not issue opin- advanced in the not And the rationale changed. Yet, a matter changed. ions of this Court has not within Court, months, thoughtfully of this decision seven is no briefed, justices, and considered argued, it Even the longer was written on. paper worth observer, however, really not need ask casual does 2009, 1, January why. The reason is obvious: On changed. composition BEING REHEARD? II. WHY IS THIS CASE 1, on October 2008. On Novem- argued This case was then-Chief Justice 4,2008, Justice HATHAWAY defeated ber This for his seat on this Court. case the election TAYLOR 2008, Chief with former was decided December majority. his with the casting Justice TAYLOR vote Michigan Catastrophic rehearing, response to the motions (MCCA) has conducted an actuarial assessment Claims Association premiums expected in auto insurance reversal detail the increase catastrophic produce percent in original more our decision will —19 precise. Freeland in premiums to See the affidavit Gloria claims be supplement appellee’s motion for support appellant’s to its answer appendix. rehearing, as an attached hereto

28 484 Mich 1 Dissenting Opinion by Young, J. The majority’s opinion today new offers no new or argument. fact, rationale it is merely extended of Justice quotation WEAVER’S former dissent. For this century over Court has adhered principle rehearing a motion for be should denied party unless a has raised an issue fact or law that was not previously may considered but which affect the Indeed, outcome.5 this Court codified principle 6 our court rules.5 As Justice Weaver’s former dissent in these cases and the majority’s opinion new obvious, make parties have not raised a new issue of or fact law to rehearing. merit The only difference is in the member ship of early 1883, this Court. As as this Court had the wisdom to realize that such a change is not a proper ground rehearing. In Peoples Ass’n,7 v Evening News opinion Court’s on a motion for rehearing stated entirety: its 5 Nichols, Marsh, Shepard 439, 440; See & Co v Mich 62 29 NW 37

(1886); (1879). Thompson Jarvis, 40 Mich 2.119(F)(3), provides: See MCR which Generally, restricting court, and without the discretion of the rehearing presents merely motion for or reconsideration which by court, expressly by same issues ruled on either reason- granted. implication, able moving party not be will The must palpable parties

demonstrate a error which the court and the have disposition been misled and show that a different motion must result from correction of the error. 2.119(F)(3) majority The ‘palpable new states that MCR “creates a rehearing error’ standard for cases.”Ante at 12 n 12. actual standard palpable created is: “a parties error which the court have been parties majority suggest misled . ...” Neither the nor the new that this previously majority Court was simply misled. Plaintiffs and the new disagree prior opinion previously with this Court’s for the reasons stated analysis flawed Justice Weaver’s dissent. 11; NW (ON 29 V REHEARING) Opinion by Dissenting Young, J. three having been heard and decided when This case having only sitting, change in the and a judges were change being to occur on place [about] and a further taken rehearing made for a January, the a motion is now first it January the full Court as will at next term before the then constituted. be rehearing

Held, unanimously, will not be ordered that change ground merely that a of members on the occur.[8] place either or is about bench has taken change the because By ordering rehearing simply has overruled majority taken the new place, Court has 9 Will principle Peoples.8 and clear longstanding reopen justify now any assigned judge in an change ruling? ing of a predecessor’s feels unencum- majority It apparent that new endured one that has by principles such bered —even And, its members no perhaps, than 100 years. for more by concerns and a need to be cosseted longer feel for the decade they past to have professed beliefs minority they philosophical when were members Indeed, once ex- Chief Justice KELLY of this Court. Court being that a decision of the claimed recent time out- hardly “has had to become reconsidered similarly protested Justice CAVANAGH moded.”10 “ Court believes that reconsidera- majority [i]f a I granted, proper tion be then believe should arguments and hear course would be to receive briefs 8 Id. 21. at 9 Peoples has this Court been The restraint demonstrated denying rehearing duplicated by when the sole basis is a other courts change composition Valley v Golden Co Green in the of the court. See (1938); Estate, 171, 190; gard’s v ND 284 423 Gas Products Co 69 NW 372; Wyo 227, Rankin, (1922); Steinhoff, v 25 Mont 207 P 993 Wolbol (1870); (1918); Dorman, 258; Woodbury v 15 Minn 341 Stearns 170 P 381 1888). (NY Hemmens, Pl, v 3 NYS Comm (1999) J., Hoffius, McCready dissent (KELLY, ing). I 484 MICH Dissenting Opinion Young, J. argument

the defendant’s constitutional before re- manding case to the trial court.”11 facts, nothing

Because arguments, legal rationale I changed, support has continue Court’s do feel original decision and not the need to it in entirety restate its here.

III. FACTSAND PROCEDURALHISTORY The facts and procedural history of these consoli- uncontested, dated are appeals simple, and have been set out this Court detail three times.

The question central here is whether an insurance company that strikes a bad bargain with its insured may fob off on the Michigan Claims Catastrophic Asso- (MCCA), ciation a nonprofit entity created Leg- islature to spread the costs associated with catastrophic injuries, automobile these “unreasonable” expenses. our decision, earlier held we that the MCCA had explicit added). J., dissenting) (emphasis at Id. 1236-1237 Unlike (Cavanagh, case, McCready authority the defendants in cited new for their position. Nevertheless, Chief Justice Cavanagh and Justice Kelly were by considering authority adamant this Court erred the new rehearing. It is indeed at least curious Chief Justice Kelly Cavanagh opposed McCready, Justice the remand order in which was premised freely joined authority, on new but this Court’s order for rehearing briefing argument,” “without further or oral United States Fidelity Guaranty Michigan Catastrophic ’n, Ins & vCo Claims Ass 483 (2009), Mich opinion any and the reversal this Court’s without new being issues raised. Moreover, who, I during Supreme find it odd that Justice her Hathaway, campaign, actively promoted the fabrication that former Chief Justice slept through argument Detroit, the oral Taylor McDowell (2007), appropriate it finds her cast vote to overturn this Court’s attending argument decision without much allowing so as on this case or party opposing day the motion to have its in court. See 4:28 to minutes 4:40 (ac- <http://www.youtube.com/watch?v=_7woWJDklQg> at video 2009). cessed June Rehearing) USF&G v Opinion by Dissenting Young, J. authority assuming responsibility resist statutory company’s payouts. unreasonable insurance an Guaranty Fidelity & Com- Plaintiff United States (USF&G) judgment into a consent with entered pany in USF&G insured, Daniel resulted Migdal, its which care services.12 an for attendant hour paying $54.84 Company of Midwest Plaintiff Hartford Insurance (Hartford) its agreement a settlement with entered into insured, Allen, that Hartford required Robert which services. The MCCA hour for attendant care pay $30 beyond Hartford USF&G and indemnify refused to respectively, rejecting higher $22.05 rate of $20 “unreasonable.” amounts as brought seeking declaratory

Plaintiffs these actions required that the MCCA to reimburse judgments was they paid full care services that rate attendant conflicting The circuit courts entered their insureds. appealed. judgments aggrieved parties and the may company an insurance refuse The debate here not whether injured Indeed, plaintiff fully compensate catastrophically insured. required fully compensate companies their insureds insurance were company question can under I. The is whether an insurance USF&G escape having agree overcompensate this the to its insured and burden very Michigan policyholders pay bargain. This issue rest of for that bad I itself. is well illustrated the facts of USF&G insured, Migdal, pays Daniel to cover costs that USF&G its rate injuries catastrophic his is so inflated that father associated with his (Daniel’s company, Management, “caregiver”) make started a Medical to hourly payments profit arrangement. $54.84 from the From the (who makes, actually Management pays the nurses USF&G Medical care) benefits!) (including average and provide $32 of an hour Daniel’s an hourly payment for itself. So retains the remainder of USF&G that, paying payment all of Daniel’s inflated after for was USF&G arrangement care, Management approximately Medical earned from this $200,000 majority’s opinion, it profits new will he for 2003. Under profits USF&G, pay Michigan policyholders, of not who will for Daniel’s father. 484 Mich 1 Dissenting Opinion by Young, J. Appeals

Court appeals consolidated the and held that statutorily “the MCCA required to reimburse an insurer for 100 percent amount that insurer paid in PIP [personal protection insurance] benefits statutory insured excess of the threshold listed in 500.3104(2), MCL regardless of the reasonableness payments.”13 these The MCCA sought appeal leave Court, which was granted, and this held Court “when a member insurer’s policy only provides cover- age for charges,’ ‘reasonable the MCCA has authority indemnify refuse to charges.”14 unreasonable Because the composition of this changed 1, January sought USF&G Hartford rehear- ing15and the majority granted new this motion “with- out briefing further or oral argument.”16

