Opinion
NO. 2018-CA-000415-WC NO. 2018-CA-000551-WC
05-08-2020
FORD MOTOR COMPANY (LAP) APPELLANT/CROSS-APPELLEE v. RAY HENRY PICKETT; HON. R. ROLAND CASE, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD APPELLEES/CROSS-APPELLANTS
BRIEFS FOR APPELLANT/CROSS-APPELLEE FORD MOTOR COMPANY (LAP): George T. T. Kitchen, III Louisville, Kentucky BRIEF FOR APPELLEE/CROSS-APPELLANT RAY HENRY PICKETT: Ched Jennings Louisville, Kentucky
NOT TO BE PUBLISHED PETITION AND CROSS-PETITION FOR REVIEW OF A DECISION OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-15-01910 OPINION
VACATING AND REMANDING APPEAL NO. 2018-CA-000415-WC AND AFFIRMING CROSS-APPEAL NO. 2018-CA-000551-WC
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BEFORE: ACREE, TAYLOR, AND K. THOMPSON, JUDGES. TAYLOR, JUDGE: Ford Motor Company (LAP) (Ford Motor) petitions and Ray Henry Pickett cross-petitions this Court to review a February 16, 2018, Opinion of the Workers' Compensation Board (Board) vacating and remanding an Opinion, Award, and Order of the Administrative Law Judge (ALJ). We vacate and remand Appeal No. 2018-CA-000415-WC, and affirm Cross-Appeal No. 2018-CA-000551-WC.
Pickett started his employment with Ford Motor in July 2012. Pickett alleged that he suffered a work-related injury to his neck (cervical spine) on January 16, 2015, and to his left shoulder on July 13, 2015, while working at Ford Motor. On November 30, 2015, Pickett filed a claim for workers' compensation benefits. Eventually, the ALJ rendered an Opinion, Award, and Order (opinion) on July 31, 2017. Therein, the ALJ found that Pickett did not sustain a work-related injury to his cervical spine but rather suffered from a preexisting active condition thereto. However, the ALJ also found that Pickett did sustain a work-related injury to his shoulder. The ALJ awarded Pickett temporary total disability benefits from May 18, 2016, through September 16, 2016. The ALJ further concluded that Pickett was entitled to a 5 percent permanent impairment rating and accordingly awarded Pickett permanent partial disability benefits. As Pickett was born on January 14, 1955, the ALJ concluded that Pickett's permanent partial disability benefits would terminate when he reached the age to receive his normal social security benefits or two years after the injury, whichever occurred later, per Kentucky Revised Statutes (KRS) 342.730(4). Subsequently, Pickett and Ford Motor sought review with the Board.
By Opinion entered February 16, 2018, the Board vacated and remanded the ALJ's Opinion. The Board observed that KRS 342.730(4) was declared unconstitutional by the Kentucky Supreme Court in Parker v. Webster County Coal, LLC (Dotiki Mine), 529 S.W.3d 759 (Ky. 2017). As a consequence, the Board determined that the prior version of KRS 342.730(4) would control the duration of permanent partial disability benefits. The Board remanded for the ALJ to determine benefits in accordance with the prior version of KRS 342.730(4).
Thereafter, Pickett and Ford Motor filed petitions in this Court for review. While the petitions were pending in this Court, the Kentucky General Assembly amended KRS 342.730(4) on July 14, 2018. Under the amended version of KRS 342.730(4), income benefits would terminate when the employee reached the age of seventy or four years after the employee's injury, whichever occurred later in time. The Legislature also provided that KRS 342.730(4) should apply retroactively to all claims that had not been "fully and finally adjudicated" and had an injury/disease date on or after December 12, 1996.
By order entered January 25, 2019, the Court of Appeals, sua sponte, placed these appeals and others in abeyance pending the Supreme Court's decisions in two appeals - Lanier v. University of Louisville, Appeal No. 2018-SC- 000685-WC and Holcim v. Swinford, Appeal No. 2018-SC-000627-WC. Both appeals centered upon whether KRS 342.730(4) should be given retroactive application.
By order entered March 14, 2019, the Kentucky Supreme Court dismissed Lanier v. University of Louisville, Appeal No. 2018-SC-000685-WC.
The Supreme Court eventually rendered an Opinion in Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019) and determined that the amended KRS 342.730(4) applied retroactively to pending cases. The Court declined to reach the constitutionality of KRS 342.730(4) because the Attorney General was not properly notified of the constitutional challenge per KRS 418.075. After the Opinion in Holcim was rendered, the Court of Appeals returned these appeals to the active docket for a decision on the merits. We shall initially address Ford Motor's arguments raised in its petition (Appeal No. 2018-CA-000415-WC) and then Pickett's arguments raised in his cross-petition (Appeal No. 2018-CA-000551-WC) for review.
