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Jan 2007
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January 15, 2007

When Up is Down and Left is Right--and Published Precedent is Nonbinding

The Michigan Court Rules could not be more clear: "A published opinion of the Court of Appeals has precedential effect under the rule of stare decisis." MCR 7.215(C)(2). The problem is when that published opinion is precisely on point – and reaches the exact opposite result for which you are advocating on appeal. There are few good options in that scenario, but all is not lost. This article mentions two of the most common ways to avoid bad case law, then discusses some much lesser-used alternatives.

Distinguish It

Perhaps the most obvious and frequently used way to avoid the effects of a published opinion is to distinguish it. Court decisions are inherently fact-intensive. Indeed, a court will often intentionally write an opinion so that the holding is heavily dependent on the facts; that way, the court can limit the impact of the opinion's holding at a later date, if necessary:

In a system bound by precedent[,] such distinctions may often be in the nature of hair-splitting, this being the only instrument to hand for avoiding the consequences of an earlier decision which the court considers unreasonable, or as laying down a principle which is "not to be extended."

Aldisert, Winning on Appeal: Better Briefs and Oral Argument § 8.4, p 110 (2d ed, 2003), quoting Lloyd, "Reason and Logic in the Common Law," 64 Law Q. Rev. 468, 482 (1948).

Take advantage of this incrementalist judicial philosophy when it comes to changes in the law. A published case that can be distinguished factually is obviously "not binding precedent." Tyler v Huron Valley Sinai Hosp, 2006 WL 740168 (Mich Ct App, Mar 23, 2006) (emphasis added). The difficulty comes in knowing when a different fact pattern actually makes a case distinguishable, and convincing the court when it does. Like debating how many angels can dance on the head of a pin, there is bound to be significant disagreement. Simply distinguishing precedent is therefore not enough.

Dictum

A second, universally-recognized way to avoid the effects of a published opinion is to expose its adverse holding as mere dictum. It is well settled in Michigan (as in other states) that any statement unnecessary to a decision before a court must "be regarded as merely dictum that is not binding" and cannot "establish a rule of law." Kilby v Chubb Group of Ins Cos, __ Mich App __, __; __ NW2d __; 2006 WL 862824 (2006), quoting Arco Indus v American Motorists Ins Co, 233 Mich App 143, 147-148; 594 NW2d 74 (1998); Verbrugghe v Select Specialty Hosp, __ Mich App __, __; __ NW2d __; 2006 WL 787933 (2006), citing Carr v City of Lansing, 259 Mich App 376, 383-384; 684 NW2d 168 (2003) (noting that a prior opinion’s discussion of a legal principle based on a hypothetical was "dicta, and not binding on subsequent panels").

The chief problem with this approach is that, like distinguishing facts, dictum is inherently in the eye of the beholder. The Michigan Court of Appeals defines "dictum" as "judicial comment made during the course of delivering a judicial opinion, but one that is unnecessary to the decision in the case and therefore not precedential (thought it may be considered persuasive)." Robrahn v RFN GroupInc, 2006 WL 509772 (Mich Ct App, Mar 2, 2006), quoting Carr, 259 Mich App at 383-384; 674 NW2d 168. This vague definition resurrects the problem with counting angels. Again, it is not enough to cry "dictum!" and then move on with a legal argument. But there are additional (and less frequently used) tools in the appellate toolbox that may help solve this problem.

Cases Decided Before November 1, 1990

One sound (though less traditional) method for disavowing precedent is to take advantage of a curious and unique quirk in the Michigan Court Rules that harkens back to when the separate Michigan Court of Appeals districts were consolidated into a single, statewide court. In direct contradiction of MCR 7.215(C)(2)’s command that "[a] published opinion of the Court of Appeals has precedential effect under the rule of stare decisis," MCR 7.215(J)(1) states: "[a] panel of the Court of Appeals must [only] follow the rule of law established by a prior published decision of the Court of Appeals issued on or after November 1, 1990."

It would be easy to view this provision with skepticism; are all of the tens of thousands of published Michigan Court of Appeals decisions issued before November 1, 1990 truly of no precedential value? The answer is an unequivocal "yes," at least as the court rule's plain language has been unambiguously interpreted and applied by numerous Court of Appeals panels to distinguish otherwise binding, published precedent. See, e.g., Titan Ins Co v North Pointe Ins Co, __ Mich Ct App __, __; __ NW2d __; 2006 WL 788988 (2006) (published case "was issued before November 1, 1990, and is therefore not binding under MCR 7.215(J)(1)"); People v McGhee, 268 Mich App 600, ___; 709 NW2d 595 (2005) ("This case is not binding on this Court because it was decided before November 1, 1990. MCR 7.215(J)(1)."); Southern Michigan Insurance Co v State Farm Ins Co, 2005 WL 2249081 (Mich Ct App, Sept 15, 2005) ("both [decisions] were issued before November 1, 1990, and, therefore, are not binding under MCR 7.215(J)"). Thus, while a court is always free to view a case decided before November 1990 as persuasive authority, the case’s age may be the single most compelling ground for avoiding its precedential effect.

Intervening Change in Law

In addition to exempting all pre-November 1990 Court of Appeals decisions from the body of decisions considered binding, MCR 7.215(J)(1) specifically excepts decisions "reversed or modified by the [Michigan] Supreme Court." Accordingly, Michigan Court of Appeals panels have long recognized that precedent can be "gutted," even after the lower court has already relied on that precedent when issuing a decision. See., e.g., Sumner v General Motors, 245 Mich App 653, 662;633 NW2d 1 (2001) ("the law of the case doctrine does not apply where there has been an intervening change of law."); see also Baraga County v State Tax Comm’n, 243 Mich App 452, 457; 622 NW2d 109 (2000) ("Res judicata does not bar litigation where a subsequent change in the law alters the legal principles on which the subsequent case is to be resolved") (citation omitted). So long as a dispute remains pending, a change in the law must always be applied.

