Honigman Capitol Report

Karamo Wins GOP Chair

After 3 rounds of voting, Kristina Karamo, the 2022 Secretary of State nominee, won the Michigan Republican Party chair position over Matt DePerno last Saturday. Karamo came in with 57.82% of the votes despite DePerno’s endorsement by former president Donald Trump. A key difference between the two candidates is that Karamo never conceded her election loss while DePerno admitted defeat. Karamo ran her campaign for the position focused on three priorities: election security, growing the party without a compromise of values and bringing back credibility of the GOP. 

Ford’s Marshall Battery Plant

Last week Ford Motor Company announced a $3.5 billion investment to build a battery plant in Marshall. Now the Marshall Area Economic Development Alliance, the Michigan Economic Development Corporation (“MEDC”) and other partners are asking for an additional $750 million from the Strategic Outreach and Attraction Reserve (“SOAR”) Fund in addition to the initial $210 million incentive from the state’s Critical Industries Program to prepare the site. The funding would not go directly to Ford but instead would go towards land acquisition, site improvements, water treatment expansion and road improvements among other potential improvements. Involved parties tout the strengthening of the American supply chain for lithium phosphate batteries and job growth in automation and information technology as key outcomes of the battery plant investment.

Andary v USAA Casualty Ins Co

Should auto accident victims who were catastrophically injured before June 2019 receive unlimited medical benefits under the auto no-fault (ANF) insurance policies they purchased before the enactment a new law limited reimbursement for medical expenses?  That is the question posed in a closely watched case, Andary v USAA Casualty Ins Co, which will be argued before the MI Supreme Court on March 2.

Public Acts 21 and 22 of 2019 established new fee schedules that limit reimbursement for services not covered by Medicare to just 55 percent of the fees charged as of January 1, 2019, and imposed a new weekly limit on the number of reimbursable hours of attendant care that could be provided by family members.  Under the old law, insurers had to pay unlimited lifetime medical benefits to auto accident victims, as long as the medical provider’s charges were reasonable and reasonably necessary.

The Court of Appeals ruled in favor of accident victims and medical providers, noting that the Legislature omitted amendatory language that expressly or implicitly applied the reimbursement-limiting provisions of Public Acts 21 and 22 retroactively.  And under the legal standard that a statute must include a “clear, direct, and unequivocal” statement to overcome the presumption that the law in effect at the time of the accident applies, the court held that ANF insurers cannot reduce provider reimbursement for patients injured before Public Acts 21 and 22 became effective in June 2019.

The ANF insurers appealed and asked the Supreme Court to stay the effect of the Court of Appeals decision until a final order is issued in the case.  The Supreme Court denied the motion, meaning that ANF insurers are currently providing unlimited medical benefits to accident victims who became injured before June 2019 in accordance with the old law.  You can view the briefs filed by the parties and over 20 amicus briefs here, and watch the oral argument on 3/2 at this link. 

Looking Ahead

With only four weeks of legislative session until spring break, we expect the pace of activity to pick up significantly given the legislature lost nearly two weeks of session due to the Michigan State University mass shooting and recent ice storm. We expect the following issues to get great attention before spring break:

• Appropriations subcommittees will continue moving through numerous stakeholder budget presentations reacting to the Governor’s $79 billion executive recommendation. 

• Gun reform hearings are set to kick-off next week with an intent to move bills relatively quickly. Michigan House Democrats introduced Gun Safety legislation Tuesday in the wake of the Michigan State University shooting last week. The 11 bills introduced by the House fall into 3 categories: requiring universal background checks to prevent private sale loopholes, creating secure storage laws and establishing extreme risk protection orders, also known as “red flag laws” which would allow courts to remove firearms from those who pose a threat to themselves or others. The Senate introduced a similar package last week. Governor Gretchen Whitmer and Lieutenant Governor Garlin Gilchrist both issued statements Tuesday evening in support of the legislation.

• Government transparency bills – Freedom of Information Act (“FOIA”) expansion to the Governor’s office and Legislature – are also expected with Sunshine Week officially beginning March 12. For those who are unfamiliar, Sunshine Week happens in mid-March every year to promote transparency law and open government. The purpose of Sunshine Week is to raise awareness of the importance of open government and promote dialogue on the impact of government secrecy.