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Law School Case Brief

Shavers v. Attorney General - 402 Mich. 554, 267 N.W.2d 72 (1978)


In the application of the due process and equal protection rational relation tests, it is axiomatic that the challenged legislative judgment is accorded a presumption of constitutionality. What this presumption of constitutionality means, in terms of challenged police power legislation, is that in the face of a due process or equal protection challenge, where the legislative judgment is drawn in question, a court's inquiry must be restricted to the issue whether any state of facts, either known or which could reasonably be assumed, affords support for it. A corollary to this rule is that where the legislative judgment is supported by any state of facts either known or which could reasonably be assumed, although such facts may be "debatable," the legislative judgment must be accepted. 


Plaintiffs Catherine Shavers and others brought an action in Michigan state court against defendants, Attorney General of Michigan, other state officials and several insurance companies seeking a declaratory judgment that the no-fault motor vehicle insurance act, 1972 PA 294, was unconstitutional. Several defendants filed cross-complaints. The circuit court  granted a declaratory judgment that generally upheld the personal injury provisions of the no-fault act, which replaced the system of tort reparations, but found unconstitutional the property damage provisions and certain other provisions. The court of appeals vacated some of the circuit court's findings on the grounds that plaintiffs lacked standing to raise those issues, agreed that the property damage provision was unconstitutional, and reversed the finding that the exclusion of motorcycles from the act was unconstitutional insofar as it concerned a justiciable issue. The parties appealed. 


Was the Michigan no-fault motor vehicle insurance act constitutional? 




The state supreme court affirmed in part and reversed in part the appellate court's judgment and remanded the case to the trial court for further development of the record. The court ruled, inter alia, that the no-fault insurance act was constitutional insofar as it provided insurance benefits to victims of motor vehicle accidents as a substitute for tort remedies that the act partially abolished. However, the mechanisms controlling the rate-making procedure were constitutionally inadequate in three respects. First, the Legislature and/or the Commissioner of Insurance ("Commissioner") failed to give substantial meaning to the statutory exhortation that "rates shall not be excessive, inadequate or unfairly discriminatory". Second, there were inadequate statutory provisions for a motorist to attack an individual rating decision. Third, there was no adequate statutory provision for a motorist to challenge insurance refusal, discriminatory cancellation, or assignment to the Automobile Placement Facility. The court thus held that the act would remain in effect for 18 months, and during that period the Legislature and Commissioner may remedy the constitutional deficiencies in the act. Thereafter, the court would re-examine the matter to determine if the constitutional deficiencies were in fact remedied and would then enter an appropriate order.

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