WEAVER, J.
In this case, we decide whether this Court correctly gave retroactive effect to its decision in Karaczewski v. Farbman Stein & Co., 478 Mich. 28, 732 N.W.2d 56 (2007). After examination of the Karaczewski decision and the effect overruling its retroactivity would have, we overrule the holding of Karaczewski that gave the decision its retroactive effect. Accordingly, pursuant to MCR 7.302(G)(1), in lieu of granting leave to appeal, we reverse the decision of the Workers' Compensation Appellate Commission (WCAC) and remand this case to the WCAC for resolution of this case consistent with the law in effect before the Karaczewski decision.
In 1998, plaintiff Andre Bezeau, a professional hockey player, signed a three-year contract with the Detroit Vipers, a professional hockey team owned by defendant Palace Sports & Entertainment, Inc. At the time, plaintiff was a resident of Michigan, and the contract was signed in Michigan.
In June 2000, plaintiff fell from a 45-foot ladder while working at his father's roofing company in New Brunswick, Canada. As a result of the fall, he injured his groin, lower back, and right thigh. Plaintiff stayed in New Brunswick to receive treatment for his injuries, and he became a resident of New Brunswick.
In October 2000, the Detroit Vipers loaned plaintiff to the Providence Bruins, a professional hockey team located in Rhode Island. In the first game of the 2000-2001 season, which took place in Rhode Island, another player struck plaintiff, aggravating his injury. Plaintiff left the game and has been unable to play hockey since the incident.
In June 2001, plaintiff applied for workers' compensation benefits in Michigan. He claimed that he had developed osteitis pubis as a result of playing professional hockey. A hearing was held before a magistrate in the Worker's Compensation Board of Magistrates. The magistrate ruled in February 2003 that although plaintiff was disabled, there was no persuasive evidence that the incident at the October 2000 hockey game in Rhode Island caused plaintiff's disabling injuries or aggravated any preexisting injuries.
Plaintiff appealed the decision to the WCAC, which reversed the magistrate's findings. The WCAC panel found that the incident at the October 2000 hockey game was a contributing factor, among many, to plaintiff's disability. The WCAC granted plaintiff an open award of benefits.
Defendant appealed the WCAC's decision in the Court of Appeals. In February 2006, the Court of Appeals issued an unpublished opinion vacating the decision of the WCAC and remanding the case to the WCAC to "determine whether plaintiff asserted an `aggravation' or `contribution' theory at trial, whether such a theory was properly raised on appeal, and, if so, whether an award of benefits is proper under Rakestraw [v. Gen. Dynamics Land Systems, Inc., 469 Mich. 220, 666 N.W.2d 199 (2003)]." Bezeau v. Palace Sports & Entertainment, Inc, unpublished opinion per curiam of the Court of Appeals, issued
On remand from the Court of Appeals, the WCAC issued a decision in October 2006 remanding the case to the board of magistrates to determine whether plaintiff's condition after the October 2000 hockey-game incident was medically distinguishable from his condition before the incident.
Meanwhile in May 2007, while the remand to the board of magistrates in the instant case was pending, this Court issued the opinion in Karaczewski on the jurisdictional requirements for workers' compensation claims brought in Michigan. In Karaczewski, this Court overruled the interpretation of MCL 418.845 set forth in Boyd v. W.G. Wade Shows, 443 Mich. 515, 505 N.W.2d 544 (1993), and described what it termed an abrogation of the statute by Boyd's precursor, Roberts v. IXL Glass Corp., 259 Mich. 644, 244 N.W. 188 (1932). Karaczewski, 478 Mich. at 30, 39-41, 732 N.W.2d 56. The new interpretation of MCL 418.845 set forth in Karaczewski stated that for Michigan workers' compensation laws to apply to a claim for benefits, the injured employee must have been a resident of Michigan at the time of the injury and the contract for hire must have been made in Michigan.
As a result of the Karaczewski decision, defendant argued that the board of magistrates did not have subject-matter jurisdiction because plaintiff was a resident of New Brunswick at the time of the October 2000 incident. The magistrate agreed and dismissed plaintiff's claim for benefits. Plaintiff appealed to the WCAC, which affirmed the magistrate's decision. Plaintiff applied for leave to appeal in the Court of Appeals, which denied leave to appeal in an unpublished order entered September 5, 2008 (Docket No. 285593).