TV. DISCUSSION noted, As previously at issue is whether the MCCA has authority to indemnify refuse member insur- ers for payments they unreasonable make to their policyholders. agree I many with points majori- ty’s opinion, but my new points disagreement are significant and the results of our differences be will extremely costly to the Michigan. citizens of Fidelity Guaranty Michigan United States Catastrophic Ins & Co Ass’n, (2007). Claims App 184, 192; 731 NW2d 481 I, supra USF&G at 417. reply February 19, 2009, argued its brief filed that “this practice granting rehearing requests Court’s nothing based on more majority than a of a original opinion view of the Justices that the Court’s be, given is incorrect... is as it should this Court’s status as a court of ignores Peoples betrays last resort.” This plaintiffs’ statement both seeking rehearing. motivation Fidelity Guaranty States Michigan Catastrophic United Ins & vCo Ass’n, Claims 483 Mich 918 V USF&G REHEARING) 33 by Dissenting Opinion Young, J. benefits” insurance agree “personal protection I that protection as insurance “personal not the same are ‘coverage’ further that “the term coverages.”171 agree ”18 agree I particularly term than ‘benefits.’ a broader cited “coverages” by the definitions for with each of “ af- ‘[C]overage’ protection refers to majority.19 new or of risks policy by insurance the sum forded an however, disagree, insurance by policy”201 assumed an majority’s interpret “coverages” refusal with new that reference the definitions it cites —a consistent with underlying policy. insurance indemnification holding: The states its “the majority 500.3104(2) not MCL does incor- obligation set forth standard that MCL 500.3107 the reasonableness porate claimants and member insurers.”21 between requires holding Court’s unresponsive That is true but 17 and Ante at asserts “the terms ‘benefits’ 14. Justice Weaver ‘coverages’ proximity close in the statute... .” are related because of their construction, statutoiy and 15. unfamiliar with this tenet Ante at I am Indeed, separated by authority no it. two Weaver offers for whether Justice hundred, meaning I of “benefits” believe words two related, “coverages” but are distinct. 18Ante at 15. 19 Co, Mich quoting v Farm Mut Auto Ins 410 Ante at LeBlanc State “ 173, 204; (1981), proposition ‘Moverage’, a 301 775 NW2d protection meaning industry, precise refers to the insurance word by by policy, sum risks assumed insurance or the afforded following majority policy new also consistent cites the insurance.” “[ejxtent (1) by policy protection afforded an insurance definitions: (2) liabilities”; “protection the] funds reserved to meet [or amount of (3) specified policy”; against “the risks risks in an insurance risk or (4) “amount, policy”; scope and extent within the of an insurance 16, quoting College II New insurer.” Ante at Webster’s of risk covered Dictionary (2001); (1995); Dictionary College Random Webster’s House (5th ed). (7th ed); Dictionary Dictionary See Law and Black’s Black’s Law I, supra at 431 n 31. USF&G added), I, (emphasis quoting supra at 431 Jarrad n 31 207, 217; Co, Integon Nat’l Ins NW2d 6; ante Ante at also at 25. see 484 Mich 1 Dissenting Opinion Young, J.

USF&G I. This Court did not previously incorporate § the 3107 standard for personal protection insurance (PIP) 3104(2). Rather, § Court, benefits into con- by sistent with the definitions advanced majority, the interpreted “coverages” as the “protection by afforded an insurance policy” explained that “the member ultimately insurer’s will the policy control standard for the MCCA’s review policy because the the establishes ”22 protection coverages.’ ‘personal insurance the

Referring judgment consent and settlement issue, at agreement majority the new contends that “[tjhis liability, contractual or coverage, by owed each insurer is the total agreed amount to between the original contracting parties.”23 fallacy The in this asser- is tion that the consent judgment or settlement agree- “coverage.” ment amply As by demonstrated the cites, definitions the majority “coverage” refers to the underlying policy purchased by the insured. That policy only is the relevant contract. The judg- consent ment and agreement settlement separate are contrac- tual, judicially sanctioned, albeit agreements. They are distinctly personal not “the protection no-fault insur- I, 430-431; supra (“Thus, USF&G at at id. 431 n 31 the terms of the review.”). policy control the standard for the MCCA’s This fundamental distinction was underscored Justice his concurrence: Markman The requirement dissent is correct the reasonableness of integrated MCL is not 500.3107 into the indemnification clause set 3104(2). I, supra] J., § [USF&G forth at 457 dissent- [(Weaver, However, ing)]. majority opinion attempt incorpo- does not requirement statutory power rate this into the MCCA’s to review compliance a member insurer’s claim to it ensure is in with policy. Rather, holds it the MCCA can review a member’s compliance policy, which, represented by for claim with the as both parties, generally requirement includes that member insurers only I, § reimburse reasonable claims based 3107. [USF&G

supra J., concurring).] at 434 n 1 (Markman, added). (emphasis Ante at 16 V MCCA REHEARING) Dissenting Opinion Young, J. act, subject generally that are coverages anee to provide in this state i.e., were written those which 3101(1) § security requirements compulsory of a motor registrant the ‘owner or no-fault act for .. .”24 in this state’. registered to be required vehicle rationale principled offers no majority Because the it cites or this the definitions that from departing protection “personal prior interpretation Court’s I dissent. coverages,” respectfully must insurance erroneous assertions. makes additional majority will that member insurers First, majority asserts reasonable settlements an incentive to make have not, because, they if do claims catastrophic appears un- majority increase.25 The will premiums MCCA, incentives, or the work. of how aware liabilities to cover the charges that the MCCA premium among distributed statutorily evenly assume is it must to those who passed and then the member insurers26 24 Question (Preferred Michigan Risk Mut Ins Co In re Certified Ass’n), 710, 723; Catastrophic Mich 449 NW2d 660 Claims 433 (Markman, J., I, concurring) (explain supra at 437-439 See also USF&G part judgment agreement ing are not that the consent and settlement “coverages” “[a] member insurer that the member insurer’s because claims, only pay then that it will ‘reasonable’ but informs the MCCA policy subsequently the accident occurs to include modifies the after claims, essentially sought reimbursement for claims for unreasonable has paid premiums”). which it has not n Ante at 17 19. 500.3104(7)(d), pertinent part: provides which See MCL charged equal an amount to that Each member shall be providing years car of insurance member’s total written 500.3101(1)] 500.3103(1)], security required by [MCL or [MCL or

both, during period premium which the written in this state average by average premium per applies, multiplied car. The by per premium premium be the total calculated divided car shall security years providing the the total written car required of insurance 3101(1) 3103(1) all in this state of section written premium applies. during period members to which the 484 Mich 1 Dissenting Opinion by Young, J. buy Indeed, no-fault insurance.27 this Court has been informed that response to order rehear- granting case, ing the MCCA raised its rates 19 percent (or per policy million more for MCCA $693.8 assess- ments in the aggregate year) for this to create the necessary reserves to pay expansive the more claims for charges unreasonable that the majority’s new opinion permits. Contrary to the new majority’s belief that an insurer will have an economic incentive bargain payments insureds, “reasonable” to its the majority opinion perverse will have the effect of eliminating an insurer’s incentive negotiate reasonable settlements. Indeed, instead of providing protective insurers a shield against claims, unreasonable catastrophic the majority opinion provides plaintiffs’ no-fault attorneys a lethal against sword an insurer that insists on a reasonable 500.3148(1) settlement. MCL provides that a claimant’s attorney fee charged to the insurer “if the court finds that the insurer unreasonably refused to pay claim or unreasonably delayed in making proper payment.” Under majority’s decision, an insurer has no reason claim; to refuse any thus, a claimant’s attorney can use the threat attorney fees to force an insurer into an unreasonable settlement.28 Under the majority’s deci- sion, insurers will be encouraged to negotiate wrereason- I, supra Question, 32; See supra In re at 432 n at Certified (explaining premiums that the “inevitably” “passed are on” to Michigan’s 500.3104(22) (which customers); no-fault insurance MCL provides “[p]remiums charged members the association shall be recognized rate-making procedures in the for insurance rates in the same expenses premium manner recognized”). taxes are provided hypothetical The MCCA a useful conversation between a plaintiffs attorney future no-fault and an insurer: [Attorney]: high care, I know that amount is a bit for attendant

but get that is what we attorney want. We’ll sue to it and we’ll seek 500.3148(1)] penalties you [MCL fees and too. Do want that? (On Rehearing) USF&G v MCCA Opinion by Dissenting Young, J. As off onto the MCCA. pass these able settlements the MCCA must assume is stated, liability that any in who must anyone Michigan on to eventually passed buy auto insurance. why legislative majority explain can

Perhaps Michigan’s no-fault containing method for costs to their purpose is an inferior insurance customers particular, why is it preferred policy objective. at a time when the Governor has purpose inferior insurance rate freeze29 and unem- requested an auto percent?30 has exceeded 14 ployment Michigan should be My point premised is not that our decision Indeed, I keeping no-fault insurance affordable. “ decisions are left ‘[p]olicy properly maintain that such Legisla- elected people’s representatives for the ”31 Legislature policy ture’ and that has made the Rather, I decision in this case. raise this issue because majority engage matter. The has seen fit to elections on erroneous as- policy-making relying its own while that will result sumptions. This is a lethal combination harmful, may While it be consequences. unintended not, Insurer: Of course but that amount is unreasonable. [Attorney]: [The] it? What does reasonable have to do with pay you regardless. youDo to incur three times MCCA has to want attorney that amount in fees instead?

