In Ross v Consumers Power Co (On Rehearing), 420 Mich. 567; 363 N.W.2d 641 (1984), this Court attempted to clarify the parameters of sovereign, governmental, and individual immunity from tort liability granted by the governmental tort liability act, MCL 691.1401 et seq.; MSA 3.996(101) et seq., and common law. In particular, we redefined the term "governmental function," which appears in § 7 of the act, MCL 691.1407; MSA 3.996(107), as we believed the Legislature
In each of these cases, the plaintiffs seek to hold a public general hospital or medical facility vicariously liable for the negligent diagnosis, treatment, or care rendered by the hospital's employees or agents. Plaintiffs maintain that such hospitals can be held liable in a tort cause of action pursuant to Parker v Highland Park, 404 Mich. 183; 273 N.W.2d 413 (1978). Two common questions are presented:
1) Should Ross be given prospective effect only or retroactive effect?
2) Did Ross impliedly overrule that portion of Parker which held that the day-to-day operation of a public general hospital is not a governmental function?
We must also decide whether, and under what circumstances, the operation of a public general hospital or medical facility constitutes a proprietary function, which is not entitled to immunity from tort liability under § 13 of the act, MCL 691.1413; MSA 3.996(113).
We hold that the rules articulated in Ross apply to all cases commenced after January 22, 1985, the date our opinion was issued, and to those cases pending either in trial or appellate courts on January 22, 1985, in which a governmental immunity issue was properly raised and preserved.
Finally, we hold that only activities which are conducted primarily for the purpose of producing a pecuniary profit, and which are not normally supported by taxes or fees, are proprietary functions under § 13. The fact that a governmental agency produces a pecuniary profit may be evidence that the agency is engaged in a proprietary function, but it is not conclusive evidence. The focus instead should be on the primary intended purpose of the governmental activity and how the activity is normally funded.
Plaintiff Marcia Hyde was treated at the University of Michigan Hospital on July 8, 1974. On June 28, 1976, plaintiffs filed a medical malpractice suit in the Court of Claims, alleging that the hospital employees' negligent diagnoses and medical treatment caused Ms. Hyde to develop a serious post-surgical infection. Defendant Board of Regents asserted governmental immunity as an affirmative
After Parker was decided, defendant moved for accelerated judgment in April, 1979. Although Parker had held that public general hospitals are not immune from tort liability, defendant argued that this holding should not be given retroactive effect. Before a decision was rendered, this precise issue was resolved by Murray v Beyer Memorial Hospital, 409 Mich. 217; 293 N.W.2d 341 (1980). Murray held that Parker was to be applied to all cases pending on December 27, 1978, in which an express challenge to governmental immunity had been made and preserved.
Plaintiffs did not file an amended complaint alleging that defendant had been engaged in a proprietary function until October 29, 1982. Defendant moved again for accelerated judgment, claiming that plaintiffs had not made or preserved an express challenge to its governmental immunity until the amended complaint was filed. Since the filing occurred long after Parker was decided, defendant argued that Parker was inapplicable. Plaintiffs countered that they had expressly challenged defendant's immunity prior to Parker at
The trial court accepted defendant's argument and entered a judgment for defendant in an order filed February 9, 1983. A majority of the Court of Appeals affirmed.
Plaintiff is the guardian of his mother, Anita Katz. Ms. Katz has a long history of mental illness and has been hospitalized several times. On November 20, 1976, she was admitted to Clinton Valley Center, a state psychiatric facility, exhibiting abnormal twitching and movements of her mouth, face, limbs, and tongue.
In February, 1977, Ms. Katz was referred to Oakland Medical Center for a physical examination. The center was administered by the Department of Mental Health and provided general medical services to psychiatric patients. Dr. Joseph Chandler, a neurologist at the center, concluded that Ms. Katz was suffering from a degenerative nerve disease known as Huntington's chorea. Dr. Chandler prescribed Haldol for the condition. Ms. Katz had previously been treated for her mental illness with Haldol and other neuroleptic drugs, such as Thorazine, Stelazine, and Mellaril. When Ms. Katz' condition did not improve, her family insisted that the Clinton Valley Center discontinue administering any neuroleptic drugs. However, her condition did not substantially improve.
In 1979, plaintiff sued eleven doctors, two hospitals,
The two actions were joined for trial. Clinton Valley Center was granted summary judgment on the ground of governmental immunity.
On July 27, 1982, the circuit court concluded that the Oakland Medical Center could be held liable under Parker because it rendered only general medical care. The court also concluded that Dr. Chandler had been negligent in failing to obtain a complete medical and drug history, to consider tardive dyskinesia as a possible diagnosis, and to familiarize himself with the potential side effects of Haldol. Plaintiff was awarded $1,000,000 in damages (less settlements), $30,000 in attorney fees, and over $15,000 in expert witness and other fees.