Plaintiff applied for leave to appeal in this Court. We ordered oral argument on the application, directing the parties to address "whether the jurisdictional standard established at MCL 418.845, as interpreted by this Court in Karaczewski v. Farbman Stein & Co., 478 Mich. 28, 732 N.W.2d 56 (2007), should be applied in this case."
Whether this Court's decision in a previous case should be overruled is a question of law that this Court reviews de novo. Bush v. Shabahang, 484 Mich. 156, 164, 772 N.W.2d 272 (2009).
Karaczewski involved an employee whose contract for hire was made in Michigan, but who became a resident of another
The defendants in Karaczewski argued that under the plain language of the Michigan Worker's Disability Compensation Act, the employee's claim was not subject to the jurisdiction of the Michigan's Workers' Compensation Agency because the employee was not a resident of Michigan at the time of the injury. Id. at 58, 732 N.W.2d 56. The WCAC and Court of Appeals agreed with the defendants that the plain language of the relevant statute, MCL 418.845, would preclude the employee from bringing his claim in Michigan. Id. at 31-32, 732 N.W.2d 56. However, both the WCAC and the Court of Appeals noted that they were unable to rule in the defendants' favor under the binding Michigan Supreme Court precedents of Boyd and Roberts. Id. at 32, 732 N.W.2d 56.
In Boyd, this Court interpreted MCL 418.845 when faced with a similar situation involving an employee whose contract for hire was made in Michigan but who was injured and died on the job while a resident of another state. Boyd, 443 Mich. at 516, 505 N.W.2d 544. The Court examined MCL 418.845 and Roberts, a case interpreting a predecessor of MCL 418.845. Id. at 517-520, 505 N.W.2d 544. The Boyd Court held that, "pursuant to [MCL 418.845] and Roberts v. IXL Glass Corp, supra, the Bureau of Workers' Disability Compensation shall have jurisdiction over extraterritorial injuries without regard to the employee's residence, provided the contract of employment was entered into in this state with a resident employer." Id. at 526, 505 N.W.2d 544.
This Court granted leave in Karaczewski to determine whether overruling Boyd would be justified.
In general, this Court's decisions are given full retroactive effect. Pohutski v. City of Allen Park, 465 Mich. 675, 695, 641 N.W.2d 219 (2002). However, there are exceptions to this rule. This Court should adopt a more flexible approach if injustice would result from full retroactivity. Id. at 696, 641 N.W.2d 219. Prospective application may be appropriate where the holding overrules settled precedent. Id. As stated in Pohutski:
In determining whether Karaczewski was incorrectly given retroactive effect, we must first answer the threshold question whether Karaczewski clearly established a new principle of law. The decision in Karaczewski to overrule Boyd established a new interpretation of MCL 418.845 that broke from the longstanding interpretation of the statute. Although the Court interpreted the statute consistently with its plain language, the Court's interpretation established a new rule of law because it affected how the statute would be applied to parties in workers' compensation cases in a way that was inconsistent with how the statute had been previously applied.
Given that Karaczewski established a new rule of law, we now weigh the factors set forth in Pohutski to determine whether Karaczewski was correctly given retroactive application. First, we determine the purpose to be served by the new rule. The majority in Karaczewski overruled Boyd because the Boyd interpretation of MCL 418.845 failed to recognize that the statute's text required that an injured employee must have been a resident of Michigan at the time of the injury and the contract for hire must have been made in Michigan in order for the employee to be able to successfully file a workers' compensation claim in Michigan. Thus, the purpose of the new rule was to interpret the law consistently with the Legislature's apparent intent when drafting MCL 418.845.