Reversal On Other Grounds

A much more interesting corollary of the change in law doctrine, however, is that a Michigan Supreme Court need not even address the unfavorable holding when reversing a Court of Appeals decision to eviscerate that holding. According to several relatively recent Michigan Court of Appeals decisions, "where a decision of this Court is reversed, even if on other grounds that were decisive of the entire case, this Court is not required to follow the decision." Dunn v Detroit Automobile Inter-Ins Exchange, 254 Mich App 256, 261; 657 NW2d 153 (2002), citing Taylor v Kurapati, 236 Mich App 315; 600 NW2d 670 (1999) (emphasis added). Under this precedent, "a prior Court of Appeals decision that has been reversed on other grounds has no precedential value." Id. at 262, citing People v Crear, 242 Mich App 158, 165; 618 NW2d 91 (2000). Even "where the Supreme Court reverses a Court of Appeals decision on [only] one issue and does not specifically address a second issue in the case, no rule of law remains from the Court of Appeals decision." Id., citing Horace v City of Pontiac, 456 Mich 744, 754-755; 575 NW2d 762 (1998). The only exception is where the Michigan Supreme Court specifically declines to review the issue sought to be applied to a later case. Id. at 264, citing Michigan Millers Mut Ins v Bronson Plating Co, 197 Mich App 482, 490; 496 NW2d 373 (1992).

A Federal Court’s Application of Michigan Law

It is widely understood that a federal court analyzing a state law issue will look to decisions of that state’s courts for guidance interpreting the law. What may be less well known is that when applying Michigan law in such a situation, the federal court is bound only by Michigan Supreme Court decisions. Allstate Ins Co v Thrifty Rent-A-Car Systems, Inc, 249 F3d 450, 452 (6th Cir. 2001). When the Michigan Supreme Court has not decided an issue, the federal court must "predict" how the Michigan Supreme Court would decide the issue. Id. In making that prediction, the federal court should consider all relevant data, including decisional law of Michigan's lower courts, but the federal court is free to disregard those lower court decisions (even if published) if it is convinced by other persuasive data that the Michigan Supreme Court would decide otherwise. Id.

A plaintiff was able to use this rule to great advantage in Wrench LLC v Taco Bell Corp, Case No 1:98-CV-45 (WD Mich). In Wrench, the plaintiff brought a breach of implied-in-fact claim for the defendant's alleged use of plaintiff's idea for an advertising campaign featuring an edgy, digitally-animated Chihuahua. Following a substantial jury verdict, the District Court was asked to decide whether the plaintiff was entitled to prejudgment interest during the period after the District Court's initial grant of summary judgment in favor of defendant and before the Sixth Circuit's reversal and remand. Under the Michigan Court of Appeals' decision in Dedes v Asch, 233 Mich App 329; 590 NW2d 605 (1998), and its progeny, prejudgment interest had been routinely denied in such interlocutory appeal period. The District Court "predicted" that the Michigan Supreme Court would reject Dedes based on the plain language of the prejudgment interest statute, resulting in a benefit to the plaintiff of approximately $5-7 million. The District Court's decision was vindicated a short time later in Morales v Auto-Owners Ins Co, 672 N.W.2d 849; 469 Mich 487 (2003), when the Michigan Supreme Court did reverse Dedes, holding there was no common law "interlocutory appeal exception" to the statutorily required award of prejudgment interest.

Inability to Agree on Reasoning

As is more often the case at the Michigan Supreme Court level, a Michigan Court of Appeals panel may sometimes agree on a result without agreeing on the underlying reasoning. In that situation, the opinion is non-binding. Fogarty v Dep’t of Transp, 200 Mich App 572, 574-575; 504 NW2d 710 (1993). That is because "no point of law is established by the decision." Id., citing Breckon v Franklin Fuel Co, 383 Mich 251, 278-279; 174 NW2d 836 (1970); In re Perry, 148 Mich App 601, 609; 385 NW2d 287 (1986). Particularly in 2-1 panel decisions with a concurrence, there is a real opportunity to claim no law was made.

Conflict Resolution Panels

The last resort of a party faced with irrefutable published precedent is to request a conflict resolution panel. "A panel that follows a prior published decision only because it is required to do so . . . must so indicate in the text of its opinion, . . . . explaining its disagreement with the prior decision." MCR 7.215(J)(2). If a majority of Court of Appeal judges agrees that the question presented is outcome determinative and warrants resolution, a seven-member conflict resolution panel will be convened. MCR 7.215(J)(3), (4). In such a case, the "decision of the special panel must be by published opinion or order and is binding on all panels of the Court of Appeals unless reversed or modified by the Supreme Court." MCR 7.215(J)(6). If the Court of Appeals refuses such a request, there's always an application for leave.

Conclusion

Dealing with adverse, published precedent can be frustrating, but the task is not impossible. Start by distinguishing facts and identifying dictum, but do not forget about some of the other seldom-used appellate tools for dealing with adverse case law. It may yet be possible to avoid that damaging precedent and prevail.

John J. Bursch chairs the Appellate Practice Group at Warner Norcross & Judd LLP. A former federal appellate judicial clerk, he is a member of the Michigan Practice Section Council and the Publication Chair for the ABA's Council of Appellate Lawyers (CAL). Mr. Bursch routinely assists other practitioners in proceedings before the Michigan Court of Appeals and Michigan Supreme Court. He can be contacted by telephone at 616.752.2474, by e-mail at jbursch@wnj.com.

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