The center's appeal was pending in the Court of Appeals when Ross was decided. The Court initially concluded that Ross should be applied to those cases pending on appeal when Ross was decided. Applying the new definition of "governmental function," the Court held that the center was entitled to immunity because the medical treatment rendered was expressly and impliedly authorized by the state constitution, statutes, and administrative regulations. It rejected the argument that the operation of a governmental care facility is a proprietary function because a fee is charged for medical services or an incidental profit is generated. Plaintiff's belated argument that the center could be held liable for breach of contract was rejected because plaintiff had failed to cross-appeal the dismissal of the contract count. The
On January 10, 1981, Frank Powers was admitted to Annapolis Hospital, a public general hospital operated by defendant Peoples Community Hospital Authority (PCHA). Mr. Powers was diagnosed as suffering from a myocardial infarction. He died several days later, allegedly after his pacemaker malfunctioned.
Plaintiff, decedent's wife, filed suit in April, 1982, against the PCHA and two of its physicians, Drs. Bercu and Jahan. She alleged that the doctors and staff had failed to monitor and treat decedent's heart condition properly. Plaintiff and Dr. Bercu settled for $25,000. The PCHA was granted partial summary judgment to the extent that plaintiff sought to hold it vicariously liable for Dr. Bercu's negligence.
After Ross was decided, the PCHA moved for summary disposition on the ground of governmental immunity.
Relying on Faigenbaum, the circuit court concluded that Ross, rather than Parker, should be applied. It found that the operation of the hospital by the PCHA constituted a governmental function because it was expressly authorized by statute. The court further concluded that under § 13 of the governmental immunity act, it had to determine whether the hospital's rendering of medical care for a fee was conducted primarily for the purpose of producing a pecuniary profit. It found that the primary purpose of the PCHA and Annapolis Hospital was to provide health care to the surrounding communities. The PCHA'S motion for summary disposition was therefore granted.
Plaintiff filed an application for leave to appeal with the Court of Appeals. This Court sua sponte granted leave to appeal prior to the decision of the Court of Appeals. 424 Mich. 858 (1985).
II. RETROACTIVITY OF ROSS
Our first task is to determine what case law is applicable in each case. Prior to Parker, the operation of a public general hospital was considered a governmental function under both common law and § 7 of the governmental immunity act. See
The Court justified this limited retroactive application as follows:
Justice WILLIAMS further noted:
Like Parker, Ross did not indicate whether it should be applied retroactively. Nevertheless, the opinion repeatedly noted that the rules and definitions articulated therein are new
Plaintiffs present several reasons why Ross should be applied only to cases commenced after the opinion was issued. First, Parker clearly held that immunity from tort liability did not extend to public general hospitals. This holding has never been seriously challenged in the courts or by the Legislature. Second, there was no indication that Ross would overrule Parker, since none of the nine consolidated cases decided in Ross involved the immunity of a public general hospital. Finally, plaintiffs note that other decisions have been given prospective effect only. See, e.g., Putney v Haskins, 414 Mich. 181; 324 N.W.2d 729 (1982); Tebo v Havlik, 418 Mich. 350; 343 N.W.2d 181 (1984).
Furthermore, the consolidation of nine factually diverse cases should have signaled to the bench and bar that this Court was reevaluating the definition of "governmental function." Beginning with Parker, no single definition had been adopted by a majority of this Court. In addition, the case law in general was "confused [and] often irreconcilable." Ross, 420 Mich. 596. Given the uncertainty of the law in this area, the bench and bar should have realized that some of our prior decisions, including Parker, might not survive after Ross.
Finally, the general rule is that judicial decisions are to be given complete retroactive effect. We often have limited the application of decisions which have overruled prior law or reconstrued statutes. Tebo, 418 Mich. 360-361. Complete prospective application has generally been limited to decisions which overrule clear and uncontradicted case law. Id., pp 361-363.
In Hyde, the initial complaint was filed prior to Parker. The amended complaint, which alleged that the University Hospital had been engaged in a proprietary function, was filed after Parker, but before Ross. The amended complaint was filed with the trial court's permission, and defendant has never argued that the pleading should be struck. Defendant only claimed that plaintiffs' challenge to its immunity came too late to take advantage of Parker. Even if we were to accept defendant's argument, the fact remains that this case was pending in this Court when Ross was issued.
In Faigenbaum, plaintiff's complaint against the Oakland Medical Center was filed after Parker
In Powers, plaintiff's malpractice claim was filed after Parker was decided. Ross was issued while the case was still pending in circuit court. The court correctly concluded that plaintiff's claim should be decided pursuant to Ross.
III. VIABILITY OF PARKER AFTER ROSS
Our second task is to determine whether Ross impliedly overruled Parker's holding that the operation of a public general hospital is not a governmental function under § 7 of the governmental immunity act.