The next two factors to consider in determining whether Karaczewski was correctly applied retroactively are reliance interests on the old rule of law under Boyd and the effect of Karaczewski's retroactivity on the administration of justice. The concurring and dissenting justices in Karaczewski noted that the decision to give Karaczewski retroactive effect would seriously undermine the reliance interests of parties regarding the Boyd/Roberts decisions. Justice KELLY stated in her dissent that "[t]here are significant reliance concerns implicated by the overturning of Roberts and Boyd. The underlying rationale of these cases has been in place for seven decades. Attorneys, employers, insurance carriers, and various employees have relied on the holdings of Roberts and Boyd." Karaczewski, 478 Mich. at 62, 732 N.W.2d 56 (KELLY, J., dissenting). Furthermore, Justice WEAVER noted in her opinion concurring in part and dissenting in part:
In addition to Karaczewski's failure to give due weight to that reliance on Boyd and Roberts, the dissenting justices noted that retroactivity would result in a disruption in the administration of justice. Id. (WEAVER, J., concurring in part and dissenting in part); id. at 62, 732 N.W.2d 56 (KELLY, J., dissenting). As the instant case shows, it appears that the Karaczewski decision has disrupted the administration of justice in cases that came under Karaczewski's retroactive effect. Plaintiff first filed his claim in 2001, and the parties spent six years going through the appellate process to the Court of Appeals and back to the board of magistrates without having any argument over jurisdictional questions regarding MCL 418.845. While the case was on remand at the board of magistrates in 2007, Karaczewski was decided and defendant raised the jurisdictional issue for the first time in the tribunal.
Because the Karaczewski decision on retroactivity did not give due weight to the interests of employers and employees relying on the well-established law of Boyd and Roberts, and because it did not give due weight to its effect on the administration of justice, we conclude that the decision to give retroactivity to Karaczewski was erroneous.
Having established that retroactive effect was erroneous, we next decide whether this Court should overrule the decision that gave retroactive effect to Karaczewski. This Court generally adheres to the principle of stare decisis. Robinson v. Detroit, 462 Mich. 439, 463, 613 N.W.2d 307 (2000). However, we should reexamine precedent when legitimate questions have been raised about the correctness of a decision. Id. at 464, 613 N.W.2d 307. Upon such reexamination, our first step is to determine whether the precedent was wrongly decided. Id. Should we determine that precedent was wrongly decided, we also "examine the effects of overruling, including most importantly the effect on reliance interests and whether overruling would work an undue hardship because of that reliance." Id. at 466, 613 N.W.2d 307. "As to the reliance interest, the Court must ask whether the previous decision has become so embedded, so accepted, so fundamental, to everyone's expectations
As we have explained earlier, we conclude that giving retroactive effect to this Court's holding in Karaczewski was an erroneous decision. Having determined that the retroactivity holding was wrongly decided, we next turn to the reliance interests involved.
In this case, we are only reviewing the effect of retroactively applying Karaczewski's interpretation of MCL 418.845. By its nature, the retroactivity applied only to claims based on injuries that occurred before the date Karaczewski was decided. At the time of the Karaczewski decision, the workers' compensation system was operating under the prior precedent of Boyd and Roberts regarding jurisdictional questions under MCL 418.845. At the time of the Karaczewski decision, the only reliance on law regarding MCL 418.845 by parties was a reliance on the Boyd and Roberts precedents. There could not have been reliance on the law of the Karaczewski decision for claims based on injuries that occurred before Karaczewski because Karaczewski was decided after the bases for those claims had arisen. Thus, we find no reliance interests regarding the retroactive effect of Karaczewski on claims in which the injuries had occurred on or before the date Karaczewski was decided.
Our next step in examining whether the retroactive effect of Karaczewski should be overruled is to determine whether overruling that effect will result in any undue hardships for parties involved in cases affected by our decision. As we have noted, the parties involved in cases affected by this decision had no reliance interests involving Karaczewski. By overruling the retroactivity of Karaczewski, the only effect on those parties is that their cases will be governed by the precedents that governed their claims when the bases for those claims first arose. We believe that such an effect is not an undue hardship on the parties because they are simply returning to the status quo for their claims.