Insurer: Of course not.

29 See Executive Directive No. 2009-1. 14.1%, ’83, Michigan’s jobless highest Aguilar, See Louis rate since Lockwood, News, 18, 2009; jobless rate Detroit June Heather State ’83, Journal, 18, 2009, highest July Lansing State June 14.1% —since <http://www.lansingstatejournal.com/atricle/20090618/ available at 2009). (accessed 28, June NEWS01/906180327> I, ’n, supra quoting at 432 n Devillers vAuto Club Ins Ass 562, 589; 702 NW2d 539

38 484 Mich 1 Opinion by Dissenting Young, J. politically expedient position “looking to oneself as out guy,”32 for the little this case is an excellent example acting impulse how on such an altruistic rather than results in a for applying negative consequence law context, majority vast of our citizens. this each of purchase mandatory us who must no-fault coverage guy.”33 is a “little

Second, the majority emphasizes that the MCCA may a only adjust “practices member insurer’s (and procedures.”34 majority immediately The then inconsistently accurately) but concedes that MCL 500.3104(7)(g) permits “adjust the MCCA to or assist in “[wjhen the adjustment of claims” and the MCCA power adjust asserts its or assist in the adjustment of claim, the MCCA effectively steps into the shoes of the 32 See, e.g., attacks, Berg, Hathaway sketchy Todd C. but on incumbent’s (“The record, Michigan Lawyers Weekly, 2008, p October center piece Hathaway’s campaign against Taylor has been her claim that he against ‘big compa rules middle-class families and in favor of insurance corporate special ”); Berg, Hathaway’s nies and interests.’ Todd C. closure, campaign pledge may support Michigan Lawyers MSC office (“Justice-elect Weekly, 15, 2008, p Hathaway December Diane M. ran Michigan Supreme platform up for the Court on the that she stand would oppose perks for middle-class families and the lavish and benefits that themselves.”). Supreme justices bestowing were exception, course, lawyer living doing is the who makes a practitioners, majority’s opinion no-fault insurance work. For such opportunity. opinion. creates new submarket of See note 28 of this 500.3104(7)(g), provides Ante at 21-22. See MCL which MCCA shall [ejstablish procedures reviewing procedures prac- for claims procedures

tices of members of the association. If the claims practices inadequate properly of a member are considered association, may service the liabilities of the the association may person, including undertake or contract with another another member, adjust adjustment or assist in the of claims potential liability member on claims create a to the associa- may charge adjustment tion and the cost of the to the member. Rehearing) USF&G v MCCA Dissenting Opinion Young, J. previously agreed I insurer.”35 with these member struggle comprehend propositions.36Thus, I for what majority simple proposition purpose resists the statutorily adjust the MCCA authorized to claims. may “[p]laintiffs argue[d] Third, that if the MCCA reject member insurer claims on the basis charges, reasonableness of the member insurers will reim- to seek assurances that the MCCA will need making payments them, certain before thus burse delayed payment delaying payment.”37 prospect The primary to be a concern that drives the new seems majority’s analysis. support construction, In it of its contends: argument, accept

If this were to the MCCA’s consequence logical would be that member insurers would be reluctant to settle with the claimant. Member insurers jury every catastrophically might then force a trial with injured claimant in order to secure a verdict with a result.[38] stamp “reasonable” on the majority employs policy-based The rationale to depart “coverages” from its own definitions of be- goes against “[t]his cause otherwise outcome legislative purpose ensuring quick efficient and recovery system.”39 for claimants the no-fault The majority explain, however, fails to how its alternative actually fact, construction resolves the it issue. does not. majority authority concedes that the MCCAhas “requir[e] proposed agree- submission of settlement

35Ante at 22 n 24. I, supra at 430 n 30. 37Id. at n 32. 38Ante at 19.

39Ante at 19. 484 Mich 1 Dissenting Opinion by Young, J.

ments for approval. very .. .”40This is the outcome that plaintiff insurance companies sought here to avoid. Indeed, I “requiring believe that proposed submission of agreements” settlement or “seeking assurances that the MCCAwill reimburse certain payments” would have been I, a natural consequence of USF&G because it actually gave meaning to the plain language of this statute. The MCCA is likely majority’s (indeed, to act on the advice it should) and mandate that member insurers afford it the opportunity object proposed settlements or other agreements they binding. Ironically, become it ap- before pears that even the majority deny does not that the MCCA has this statutory power.

Thus, delay the issue of not resolved the majority’s opinion. Moreover, majority’s opinion does not address circumstances, present cases, like the where the MCCA was not afforded an opportunity reject agreements, likely which explains the bill $693.8 million that will be passed onto and shared by every Michigan automobile owner because of the increased and uncontrolled liability that the majority’s new opinion will create for the MCCA.

We, as jurists, are ill-prepared to make complicated policy-based judgments unrelated to policy the choices the Legislature has enacted. We do the least damage when merely we the Legislature’s follow lead by giving the words of statute a plain reading and enforc- majority acknowledges authority Ante at 22. The within the reading 500.3104(7)(g) conjunction context of 3104(7)(b), § MCL with provides which the MCCA shall [ejstablish procedures by promptly report which members shall that, the injuries association each claim on the basis of the or damages sustained, may reasonably anticipated be to involve the ultimately legally association if the member is held liable for the injuries damages. Solely purpose claims, reporting or for the the legally member shall in all instances consider itself liable for the injuries damages. The member shall also advise the association of

subsequent developments likely materially the interest the affect [Emphasis added.] association claim. USF&G V MCCA (ON REHEARING) Opinion by Dissenting Young, J. unlike the Legislature, statute as written. “The ing institutionally equipped is to assess nu- judiciary, with a particular policy merous trade-offs associated choices, has made difficult Legislature choice.”41The meanings to particular particular it used words with our role convey prior opinion respected those choices. Our by and the role as jurists, Legislature’s policy-maker, as in a statutory language the relevant manner interpreting meaning of the words chosen plain consistent with the meaning to avoid the Legislature. an effort majority the new has Legislature, words chosen that is as engaged wandering, policy-based analysis It is an mistake for misguided. expensive flawed as it is every policyholder Michigan pay. which will aiming quell likely negative Undeterred and decision, majority to its the new response policy-based and, that my “appear[] highly speculative asserts concerns indeed, My unfounded.”42 concerns will cease to be “highly speculative” they “unfounded” when are Michigan reflected in the MCCA’s annual assessments. (I drivers will soon receive their no-fault insurance bills mine) updated higher have received with the year beginning July assessment for the fiscal 2009. At that point, Michigan drivers will be free to determine for themselves whether my concerns are sound and based in reality.

Accordingly, respectfully I dissent. J., J.

Corrigan, Young, concurred with 41Devillers, Indeed, supra majority’s response my at 589. new point. majority dissent underscores this The new asserts that “there is no routinely occasionally challenged evidence that defendant or even has reasonableness of insurers’ settlements” and “it unknown whether potential actuarial assessment factored in the effect of defendant’s use of Court, 500.3104(7)(g)].” Legislature, [MCL Ante at 24. The unlike this questions. has the means to obtain the answers to those 42Ante at 23. 484 Mich 1 Dissenting Opinion by Young, J.