Three opinions were written in Parker, each adopting a different definition of "governmental function." Justice FITZGERALD, joined by Chief Justice KAVANAGH and Justice LEVIN, adopted the narrow "of essence to government" test, i.e., the activity must be of such a peculiar nature that it can only be performed by government. Justice FITZGERALD concluded that the operation of a hospital is essentially a business, regardless of who operates it. Therefore, a governmental agency which decides to engage in such activities should not be entitled to immunity from tort liability. 404 Mich. 194-195.
Justice MOODY concurred, but applied the broader "essence of governing" test, i.e., the activity must be one which can be effectively accomplished only by government. Noting the large
Justice RYAN, joined by Justices WILLIAMS and COLEMAN, dissented. Applying the "common good of all" test, Justice RYAN concluded that the examination, diagnosis, and treatment of patients are activities entitled to immunity because they promote the general public health. Id., pp 203-204.
None of the cases decided in Ross involved the tort liability of a public general hospital. However, Ross explicitly rejected each of the definitions of "governmental function" used in Parker. 420 Mich. 614-619. "Governmental function" was redefined as
We noted that this definition "is broad and encompasses most of the activities undertaken by governmental agencies." Id., p 621.
Under Ross, a public general hospital or medical facility is engaged in the exercise or discharge of a governmental function whenever its activities are expressly or impliedly mandated or authorized by constitution, statute, or other law. To the extent that Parker held that such activities do not constitute a governmental function, Parker was impliedly overruled by Ross.
The governmental immunity act was passed in 1964 to halt this Court's attempts to abolish sovereign and governmental immunity. See Ross, pp 603-606. In both 1964 and 1970, the operation of a public general hospital was considered a governmental function. Parker, 404 Mich. 190-191. There is no indication, either in the words of the act or
We suggested in Ross that plaintiffs' arguments would be better addressed to the Legislature. Id., p 621. In response to Ross, 1986 PA 175 was enacted, effective July 1, 1986. The Ross definition of "governmental function" is codified in § 1(f).
In light of this recent legislative activity, today's holding will have limited effect. Sovereign or governmental immunity from tort liability will be extended to a governmental agency operating a public general hospital or medical facility only in those cases involving a cause of action accruing prior to July 1, 1986, which was pending on January 22, 1985, or commenced on or after that date.
IV. APPLICATION OF ROSS
In each case, plaintiffs seek to hold the defendant vicariously liable for the negligence of its employees or agents. Vicarious tort liability can only be imposed upon a governmental agency where:
1) the employee or agent committed a tort while acting during the course of employment and within the scope of his authority, and
2) the employee or agent committed the tort while engaged in an activity which was nongovernmental or proprietary or which fell within an
There is no suggestion that the employees or agents in each case were acting outside the course of employment or scope of authority when the alleged torts were committed. Other than the "proprietary function" exception, plaintiffs have not alleged that any other exception is applicable. We first decide whether the diagnosis, treatment, and care rendered by each hospital, through its employees and agents, constituted the exercise or discharge of a governmental function.
Plaintiffs alleged that the employees of the University Hospital negligently diagnosed and treated Ms. Hyde's fracture. The question is whether the diagnosis and treatment of patients were activities which were expressly or impliedly mandated or authorized by constitution, statute, or other law.
The University of Michigan is statutorily required to maintain a department of medicine. MCL 390.8; MSA 15.908. The Legislature expressly authorized the construction and operation of the University Hospital through several appropriation acts.
Plaintiff argues that the operation of defendant
Oakland Medical Center at all times was operated by the DMH. The center was established in 1968 as the medical-surgical unit of the Clinton Valley Center (then the Pontiac State Hospital). It became a separate administrative unit within the DMH in 1971. The center was created because local medical facilities were reluctant to render medical treatment to mentally ill and developmentally disabled persons residing in state facilities. The center rendered medical treatment primarily to patients from Clinton Valley Center, other state psychiatric facilities, and centers for the developmentally disabled.
Plaintiff argues that there is no constitutional or statutory authority which permitted the DMH to establish and operate a general medical care facility. Plaintiff believes that the Court of Appeals incorrectly relied upon § 116 of the Mental Health Code, MCL 330.1116; MSA 14.800(116). That statute
We do not interpret the DMH's powers so narrowly. The Legislature expressly authorized the creation and operation of a general medical-surgical unit within the DMH through several appropriations acts. See, e.g., 1967 PA 32; 1971 PA 126. The latter act specifically noted:
Each resident of a mental health facility must be given a comprehensive physical and mental examination prior to, or soon after, admission and must be reexamined at least annually. MCL 330.1710; MSA 14.800(710). Recipients of mental health services are entitled to "basic human dignity" under MCL 330.1704(3); MSA 14.800(704)(3), which would include the right to prompt and adequate general medical care. Even if these statutes did not exist, the care and treatment of persons residing in state mental health facilities include an implied responsibility to protect both the residents' physical and mental well-being. See Ross, pp 641, 643. The DMH was ultimately responsible for ensuring that Ms. Katz received necessary treatment for both her physical and mental conditions.
