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Lansing, Michigan

The capital of Michigan, home to the state’s high court and legislature, is a newcomer to the Judicial Hellholes® list in 2023. Lansing, Michigan’s appearance is due to liability-expanding decisions by the Michigan Supreme Court and pro-plaintiff legislative activity. The Michigan Supreme Court overturned several precedents over the past year, increasing liability in cases ranging from slip-and-falls to medical liability actions. These decisions, combined with a barrage of liability- expanding legislation, are creating an unjust and imbalanced civil justice environment that unfairly burdens defendants and will drive up the costs of goods and services for Michigan consumers.

HIGH COURT EXPANDS LIABILITY FOR BUSINESS

Premises Liability

In a case with significant implications for property owners and insurers in Michigan, the Michigan Supreme Court overturned a long-standing framework for deciding slip-and- fall cases. The decision arose in a case in which a person sued after slipping on ice while walking from her car into a gas station. The gas station moved to dismiss the lawsuit on the ground that, under Michigan law, a property owner owes no duty to protect invitees from dangers that are “open and obvious.”

The open-and-obvious doctrine long has been an important resource for property owners in the state and most recently was applied by the Michigan Supreme Court in 2001. In the recent lawsuit, however, the plaintiff argued on appeal that the open-and-obvious doctrine was inconsistent with Michigan’s adoption of comparative negligence, since this framework does not bar recovery when a plaintiff’s own negligence contributes to their injury.

In Kandil-Elsayed v. F&E Oil, Inc., the Michigan Supreme Court overruled precedent, holding that landowners, in all instances, possess a duty to exercise “reasonable care to protect invitees from an unreasonable risk of harm caused by a dangerous condition of the land.” Despite the obvious nature of the hazard, a landowner still has a duty to protect visitors.

Justice David Viviano, in a thorough dissent, criticized the majority’s departure from decades of precedent. In his view, the open-and-obvious doctrine reflects the “straightforward notion” that property owners owe no duty to protect others from hazards that are both clearly visible and avoidable. The dissent expresses concern that the majority’s ruling will create uncertainty among business and homeowners, alike, who may be “faced with the increased threat of liability.” The dissent argued that few recent court decisions have the potential to “wreak such havoc” as this one.

As a result, Michigan courts are expected to see a wave of slip-and-fall cases in the coming months. The shift in law will require many more cases to be decided by juries rather than the court, which will lead to more expensive and time-consuming litigation. One Michigan defense lawyer stated that the court’s decision appears to turn the open-and-obvious doctrine “from a shield for the defense to a sword for the plaintiff.”

Workplace Liability

In July 2023, the Michigan Supreme Court overturned yet another precedent in a workplace liability case. In that case, a worker experienced a concussion after a workplace accident. She returned to work two months later only to continue suffering from a mental disability she alleged was related to the accident. She then sought workers’ compensation benefits which a magistrate judge denied, finding insufficient evidence linking her disability to the workplace accident. The denial of benefits was based on a 4-factor test expounded by the Michigan Supreme Court in Martin v Pontiac School District, which considers “(1) the number of occupational and nonoccupational contributors, (2) the relative amount of contribution of each contributor, (3) the duration of each contributor, (4) the extent of permanent effect that resulted from each contributor.”

In Cramer v. Transitional Health Services of Wayne, the Court disregarded the Martin test, and adopted in its place a test that considers the totality of the circumstances, placing less weight on the presence and duration of conditions that predate the alleged workplace injury.

The dissent argued that the Martin test comports with the statute because the legislature intended that a plaintiff with a pre-existing condition should have to provide evidence showing that his injury was work- related. Contrary to the majority’s view, the Court had never viewed the 4-factor test as an absolute bar to recovery, and instead merely considered a pre-existing condition when determining whether the plaintiff had established his or her burden of proof.

Expansive Medical Liability

Affidavit of Merit

In July, the Michigan Supreme Court overturned a 23-year precedent in a medical liability case involving the state’s affidavit of merit requirement. An affidavit of merit is a signed statement by a medical expert that supports a plaintiff’s claim that a healthcare provider did not meet the applicable standard of care. It discourages meritless lawsuits against doctors and hospitals that drive up the cost of health care.

In Ottgen v. Katranii, the Court held that while an affidavit of merit is required for a medical liability case to proceed, it does not need to be filed within the statute of limitations. This decision overrules Scarsella v. Pollak, which held that an affidavit of merit was required to begin a lawsuit.

There is concern that following this decision, there will be an increase in questionable medical liability cases.

Cases to Watch

Standard for Expert Evidence

In May, the Michigan Supreme Court agreed to review the state’s standard for the admissibility of expert testimony regarding the standard of care in medical liability cases. In Danhoff v. Fahim, the plaintiff’s expert’s testimony lacked any foundation in scholarly literature, and as a result, the trial court dismissed the case. The Michigan Court of Appeals upheld the dismissal because, under Michigan evidence laws and court precedent, supporting literature is an important factor in whether testimony is admissible, and “it is generally not sufficient to simply point to an expert’s experience and background to argue that the expert’s opinion is reliable.”