APPENDIX Rehearing) V Dissenting Opinion Young, J. 484 Mich 1 Dissenting Opinion J. Markman, MARKMAN, J. I (dissenting). concur fully with the discussion in part IV of Justice Young’s dissenting opinion and therefore also dissent. V REHEARING) Separate Order 21, July 2009: Recusal Denied

Motion Company Fidelity Guaranty & United States Michigan Catastrophic No. Association, Claims v Company the Midwest Hartford Insurance v Catastrophic Michigan No. 133468. Association, Claims Court, for recusal motion

On order considered, and it is denied. 27, 2009, this issued J. On March

HATHAWAY, matter.1 rehearing Since granting an order Claims Associa time, Michigan Catastrophic defendant (MCCA) asking motion to recuse tion has filed a me objection is well described myself. The nature thereto.2 3***Ihave re parties’ responses briefs pleadings these in detail. viewed review Caperton I also opportunity have had Co, Inc, 2252; US 129 S Massey A T Coal Ct _; (2009), parties filed L Ed 2d 1208 and the briefs reviewing there this new decision. whether regarding in the refusal of Justice process due violation was a himself, Su Benjamin3 the United States disqualify Court held as follows: preme of actual bias— conclude that there is a serious risk We per- objective perceptions and reasonable based —when significant personal particular case had a son with a stake placing judge in on the disproportionate influence and Guaranty Michigan Catastrophic Fidelity Ins States & Co United Ass’n, 483 Mich 918 Claims documents, including all motion and related the briefs The curiae, may chttp: parties at and amici be viewed //courts.michigan.gov/supremecourt/Clerk/10-08/133466-133468/133466 133468-Index.htm>. Virginia Appeals Benjamin Supreme sits on West Justice support million financial to his $3 received in excess in had officer, chairman, campaign chief from the individual who was executive president the case him. of the defendant in before 484 Mich l Separate Order by raising directing judge’s

case funds or election cam- paign pending when the case was or imminent.... today extraordinary

Our decision addresses an situation requires Massey where Constitution recusal. and its predict consequences amici that various adverse will follow recognizing from a constitutional ranging violation here — unnecessary from a flood of recusal motions to interference judicial disagree. with elections. We The now us facts before any by are parties point extreme no measure. other judicial involving campaign instance pre- contributions that potential comparable sents a bias to the circumstances in added).] [Id., op slip (emphasis case. at 16-17 test, Given this I arguable find no process due in violation the cases nothing before me. There is alleged the MCCA that would cause any reasonable person to believe that there is a significant and dispro- portionate influence being upon any asserted me under objective analysis.

Despite the theories proffered MCCA, my husband has no connection to or financial interest this matter. He is not attorney for or employee any nor party, is he a litigant either of these cases. He no has relationship with either the attorneys litigants these that, cases. The MCCA asserts my because spouse has handled cases in the field law, no-fault insurance I must myself. recuse How- ever, this assertion suggests basis for recusal that is so attenuated from the facts of these cases it strains logic. reasoned say

This is not that parties impeded should be from such bringing However, motions. hypothetical not every theory proffered by litigant must accepted be as accurate or controlling. The issue be decided is one of due process. Any due alleged process claim must be evaluated V MCCA REHEARING) Separate Order require does not Due objective process an standard. the merely or because himself herself justice that a recuse attorney practicing child is justice’s spouse or case, as disputed just in law is the field of involved in all a recusal require justice’s process due would not merely justice’s cases because medical malpractice in all recusal require justice’s is a or spouse physician merely jus- systems because involving cases school a teacher. spouse tice’s is for conclusion, prejudice I no personal have bias Moreover, I neither in this matter. any party

or against real or family any of immediate has any my nor member The allegations in this case. arguable financial interest not a for recusal because made are basis due of and no appearance impropriety there is no there is no reason Accordingly, violation. process considered this motion myself.4 Having carefully recuse recusal, deny for I it.5 J. We concur with C.J., and KELLY, CAVANAGH,

statement of Justice HATHAWAY. Hathaway’s WEAVER, denial agree J. I with Justice is not violated process the recusal motion because due in this case. justices. Currently, governing On are rules the recusal there no 18, 2009, publish majority for comment

March of this Court voted to justices. govern proposals rules the recusal of that would various governing comprehensive as rules Mich 1205 Until such time justices Michigan adopted, are I follow this Court’s will recusal whereby justice sought practice decides current from whom recusal Michigan’s practice is as recusal the same the motion for recusal. current Court, Supreme is no indication in States and there that of United process. Caperton practice violates due acquiesce of Justices I do not statements Corrigan, While practice participate in I will not this Court’s Young, Markman, inappropriate and engaging responses are to comments others that unnecessary. devoting the state’s limited This should discontinue colloquy unproductive resources to i Separate Order

I opportunity history take this to provide some on the 2003,1 issue of disqualification this Court. Since have clear, written, raised the of the need for issue and fair for disqualification Michigan Supreme rules Court jus- (former tices,1 “majority but the of four” Chief Justice and Justices Taylor MARKMAN) CORRIGAN, YOUNG, refused to address the issue. When this Court looked at disqualification the issue of in 2006, the of “majority publish four” refused to proposed disqualification rules formulated of members this Court.

In March year, of this after former Chief Justice TAYLOR’s removal from this Court aas result of his overwhelming election, defeat in the 2008 the “remain- (Justices ing three” MARKMAN) CORRIGAN, YOUNG, against voted publishing proposed rules for disquali- fication. a Fortunately, majority voted March to publish, for public 1, comment August 2009, until 1 See, e.g., opinions by J., or JK, the statements in In re 468 WEAVER, 202, (2003); DaimlerChrysler Mich 219 Corp, Gilbert v 469 Mich 883 (2003); Advocacy Org ’n, Patients & Providers v Auto Club Ins Ass 472 for 91, (2005); Detroit, Mich 999, (2006); 96 v McDowell 474 Mich 1000 Stamplis (2006); Sys, v St Health John 474 Mich 1017 Heikkila v North Inc, Trucking, 1080, (2006); Star 474 Mich Hosp, 1081 Lewis v John St (2006); 474 Michigan, 1027, (2006); Mich 1089 v Adair 474 Mich 1044 Fieger, 231, (2006); Grievance Administrator v 476 Mich 328 Grievance Fieger, 1228, (2006); People Parsons, Administrator v 477 Mich 1231 v (2007); Parlor, Inc, (2007); 728 NW2d 62 Ruiz v Clara’s 477 Mich 1044 Dep’t Corrections, (2007); Neal v 477 Mich 1049 State Automobile Mut of Fieger, 1068, (2007); Gold, Ins Co v 477 Mich 1070 Ansari v 477 Mich 1076, (2007); Antonini, 218, (2007); 1077 Short v 729 219 NW2d Traveling Services, PC, 222, (2007); v Flemister Med 729 223 NW2d Detroit, 1079, (2007); McDowell 477 Henry Mich 1084 Johnson v Ford Hosp, 1098, (2007); Dearborn, 477 City Mich 1099 Tate v of (2007); Dep’t Jordan, 1102 Labor & Economic Growth v 480 (2007); Cooper Ass’n, Mich (2007); 869 v Auto Club Ins 739 NW2d 631 Protecting Michigan’s and Citizens Secretary State, Constitution v (2008). Mich 960 my website, personally www.justiceweaver.com.

Also see funded Rehearing) v MCCA Separate Order 3tobe of disqualification2 for rules three proposals later in Of 2009. public hearing at a considered March, I note this Court published by proposals protec the due sufficiently provides process Alternative C Supreme States out the United tions laid Co, Inc, Massey v A T Coal recent decision of Caperton 2252; L Ed S 2d 129 Ct US _; Court’s Supreme I United States note that also disqualification regard with Caperton3 discussion raises further justice for elections contributions campaign Currently, this process to due concerns. regard issues with providing justice’s disclosure Court has no rules cases, or the when parties contributions campaign members, significant contribute family immediate parties’ directly indirectly, justice’s money, amounts Court, the Hopefully Legislature, campaign.4 and/or rules that will ensure will create disclosure public rights. process of due protection CORRIGAN, the motion of I would not resolve recusal J. Michigan Claims Association Catastrophic defendant (MCCA) Rather, supplemen at time. I would order this Massey v A T briefing Caperton tal the of application of Co, 2252; Ed 2d S Ct 173 L Inc, Coal 556 129 US _; (2009) ad Caperton to these cases. (Caperton), 1208 party a when a disqualification judge the dressed case requires that interest a judge’s alleges federal the Due Process Clause recusal under 2 “majority proposals proposals that These three are same publish in four” refused to 2006. 3 Young Corrigan Taylor filed an and former Chief Justice Justices plaintiff opposition Caperton to the case amicus curiae brief ultimately appeal. Caperton’s successful contributions, fur involving campaign I Beyond process due issues ensuring process rules due ther Court does not have note by justices representation attor requiring as of their former disclosure Court, regardless neys parties appearing of how far before the representation may past have been. l Separate Order

constitution. To whether weigh required, recusal is a Caperton requires serious, assessment of whether objective risk of actual bias exists requires to judge recuse himself or herself. Because the MCCA Hathaway’s that Justice argues participation in these rights, cases violates its federal process Caperton due Indeed, relevant and could prove controlling. the MCCA has submitted Caperton to this Court as supplemental authority in support itsof motion. scope Caperton