Further justification for overruling the retroactivity of Karaczewski can be found in the inequity in the instant case, which arose as a result of the retroactivity holding. When the instant case was filed, the Boyd and Roberts interpretations of MCL 418.845 clearly governed the case, and plaintiff met the requirements of those interpretations. The Boyd and Roberts interpretations remained the governing interpretations of MCL 418.845 for more than six years while the case made its way from the board of magistrates to the WCAC, then to the Court of Appeals, then back to the WCAC on remand and, finally, back to the board of magistrates. During the entire appellate process, the interpretation of MCL 418.845 was not an issue in this case. But when the case was before the board of magistrates on remand to determine an entirely unrelated factual matter, this Court handed down the Karaczewski decision, overruling the Boyd and Roberts interpretations for all cases in which there had not been a final judgment. The Karaczewski decision therefore changed the law of this case in the middle of the appellate process without the parties having raised any issue regarding that specific point of law. We find that outcome to be inequitable, and thus we feel that it should be reversed.
We have concluded that the factors for overruling precedent laid out in Robinson weigh in favor of overruling the retroactivity holding of Karaczewski. Moreover, we have found further justification for overruling the retroactivity holding as a result of the inequity that has arisen in this case. Accordingly, we overrule the holding of
It should be particularly noted that our holding today affects only claims based on injuries that occurred on or before the date this Court decided Karaczewski, as long as the claim has not already reached final resolution in the court system. We do not overrule any aspect of the Karaczewski opinion other than its retroactive effect. Contrary to the assertions in Justice YOUNG'S dissent, which Justices CORRIGAN and MARKMAN also join, there is no majority to overrule Karaczewski in its entirety. We note that Chief Justice KELLY concurs with this opinion in part and dissents in part because she would in fact completely overrule Karaczewski. Six justices have chosen not to agree with Chief Justice KELLY'S position to completely overrule Karaczewski, and as a result, the portrayal of the lead opinion contained in Justice YOUNG'S dissent is inaccurate. Karaczewski's interpretation of MCL 418.845 remains the law of this state for claims based on injuries that occurred after the date that Karaczewski was decided but before the effective date of the amendment of MCL 418.845 by enacting 2008 PA 499.
We reverse the decision of the WCAC. We overrule this Court's decision to give retroactive effect to Karaczewski because the decision was erroneous, overruling it will not affect any reliance interests of the parties affected by our decision, and no undue hardship will occur as a result of our decision. Our holding affects claims based on injuries that occurred on or before the date this Court decided Karaczewski, as long as the claim has not already reached final resolution in the court system. Accordingly, we remand this case to the WCAC to continue proceedings consistent with its actions before the Karaczewski decision.
Reversed and remanded.
HATHAWAY, J., concurred with WEAVER, J.
MICHAEL F. CAVANAGH, J. (concurring).
I concur in the result, and I join the lead opinion in full except for part III(B). I agree that the interpretation of MCL 418.845 adopted in Karaczewski v. Farbman Stein & Co., 478 Mich. 28, 732 N.W.2d 56 (2007), should only have been applied prospectively and that Karaczewski should be overruled to the extent that it held otherwise. I write separately because whereas the lead opinion applies the stare decisis approach from Robinson v. Detroit, 462 Mich. 439, 463-468, 613 N.W.2d 307 (2000), I continue to prefer the modified version of this approach articulated by Chief Justice KELLY in Petersen v. Magna Corp., 484 Mich. 300, 316-320, 773 N.W.2d 564 (2009) (opinion by KELLY, C.J.). The result, however, is the same.
Under my preferred approach to stare decisis, there is a presumption in favor of upholding precedent that may be rebutted only if there is a compelling justification to overturn precedent. Id. at 317, 773 N.W.2d 564. In determining whether a compelling justification exists, courts may use a number of evaluative criteria if relevant but, importantly, a compelling justification requires more than a mere belief that a case was wrongly decided.
One criterion is particularly relevant to this question: the extent of reliance on the prior interpretation of MCL 418.845 and the extent to which overruling it might cause special hardship and inequity. See id. at 320, 773 N.W.2d 564. Although the reliance interests usually weigh against overruling a decision or, at best, are neutral, this case presents the unusual situation in which the reliance interests weigh in favor of overruling a decision.
MARILYN J. KELLY, C.J. (concurring in part and dissenting in part).
