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Who should pay when the government screws up?

Can taxpayers be held liable for the negligence of their government the way stockholders or donors are when corporations or charitable organizations behave badly?

Sue Quintanilla holds a glass of water after

Sue Quintanilla holds a glass of water after a neighborhood roundtable on the drinking water crisis. Photo Credit: AFP / Getty Images / Jim Watson

An ignition switch defect is implicated in 124 auto fatalities. A fatigued crew runs its oil tanker aground, spoiling 1,300 miles of pristine coastline. A priest transferred after complaints in his old parish is accused of molesting more children in his new one.

We all know what happens next when screw-ups of this magnitude occur:

Lawyers file lawsuits alleging sins of omission (negligence) or commission (fraud). If the evidence supports their allegations, the individuals or corporations implicated can end up paying millions or even billions of dollars in damages.

Cynics like to disparage the motives of everyone involved in this process - especially the lawyers. But when the tort system works reasonably well, it serves two useful purposes: Innocent victims are compensated for their injuries, and everyone is deterred from repeating the mistakes or misconduct that led to catastrophe.

But what happens when those implicated in a five-alarm scandal - the sexual abuse of hundreds of young women, say, or the poisoning of an entire city’s water supply - are employees of a government elected by the people and underwritten by their taxes, utility fees and tuition payments?

Can taxpayers be held liable for the negligence of their government the way stockholders or donors are when corporations or charitable organizations behave badly?

Are those injured by the negligence of government employees entitled to the same compensation as those injured by the negligent employees of an automaker, oil company, or archdiocese?

The short answer to both questions is no.

A legal doctrine born in medieval England - and buttressed by plenty of 21st Century jurisprudence - makes government entities from the White House and U.S. Congress to townships and community colleges immune from the sorts of lawsuits filed every day against homeowners, insurance companies, manufacturers and professionals.

Besides indemnifying taxpayers against the sins of those who govern in their name, this broad grant of immunity prevents tens of thousands of citizens from recovering compensation for injuries and financial losses attributable to governmental negligence or recklessness.

State and federal law also recognizes significant exceptions to government immunity - exceptions that may ultimately enable those poisoned by Flint’s lead-tainted water or sexually abused by MSU physician Larry Nassar to obtain significant damages in the tsunamis of litigation already bearing down on Michigan’s executive branch and MSU.

But establishing who can and can’t be sued may end up consuming as much or more time and energy as discovering who could have stopped what happened to the victims in Flint and East Lansing.

A royal perq, updated

Sovereign immunity - the idea that “the king can do no wrong” - dates to an epoch when kings and queens decreed what the law was and appointed the judges who enforced it locally.

The U.S. Constitution initially gave lawyers and litigants more latitude, but it didn’t last; by 1795, the states had ratified the 11th Amendment, which forbids citizens of any state from suing another state in federal court. The 11th Amendment has since been construed by the courts to bar most lawsuits against states, except those in which plaintiffs assert that their constitutional rights have been violated.

It’s easy to understand why monarchs who presumed to rule by divine right had no patience for legal challenges brought by their lowly subjects. But fast forward 500 years, and it’s harder to explain why democratically elected officials - or the constituents in whose name they govern - should enjoy the same immunity.

“Governmental immunity isn’t really a defense,” notes Peter Henning, a professor at Wayne Law. “It’s barring the courthouse door, saying we really don’t want judges and juries second-guessing the government’s decisions.”

But besides protecting the public purse, a state or local agency’s assertion of government immunity can hamstring efforts to find out how a catastrophe like the contamination of Flint’s water supply took place, and delay corrective action.

Just last month, lawyers for MSU asked a federal judge in western Michigan to throw out nine lawsuits filed by hundreds of Dr. Larry Nassar’s former patients on grounds that the university “retains absolute immunity from liability” for its former employee’s actions.

If the university prevails, the patients’ lawyers might never have the opportunity to ask university officials under oath what they knew about Nassar’s misconduct and when they knew it.

Lawyers suing to the state Unemployment Insurance Agency to find out why Michigan withheld benefits from tens of thousands of workers who were entitled to them face similar hurdles.

Exceptions to the rule

But government immunity is not absolute. The 20th Century saw a vigorous tug of war between conservatives trying to protect the public purse and reformers determined to make government agencies more accountable.

At the state level, Michigan lawmakers adopted exceptions to government immunity that authorized plaintiffs to sue state and local agencies for damages arising from the negligent operation of a government motor vehicle, medical malpractice in state-run hospitals, and failure to repair unsafe roads or clogged sewer lines.

Republican justices who assumed control of the Michigan Supreme Court after John Engler’s election as governor in 1998 have spent the last 20 years narrowing most of those exceptions - or at least that’s the way the plaintiff’s bar sees it. Robert Young, who served as chief justice of the state’s highest court from 2011 to 2017, insists that he and he GOP colleagues merely enforced the restrictions state lawmakers put in place.

“It’s a policy choice, and it’s quite clear that the state Legislature wanted to limit the taxpayers’ liability,” Young says.

Immunity issues are no less complicated in federal court, where the 11th Amendment bars most damage claims against the state and state officials acting in their official capacity but permits plaintiffs to sue local governments and their employees.

Michael Pitt, one of the lead plaintiffs’ lawyers representing Flint residents in a series of lawsuits pending before federal and state courts, says the multiple claims are necessary to “zig and zag arround the immunity defenses government lawyers are able to assert in different venues.”

The state Court of Appeals ruled last month that the State Court of Claims will have to hear Flint residents’ claims that Michigan violated their constitutional rights by contaminating Flint’s drinking water - although the state will likely appeal that ruling to the Michigan Supreme Court.

Seeking justice

Although the rules regarding when and for what sorts of bad behavior the government may be sued are complex and contested, the tension underlying that struggle is a simple one.

Michigan taxpayers don’t want to be held liable for their government’s incompetence any more than the monarchs of medieval England did. But their sense of fair play may be offended if government lawyers succeed in stiff-arming families whose drinking water was poisoned and young women who were molested by a university physician.

Courts will have the first crack at balancing the competing interests of victims and taxpayers. But the issue of just compensation is likely to figure in this year’s elections for governor, attorney general and state Legislature as well.

In the end, lawmakers may have to intervene. They should consider arranging extraordinary compensation for innocent victims whose claims are barred by a moth-eaten immunity doctrine, just as they did last year for inmates found to have been imprisoned for crimes they never committed. Because no legal doctrine, however venerable, can absolve us of our responsibility to one another.

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