Recent Cases - Bailey And Retroactivity

Michigan Court of Appeals

Bailey And Retroactivity

In Pieser v Sara Lee Bakery and Second Injury Fund (Vocationally Handicapped Provision)March 20, 2008), the Court of Appeals addressed whether the employer was entitled to reimbursement as a result of a change in the law precipitated by the Supreme Court’s decision in Bailey v Oakwood Hospital & Medical Center, 472 Mich 685; 698 (CA Docket Nos. 275608 and 277884, rel’d NW2d 374 (2005). Recall that Bailey held that the Second Injury Fund is obliged to reimburse employers under the vocationally handicapped provision even if the employer failed to provide notice to the Fund within the time limits described in MCL 418.925(1).

After release of Bailey, the employer and its carrier sought reimbursement in Pieser on an old claim. The Workers’ Compensation Appellate Commission agreed with defendant and gave Bailey retroactive effect ordering the Fund to reimburse the employer for all benefits paid after the date of Bailey’s release on June 29, 2005.

The Court of Appeals reversed the Appellate Commission. The Court of Appeals said it saw no reason to stray from “the ‘usual’ rule of limited retroactivity. Therefore, because this case was no longer pending at the time Bailey was released, that case is inapplicable to the instant matter and the fund is correct in its assertions that the WCAC erred in granting defendants any reimbursement at all.”