By John Lindstrom
Publisher
Posted: May 22, 2014 2:38 PM

A name popped up in this week’s Court of Appeals decision that isn’t heard much anymore, but once had a huge impact on life around the Capitol.

In its decision on Wednesday holding that the Michigan Catastrophic Claims Association did not have to reveal its documents, the court said that such a requirement was not made under the decision Shavers v. Attorney General.

Shavers was the decision that upheld the constitutionality of the now 41-year-old automotive no-fault insurance system in Michigan. It also had an effect on another major social issue at the time. And created a bit of constitutional crisis on its own.

No-fault went into effect in Michigan in 1973. Just one month later, the case known as Shavers was filed. It slowly, and I do mean slowly, worked its way through the legal process, being heard first in Wayne Circuit Court, then the Court of Appeals and then before the Supreme Court in March 1977. Take note: March 1977.

While that case was wending its way, the Legislature was embroiled in trying to resolve a major social/economic issue known as “redlining.” Redlining, which critics will contend still occurs, was the practice of marking out various geographic areas – almost always urban – and charging far higher insurance rates in those areas.

Critics argued that this hurt efforts to restore and rebuild the state’s cities, particularly Detroit. Supporters said the action reflected actuarial data, and to require statewide basing of policies, which some critics wanted, would force people across the state to pay for higher property crime and automotive crash rates in the cities.

This debate really began in earnest in 1976, moved through 1977 and was still hot in 1978.

Sometime in early 1978, the Detroit Free Press wrote an editorial begging the Supreme Court to finally make a decision on Shavers, the no-fault case. Yup, we had gone nearly a full year with no resolution.

And would go for a nearly a full 15 months before the elderly clerk who brought copies of decisions to reporters lugged a massive pile of paper to the Capitol press room. It was June 1978, and the Shavers decision had arrived in thick mounds of blue, legal-sized paper.

The court ruled 4-3 that no-fault was constitutional, but unconstitutionally exposed consumers to high rates and arbitrary cancellations. The court said the Legislature had to fix that, and gave it 18 months to do so or no-fault would be tossed out.

Reading the decision, reporters realized the court was also saying fix redlining because that was the practice that was largely to blame for the arbitrary nature of the insurance rate problems.

But the court had also told the Legislature what to do, and in so doing really, well, pissed off the Legislature. Liberals, conservatives, Democrats and Republicans were furious, demanding to know who the court thought it was to tell them what to do. In a pique, some House Democrats even said, screw ‘em, we should do nothing and see what the court does in 18 months.

The Legislature, however, complied. Now, members wouldn’t say they caved, but they passed a compromise measure that help control rates a little better to save no-fault.

In large measure, they did so because by then nobody – even those who had opposed no-fault – wanted to run the risk of scrapping the no-fault system. The insurance industry did not want to completely change its operations again. And motorists who complained about high insurance rates liked the fact that they could get cars repaired and claims paid right away, as opposed to waiting months or even years, in some cases, for insurance companies to chase each other and decide who was paying what for whom.

All that was due in part to the Shavers decision. Somehow in this electronic age, we have lost the drama of watching an elderly court clerk bent over with the weight of big, blue decisions. Oh well.