General Motors Corporation v. Romein

PETITIONER:General Motors Corp. et al.
RESPONDENT:Romein et al.
LOCATION:Residence of Stephanie Nordlinger

DOCKET NO.: 90-1390
DECIDED BY: Rehnquist Court (1991-1993)
LOWER COURT: Michigan Supreme Court

CITATION: 503 US 181 (1992)
ARGUED: Dec 10, 1991
DECIDED: Mar 09, 1992

Kenneth Steven Geller – on behalf of the Petitioners
Theodore Sachs – on behalf of the Respondents

Facts of the case


Media for General Motors Corporation v. Romein

Audio Transcription for Oral Argument – December 10, 1991 in General Motors Corporation v. Romein

Audio Transcription for Opinion Announcement – March 09, 1992 in General Motors Corporation v. Romein

Sandra Day O’Connor:

The second case is General Motors Corporation versus Romein which comes to us on certiorari to the Supreme Court of Michigan.

In 1987, the Michigan legislature enacted a statute that had the effect of requiring the petitioners, General Motors Corporation and Ford Motor Company, to repay workers’ compensation benefits they had withheld in reliance on a 1981 workers’ compensation statute.

The petitioners brought suit alleging that the retroactive impact of the 1987 statute violated the Contract Clause and the Due Process Clause of the Federal Constitution.

The Michigan Supreme Court upheld the 1987 statue against these challenges on the ground that the employers had no vested contractual rights in making payments in accordance with the 1981 statute that would require invoking the Contract Clause, and also on the ground that the retroactive provisions did not violate the Due Process Clause because they furthered a rational legislative purpose.

The petitioners were ordered to refund nearly $25 million to disabled employees.

We hold there was no contractual term between the employers and their employees that allowed the employers to rely on the finality of payments made pursuant to the 1981 statute.

Because there was no contract, the Contracts Clause does not apply.

We also hold that the retroactive provisions of the 1987 statute was rationally related to legitimate legislative purposes because they preserve the compromise struck by the 1981 workers’ compensation reforms in Michigan, and because they equalize the payments made by all employers during the time when the interpretation of the 1981 statute was in dispute.

Accordingly, we affirm the judgment below.

The opinion is unanimous.