There is nothing in § 116 of the Mental Health Code which would prevent the DMH from fulfilling its statutory duties by operating a general medical care facility for mentally handicapped patients. Section 116 provides in pertinent part:
We conclude that the DMH was expressly and impliedly mandated by statute to secure, in some manner, those general medical services necessary for Ms. Katz's physical well-being. The DMH was expressly authorized by statute to provide such services directly through the Oakland Medical Center. The operation of a general medical facility implicitly includes the diagnosis and treatment of patients. Therefore, the employees of defendant center were engaged in the exercise or discharge of a governmental function when the malpractice occurred.
Plaintiff initially argues that Annapolis Hospital is not entitled to immunity from tort liability because it is not a "governmental agency." Section 1(d) of the governmental immunity act, MCL 691.1401(d); MSA 3.996(101)(d), defines "governmental agency" as "the state, political subdivisions, and municipal corporations." These terms are also defined in § 1:
Although hospitals are not listed in these definitions, plaintiff has overlooked the entity she actually sued. Plaintiff properly sued the Peoples Community Hospital Authority, an entity formed by twenty-four southeastern Michigan communities, which runs five community hospitals, including Annapolis Hospital. An authority formed by one or more political subdivisions is included within § 1(b)'s definition of "political subdivision."
Plaintiff also argues that there is no statute or other law authorizing or mandating the specific types of routine medical care provided by public general hospitals. Plaintiff has misperceived how the Ross definition of "governmental function"
We conclude that the care and treatment of patients by Annapolis Hospital were expressly authorized by statute. Defendant authority was established pursuant to the joint hospital authority act, MCL 331.1 et seq.; MSA 5.2456(1) et seq. This act authorizes two or more cities, townships, and villages to incorporate a hospital authority in order to construct, own, and operate one or more community hospitals. "Hospital" is specifically defined in the act as a building, structure, or related facility "intended for, incidental, or ancillary to the care of the sick or wounded, or for the care of persons requiring medical treatment...." MCL 331.1(2); MSA 5.2456(1)(2). The employees and agents of Annapolis Hospital were therefore engaged in the exercise or discharge of a governmental function when the alleged torts occurred.
V. "PROPRIETARY FUNCTION" EXCEPTION
Although the employees and agents in each case
Although § 13 only refers to the state, Ross judicially extended the statutory definition of "proprietary function" to nonsovereign governmental agencies. Id., pp 613-614. Thus, the following discussion of the "proprietary function" exception applies to all state and local governmental agencies.
In each case, plaintiffs maintain that the hospital or medical facility was performing a proprietary function because it charged a fee for the diagnosis, treatment, and care rendered to its patients. In Hyde, plaintiffs raised this allegation
In Faigenbaum, the "proprietary function" exception was not raised until after Ross was decided and shortly before oral arguments were held by the Court of Appeals. That Court held, apparently as a matter of law, that the operation of a governmental care facility cannot be deemed a "proprietary function," even where the facility charges for its services and produces an incidental profit. 143 Mich.App. 313-314. However, this precise issue was not fully litigated at trial.
Powers is the only case in which a full evidentiary hearing has been conducted, and findings of fact and law made, as to whether the diagnosis, treatment, and care of patients at Annapolis Hospital constituted a proprietary function. We therefore begin our analysis of the "proprietary function" exception with a summary of the undisputed evidence presented in Powers.
Defendant PCHA was organized in 1945 to provide medical services to the rapidly growing western Wayne County communities. The PCHA currently operates five community hospitals, which serve approximately 250,000 patients annually. The number of participating communities has grown from nine to twenty-four. Each community levies an assessment on its residents to redeem construction bonds. In return, the residents are charged a lower fee for medical services than that charged to nonresident patients. Most of the PCHA'S revenue is generated from fees charged for medical services rendered.
The PCHA actively competes with other health care providers for both resident and nonresident patients. In response to changing medical needs of
The trial court found that § 13 of the governmental immunity act contains two tests: 1) was the activity in question conducted primarily for the purpose of producing a pecuniary profit, and 2) was the activity supported by taxes or fees? The court concluded that even though the PCHA had excess revenues, it did not operate its hospitals primarily to produce a pecuniary profit. Rather, the history of the PCHA clearly indicated that it
The trial court correctly interpreted § 13. Prior to the enactment of the governmental immunity act, decisions of this Court had differed as to how much, if any, incidental profit could be generated before an activity was deemed to be a proprietary function.
Unlike the definition of "governmental function," the definition of "proprietary function" is quite specific and needs no interpretation. Before
1) The activity must be conducted primarily for the purpose of producing a pecuniary profit, and
2) The activity cannot normally be supported by taxes or fees.
