THE IMPACT OF THE MICHIGAN SUPREME COURT’S RECENT RULING ON COVID-19

On last Friday afternoon, October 2, 2020, the Michigan Supreme Court issued its 107 page decision in the case of In re Certified Questions from the United States District Court, Western District of Michigan, Southern Division (Midwest Institute of Health, PLLC v Governor).

The Supreme Court ruled:

that the Governor lacked the authority to declare a “state of emergency” or a “state of disaster” under the EMA [Emergency Management Act of 1974, MCL 30.301, et seq.] after April 30, 2020, on the basis of the COVID-19 pandemic. Furthermore ... the EPGA [the Emergency Powers of the Governor Act of 1945, MCL 10.31] is in violation of the Constitution of our state because it purports to delegate to the executive branch the legislative powers of state government – including its plenary police powers – and to allow the exercise of such powers indefinitely. As a consequence, the EPGA cannot continue to provide a basis for the Governor to exercise emergency powers. (Slip opinion, p. 48.)

The ruling on the EMA was unanimous, with all seven justices supporting the holding. A 4-3 majority held that the EPGA was unconstitutional. Governor Whitmer has asserted that the ruling does not take effect for “at least 21 days, and until then, my emergency orders retain the force of law.” The Governor has the right to request a rehearing in the next 21 days, but there are serious questions as to the continuing validity of the Executive Orders that the Michigan Supreme Court held are based on an unconstitutional expression of authority.

Governor Whitmer issued Executive Order (EO) 2020-128 on June 28, 2020. In that EO, she changed the legislatively established burden of proof in the Worker’s Disability Compensation Act, MCL 418.101, et seq., in cases involving “COVID-19-response employees”. The statute provides that the burden of proving a work related injury, condition or disease is on the employee. EO 2020-128 created a presumption that a person who had tested positive for COVID-19 “on or after March 18, 2020, either by a physician or by a test shall be presumed to have suffered a ‘personal Injury’, as defined by” MCL 418.401(2)(b). It shifted the burden to the employer to disprove that the employee had become infected due to work exposures by “rebuttal by specific facts to the contrary”.

In the preamble to EO 2020-128, Governor Whitmer explicitly relied upon the rule-making authority granted her by EPGA and EMA. In holding that the EPGA is unconstitutional and that the that the powers conveyed to the Governor by EMA expired on April 10, 2020, it is our opinion, the Michigan Supreme Court’s ruling in In re Certified Questions From The United States District Court nullifies executive order EO 2020-128, and that it is not enforceable against Michigan employers of “COVID-19-response employees”.

There remains a question as to whether the Supreme Court’s ruling also nullifies the prior Emergency Administrative Rules issued by the Worker’s Disability Compensation Agency and signed by Governor Whitmer on March 18, 2020 (superseded) and March 30, 2020, issued at a time when she did have authority to promulgate Emergency Rules. The Emergency Administrative Rules applied to “injuries” occurring on or after March 18, 2020, until they were superseded by Rules of March 30, 2020 and, subsequently, Executive Order (EO 2020-128) issued on June 28, 2020. It is unclear whether those Rules are valid for dates of “injury” occurring before the Governor’s authority under the EMA expired on April 10, 2020. Those rules similarly relied upon the rule-making authority granted by EPGA and EMA and created a similar rebuttable presumption of compensability for “first response employees”.

However, it is our opinion, that neither of the Emergency Rules is valid or enforceable. The Emergency Rules were promulgated by the Director of the Workers’ Compensation Agency and, were effectuated immediately under the emergency provisions of the Administrative Procedures Act of 1969 (MCL 24.248(1)). However, the Director of the Workers’ Compensation Agency does not have the authority or powers to promulgate Emergency Rules of this type. According to the heading of the Emergency Rules, authority to issue the rules was purportedly conferred on the Director of the Workers’ Compensation Agency pursuant to MCL 418.205 and MCL 418.213 of the Workers’ Disability Compensation Act. However, MCL 418.205 only provides the Director with authority to “make rules not inconsistent with this (Workers’ Disability Compensation) Act for carrying out the provisions of the Act in accordance with the Administrative Procedures Act of 1969”. MCL 418.213(8) only provides authority to “promulgate rules on administrative hearing procedures”. While the Governor concurred in the Agency’s finding that the circumstances creating the emergency have occurred and the “public interest” required promulgation of the rules, her emergency powers restrict her to promulgating “reasonable orders, rules, and regulations as he or she considers necessary to protect life and property or to bring the emergency situation within the affected area under control.” MCL 10.31 (1).

In the Emergency Rules, the Director concluded that there were no administrative rules providing guidance to employers, carriers, or employees on the treatment exposure to Covid-19 with respect to workers’ compensation coverage. In our opinion, the Director, much like the Governor, was attempting to legislate and create new rights inconsistent with the Workers’ Disability Compensation Act, outside the confines of his authority. Of note, MCL 418.401 regarding occupational diseases indicates that a “personal injury includes a disease or disability that is due to causes and conditions that are characteristic of and peculiar to the business of an employer and that arise out of in the course of scope of employment. An ordinary disease of life, to which the public is generally exposed outside of employment, is not compensable.” We believe the Director exceeded his authority by creating presumptions (unrebuttable under the March 18, 2020 rules and potentially rebuttable under the March 30, 2020 rules) and rights inconsistent with the Act.

Employers who paid questionably work related COVID-19 claims with dates of “injury” on and after April 10, 2020, because of the presumption of compensability, should consult their worker’s compensation attorneys to determine whether certain claims should be disputed, and/or whether recoupment petitions should be filed.

If you have any questions or would like to discuss this matter further, please contact the worker’s compensation attorneys at Hickey Combs PLC.

Hickey Combs PLC

Leonard M. Hickey

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John B. Combs

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