54; 267 N.W.2d 72; 1978 Mich. LEXIS 399

March 3, 1977, Argued
June, 1978, Decided

SUBSEQUENT HISTORY: [***1] Application for rehearing filed August 31, 1978. Decided Rehearing Denied
December 1, 1978.

PRIOR HISTORY: 65 Mich App 355; 237 NW2d 325 (1975).


DISPOSITION: The decision of the Court of Appeals is affirmed in part and reversed in part. Remanded to the trial
court for further development of the record.

CASE SUMMARY:


PROCEDURAL POSTURE: Plaintiffs appealed a ruling of the Michigan Court of Appeals that the Michigan No-
Fault Insurance Act 's (Act) personal injury protection scheme and exclusion of two-wheel vehicles were constitutional
under the United States and Michigan Constitutions, while the Act's property damage protection scheme was unconsti-
tutional but severable.

OVERVIEW: Plaintiffs sought a declaratory judgment regarding the constitutionality of the Michigan No-Fault Insur-
ance Act (Act) under U.S. Const., amend. XIV, Mich. Const. art. 1, § 17. The lower appellate court ruled that the Act's
personal injury protection scheme and exclusion of two-wheel vehicles were constitutional, but its property damage
protection scheme was unconstitutional and severable. On appeal, the court affirmed in part and reversed in part, re-
manding the matter to the trial court for further development of the record. The court granted constitutional approval of
the Act's personal injury protection and property damage protection insurance schemata, but held that the Act's compul-
sory insurance requirement was constitutionally deficient and denied due process by failing to protect motorists from
potentially unfair insurance rates, insurance refusal, or insurance cancellation. To permit legislative corrective action,
the court ruled that the Act would remain in effect for 18 months from the issuance of its opinion.

OUTCOME: The court affirmed in part and reversed in part, finding that the Act's compulsory insurance requirement
was constitutionally deficient and denied motorists due process; the court permitted the Act to remain in effect for an
additional 18 months to allow legislative correction of deficiencies.

CORE TERMS: no-fault, motor vehicle accidents, No-Fault Act, motorist, compulsory, property damage, coverage,
insurer, constitutional law, equal protection, personal injury, equitable, premium, entitlement, insurance rates, classifica-
tion, declaratory judgment, insured, legislative judgment, fault, police power, discriminatory, reimbursement, registrant,
property interest, tortfeasor, equal protection, automobile insurance, tangible property, nonresident

LexisNexis(R) Headnotes

Civil Procedure > Justiciability > General Overview
Constitutional Law > The Judiciary > Case or Controversy > Standing > General Overview Page 2
402 Mich. 554, *; 267 N.W.2d 72, **;
1978 Mich. LEXIS 399, ***
[HN1] The Michigan No-Fault Act does not, on its face, contemplate the expenditure of state funds. The court does not
believe that the taxpayers' suit rule and statute, Mich. Comp. Laws § 600.2041, is intended to give plaintiffs standing to
test the constitutionality of an entire act when the expenditure of funds alleged is incidental to its implementation.

Constitutional Law > The Judiciary > Case or Controversy > Standing > General Overview
[HN2] See Mich. Gen. Ct. R. 521.1 (1963).

Civil Procedure > Justiciability > Case or Controversy Requirements > Actual Disputes
Civil Procedure > Declaratory Judgment Actions > State Judgments > General Overview
Constitutional Law > The Judiciary > Case or Controversy > Standing > General Overview
[HN3] The existence of an actual controversy is a condition precedent to invocation of declaratory relief. In general,
actual controversy exists where a declaratory judgment or decree is necessary to guide a plaintiff's future conduct in
order to preserve his legal rights.

Civil Procedure > Declaratory Judgment Actions > State Judgments > General Overview
Constitutional Law > The Judiciary > Case or Controversy > Standing > General Overview
[HN4] Before affirmative declaratory relief can be granted, it is essential that a plaintiff, at a minimum, plead facts enti-
tling him to the judgment he seeks and proves each fact alleged, i.e., a plaintiff must allege and prove an actual justicia-
ble controversy.

Governments > State & Territorial Governments > Police Power
[HN5] The court holds that the Michigan Legislature has authority under its police power to compel the purchase of no-
fault insurance.

Constitutional Law > Bill of Rights > Fundamental Rights > Procedural Due Process > Scope of Protection
[HN6] The protections of the due process clause can only be invoked when there has been state action.

Constitutional Law > Bill of Rights > Fundamental Rights > Procedural Due Process > Scope of Protection
Constitutional Law > Substantive Due Process > Scope of Protection
[HN7] The concepts of "liberty" and "property" protected by due process are not to be defined in a narrow or technical
sense but are to be given broad application.

Constitutional Law > Bill of Rights > Fundamental Rights > Procedural Due Process > Scope of Protection
[HN8] The existence of interests or benefits entitled to due process protection depends on the extent to which govern-
ment activity has fostered citizen dependency and reliance on the activity.

Constitutional Law > Bill of Rights > Fundamental Rights > Procedural Due Process > Scope of Protection
Governments > State & Territorial Governments > Licenses
Insurance Law > Motor Vehicle Insurance > Coverage > Compulsory Coverage > General Overview
[HN9] A driver's license, once issued, is a significant interest subject to constitutional due process protections.

Constitutional Law > Bill of Rights > Fundamental Rights > Procedural Due Process > Scope of Protection
Insurance Law > Motor Vehicle Insurance > Coverage > No-Fault Coverage > General Overview
[HN10] Michigan motorists are constitutionally entitled to have no-fault insurance made available on a fair and equita-
ble basis.

Constitutional Law > Bill of Rights > Fundamental Rights > Procedural Due Process > Scope of Protection
[HN11] In determining what process is due, the court considers: first, the private interest that will be affected by the
official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the prob-
able value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the
function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement
would entail.

Constitutional Law > Bill of Rights > Fundamental Rights > Procedural Due Process > Scope of Protection
Governments > State & Territorial Governments > Police Power Page 3
402 Mich. 554, *; 267 N.W.2d 72, **;
1978 Mich. LEXIS 399, ***
[HN12] The test to determine whether legislation enacted pursuant to the police power comports with due process is
whether the legislation bears a reasonable relation to a permissible legislative objective.

Constitutional Law > Equal Protection > Level of Review
[HN13] Under traditional equal protection analysis, a legislative classification must be sustained, if the classification
itself is rationally related to a legitimate governmental interest.

Constitutional Law > Equal Protection > Level of Review
Constitutional Law > Equal Protection > Scope of Protection
[HN14] Under the equal protection clause a person's interest in operating an automobile is not fundamental. The right to
travel protects movement in the sense of migration, not the individual's choice of a particular means of transportation.

Civil Procedure > Judgments > General Overview
Constitutional Law > Equal Protection > Level of Review
Constitutional Law > Equal Protection > Scope of Protection
[HN15] In the application of the due process and equal protection rational relation tests, it is axiomatic that the chal-
lenged 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.

Civil Procedure > Judgments > General Overview
Constitutional Law > The Judiciary > Case or Controversy > Constitutionality of Legislation > General Overview
Constitutional Law > Equal Protection > Scope of Protection
[HN16] Because the presumption of constitutionality is a rebuttable presumption, a party challenging the legislative
judgment may attack its constitutionality in terms of purely legal arguments, if the legislative judgment is so arbitrary
and irrational a