There is nothing in § 13 which requires that the activity actually generate a profit before it can be deemed a proprietary function. If the availability of immunity turned solely upon an examination of the ledgers and budgets of a particular activity, a fiscally responsible governmental agency would be "rewarded" with tort liability for its sound management decisions. Such a rule could discourage implementation of cost-efficient measures and encourage deficit spending. Moreover, the rule would be difficult to implement and inconsistent in its results. If an activity operates at a loss one year, but makes a profit the next year, does the availability of immunity from tort liability also change? If one of the hospitals operated by the PCHA consistently operates at a loss, would immunity be granted to that hospital, but not the other fiscally sound hospitals?
The existence of a profit is not an irrelevant consideration, however. The fact that a governmental agency pursues an activity despite consistent losses may be evidence that the primary purpose is not to make a pecuniary profit,
Another relevant consideration is where the profit generated by the activity is deposited and how it is spent. If the profit is deposited in the governmental agency's general fund or used to finance unrelated functions, this could indicate that the activity at issue was intended to be a general revenue-raising device.
The trial court concluded that the PCHA'S primary purpose in operating its hospitals was to provide hospital and medical care to area residents. In light of all the evidence presented, this finding is not clearly erroneous.
Even if we were to conclude that the PCHA'S primary purpose was to produce a pecuniary profit, the operation of the hospitals was in fact
The Legislature has defined "proprietary function" in a very narrow, unambiguous manner. The focus is on the primary intended purpose of the activity and how the activity is normally funded. A plaintiff who merely alleges that a governmental agency provides goods or services for a fee has not sufficiently alleged that the agency is engaged in a proprietary function. Often, an agency is required by statute or other law to charge a fee for its goods and services.
In Hyde, ¶ 5 of plaintiffs' amended complaint stated
Plaintiffs bear the burden of pleading facts in their complaint which would justify a finding that recovery in their tort cause of action is not barred by the governmental immunity act. Ross, p 621, n 34; Galli v Kirkeby, 398 Mich. 527, 532, 540-541; 248 N.W.2d 149 (1976).
In Faigenbaum, plaintiff did not allege in his Court of Claims complaint that the Oakland Medical Center was engaged in a proprietary function when the malpractice occurred. Nor was this issue litigated. Plaintiff first raised the argument in his supplemental brief filed with the Court of Appeals shortly after Ross was decided. We will not consider this untimely and unpreserved argument. See Swartz v Dow Chemical Co, 414 Mich. 433, 446; 326 N.W.2d 804 (1982).
Plaintiff also asks that his contract claim
The fact that substantially identical facts underlie a plaintiff's tort and nontort causes of action does not automatically render them duplicative. Ross, pp 647-648. The trial court should have instead determined whether plaintiff had properly pleaded and could prove the elements of a breach of contract claim. Although we do not condone plaintiff's failure to appeal this issue in a proper manner, we remand this case to the trial court for a determination on this issue. Plaintiff raised the contract claim in his complaint and its viability will determine the outcome of this litigation. Swartz, supra.
In Hyde, the decision of the Court of Appeals is affirmed on different grounds.
In Faigenbaum, the decision of the Court of Appeals is affirmed insofar as it held that Ross is to be given limited retroactive effect, and that Parker was impliedly overruled by Ross. The case is remanded to the Wayne Circuit Court for further proceedings on plaintiff's breach of contract claim. We do not retain jurisdiction.
In Powers, the decision of the Wayne Circuit Court is affirmed.
LEVIN, J. (dissenting).
In 1978, this Court ruled, in Parker v Highland Park, 404 Mich. 183; 273 N.W.2d 413 (1978), that the operation of a general hospital was not a "governmental function" within the meaning of the governmental tort liability act.
Six years later, in Ross v Consumers Power Co (On Rehearing), 420 Mich. 567; 363 N.W.2d 641 (1984), this Court ruled that the construction of a drain, operations of a juvenile-care facility by the Department of Social Services, operations of facilities for emotionally disturbed persons by the Department of Mental Health, operations of a school district, the issuance of dredging permits by the Department of Natural Resources, the police response to a disturbance, and operations of a 911 system, were governmental functions.
In two of these cases, consolidated on appeal, it was held, after Ross was decided, that because the operation of a general hospital is an activity that the defendant governmental entities were authorized by law to engage in, they were, pursuant to Ross, immune from tort liability.
After argument in this Court, the governmental tort liability act was amended by 1986 PA 175. There was added, for the first time, a definition of
Sec. 1. As used in this act:
The Legislature thereby adopted, for causes of action arising on and after July 1, 1986, both the Ross definition of governmental function and the concept (expressed in Parker) that a governmental agency operating a general hospital was subject to tort liability and, as well, the concept (expressed in the companion case of Perry v Kalamazoo State Hospital, 404 Mich. 205; 273 N.W.2d 421 ), that a governmental agency operating a state mental hospital was not subject to tort liability.
Because Act 175 is not effective as to causes of action arising before July 1, 1986, this Court must decide whether to overrule Parker and, if so, whether to make such overruling effective before July 1, 1986.
The question is therefore whether a governmental agency operating a general hospital is subject to tort liability pursuant to Parker in respect to causes of action arising before the July 1, 1986, effective date of Act 175. We would hold that it is.