The and how courts will implement it present significant questions, unanswered particularly our Caperton Court. held state supreme court justice disqualified was from hearing a case involving corporate party whose chairman and expended CEO had million support justice’s $3 campaign, although the individual expended this money independently and through donations an independent political group. Ct Caperton, 129 S at 2257. The Court concluded that the justice disqualified was although he professed that the funds were solicited and expended without knowledge, his direction, or control under very state election laws similar Co, our own. See Caperton Inc, A T Coal Massey (2008) (W Va 624, 703-705; W Va 679 SE2d 223 Caperton.) (Benjamin, C.J., acting concurring). Indeed, Michigan al independent lows political groups expend unlim ited money elections, during being often without required even to reveal their funding sources.* For example, during the 2008 election cycle, independent Michigan Act, Campaign seg., Finance et MCL 169.201 does regulate expenditures, not including certain those “for communica subject tion on a or support issue if the communication does not oppose question by a ballot or candidate name or clear inference.” 169.206(2)(b). Right Michigan, Miller, MCL See also Inc v 23 Life of (WD 766, Mich, Supp 1998), F quoting Buckley Valeo, 2d 767 424 US (1976) 1, (observing 44 n Michigan prohibited & 52 that is from (On REHEARING) 51 V Separate Order at the race for Justice aimed expenditures HATHAWAY’s million.* topped seat on this Court $3.75 current reasons, view, deciding in the MCCA’s my these For is days Caperton precipitous. motion recusal within hardly 8, 2009. We was released on June have Caperton much less its ramifica- digest opinion, time to had tions, opinion positively that particularly given attempt- explaining in the standards for courts Delphic now justices Four of this Court implement it. ing fact- or the benefit of vote, any explanation without par- HATHAWAY’s decision to support Justice finding, had Thus, although we have in these cases. ticipate not have the benefit study time to do Caperton little by advocacy” speech protected “express established regulating test only express Buckley, permits regulation ‘in of “communications that which ” candidate,’ clearly of a identified such advocate the election or defeat terms “ advocacy defeat, employing ‘express election or such as words as those for,” “elect,” your for,” Congress,” “support,” “cast ballot “Smith for “vote ’ “defeat,” “reject” ”); against,” Planned Parenthood “vote Affiliates (ED 1998) Mich, (noting Miller, Supp 740, Michigan, Inc v 2d 21 F advocacy”). prohibited Buckley regulating Michigan is under from “issue Therefore, major expenditures, including practice, many televi those for ads, reporting Michigan Campaign not are covered our laws. See sion Network, Finance, p Michigan Campaign Guide Finance 2008 Citizen’s (accessed <http://www.mcfn.org/pdfs/reports/MCFNCitGuide08.pdf> 2009) (hereinafter Guide”) (“[Ajdvertisements 18, June “MCFN Citizen’s qualifications define!] the character and of the candidates without exhorting against explicitly candidate” “not consid a vote for or either are money campaign paid expenditures to be and the sources of ered disclosed.”). major required Accordingly, although a ads are not to be candidate, may ultimately expenditure expenditure its benefit —and funding may control. he outside the candidate’s awareness and sources— Further, regulated “independent expenditures” parties, even third which candidate, reported they support if must be made without must be 169.209(2); MCL direction or control of the candidate. MCL 169.251. 14; Guide, p Michigan Campaign see Finance MCFN Citizen’s also Network, Anonymous Supreme campaign, Court No donors dominated (accessed 19, <htfp://www.mcfn.org/press.php?prId=77> vember 2009) (“More Michigan percent spending for the than 60 June Supreme campaign Chief Clifford between incumbent Justice any Hathaway Taylor Judge not be Diane Marie will disclosed paid campaign report it for candidate-focused ‘issue’ finance because advertising.”). 52 l Separate Order it, Court briefing proceeds essentially to hold that such a vote mandatory procedure is a for all recusal raising process motions due concerns.3

THE FOR MCCA’SMOTION RECUSAL The most relevant aspects of MCCA’s motion fol- low. After this Court issued March 2009 its decision to grant decision,5 reconsideration4 of December 2008 its occasioned newly elected Justice HATHAWAY’spartici- Caperton although concerning sparked This occurs has much debate its application. example, Michigan Lawyers Weeklyquoted For former Michi gan Supreme Taylor stating State Court Chief Justice as that Clifford “ Caperton justice challenged ‘has to mean that the make can’t the recusal ” constitutional, decision may Michigan alone.’ MSC recusal rule not be Lawyers Weekly, 2009, p asserted, Kelly June 23. Justice also in Chief 15, “ press release, Caperton ‘signals recent do need have we ” appropriate protections place’ Michigan Supreme in “will and assist the develops disqualification justices.” Michigan Court as it its own rules for Supreme Court, Information, Caperton ruling by Office of Public U.S. Supreme highlights importance justice, impartial says Court fair Michigan Supreme Marilyn Kelly, 9, Court Justice June Chief <http://courts.michigan.gov/supremecourt/Press/060909-CapertonDQ.pdf> (accessed 2009). Wayne County Prosecuting Attorney June 18, Assistant Timothy Baughman, hand, “[rjespectfully” “heartily” on the other but disagreed comments, asserting Taylor’s with former Chief Justice in a Lawyers Michigan WeeklyViewpoint comment: Caperton identity is a case about standards not about

of the decision-maker.... Nothing Caperton requires decision on a recusal justice body justices. motion be reviewed another For the Michigan Supreme practice [to continue] to follow the Supreme perfectly permissible, long system U.S. Court is so as a “objective standards, ['Caperton’ rules” exists. was about recusal maker, Michigan 22, Lawyers Weekly, not p 7.] decision June Guaranty Fidelity Michigan Catastrophic United States Ins & Co v (2009). Ass’n, Claims 483 Mich 918 Fidelity Guaranty Michigan Catastrophic United States &Ins Co v Ass’n, Claims 482 Mich 414 (On REHEAKING) USF&G V Separate Order her recusal. cases, MCCA moved for these pation that Justice argues the MCCA Specifically, HATHAWAY’s that could husband, has an interest Kingsley, Michael proceed- by the outcome of substantially affected be attor- no-fault practicing plaintiffs’ he is a ings because such, direct interest that is As he has a Michigan. ney obliga- unlimited in the MCCA’s more than de minimis protection personal to reimburse insurers tions have to insureds who been paid insurance benefits in The catastrophically injured automobile accidents.6 insurers for that it reimburses MCCA further asserts clients, having made such Kingsley’s made to payments 6 statutory obligation to reimburse insurers The has unlimited MCCA injury paid personal percent insureds losses due to of claims whose for $460,000. statutory cap caps; the current is MCL exceed certain (7)(a). 500.3104(2)(i) YOUNG, by post explained at and As is further Justice rehearing 62, prior opinion on the asserts that reversal of this Court’s MCCA paid by require all insurers to their MCCA to reimburse benefits will the insureds, catastrophically injured regard of without to the reasonableness underlying Accordingly, expenditures. states that the MCCA the insured’s claims will have little incentive to defend unreasonable its insurer members expenditure insureds; in by the issue their no matter how unreasonable —at cases, expenditures example, $54.84 an are an one of these insured’s claim, accepts its insured’s hour for attendant care services—if insurer obligated The the insurer in full. the MCCA will be reimburse reimbursement, guarantee coupled with the lure asserts: ‘With a of MCCA costs, strong saving a motive legal members will have to settle defense protection early no [personal insurance] claims and with little or resistance.” lawyers Kingsley represent directly like Mr. who It “This benefits concludes: cases, typically and receive plaintiffs in automobile insurance who no-fault illustrate, proceeds To the MCCA has their fees out of the of settlements.” attorney plaintiff’s provided hypothetical a future conversation between an insurer: [Attorney]: high for attendant “I that amount is a bit know

care, get sue to it and we’ll seek but that is what we want. We’ll 500.3148(1).] you penalties Do attorney [See too. MCL fees and want that?” not, is “Of but that amount unreasonable.” Insurer: course [Attorney]: [The] it? reasonable have do with “What does pay you regardless. you want to incur three times MCCA has to Do attorney in fees instead?” amount i Mich Separate Order recently a reimbursement as as April 2009.* obligation MCCA’s poten to reimburse insurers —and the resulting to plaintiffs’ attorneys tial benefits directly —is issue in Indeed, at these cases. that it MCCA asserts raised to pay has the amounts needed expected claims its reserves almost million of this anticipation $694 likely Court’s reversal on its rehearing prior deci sion, stemming from newly participation elected Justice HATHAWAY in the decision after rehear ing. The MCCA further states that is this increase primary cause of 19 percent increase its assess ments for catastrophic coverage year, this which affects all no-fault insurance policy holders’ rates. The MCCA claims if, on rehearing, prohibits this Court the MCCA from engaging in a inquiry, “reasonableness” see n of6 statement, attorneys expense will the rewards at reap Michigan drivers, whose insurance rates rise will support resulting systemic increased costs.8 “Of

