Appeals court must decide if MCCA is public, subject to FOIA

State Supreme Court rules Michigan’s Constitution requires if one law modifies another, that other law must be amended, too.

Michigan’s high court on Friday reversed a Court of Appeals ruling and ordered that lower court to determine if the legislatively created Michigan Catastrophic Claims Association (MCCA) is a public body and therefore potentially subject to the state’s Freedom of Information Act.

In a decision that does not resolve the ongoing dispute about MCCA’s status, the Supreme Court unanimously remanded the case to the Court of Appeals and vacated the appellate court’s decision that the establishment of MCCA did not violate Article 4, Section 25 of the Constitution that requires any legislative act that alters or changes a section of one law, in this case the FOIA, must be also reenacted in the law it effects. That did not happen when the law establishing the MCCA was passed in 1978.

One of the problems citizens have in seeking public records under FOIA is that many other laws on the books specifically exempt the records under FOIA, but the FOIA statute itself is not updated to reflect this. This Michigan Supreme Court decision will likely generate a flurry of amendments to FOIA exemptions section which would be disastrous for transparency and accountability in the state. But it could be an opportunity to reexamine the almost routine practice by the Legislature to simply exempt what should clearly be public records from public disclosure.

There are many other statutes on the books that specifically exempt public records from FOI disclosure yet those records or public bodies are not listed in the FOIA itself as the Supreme Court now maintains is required by the Constitution in Article 4, Section 25.

The Appellants in this case, Coalition Protecting Auto No-Fault (CPAN), in its brief argued: The specific provisions of FOIA have never been amended to reflect that the MCCA is now exempt from its terms.” On that procedural basis, it argued the Appeals Court erred in its decision against the group.

If the appeals court determines that MCCA is a public body, then MCCA must follow the FOIA and that would mean financial records that a number of individuals and groups have sought in years past must be disclosed. However, the Legislature could also amend the FOIA and add MCCA to what would be a growing list of exemptions.

The MCCA was created by the Legislature in 1978 to reimburse insurance companies for auto injury claims that exceed $300,000. To pay for this, MCCA assesses every Michigan motorist a fee, currently $186 a vehicle under the no-fault insurance system. The MCCA insists it is a private, nonprofit group and by its enacting legislation which exempted it from FOIA, it is not required to publicly disclose information groups like the CPAN seek. MCCA’s board is populated predominantly by insurance company executives.

CPAN and others maintain that transparency is important to insure that Michigan motorists are not being overcharged when they pay the current $186 per vehicle fee. The fee does fluctuate and is set by MCCA’s board.

If the Court of Appeals decides MCCA, though enacted by the Legislature, is not a public body, then FOIA would not be applicable and these money records, estimated at around $17 billion, will remain secret from the public. If MCCA is a public body, then expect a major lobbying effort by the auto insurance industry to persuade the Legislature to amend FOIA to exempt these records from public disclosure.

Stay tuned.

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