The question whether a governmental agency is immune from or subject to tort liability in respect to the operation of a hospital was not presented
Before this Court could decide that question, the Legislature indicated its general satisfaction with the results in Ross, Parker, and Perry; the Legislature adopted in Act 175 the Ross definition eliminating tort liability for all lawful governmental operations, but excepted, as set forth in Parker, the operation of a general hospital but not, as set forth in Perry, the operation of a state mental hospital.
The legislative adoption of the Ross definition of governmental function, and of the Parker/Perry distinction and qualification respecting general and state mental hospitals, were both made effective as to causes of action arising on and after July 1, 1986. The Legislature did not place its imprimatur on the Ross definition unmodified by the Parker/Perry distinction and qualification for causes of action arising before July 1, 1986.
We are obliged in construing legislation, in the instant case the governmental tort liability act, to search for and seek to implement the intent of the Legislature.
Where an amendment is enacted after controversy has arisen concerning the construction of an act, the amendment has, at times, been regarded by this Court as an expression of the legislative view of the original enactment — the purpose of the legislation being to clarify, because of the difference of opinion, the meaning of the original act rather than to work a substantive change of law. See Detroit Edison Co v Dep't of Revenue, 320 Mich. 506, 519-520; 31 N.W.2d 809 (1948). Such an amendment has been viewed as a legislative expression
Act 175 expresses the legislative judgment, and thus declared as the public policy of the state, that all lawful governmental operations shall be regarded as governmental functions immune from tort liability except, among others, the operation of a general hospital.
In none of the nine cases decided in Ross was the service provided by government mainly provided in the private sector and largely funded in the same manner as like services provided in the private sector. Because Ross did not consider the factual situation presented in Parker, it cannot properly be said today that Parker was impliedly overruled by Ross.
When Ross was decided the Court, aware of Parker, left open the question of Parker's continued viability in recognition of the impropriety of deciding a question not before it. A question left open to be decided at a later date could not have been impliedly decided when Ross was decided.
To be sure, there are situations where, because the facts and context are essentially the same as those in an earlier case, the Court could not properly fail to apply a rule announced in the earlier case and, hence, there has been an implied overruling by the earlier case of any still earlier contrary decision.
This is not such a case. While the language of the Ross definition of governmental function in terms left no room for a distinction, what was said in Ross should, under long-established principles, be read in the context of what was then before the
What was said in Ross could not foreclose this Court from recognizing, when the issue was presented, the difference and distinction between one governmental activity and another — the difference and distinction between a governmental activity mainly provided and funded by government and a governmental activity mainly provided in the private sector funded by users without significant governmental subvention.
The opinion of the Court acknowledges that "[n]one of the nine consolidated cases decided in Ross involved the tort liability of a public general hospital...."
To the extent that the Ross definition embraced within its sweeping ambit "governmental" operations and services mainly provided in the private sector and mainly funded by user fees — to the extent it dealt with the question theretofore decided in Parker — it went beyond the ambit of what was before the Court for decision and beyond the appropriate exercise of judicial authority.
What the Court says in an opinion beyond what
What the Court does in a particular case rather than what it says is more likely to stand the test of time. What the Court did in Ross was to hold that operations of schools, the Departments of Natural Resources and Mental Health, 911 and police department operations — operations without an equivalent counterpart in the private sector, operations largely funded by taxes — are governmental functions within the intendment of the governmental tort liability act. That is all the Court did or could properly do.
The view that Ross impliedly overruled Parker presupposes either that (i) there is no meaningful difference between such tax-supported governmental operations as police and fire departments, public schools, state-operated mental institutions, and the Department of Natural Resources, on the one hand, and user-supported government operations of a general hospital, on the other, or that (ii) this Court is incapable of defining the term "governmental function" in a manner both consistent with what the Court decided (as distinguished from what it said) in Ross and, in recognition of the difference and distinction between such governmental operations, consistent with what was decided in Parker/Perry.
The Supreme Courts of Pennsylvania, North Carolina, Kansas, and Minnesota,
Justice MOODY recognized the difference and distinction in Parker/Perry. By his fourth vote, he implemented the difference and distinction for six years.
It is within the competence of this Court to recognize the difference and distinction and to say, for example, that it is beyond the policy and intent of the Legislature — in excepting from the general rule of tort liability the operations of government that constitute a "governmental function" — to except from the general rule of tort liability the governmental operation of a general hospital because such hospitals, in contradistinction from other governmental operations, generally provide services obtained by most of the state's population in the private sector that are largely funded in the same manner as like services obtained in the private sector.
The Court might thus define (or redefine) "government function" for the period January 22, 1985 (the day Ross was announced), through June 30, 1986 (the day before Act 175 became effective), as any government activity, not ultra vires, other than a service mainly provided the state's population in the private sector that is largely funded, where provided in the public sector, in the same manner and from the same sources as like services obtained in the private sector.