Insurer: course not.” 2.003(B)(5) provides part MCR judge disqualified that a from hearing judge’s spouse if “the case has an ... economic interest subject controversy... any matter in or has other more than de minimis substantially interest be proceeding.” could affected MCR 2.003(B)(6)(c) provides judge disqualified “judge also that a is if the or the by judge’s spouse judge ... known the to have a more than de minimis substantially by that proceeding!.]” Similarly, interest could be affected the Supreme requires regard justice’s the United States Court recusal with to a “ spouse compensation if substantially ‘the amount of the relative’s could be outcome’____” by Michigan, 1027, 1031 affected the See v Adair (2006) (statement C.J., J.), quoting the United Taylor, Markman, Supreme Policy, 1, States Court’s Statement of Recusal November 1993. 8 negligence No-fault automobile cases remain a dominant factor in Michigan filings every year. 46,216 filings civil Of the new civil Michigan 2008, 8,477 circuit courts in more than all one-fifth of civil —or cases—were Report Michigan automobile related. See Annual 2008 of the Court, Supreme p <http://www.courts.michigan.gov/scao/resources/ 30 (accessed 2009). publications/statistics/2008/2008execsum.pdf> 18, June Further, many, most, court, because if not no-fault claims out settle the potentially number of ruling claims affected this Court’s is much higher than the number of cases filed. REHEARING) V Separate Order

THE CAPERTON DECISION “under- Court Supreme the United States Caperton, In and asserted that objective need for rules” score[d] the motions to be decided recusal requires Due Process Clause do of actual require proof not objective standards “by concluding In S Ct at 2263. Caperton, bias.” Virginia Appeals Court recently Supreme West elected hearing from Benjamin disqualified Brent was Justice campaign expen- case as result substantial underlying chairman, CEO, president ditures Co., Inc., the Massey A. T. Coal company, respondent objective in- requires an process held that “[d]ue “ the circumstances ‘would to establish whether quiry” average... to ... judge to the possible temptation offer a ” nice, clear and true.’ Id. him to hold the balance lead not Ohio, 273 US 510, Tumey quoting at purported thus considered the the Court Significantly, recusal, Caperton, the motion for see underlying facts concluded, its 2264,9and on the basis of assess- Ct at S serious, facts, that “there was... ment of those bias,” id. at 2265. objective risk of actual RAISED BY CAPERTON QUESTIONS I think light opinion, do not Caperton can resolve the MCCA’s recusal motion —which we first process due concerns —without squarely raises following questions: addressing (cid:127) practice— historical recusal Does this Court’s for his or permits justice each decide motions which here— and which Justice HATHAWAY follows her recusal for requirement Court’s comport Caperton with “[N]ei Justice HATHAWAY states: objective standards? my family any has any I nor member of immediate ther confusingly, purported facts under Somewhat the Court considered motion, procedure lying there “no but also conceded that was recusal judicial factfinding....” Caperton, 129 at 2264. S Ct [July- 484 Mich 1

Separate Order arguable real or financial interest this case. allegations made the MCCA are not a basis appearance recusal because there is no of impropriety and no due at process violation.” Ante 47. She adds: test, “Given I Caperton] [the find no due arguable process violation in the cases before me. There is nothing alleged by the MCCA that would any cause person significant reasonable to believe that is a there and disproportionate influence being upon asserted me any objective under analysis.” Ante at 46. But challenged justice in Caperton issued similar state himself, ments he which declined to recuse explain ing that had moving party provided no objective evidence of actual bias and expressing subjective his opinion that none his of motives were improper. Caper

ton, 129 S at Indeed, Ct 2262-2263. West Virginia’s recusal are rules strikingly similar to the practice followed this See Court. W VaCaperton, at 702. supra Like Justice HATHAWAY—albeit providing while exten sive factual detail concerning allegations against him and legal precedent subject on the of recusal— Benjamin Justice “I pecuniary asserted: have no inter est in the outcome of this matter. personal ... I have no involvement with nor any personal harbor antipathy any toward party or counsel herein.” Id. at 697. He conduct, added: act improper “[N]o or and no appear ance of an improper act or conduct with respect to case, case, any other my has occurred on part[.]” Id. at 701. “Simply put, have, I do not any nor was there evidence to show I ‘direct, that had a personal, substan tial, pecuniary interest’ in this case.” Id. at 702. Yet the United States Supreme Court concluded his subjective assertions that he lacked actual bias were insufficient for constitutional purposes. Caperton, 129 S Ct at 2263. Particularly in light the similari ties between Michigan’s and West Virginia’s recusal V REHEARING) Separate Order have in recusal decisions both states practices indeed, — justice of individual whose to discretion been left simply at 702—I Caperton, supra is W Va sought, recusal the historic study that without further cannot conclude today complies by Justice practice followed HATHAWAY can I conclude that Justice with Nor Caperton. HATHAWAY of to facts any similarity may conclusively disavow that offering opinion “[t]here her own Caperton by simply any cause by the MCCA that would nothing alleged is significant to that there is a person believe reasonable me under upon asserted being influence disproportionate Ante at 46. any objective analysis.” (cid:127) of justices four Caperton it sufficient under that Is voted to Justice support this Court have HATHAWAY’s to ad- Caperton expressly failed Although decision here? fact-finding, method for the Court reached proper dress a surrounding considering its facts by carefully decision Benjamin’s alleges election. Here the Justice her hus- HATHAWAY must recuse herself because Justice band has than a de minimis financial interest more very points of these cases. The MCCA subject matter Mr. Kingsley’s it made to one of payments just recent has the amounts alleges clients. It also it has raised its expected by needed to claims and reserves pay $693.8 on potential in this Court’s reversal anticipation million cases; it rehearing ruling earlier in these states its reverse, because, if we necessary the rate hike will be sub- as clients will receive Kingsley’s claimants such Mr. higher in attor- stantially payments result higher —which legal insurers have no will ney contingency fees—because demands resisting unreasonable settlement basis attorneys. decide possibly Can we plaintiffs’ made “ ‘the alleged probabil- facts establish that whether these is too on the ity part [Justice of actual bias HATHAWAY] ” engag- tolerable’ without first high constitutionally to be test the claim inquiry ing independent in some kind 484 Mich 1 Separate Order Hathaway’s summary and Justice denial of it?10 See 2257, Larkin, at Caperton, quoting 129 S Ct Withrow v 421 US

