Republican legislation prioritizing corporations advances, 57-49
LANSING — Members of the House Democratic Caucus expressed their outrage and disbelief at the passage of House Bill 5558, legislation that erodes even further the rights of residents under the Michigan Consumer Protection Act. When a Michigan veteran tried to exercise what rights remained in the law by suing a deceptive insurer, legislative Republicans rushed to the defense of the corporation.
“It’s appalling the extent to which insurance companies are willing to go to avoid being accountable to their customers,” said state Representative Phil Cavanagh (D-Redford), Democratic vice chairman of the House Judiciary committee, where the bill originated. “This bill is just the latest in a line of attacks on Michigan consumers, who used to have the best protection in the nation.”
Tina Dell was in the Army National Guard and four days away from duty with the active Army when she was catastrophically injured, as a pedestrian, in a car accident. In 1987, her insurer told Dell’s mother that her insurance didn’t cover attendant care. More than 20 years later, Dell’s family found out that was false. They sued their insurer for unpaid benefits, and a jury awarded $2 million in damages. Jim Burnett, a lawyer with Burnett and Kastran PC in Allegan that tried the case, said that despite claims from Republicans that the bill is simply clarifying the law, HB 5558 is a “direct response” to the verdict.
The bill is a “direct attack on one of our veterans who was catastrophically injured as a result of her involvement in a motor vehicle collision,” Burnett said. “The bill would reward and insulate any Michigan no-fault insurance carrier who engages in misrepresentation, lies, cheats and denies benefits to a catastrophically insured customer. I can’t imagine anyone with even half of a heart wanting to support this legislation.”
Amendments to Michigan Consumer Protection Act to deny consumers the right to sue companies that are regulated by the state, such as insurers, went into effect in 2001. The bill didn’t apply the new rules retroactively, however. HB 5558 would apply retroactivity to the law and pre-empt lawsuits filed for actions that took place before 2001. It was amended today to exempt court actions filed before the current bill becomes law. While Dell’s award might remain intact, others in Michigan will lose out.
“Michigan consumers have lost their last recourse to compensation when corporations treat them unfairly. This is the nail in the coffin for the Consumer Protection Act,” said state Rep. Jeff Irwin (D-Ann Arbor). “Time and again, Republicans show they will side with corporations and special interests over regular people.”
Last month, House Democrats unveiled a package of legislation that would put consumer protection back into the law. The bills hold insurance companies accountable by prohibiting unfair or deceptive practices and allowing consumers to file a lawsuit when companies don’t comply. They make insurance more affordable by making it harder for companies to charge excessive rates. Finally, the bills increase transparency by encouraging whistleblowers to come forward when they see misconduct from the inside.
“This bill attacks consumers for the benefit of corporations. The people of Michigan sent us to Lansing, and that’s who we need to work for,” said state Rep. Theresa Abed (D-Grand Ledge), who sponsored a bill in the Democrats’ package forcing insurers to act in good faith when a customer files a claim. “The legislation my colleagues and I introduced will make insurance affordable, accountable and transparent, and we will continue fighting for Michigan consumers, not special interests.”
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S689 House Office Building
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Fax: (517) 373-5976
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I’m State Representative Phil Cavanagh, and I serve Michigan’s 10th House District.
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State Representative Phil Cavanagh
10th House District