Apportionment of liability under the WDCA – and an early look at Justice McCormack’s approach to statutory construction


Smitter v Thornapple Township (June 19, 2013) is, in most respects, a typical opinion from the Michigan Supreme Court. The Court was presented with a question of statutory construction that affected the allocation of liability between Thornapple Township—the employer of the plaintiff/part-time firefighter—and the Second Injury Fund under the Worker’s Disability Compensation Act. The Court applied the plain text of the Act and determined that, if a township failed to seek reimbursement as required by the Act, it relinquished the opportunity to do so later—even if it overpaid. The legislature’s use of the term “shall” made the Act’s requirements mandatory in the majority’s view.

Smitter is also notable because it is the first opinion to showcase Justice Bridget McCormack’s approach to statutory construction, suggesting that she views matters of public policy as relevant when parsing legislative enactments.

The plaintiff in Smitter was injured while working as a part-time firefighter for Thornapple Township. The township was therefore liable for wage loss benefits. But because the plaintiff had dual employment and was injured while working at a job that provided less than 80% of his wages, Thornapple Township was also required to coordinate the payment of those benefits with the Second Injury Fund. The Court summarized the allocation of liability as follows: “[B]ecause [plaintiff] earned 11 percent of his weekly wages with the township, it [was] liable for 11 percent of [plaintiff’s] weekly benefits.” The Second Injury Fund was liable for the rest.

Before the township sought to apportion liability with the Second Injury Fund, however, it voluntarily overpaid the plaintiff. It therefore sought reimbursement from the Second Injury Fund. The Michigan Supreme Court held that the township was not entitled to reimbursement after the fact. The Worker’s Disability Compensation Act required the township to follow the statutory procedure for allocation before payment and the use of the term “shall” in the Act made this procedure mandatory.

In dissent, Justice McCormack wrote that, although “’shall’ generally implies a mandatory directive,” there were textual clues in the Act that “undercut the general principle that the ordinary usage [of ‘shall’] applies.” Her analysis focused, for example, on language suggesting that the “employer’s obligation may be reduced by coordination, not the Second Injury Fund’s obligation or the employee’s bottom line benefits.” Justice McCormack concluded, therefore, that “the decision to coordinate rests with the employer…” She also notes that there is no language integrating two sections of the Act.

In a separate section of her dissent, Justice McCormack considered public policy implications. She concluded that an interpretation that treated coordination with the Second Injury Fund as optional rather than mandatory advanced freedom of contract:

[T]here is no reason to suppose the Legislature sought to interfere with the prerogative of this subset of employers to enter into employment contracts and offer their employees whatever insurance benefits the employer and employee jointly elected. Respecting employment contracts seems especially important for employers trying to attract first responders in tough economic times.

Justice McCormack’s dissent therefore highlights a willingness to consider public policy when construing statutory text.

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