I light raise these concerns in part dissent filed Chief asks, Justice Roberts He Caperton. among constitutional, Michigan Lawyers Weekly, created needed to meet the hearing.... Weekly. As former “ ‘You Caperton Where can’t Chief else or how new without set Justice objective up giving parties Taylor else kind test?’ will suggested Michigan Lawyers of test they ” June MSC recusal rule be the U.S. 15, 2009, p able opportunity adduce the facts Supreme 23. may to have a not be Moreover, intimates, Caperton holding— as Justice the narrow Young that, circumstances, judge disqualified under some elected from hearing a campaign case the basis of his contributions to or her also—is directly implicated regularly implicated in case this and will continue to be given Michigan in cases before this Court the current state election law.As case, January 8, 2009, ceremony, it bears this at her investiture Justice organizations Hathaway supported attributed her election to various campaign. Ceremony her Investiture for the Honorable M. Hathaway, Diane cliii, particular acknowledgment clxviii Of note is her Michigan (MAJ); explicitly supported Association for Justice the MAJ has support the in defendants these cases and filed an amicus curiae brief in rehearing. Organizations supported the motion for Hathaway’s Justice including campaign, AFL-CIO, president, Gaffney, the whose Mark acted as proceeding, master of at ceremonies the investiture also are members of the No-Fault, Protecting Coalition Auto which filed an amicus curiae brief in opposing Further, Hathaway’s these cases Justice recusal. these cases companies parties. During campaign, involve insurance as her Justice regularly spoke Hathaway against companies suggested out insurance and “ ” big companies’ ‘sid[e] that she not would with insurance she if were Hathaway justice, to this Michigan elected Court. sworn in as MSC’s 104th 12, Lawyers Weekly,January 2009, p Upon justice 2. her investiture as a “ Court, years, told Michigan this she the Detroit News: ‘For at least 10 Supreme companies.... Court has been in favor [Now] of insurance I think ” justice Supreme Michigan we see a more will lot real out this Court.’ Supreme justice, News, 8, January to in swear newest Detroit 2009. objective Caperton inquiry, inescapable Under an it seems that such com “ analyzed must ments be to establish whether the circumstances ‘offer a possible temptation average... judge to the to ... lead him not to hold the ” nice, true,’ 2264, Caperton, quoting Tumey, balance clear and 129 S Ct at 532, objective supra suggest serious, bias,” at “a Caperton, or risk of actual 129 Ct at S 2265. Rehearing) v MCCA Separate Order not does although justice 40 questions, whether — litigant in the case—a actual financial interest have an himself or refusal to recuse may challenge justice’s 1983,11 under USC district court herself federal Caperton provides guidance significant no Finally, fact that I note the anonymous campaign expenditures, concerning to the effect of how evaluate Indeed, Michigan, in n 1 of this statement. common in as I discuss which are expenditures during season anonymous independent election Party garnered by from undisclosed the Democratic $1.4 included million Hathaway’s campaign impugning a TV ad Justice to underwrite donors courts, public Michigan Taylor. opponent, it’s the former Justice Chief time, Press, blindfolded, At it Free June 2009. this is Detroit that’s comply Caperton totally attempting to would take how a court with unclear Benjamin presaged in his W Va Justice such donations into account. As concurrence, Caperton subject having judicial every decide officer in state attorney party a case involves a or who contributed merits of or, conversely, campaign opposed his her for office. supported, or or support or so-called now those who contribute to This includes political campaigns Expenditure Groups engage Independent who completely independent of of office. candidates law,everyjudicial Appellees’argument officer If the became any every disqualified case in an from which this state would he judicial organization independent nonparty officer over which groups contributions from individuals or had no control received entity party person with a or an included a or affiliated which case, nonparty attorney independent organization when the against judicial wage campaign used its contributions likely Conversely, opponent. such a standard officer’selectoral would judge independent require a also to recuse himself or herself when operated against judge supported the expenditure group judicial judge’s opponent. system down under such Our would break supra disqualification. Caperton, [W Va at a standard for 703-704.] study process Clearly, further and a for without the benefit of properly objective fact-finding, ill-equipped this Court is to resolve the questions presented by Caperton. complex 11 majority’s disqualifi summary treatment this nature process may due claim in lead the MCCA test its cation motion indeed yet This is USC rather than in this Court. federal court under 42 1983 parties Caperton why brief due another reason we should allow process question.

[60] Separate Order ^[484] Mich ^[1] deprived which a permits person right by federal damages. state Caperton, official sue 129 S atCt (Roberts, C.J., 2271 dissenting). He also reasonably asks whether the parties discovery are “entitled to with “ respect to the judge’s and, recusal decision” a judge [i]f erroneously recuse, fails do we apply harmless-error review?” Id. at suggests, 2271-2272. As he the ramifi- cations are broad. This Court should Caperton seri- ously properly dispose consider how to of a “Caperton claim”12 alleging probability of a justice’s bias disqualifies justice under the Due Process Clause.

I thorough would thus invite supplemental briefing on these significant issues disposing before of MCCA’s recusal motion. majority Because the has chosen to pre- cipitously motion, I disqualification resolve dissent. J. 170-year-old Consistent with the Court’s YOUNG, I disqualification practice, do participate not determination whether Justice HATHAWAY should dis qualify join herself. I in Justice dissenting CORRIGAN’S 1 statement concerning the I Caperton* question. believe that this new United States Supreme opinion has radically the landscape judicial altered disqualifica tion and this change warrants that this Court at least argument by entertain the parties about how Caperton might affect pending disqualification motion.

However, given Justice HATHAWAY’s stated position on matters, I disqualification also write to raise ques- tions about the casual she way has chosen to decide this motion and her response may how bear extra- disqualification constitutional proposals un- currently der consideration this Court. Caperton, (Scalia, J., dissenting). See S Ct at 2274 Co, Caperton Massey Inc, A T Coal 2252; US _; S129 Ct

L Ed 2d 1208 REHEARING) 61 V MCCA Separate Order of more continual and subject been the Newissues have than last decade on this Court contentious debate should the dis- apply standard that appropriate who is now justices.2 Justice of qualification HATHAWAY, cases, motion these subject disqualification of as on this issue efforts to comment dismisses our and a waste of tax- “unnecessary,” “inappropriate,” however, are a traditional questions, dollars. Such payer inherent and discussion of the debate part Court holds is, why this example, It judicial process. briefs, responses and it welcomes arguments, why oral this briefs, responses By to briefs. replies and even and arrive at hopefully ourselves we educate process fails appre- HATHAWAY either decisions. Justice better simply seeks process of judicial ciate nature inadequacies about of questions hard to avoid the limited the dis- extraordinarily response her own evident be- particularly motion. This is qualification themes Justice HATHAWAY’s one the central cause her was asser- Supreme campaign late Michigan “appearance impropri- tion that she subscribed to an was, therefore, standard and ety” disqualification the previous philo- “more ethical” than the members of TAYLOR and Chief Justice majority sophical —former and Markman and I.3 Justices Corrigan 2 (2006) (state See, e.g., Michigan, 1027, v 474 Mich 1038-1039 Adair J.); Fieger, C.J., v ment of and Grievance Administrator Taylor, Markman, (2006) C.J., 231, (opinion 476 Mich 266-281 Corrigan, Taylor, America, JJ.); Boy 473 Mich 853 Scalise v Scouts Young, Markman, (2003) (statement J.); (2005); JK, re Mich Weaver, (2003), DaimlerChrysler Corp, 469 Mich 883 reconsideration Gilbert provided her own Justice Weaver has also denied Mich 889 endorsing history Justice personalized in her statement debate participation in these cases. continued Hathaway’s campaign: following part “Our Su was of Justice Hathaway’s recusing impartial. They being are not preme fair and ... Court is not going problem; judges are need who to be that is the we themselves and Separate Order l [July- OF THE

THE NATURE ALLEGATIONS AGAINST HATHAWAY JUSTICE Defendant Michigan Catastrophic Claims Associa (MCCA) tion has asserted that Justice HATHAWAY’s plaintiffs’ husband attorney is a no-fault who stands to practice in profit par his no-fault if Justice HATHAWAY ticipates in these to by cases overturn a decision made this just ago. months The of thrust this claim is a that reversal of earlier opinion our will remove the basis, and legal incentive, thus the for insurance com panies to resist unreasonable no-fault settlements de manded their by attorneys. claimants Conse because quently, companies insurance will be free to pass on these unreasonable settlements to the MCCA (which eventually will be paid by public, who insurance), buy must no-fault practitioners no-fault will increase their fee contingency yields by obtaining 4 higher settlements than warranted. A reversal will cost impartial rendering happening.” fair and their decisions and that is not (October 2008). Lansing 17, quipped Interview with State Journal She Taylor “walking former Chief a Justice was conflict interest” of because his office, <http://www.youtube.com/ wife had worked in the Governor’s (accessed 2009). 16, watch?v=_7woWJDklQg> alleged June It was never Taylor’s financially that former Chief Justice wife stood to benefit from her Court, suggests husband’s role this as defendant here that Justice Adair, supra Hathaway’s Finally, husband will. See at n 1. 1028 Justice Hathaway pledged her, have, people to the who elected “I and I will continue appearance disqualify myself there whenever is the impropriety,” to of League Michigan of Women Voters Voter Guide (accessed <http://www.lwvmi.org/documents/LWV08SupremeCourt.pdf> 2009) 16, (emphasis added), and, myself recusing June “I have a habit of if appearance I impropriety,” think that there is even an Interview with (October 2008). Lansing 17, State Journal nonprofit a Legislature MCCA is association created ensure that there are sufficient resources to fund benefits under our catastrophically injured. no-fault law for the See MCL 500.3104. Under decision, prior authority reject our the MCCA has unreasonable claims policy only provides coverage when member insurer’s for “reasonable Fidelity charges.” Guaranty Michigan United States Ins & vCo Cata strophic Ass’n, 414, Claims The MCCA contends Rehearing) v MCCA Separate Order aggregate Michigan purchasers insurance no-fault accounting, year alone, more million of $693.8 percent large part, for more increase than every premium catastrophic no-fault automobile claims policy bear, which this state will issued in insurance already of directors has the MCCA’sboard increase approved anticipation critical Justice HATHAWAY’s prior decision. See the Court’s vote to reverse in Docket No. filed the MCCA affidavit n 2 of to in the documents referred is one of which Justice statement. Hathaway’s why, bothering explain

Despite this, without simply she be denies that should Justice HATHAWAY appearance disqualified, adding there no impropriety participation. HATHAWAY does in her Justice deign deny her is a no-fault husband not even plaintiffs’ practice

practitioner his will or to assert that participation in a her decision to not benefit from prior decision. overturn this Court’s up to her own refusal live to Justice HATHAWAY’s worthy expressed of in of is note its standard conduct right: people deserve to know The of this state own running promise thing one when whether candidates far elected. But the but deliver another when office important is horror that wouldbe visited more issue the “appear- preferred on this Court if Justice HATHAWAY’s disqualification impropriety” were standard ance of actually adopted. OF IMPROPRIETY”?