The ATRF will keep a watchful eye on Michigan’s Supreme Court to see whether it upholds Michigan law or once again overturns long-standing precedent and allows junk science into state courtrooms.

Who Can be an Expert

In Estate of Horn v. Swofford, the Michigan Supreme Court will decide whether an expert witness in a medical liability case must be an expert in the “one most relevant” specialty to be qualified to testify. Here, the plaintiff included an affidavit of merit from a doctor specializing in neuroradiology in a case alleging that the defendant doctor failed to identify the severity of his condition and neglected to perform brain surgery. The parties disagreed about whether neuroradiology or diagnostic radiology should be considered the most relevant specialty.

“Scarsella’s holding effectuates the legislature’s intent to make a demonstration of merit at the inception of the action mandatory and to thereby deter frivolous claims. A decision to overrule Scarsella will create an open-ended exception to the law.”

Litigation Center of the American Medical Association and State Medical Societies

A BARAGE OF LIABILITY-EXPANDING LEGISLATION

The 2022 statewide elections flipped the balance of power in the Michigan legislature. As a result, the trial bar was emboldened and pushed an aggressive liability-expanding agenda that was adopted by Michigan legislators.

FDA-Defense Bill

S.B. 410 repeals an existing liability protection, in place for over 25 years, that ensures that the expertise of the federal agency charged with ensuring drug safety is reflected when courts decide lawsuits challenging whether a medication was unreasonably dangerous or a warning or label was inadequate.

These protections have been mischaracterized by the plaintiffs’ bar as an “absolute defense” in these actions. In reality, the existing statute stands for the modest proposition that the considered judgment of federal regulators, who are experts in their field, should hold great weight when determining liability, and the law should consequently align with the FDA’s decision making. Lawsuits that assert that a medication is unsafe, even when the FDA has found it beneficial, or that claim warnings are inadequate, even as the FDA specifically mandated those warnings, are in conflict or at least considerable tension with the FDA. The current statute permits lawsuits if the manufacturer sells the drug after the FDA withdraws its approval or recalls the drug, or if the FDA finds that the manufacturer withheld or misrepresented information about risks from the agency.

Soon after the bill passed, Michigan Attorney General Dana Nessel stated that she expects the law to aid her office’s litigation against drug manufacturers in the state.

Liability-Expanding Bills Under Consideration In 2024

Bad Faith Legislation to Drive Costs Sky-High

S.B. 329 creates a cause of action against insurers for “bad-faith” failures to settle claims. In addition to benefits wrongfully withheld, plaintiffs may recover emotional distress damages, punitive damages and attorney’s fees.

A priority of the trial bar, this new law will lead to substantial increases in the costs of insurance while providing little benefit to consumers. Michigan state law already requires the prompt payment of valid insurance claims and data shows that the vast majority of property and casualty claims are timely paid. Under existing law, insurance companies can be fined or have their license revoked if an investigation finds evidence of abuse. The only people who will benefit from new bad-faith action are trial attorneys, who will reap millions in fees and settlements at the expense of Michigan consumers.

According to a new study, “The legislation would create 35 new avenues for legal action against insurance companies, creating a potential cost to Michigan consumers ranging between $2.4 billion and $4.7 billion” or “11% to 21% of the estimated current annual premium paid by Michigan residents and businesses.” The study goes on to say that some increases to individual premiums may be even higher.

Consumer Protection Act Expansion

Michigan legislators are also seeking to pull back reasonable constraints on liability under the state’s consumer protection statute, a move that would expose a wide range of businesses and professionals to new forms of unnecessary and costly litigation. Currently, the Michigan Consumer Protection Act (MCPA) includes a “regulatory compliance exemption” that the Michigan Supreme Court has interpreted as barring litigation that centers on transactions or conduct that is authorized under state and federal law or already regulated by a government agency. In a series of bills, most notably H.B. 5201, these protections would almost entirely be removed, making businesses that are already compliant with various state and federal regulations open to private lawsuits, including class actions. The proposed legislation would also authorize use of the statute in certain business disputes, and permit higher civil penalties in certain cases that can be aggregated “per violation,” such as each time an ad is viewed.

“Polluter Pays” Package

In October, members of the Michigan legislature introduced a package of environmental litigation bills that are certain to benefit trial attorneys across the state. The bills attempt to undo legislative enactments from the 1990s, in which the state government took responsibility for funding various environmental cleanup efforts. The package intends to revive the statute of limitations for these claims, allowing plaintiffs to sue companies for operations dating back nearly three decades.

Making matters worse, proposed legislation would also provide a medical monitoring cause of action, allowing plaintiffs to seek damages even if they have experienced no injury. Instead, one need only allege that exposure to a hazardous substance has led to an “increased risk” of developing a serious disease, a standard notoriously difficult to articulate or refute. The bill’s vague language contributes to this difficulty, as it does not specify what level of exposure is needed to state a claim and defines “serious disease” to encompass any condition that has the potential to cause a later disability. This, combined with the statute’s fee-shifting provision and the potential for class action lawsuits, would provide a strong incentive for plaintiffs’ lawyers to pursue mass “no injury” medical monitoring claims.