I concur with the majority opinion that Karaczewski v. Farbman Stein & Co.
Only after this Court upset 74 years of law in Karaczewski did the Legislature speak by enacting 2008 PA 499. It abrogated Karaczewski scarcely more than two years after it was decided.
Furthermore, I believe that the Robinson factors clearly call for overruling Karaczewski.
Second, overturning Karaczewski would not work an undue hardship. Reliance on it has been minimal, given that it was decided recently. Because it displaced 74 years of precedent in Michigan, it is not "so embedded, so accepted, so fundamental, to everyone's expectations" that overruling it would result in "significant dislocations."
I believe these compelling justifications necessitate that this Court overrule Karaczewski. Accordingly, while I concur with the majority that Karaczewski does not apply retroactively, I would overrule it entirely.
WEAVER, J. (concurring).
I concur fully in and sign the lead opinion reversing the decision of the Workers' Compensation Appellate Commission (WCAC), remanding this case to the WCAC, and overruling the holding of Karaczewski v. Farbman Stein & Co., 478 Mich. 28, 732 N.W.2d 56 (2007), that gave the Karaczewski decision retroactive effect.
I write separately to correct the mistaken assertions in Justice YOUNG'S dissent, which is signed by Justices CORRIGAN and MARKMAN,
The dissent attempts to characterize the majority's opinion and decision not to apply Karaczewski retroactively as a decision to effectively overrule Karaczewski. This characterization is not only incorrect and inaccurate, it is misleading and intellectually deceptive.
Further, the dissent's attempt to characterize the lead opinion as being representative of a so-called new philosophical majority is also false. There is no philosophical majority in this case. While the justices forming the majority each agreed with the result in this case, each justice reached his or her conclusion based on different reasons.
It appears that the dissent is attempting to lump together the four justices who agree with parts of the lead opinion into having had some sort of previously stated fidelity to stare decisis that those justices have abandoned since former Chief Justice TAYLOR'S overwhelming defeat in the 2008 election.
The dissent quotes various past statements, made by those justices signing portions of the lead opinion, regarding stare decisis and criticizing the former "majority of four" (former Chief Justice TAYLOR, and Justices CORRIGAN, YOUNG, and MARKMAN). With respect to myself, the dissent quotes a statement I made in response to the improper and unfair dismantling of decades of longstanding insurance contract law by the former "majority of four" in Devillers v. Auto Club Ins. Ass'n, 473 Mich. 562, 702 N.W.2d 539 (2005). In Devillers, I stated, "Correction for correction's sake does not make sense. The case has not been made why the Court should not adhere to the doctrine of stare decisis in this case." Id. at 622, 702 N.W.2d 539 (WEAVER, J., dissenting) (emphasis added).
The dissent's use of my Devillers statement appears to be a weak attempt to manufacture some sort of story to try to get people to believe that a philosophical majority of justices exists and is out to overrule precedent created by the "majority of four." The dissent's mistaken assertions that I have somehow changed my view of stare decisis since former Chief Justice TAYLOR was defeated and that I am part of a philosophical majority are simply incorrect.
My Devillers statement itself shows that I was criticizing the disregard for stare decisis in that specific case. My Devillers statement is an example of my service to the rule of law and a partial expression of my view of the policy of stare decisis, which is that past precedent should generally be followed but that, in deciding whether wrongly decided precedent should be overruled, each case should be looked at individually on its facts and merits through
Over the past decade, the principal tool used by this Court to decide when a precedent should be overruled is the set of guidelines that was laid out in Robinson v. Detroit, 462 Mich. 439, 463, 613 N.W.2d 307 (2000), an opinion written by former Justice TAYLOR that Justices CORRIGAN, YOUNG, MARKMAN, and I signed, and that I have used numerous times. In the instant case, my lead opinion specifically, and properly, applies the Robinson guidelines. Thus, the dissent's assertion that I have changed my view on stare decisis makes no logical sense.
