Laundree v. AMCA International

Citation: 908 F.2d 43Docket: No. 89-2058

Court: Court of Appeals for the Sixth Circuit; July 6, 1990; Federal Appellate Court

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Plaintiff Ronald Laundree, a Michigan resident, filed a lawsuit against his employer, AMCA International, and its insurance carrier, Travelers Insurance Company, after sustaining a work-related injury caused by a crane operator allegedly under the influence of alcohol. Laundree claims that AMCA’s management was aware of the operator's habitual intoxication and knew he was drunk on the day of the incident, which occurred on January 21, 1987. Prior to this incident, the Michigan Supreme Court ruled in Beauchamp v. Dow Chemical Co. that intentional torts by an employer could allow for traditional tort claims outside the scope of Michigan's workmen's compensation law. This ruling defined intentional torts as actions where the employer knows that an injury is substantially certain to occur and proceeds regardless of that knowledge.

In response to the Beauchamp decision, the Michigan legislature amended the workmen's compensation act to permit separate lawsuits for intentional torts, defining intentional torts as injuries resulting from deliberate acts where the employer had actual knowledge of the certainty of injury and willfully disregarded that knowledge. This revised statute, effective May 14, 1987, four months after Laundree's injury, became central to the district court's dismissal of his case on the grounds that Laundree did not meet even the more lenient standards established in Beauchamp, and that the amended statute was retroactively applicable.

Laundree contests the dismissal, arguing against both the retroactive application of the amendment and the court's interpretation of his claim under the Beauchamp standard. Notably, there exists a division among Michigan appellate courts regarding the retroactivity of the amended statute, with some courts asserting that it should be applied retroactively as it is remedial in nature, provided it does not create new rights or eliminate existing ones.

The court determined that the amendment to the statute neither created new rights nor eliminated existing ones, as stated in the statute's language: "This subsection shall not enlarge or reduce rights under law." The Bowden case supported the retroactive application of the amendment, concluding that the plaintiff's claim was based on negligence and was therefore barred by the exclusive remedy provision of M.C.L. 418.131. However, a later Michigan Court of Appeals panel referred to Bowden's retroactivity ruling as dicta, a characterization deemed inaccurate by the court, which noted that the Schefsky decision indicated the plaintiff did not meet the required "substantial certainty" standard. The Mikedis court avoided the retroactivity issue, making its comments regarding Schefsky's ruling potentially also dicta. Temple v. H.J. Heinz Co. reinforced Schefsky's holding, asserting the amendment’s retroactive effect as procedural and aimed at clarifying legislative intent without altering substantive rights. The court distinguished this from a separate Supreme Court ruling, which found that a different amendment operated prospectively, affecting substantive rights by altering standards for disability. The Schefsky interpretation remains authoritative in Michigan law regarding the amendment's retroactive effect on Laundree's claim. Ultimately, it was concluded that the plaintiff's complaint did not satisfy the Beauchamp standard.

Beauchamp distinguishes between the 'substantial certainty' and 'substantial likelihood' legal standards. In *Serna v. Statewide Contractors*, two men were killed in a ditch collapse after multiple warnings regarding unsafe conditions were ignored, suggesting a potential for meeting the substantial certainty standard. The Michigan Supreme Court indicated these facts could satisfy this test. Similarly, in *Film Recovery Systems*, the employer knowingly exposed workers to hazardous conditions leading to a worker's death and injuries from hydrogen cyanide poisoning, with corporate officers convicted of involuntary manslaughter. This case exemplifies conduct meeting both substantial certainty and substantial likelihood standards. However, the plaintiff's allegations in the current case only meet the substantial likelihood standard, failing to satisfy the amended statute. Consequently, the district court's judgment is affirmed. Additionally, the previously unreported *Film Recovery* case saw the reversal of the criminal convictions by the state court of appeals.