If this Court were in these consolidated cases to recognize the distinction between a general hospital and all other government operations, and to so
The legislative adoption of the Ross definition was no more than a convenient way of stating what could be said in another way with the same result. Act 175 does not imply that the Legislature viewed Ross as overruling Parker, and most importantly the enactment of Act 175 did not imply that the Legislature viewed Ross as correctly overruling Parker and a correct expression of legislative intent.
"By adopting this narrow exception to the broad immunity granted by Ross and codified by 1986 PA 175, it is clear"
If one focuses on the effective date of July 1, 1986, one could argue, and correctly so, that the Legislature did not make the rules announced in Act 175 — the Ross definition modified by the Parker/Perry
This Court should not insist that its word formulation in Ross, rejected in this one application by the Legislature, must govern decision in this case. No grand design, plan, or symmetry would be offended by continuing the rule of Parker through July 1, 1986, the effective date of the new legislation.
The codification of the Ross definition effective July 1, 1986, as amended by the exception for general hospitals, means that the codification of the Ross definition as amended did not become effective until July 1, 1986. There is, to repeat, no implication from the July 1, 1986, effective date that the unamended Ross formulation is to be effective before July 1, 1986, or that it is codified and written in stone for the period of January 22, 1985, through June 30, 1986.
One can as readily argue that the application before July 1, 1986, of the Ross definition was rejected by the Legislature, as that the continued application of Parker through June 30, 1986, was rejected.
The question when, if at all, the obiter dictum of Ross becomes effective is a separate question which the Legislature left to the courts. This Court can readily justify delaying the effective date of the Ross dictum or modifying the dictum in recognition that it is dictum and the impolicy of creating a window of immunity by overruling Parker. There is nothing in the legislatively ordained July 1, 1986, effective date that militates for or against either result.
Parker should not be overruled. The result of Parker is now the law for causes of action that arise on and after July 1, 1986. Parker has governed, since 1978, in hundreds, perhaps thousands, of lawsuits settled or tried on the basis of Parker. There are hundreds or perhaps thousands of cases pending in the courts where litigants and lawyers in reliance of Parker have expended considerable energy and large sums in cases awaiting trial. Partial settlements have been entered into and nonhospital defendants not named or released from liability in reliance on the rule of Parker in the expectation of a day in court against a governmental hospital defendant.
The argument that Parker was not precedentially binding because "no single definition had been adopted by a majority of this Court,"
Even if Ross impliedly overruled Parker it would not be consequential if it is not overruled effective before July 1, 1986. The same considerations of fairness that prompted this Court to delay the effective date of the new rules announced in Tebo and Gusler require, at least, that the effective date of any overruling of Parker be delayed until January 22, 1985, the day the Ross definition (together with the Ross obiter dictum) was announced.
The opinion of the Court states:
Footnote 35 of the opinion states:
It thus appears that a governmental hospital need not plead governmental immunity as an affirmative defense and that the failure to plead an affirmative defense would not be a failure to "preserve" the governmental immunity issue. Nevertheless, under the Court's formulation, the issue must be "properly raised." The opinion does not state whether this might have been done by motion for summary judgment, in the pretrial statement,
It appears, since the opinion of the Court speaks in the past tense — "was properly raised and preserved" (emphasis supplied) — that the governmental immunity issue must have been properly raised and preserved by January 22, 1985. If that is a correct reading, then if a motion for summary judgment were filed after January 22, 1985, it would be too late. And since the governmental immunity issue need not be raised as an affirmative defense, raising it by answer on or before January 22, 1985, might not be to "properly" "preserve" it.
If, as appears, the window of immunity announced by the Court today applies only to cases where motions for summary judgment were filed on or before January 22, 1985, the effect of the
Parker thus is not overruled as to cases commenced on or before January 22, 1985, in which the defendant hospital failed to file a premature motion for summary judgment and, possibly, also is not overruled as to cases in which the defendant hospital filed a superfluous affirmative defense. If a case was filed on, say, January 15, 1985, Parker would probably govern because the defendant hospital's answer was not due until after January 22, 1985. If, however, the defendant hospital filed a premature motion for summary judgment that was denied, Parker governs despite the expenditure of energy and money preparing the case for trial in reliance on that denial which presumably would have been predicated on Parker.
The Court has not adequately explained why it has reached such a peculiar result now that the Legislature has spoken and clearly said that the public policy of this state is that general hospitals are not immune from and rather are subject to tort liability.
ARCHER, J., concurred with LEVIN, J.
ARCHER, J. (dissenting).
While I concur with Justice LEVIN's dissent, I write separately.
The Legislature has specifically provided that tort liability may be imposed upon a governmental agency that owns or operates a public general hospital or county medical facility. 1986 PA 175.
In Parker, the majority held that public general hospitals are not immune from tort liability. None of the nine cases decided in Ross involved that issue. The Legislature decided not to grant immunity to governmental agencies that own or operate hospitals or county medical facilities and provided that the agents or employees of such hospitals were not immune from liability.