Furthermore, I note that my position in Devillers is in no way inconsistent with my position on stare decisis in this case, nor is it inconsistent with any position on stare decisis that I have taken in other cases, such as Robinson. Devillers involved the "majority of four" overruling precedent involving contract interpretation from a case that was nearly twenty (20) years old. In my Devillers dissent, I noted that I agreed with the majority's interpretation that the old precedent was incorrect, but given the passage of time since that specific precedent was decided, the Court should not disturb that longstanding precedent because the law had become so ingrained that to overrule it would harm the reliance interests of parties in insurance cases. My position in Devillers was entirely consistent with the reliance prong of the Robinson guidelines.
My position in the instant case is also consistent with the reliance prong of the Robinson guidelines since Karaczewski, the case of which a portion is now being overruled, was only decided three (3) years ago. Furthermore, the portion that is being overruled is merely that decision's retroactive effect—applying the new decision to parties' past actions. My statement in Devillers is actually supportive of my position in the instant case because in both instances my position has been to apply the longstanding law that parties had relied on when their cases arose.
The dissent cannot point to a statement where I professed some sort of position
There are many factors to consider when deciding whether or not to overrule precedent, and the importance of such factors often changes on a case-by-case basis. The Robinson guidelines are relevant in cases such as the instant case, in which reliance interests are at risk. By no means do I consider the Robinson guidelines a "be-all, end-all test" that constitutes precedent of this Court to be used whenever this Court considers overruling precedent. I view Robinson as merely providing guidelines to assist this Court in its legal analysis when pertinent.
In the end, the consideration of stare decisis and whether to overrule wrongly decided precedent always includes service to the rule of law through an application and exercise of judicial restraint, common sense, and a sense of fairness—justice for all.
YOUNG, J. (dissenting).
I dissent from the decision by the majority of justices to "overrule the retroactive effect of Karaczewski."
At the time of plaintiff's injury, MCL 418.845 provided:
Here, there is no question that plaintiff was not a resident of this state when he was injured. Therefore, pursuant to MCL 418.845 and Karaczewski, the magistrate correctly held that the Workers' Compensation Agency did not have jurisdiction.
Karaczewski overruled Boyd on the basis of the rather unremarkable proposition that the use of the conjunction "and" in MCL 418.845 was unambiguous and that the statute must be applied as written. Nonetheless, in order to protect the reliance interests of injured plaintiffs who had already received an award of compensation benefits as part of a final judgment, Karaczewski's holding was given limited retroactive effect, applying only to claimants who had not received a final judgment awarding benefits as of the date of the opinion.
The justices in the majority are unable to identify any analytical defect in the substantive holding in Karaczewski; indeed, Justice WEAVER explicitly concurred in Karaczewski's substantive analysis. Instead, they elect to overrule the limited retroactive application of the opinion in favor of purely prospective application.
The decision in this case is another instance in which the Court's new philosophical majority seems to retreat from its previously stated fidelity to stare decisis.
CORRIGAN and MARKMAN, JJ., concurred with YOUNG, J.
On order of the Court, the motion for rehearing is considered, and it is DENIED.
YOUNG, J., would grant rehearing and reverse the decision of the Court of Appeals for the reasons set forth in his dissenting opinion in this case, 487 Mich. 455 (2010).
CORRIGAN and MARKMAN, JJ., join the statement of YOUNG, J.
I recognize that 2008 PA 499 ultimately expanded jurisdiction in workers' compensation cases beyond where it had been before Karaczewski. But the legislative analyses make clear that the amendment was in direct response to Karaczewski and sought to restore jurisdiction to the Workers' Compensation Agency.
I remain committed to the stare decisis factors I proposed in Petersen v. Magna Corp., 484 Mich. 300, 317-320, 773 N.W.2d 564 (2009), and I believe that this Court should adopt those factors.
Chief Justice Roberts further called stare decisis a "principle of policy" and said that it "is not an end in itself." Id. at ___, 130 S.Ct. at 920, 175 L.Ed.2d at 807. He explained that "[i]ts greatest purpose is to serve a constitutional ideal—the rule of law. It follows that in the unusual circumstance when fidelity to any particular precedent does more to damage this constitutional ideal than to advance it, we must be more willing to depart from that precedent." Id. at ___, 130 S.Ct. at 921, 175 L.Ed.2d at 807.