HOW MAY A REBUT AN “APPEARANCE JUSTICE provided information in HATHAWAY has Justice no family’s allegations response her fi- of to defendant’s will a dramatic increase its that reversal of the Court’s decision cause along pass exposure to the of it will the cost insurance purchasers of no-fault insurance. l Mich Separate Order nancial interest in a of prior reversal the Court’s decision; surely conclusory her terse and statement not they what envisioned people when elected a vowing candidate to adhere a “higher” “appearance of impropriety” disqualification standard. not Ought such a standard that the require target disquali- of provide motion statements5 or an fication financial evidentiary hearing be conducted determine the merit the allegations disqualification?6 of

WHATSUFFICESTO ESTABLISHAN “APPEARANCEOF IMPROPRIETY”? According allegations Justice of a HATHAWAY, spouse’s “economic subject interest matter controversy” “more than de minimis interest substantially could be proceeding”— affected 2.003(B)(5) grounds requiring recusal under MCR (6)(c) so irrelevant as to not even merit a discus —are sion her statement. these allegations increased If During campaign, affirmatively her supported Justice Hathaway other financial “I disclosures: believe that there should be disclosure campaign all spending.” Michigan Campaign election Finance Network, Questionnaire Michigan Supreme for 2008 Court Candi dates, p 1 <http://www.mcfn.org/pdfs/reports/SCquestionnaire.pdf> (accessed 2009). Indeed, organizations June several member Protecting No-Fault, Coalition Auto which has filed amicus curiae supporting brief in these cases partici Justice continued Hathaway’s pation, supported campaign. Michigan Justice Trial Hathaway’s Lawyers gave Association and the United Automobile Workers each $34,000 campaign, Justice the maximum allowed Hathaway’s During campaign, judge law. her Justice stated that “a Hathaway disqualifying any consider!] should party herself in instance where a campaign made a has substantial contribution.” Id. Justice Hatha disqualification ethics, calculus do such contributions not way’s appearance impropriety”? raise “even the mere Id. at 2. why, having promised "higher elected, And standard of conduct” if is it defensible for to Justice shelter under the Court’s Hathaway disqualification practice disparaged campaign historical that on she trail? 65 V REHEARING) (ON Separate Order in these her participation a result profit as family of impropriety, appearance do establish an cases not of what would.7 IS WHETHER THERE WILL DETERMINE

WHO IMPROPRIETY”? AN “APPEARANCE OF members of the my knowledge, time to For the first merits a disqualification in the of Court have participated Al- justice. another decision on a motion addressed WEAVER and Chief Justice though CAVANAGH and Justices and de- endorsed Justice HATHAWAY’s joined have KELLY of solely cision, on the basis Justice have done so they any inquiry additional statement without HATHAWAY’s allegations her or the participation into the merits of rote merely ratifi- this, participation raised. their cursory denial of the motion of cation Justice HATHAWAY’s disqualify. of majority’s participation and approval new Justice HATHAWAY of the determination whether merits an alteration of our while disqualified, should be is consistent with several Court’s traditions, full Court require disqualification proposals pending the Chief Justice.7 With participation rehearing Moreover, these was fact that motion for cases do the replacement prompted solely Hathaway’s of Chief because Justice legal utterly fact no substantive or and the new Justice TAYLOR motion, required by generally arguments as MCR raised were 2.119(F)(3), respect impropriety her give appearance with rise to Ass’n, Evening See, e.g., Peoples participation? News Mich (1883), opined rehearing not that “a will be ordered which this Court ground merely change bench either that a of members of the has place about to occur.” taken or is majority why chose to Hathaway Justice the new It is unclear claiming adopt aspects proposals to adhere to our some while new stated, practice. disqualification As Justices current CAVANAGH never, knowledge, my publicly Kelly have and Chief Justice Weaver targeted disqualification justice with endorsed the decision another Separate Order

out a question, lodging such determination with other justices will, best, of this Court at lead to gamesmanship change the philosophical composition of the Court to I alter the each ask: a result such case. Would 4-3 decision the members of the Court favoring partici- pation challenged of a justice public cause to have greater or faith the targeted justice lesser that should ethically participate?

HOW WOULD A SUCH PROCEDURE BETTER SERVE THE PEOPLE THIS THAN OF STATE THE NEARLY 200-YEAR-OLD CURRENT DISQUALIFICATION PRACTICE?

These are but questions raised by Justice few disposition pending motion dis- HATHAWAY’S qualify her. Given Justice HATHAWAY’S prom- campaign ises colleagues’ and our published statements on dis- qualification the years, only over not the parties, but the public deserve more. J. Defendant has moved for Justice MARKMAN, disqualification, arguing that “her

HATHAWAY’s has spouse an interest that could be substantially affected the outcome the proceedings.” Justice motion, HATHAWAY now concluding denies this that she has “no personal prejudice,” bias there appearance “no of impropriety,” and that there is “nothing . . . alleged any that would cause reasonable person to believe that there is a significant disproportionate being me,” influence asserted upon little explanation. with to no This decision must be against viewed in which backdrop Justice HATHAWAY has been her free in criticism other justices for (For their disqualification decisions. example, assert- as done have here. because motion, considered they However, they Hathaway’s nothing Justice it is hard to beyond understand statement, being what their endorsement than other a statement adds, of solidarity. Rehearing) v MCCA

Separate Order this Court was a former Chief Justice of ing his wife worked of interest” because “walking conflict office; Supreme that “our stating Governor’s are impartial...[;] they being is not fair we problem; and that is the recusing not themselves impartial are to be fair and judges going need who happening”; and that is not rendering their decisions that, have, “I and I will continue and proclaiming appearance there is the disqualify myself whenever Hathaway supported Justice has also impropriety.”)1 procedures new propose this Court’s decision to there is disqualification whenever require would 2009-4; ADM File No. see impropriety.” “appearance (2009). Finally, the United States Su- 483 Mich 1205 A in ago Caperton Court’s decision a few weeks preme Co, Inc, ; 2252; 129 S Ct Massey T Coal 556 US _ (2009), must disqualification L Ed 2d 1208 held that “objective determined on the basis of stan- now be it difficult to understand backdrop, dards.” Given this conclusory believes that her why Justice HATHAWAY Contrary to defendant’s motion is sufficient. response her justification unwillingness explain to her for her (“I practice will not in this Court’s position participate engaging responses to comments of others are should discon- inappropriate unnecessary. and This Court devoting unproduc- tinue the state’s limited resources to colloquy.”), hardly high ground tive it is to take been justice questions to decline to address that have justices, raised other and that are a parties reform outgrowth justice’s proposals, direct of that own recent her own criticisms of other and a past justices, Supreme decision of the United States Court. Given (accessed <http://www.youtube.com/watch?v=_7woWJI)klQg> June Journal, 2008; 18, 2009); Lansing Interview with State October League Michigan Voters Voter Guide of Woman (accessed <http://www.lwvmi.org/documents/LWV08SupremeCourt.pdf> 18, 2009), respectively. June l Separate Order was

Caperton just ago, decided a few weeks and in fairness I parties, would direct the filing supplemental Among briefs. I questions parties would direct the justices address are whether all must participate now deciding justice’s another disqualification and whether justice object who is the of disqualification may even Absent I participate. briefing, yet such am not prepared to deviate from this Court’s of 172 practice years to the Therefore, I contrary. neither participate nor address Hathaway’s the merits of Justice decision not to grant defendant’s motion.

Case Details

Case Name: United States Fidelity & Guaranty Co. v. Michigan Catastrophic Claims Ass'n

Court Name: Michigan Supreme Court

Date Published: Jul 21, 2009

Citation: 484 Mich. 1

Docket Number: Docket 133466 and 133468

Court Abbreviation: Mich.