Months after the Ross decision, the Legislature held hearings on proposals to reform tort law in this state. Although the Legislature limited the noneconomic damages that some plaintiffs could recover in medical malpractice cases, other reforms were not enacted. The Legislature decided to retain tort liability for governmental agencies that own or operate certain general hospitals. Since the Legislature has expressed a clear judgment requiring certain public general hospitals to remain liable, this Court should respect that judgment. Legislators are elected representatives of the people
The government and its agents have a duty to act responsibly in the name of the people who authorize them to act. This is especially true in the area of public health where the sick and injured are especially vulnerable and must rely upon the professional expertise of their caretakers. In expanding the scope of governmental immunity in these cases, the Court is protecting the government and its agents from the legal consequences of negligent acts.
While absolute immunity from liability may be required in limited instances in order to allow some governmental agencies and employees the freedom in which to exercise their mandate from the people, such freedom is not justified in this case.
By authorizing the government to engage in certain activities, such as operating a public hospital, the public has not at the same time relieved the government of its duty to act with care.
As Justice LEVIN correctly observed in his partial dissent in Ross:
The determination whether a governmental agency acted within the limits of its authority still requires judicial interpretation. To state that an activity is expressly or impliedly mandated or authorized by constitution, statute, local charter or ordinance, or other law adds little to the analysis we must use to determine the nature of the responsibilities of the agency and whether the specific acts alleged were beyond the public mandate.
Because the majority ignores the precedence of Parker, and extends the immunity of government to an unacceptable degree, I dissent.
1986 PA 175 also modifies the tests for individual immunity from tort liability articulated in Ross.
In Faigenbaum, plaintiff sued the Oakland Medical and Clinton Valley Centers, but not the DMH. However, the DMH was the department responsible for running the Oakland Medical Center and will ultimately pay any judgment entered, especially since the center is no longer in existence. The governmental immunity act cannot be circumvented merely by naming a facility as the defendant, rather than the state or local governmental agency which operates the facility. Since a department of the state is included within § 1(c)'s definition of "state," the governmental immunity act is applicable.
2. Ross, supra, p 640 (Willis v Dep't of Social Services). The Court said "[t]he question therefore is whether allowing decedent to participate in a swimming outing, and the care and supervision of decedent during the outing [with the juvenile care facility], constitute the exercise or discharge of a nonproprietary, governmental function."
3. Ross, supra, pp 642-643 (Siener v Dep't of Mental Health). "We must therefore determine whether the control and supervision of emotionally disturbed patients by [the Department of Mental Health in the Hawthorn Center] and their employees during a field trip is expressly or impliedly mandated or authorized by constitution, statute, or other law."
4. Ross, supra, p 646 (Rocco v Dep't of Mental Health). The Court said the crucial inquiry was "whether the placement of patients within a mental health facility, and the care, control, and supervision of in-patients, are activities which are expressly or impliedly mandated or authorized by constitution, statute, or other law."
5. Ross, supra, p 649 (Regulski v Murphy). The Court said it was required to "determine whether the instruction and supervision of students enrolled in a building trades class, as well as the provision of safety devices and measures, constitute the exercise or discharge of a nonproprietary, governmental function."
6. Ross, supra, p 653 (Trezzi v Detroit). The Court said: "We therefore must determine whether the categorizing of emergency calls by a 911 operator and the dispatch of police vehicles in accordance therewith are activities which are expressly or impliedly mandated or authorized by constitution, statute, or other law."
7. Ross, supra, p 655 (Disappearing Lakes Ass'n v Dep't of Natural Resources). The Court inquired "whether the issuance of dredging permits and extensions, and activities related thereto, are activities which are expressly or impliedly mandated or authorized by constitution, statute, or other law."
8. Ross, supra, p 660 (Zavala v Zinser). "[W]e must determine whether [a police] officer's decision to request and await backup assistance is expressly or impliedly mandated or authorized by constitution, statute, or other law."
In Powers v Peoples Community Hospital Authority, the circuit court concluded, on the basis of Ross, that the operation of a general hospital was a governmental function. This Court granted leave to appeal prior to decision of the Court of Appeals. 424 Mich. 858 (1985).
In Hyde v Michigan (not officially reported), a divided Court of Appeals ruled that Parker v Highland Park, supra, did not apply because this Court had subsequently held in Murray v Beyer Memorial Hospital, 409 Mich. 217, 221; 293 N.W.2d 341 (1980), that "the rule of Parker is to be applied to all cases pending on December 27, 1978, in which an express challenge to the defense of governmental immunity was made and preserved as well as all cases started after that date," and, in the view of the majority, the plaintiff had not made and preserved an express challenge to the defense of governmental immunity. The Court's disposition makes it unnecessary to express an opinion whether Hyde was correctly decided by the Court of Appeals.
The act became effective July 1, 1986.