This report was prepared by Bill Bowerman, Chief Analyst of the Senate Fiscal Agency General Government Unit. Pat Stinton-Harper typed the report. The Senate Fiscal Agency would like to thank all State departments and agencies for their cooperation.

Any questions regarding this report, or requests for additional copies, should be directed to:

Bill Bowerman
Senate Fiscal Agency
P.O. Box 30036
Lansing, MI 48909-7536

Phone: (517) 373-2768
TDD: (517) 373-0543

OVERVIEW

TABLE 1  Total Payments by Department FY 1987-88 through FY 1996-97

TABLE 2  Judgements Paid by Department FY 1987-88 through FY 1996-97

TABLE 3  Settlements Paid by Department FY 1987-88 through FY 1996-97

TABLE 4  FY 1996-97 Number of Cases and Payments by Department

TABLE 5  Highway Negligence Cases - Judgments Compared with Settlements

TABLE 6  Highway Negligence Payments - Judgments Compared with Settlements
 

LISTING OF CASES RESULTING IN PAYMENTS DURING FY 1996-97:
 

AGRICULTURE
CIVIL SERVICE
COMMUNITY HEALTH
CONSUMER & INDUSTRY SERVICES
CORRECTIONS
EDUCATION
ENVIRONMENTAL QUALITY
FAMILY INDEPENDENCE AGENCY
JUDICIARY
LOTTERY
MANAGEMENT AND BUDGET
MICHIGAN JOBS COMMISSION
MILITARY AND VETERANS AFFAIRS
NATURAL RESOURCES
STATE
STATE POLICE
TRANSPORTATION - HIGHWAY NEGLIGENCE LITIGATION
TRANSPORTATION - TRANSPORTATION DIVISION
TREASURY

The information in this document is based on reports filed by State departments and agencies pursuant to Section 396(4) of The Management and Budget Act (Public Act 431 of 1984). Based on the amounts reported, the State of Michigan paid $25,894,694 for judgments and settlements in fiscal year (FY) 1996-97. Of the 181 cases that resulted in payments, 32 were judgments totaling $6,612,329, and 149 were settlements totaling $19,282,365. The amount paid represents a reduction of $88,631,198 from the $114,525,892 paid in FY 1995-96. Seventy-nine percent ($90,525,000) of the amount paid in FY 1995-96 related to the Miller Brothers, et al v Department of Natural Resources and Carnagel Oil Associates, et al v Department of Natural Resouces cases that involved alleged taking of property rights.
 

The funding sources for payments in FY 1996-97 were as follows:
 

Tables 1, 2, and 3 provide a 10-year history (FY 1987-88 through FY 1996-97) of payments made by State departments and agencies.  Table 1 provides information on total payments (judgments and settlements), Table 2 lists judgments, and Table 3 lists settlements. Payments do not include workers' compensation and unemployment cases. A summary of departments that made payments of over $500,000 begin with Table 4. Reports submitted by departments and agencies include the name of the case along with information regarding the funding source, the county where the cause of action arose, and a short description regarding the plaintiff's allegations (summary of case).
 

PAYMENTS BY DEPARTMENTS
 

Eight departments made payments totaling over $500,000. Table 4 summarizes the number of cases and payments for these departments.

Department of Community Health
 

Payments made in 4 of 12 cases by the Department of Community Health in FY 1996-97 accounted for 87.0% of its total payments. Amounts paid ranged from $1,500 each in 2 cases (one alleging sex and age discrimination and the other a patient injury) to $375,000 for a case involving registered nurses at the Clinton Valley Center working out of class in lower union jobs.
 

Department of Corrections
 

The Department of Corrections made payments in 45 cases totaling $4,639,321. This represents an increase of $2,058,062 (79.7%) from the $2,581,259 paid in FY 1995-96 for 55 cases. Payments ranged from $72 regarding a petition for review in Dean, Michael v MDOC to $2,286,957 for an employee discrimination case in Grant, Ina, et al v MDOC, Bureau of Field Services. The median payment was $9,285. Payments totaling $3,974,234 in 16 cases that alleged employee discrimination accounted for 85.7% of payments made by the Department of Corrections in FY 1996-97.
 
 

Department of Education
 

Payments by the Department of Education for 5 cases totaled $1,878,837, which represents a decrease of $3,452,799 (64.8%) from the amount paid in FY 1995-96. The reduction is due to the decreasing amount related to continuing payments in the Berry v Benton Harbor Area School District desegregation case. State payments for this case have totaled $53,884,071 from FY 1980-81 through FY 1996-97. The $1,297,349 payment in FY 1996-97 was $4,034,287 less than the $5,331,636 payment in FY 1995-96. This is due to settlements reached with the Eau Claire School District and the Coloma School District that modify the State's school aid funding obligations to those districts for FY 1995-96 and subsequent fiscal years. No settlement has been reached with the Benton Harbor Area School District.
 

Payments by the Department of Education in 4 other cases in FY 1996-97 totaled $581,487. Cases included a $342,156 payment in West Michigan Academy v Governor, et al for State Aid payments by two public academies and a $166,831 payment in Paul Ettinger v MDE for alleged age and handicap discrimination.

Family Independence Agency (FIA)
 

Payments by the Family Independence Agency totaled $1,399,850 for 9 cases. A case alleging improper placement of a child in foster care (Wilber, Martez v Wayne FIA) resulting in a payment of $785,617, and a case involving alleged wrongful removal of children (Webb, Gerald & Kari v FIA, et al) resulting in a payment of $300,000, account for 77.5% of total FIA payments.
 

Judiciary
 

One case (Nancy Ashford v State Judicial Council) accounted for $714,000 of the $724,000 paid by the Judiciary in FY 1996-97. The case alleged discrimination resulting in failure to hire.
 

Department of Natural Resources
 

Of the $3,442,198 paid by the Department of Natural Resources, $2,320,005 (67.4%) is attributable to Carnagel Oil Associates, et al v State of Michigan, et al. The case alleged regulatory taking of property rights. In FY 1995-96 there were payments of $30,000,000 in this case, and $60,525,000 in Miller Brothers, et al v Department of Natural Resources, et al. Other payments by the Department in FY 1996-97 include $261,305 for phosphorus levels at Fisheries Platte River Hatchery in Platte Lake Improvement Association v MDNR and $574,387 for a slip and fall on a cabin step case in Lambert v MDNR.
 

Department of State Police
 

Payments by the Department of State Police ranged from $90 in Clark v MSP for a Freedom of Information Act claim to $300,000 in Rought v Porter for a case involving a shooting during a narcotics investigation. The median payment was $26,250. Three cases with payments totaling $610,000 accounted for 69.9% of payments made by the Department of State Police.
 
 

Department of Transportation
 

The Department of Transportation made payments in 55 cases totaling $11,080,416. This represents an increase of $1,513,321 (15.8%) from the $9,567,095 paid in FY 1995-96. Fifty of the cases were highway negligence actions99.4%) of transportation payments. Payments for highway negligence cases ranged from $1,503 in Vang v MDOT for water flooding over a highway, to $2,100,000 in Belyea v MDOT for alleged failure to warn and sign for special hazard and failure to maintain for snow and ice. The median payment in highway negligence cases was $50,000. There were 8 cases with payments over $500,000 that accounted for $7,601,974 (69.0%) of highway negligence payments.
 

Table 5 and Table 6  provide statistics on highway negligence cases and payments over the last 14 years. From FY 1983-84 through FY 1996-97 the State paid $201.9 million for 981 cases. Over that time period annual payments ranged from $7.5 million in FY 1985-86 to $26.7 million in FY 1986-87.