Should Michigan drivers be entitled to information about how their auto insurance fees are set? Is that information publicly accessible through the Freedom of Information Act (FOIA), or private under the Michigan No-Fault Act? The Michigan Court of Appeals weighs in.
The question of whether the Michigan Catastrophic Claims Association (MCCA) is subject to Freedom of Information Act (FOIA) requests has bounced up and down the courts for the last several years. Now the Court of Appeals has struck one more blow to consumers’ right to information, finding that even though the MCCA is “public body” under FOIA, its records are private because of an exception written into the Michigan No-Fault Act.
A Bumpy Road Through the Courts
The case, Coalition Protecting Auto No-Fault v Michigan Catastrophic Claims Association, has an especially complicated appellate history. After the Michigan Court of Appeals denied CPAN’s claim for records under FOIA in 2014, the consumer-protection group sought rehearing, but was denied.
Next, the case went up to the Michigan Supreme Court. But after oral argument, the Court didn’t issue an opinion. Instead, it vacated part of the lower court’s decision and instructed the Court of Appeals to decide two things:
- Was The MCCA A “Public Body” Under FOIA; And
- Was The No-Fault Act’s FOIA Exclusion A Violation Of The Michigan Constitution.
One, it would seem, would naturally lead to the other, but the Court of Appeals’ recent decision shows there is more than one way to split a hair.
FOIA and MCCA as a Public Body
FOIA applies to all public bodies, including government agencies, state officers and employees (except the governor or lieutenant governor’s offices), municipalities, and:
“Any other body which is created by state or local authority or which is primarily funded by or through state or local authority.” MCL 15.232(d)(iv)
The court read this provision in the disjunctive – meaning that an entity had to be either created by state or local authority or publicly funded to qualify as a FOIA public body. The MCCA was created by state authority when the Legislature amended the No-Fault Act in 1978. That makes it a public body even though it is not publicly funded, and even though it would not qualify as a state agency under other Michigan law.
A FOIA Exception Buried in the Michigan No-Fault Act
As a public body, the MCCA should be subject to FOIA requests for information. However, an exception buried in the Michigan No-Fault Act excludes “[a] record of an association or facility” from disclosure, including the MCCA. The question the Michigan Supreme Court had for the Court of Appeals was whether that exception violated the Michigan Constitution by amending the FOIA law by reference. Article 4, Section 25 of the Michigan Constitution says:
“No law shall be revised, altered or amended by reference to its title only. The section or sections of the act altered or amended shall be re-enacted and published at length.”
The purpose of this constitutional article is to increase transparency in state legislative actions and to make it so legislators and residents would know what any given law meant by reading it. Courts dating back as early as 1865 have recognized that “implied amendment” created “mischief” and created conflicts within the state’s legal code. To avoid any such mischief, bills designed to directly or indirect “revise, alter, or amend the operation of previous statutes” require full republication.
Court Upholds MCCA Secrecy
Somehow, the court found that the amendment to the No-Fault Act which created an exception to the FOIA law did not violate this constitutional requirement. The court ruled that a section within FOIA itself gave legislators permission to bury exceptions in other laws. MCL 15.243(1)(d) says:
“A public body may except from disclosure as a public record under this act any of the following . . . Records or information specifically described and exempted from disclosure by statute.”
The court said that because of this provision, FOIA and the Michigan No-Fault Act “work in concert” and don’t violate the constitutional requirement for transparency.
Decision Undercuts Constitutional Transparency
Michigan Court of Appeals Judge Elizabeth Gleicher dissented from the decision because of this conclusion. Gleicher correctly states:
“By inserting a FOIA exemption into a statute addressing certain operational mechanics of insurance ‘associations,’ the Legislature obscured from public view its significant diminution of the FOIA’s reach. Because this piecemeal amendment contravenes our Constitution, I respectfully dissent.”
To meet constitutional muster, the Legislature should have amended the FOIA law, adding MCCA records to the list of documents not subject to disclosure. By burying the amendment in the No-Fault Act, lawmakers went against the principles and the language of the Constitution, obscuring an important amendment and cutting residents off from vital information about a public body.
CPAN has already announced that it is considering appealing the case once more to the Michigan Supreme Court. Spokesperson Josh Hovey said in a statement:
“This case is about far more than auto no-fault insurance. Yes, CPAN believes that having open access to the MCCA’s financial records is vital to understanding Michigan’s auto no-fault system. But at its core, this case has broad implications for the openness and transparency of Michigan’s government overall.”
Without that appeal, CPAN v MCCA opens the door for Legislators to pass laws excluding themselves from state constitutional requirements. And that is a dangerous precedent to set.
David Christensen is an auto accident attorney for Christensen Law in Southfield, Michigan. He represents car crash victims against the auto insurance industry. If your client is facing a complicated no-fault matter, contact Christensen Law for a referral today.