NO. 2018-CA-000415-WC
Ford Motor's arguments concern what version of KRS 342.730(4) is applicable to Pickett's claim. Following the dictates of Holcim, 581 S.W.3d 37, we are constrained to conclude that the amended version of KRS 342.730(4) retroactively applies to Pickett's claim. Consequently, the Board and ALJ erred by concluding otherwise.
NO. 2018-CA-000551-WC
Pickett also raises arguments concerning the proper version of KRS 342.730(4). As before stated, the amended version of KRS 342.730(4) retroactively controls Pickett's claim per Holcim, 581 S.W.3d 37.
Pickett alternatively maintains that the amended version of KRS 342.730(4) is unconstitutional as violative of the equal protection clause and the due process clause. We disagree.
The amended version of KRS 342.730(4) provides:
All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee reaches the age of seventy (70), or four (4) years after the employee's injury or last exposure, whichever last occurs. In like manner all income benefits payable pursuant to this chapter to spouses and dependents shall terminate as of the date upon which the employee would have reached age seventy (70) or four (4) years after the employee's date of injury or date of last exposure, whichever last occurs.
It is generally understood that legislative enactments are presumed to be constitutional. Brooks v. Island Creek Coal Co., 678 S.W.2d 791, 792 (Ky. App. 1984). To comply with the equal protection clause and the due process clause, our Supreme Court recognized that "[a] statute involving the regulation of economic matters or matters of social welfare [must be] . . . rationally related to a legitimate state objective." Wynn v. Ibold, Inc., 969 S.W.2d 695, 696 (Ky. 1998).
By its plain terms, KRS 342.730(4) terminates income benefits either when the claimant reaches seventy years of age or four years after injury, whichever occurs later in time. It is patently clear that KRS 342.730(4) treats injured elderly claimants differently from injured younger claimants. The reason for this disparate treatment rests upon the elderly claimants' entitlement to social security benefits and the corresponding objective of preventing duplication of benefits. See Parker, 529 S.W.3d at 767-68; Wynn, 969 S.W.2d at 697.
This difference in treatment under Kentucky Revised Statutes 342.730(4) was aptly explained as follows:
[U]nder the statute, a worker who is injured more than 425 weeks (or 520 weeks under certain circumstances) before he or she reaches normal Social Security retirement age will receive all of the permanent partial disability income benefits to which he or she is entitled. A worker who is injured less than 425 weeks before he or she reaches normal Social Security retirement age will not receive all of the permanent partial disability income benefits to which he or she is entitled.Parker v. Webster County Coal, LLC (Dotiki Mine), 529 S.W.3d 759, 768 (Ky. 2017) (footnote omitted).
Previously, the Supreme Court has upheld the constitutionality of a workers' compensation statute limiting income benefits to claimants based upon age:
Keeping in mind that the purpose of workers' compensation legislation is to maintain a stream of income to disabled workers and their dependents, we are
persuaded that avoiding a duplication of income benefits is a legitimate state objective and sound public policy. See Brooks v. Island Creek Coal Co., supra. At a time when workers become eligible for other forms of income replacement, not only does KRS 342.730(4) help avoid making it more profitable to be disabled than not, it also serves to reduce the overall cost of maintaining the workers' compensation system, thereby improving the economic climate for all the citizens of the state. We, therefore, conclude that KRS 342.730(4) complies with the requirements of due process and equal protection and is constitutional.Wynn, 969 S.W.2d at 697 (citation omitted).
Upon the same reasoning, we believe the prevention of duplication of benefits constitutes a rational basis for treating injured elderly claimants differently from injured younger claimants in KRS 342.730(4). As a rational basis exists, we conclude the classification contained in KRS 342.730(4) does not violate the constitutional guarantees of equal protection or due process.
Pickett further asserts that the retroactive application of the amended version of KRS 342.730(4) offends Sections 1, 2, 3, 59, and 60 of the Kentucky Constitution. In particular, Pickett argues:
First, retroactivity for certain sections of HB [House Bill] 2 and not others is arbitrary and violative [sic] of the due process and equal protection provisions of the Kentucky Constitution. There are no reasons or references by the Legislature in HB 2 for any "emergency" need for retroactive application of Section 20 subparagraph 3, or for that matter, any provision of HB 2 being an "emergency". [sic] As such, the subject provision should not be permitted to be retroactive and
should only apply to cases involving injuries occurring after July 13, 2018.Pickett's Brief at 18-19. So, Pickett claims that retroactive application of the amended version of KRS 342.730(4) infringes upon his right to recover workers' compensation benefits and unconstitutionally impairs his vested right to those benefits.
Second, the classification of limited retroactivity violates the provisions of the Kentucky Constitution prohibiting special legislation. This amendment to KRS 342.730(4) applies to injured older workers but not all injured workers. As such, the subject provision should not be permitted to be retroactive and should only apply to cases involving injuries occurring after July 13, 2018.
In this case, the enacted amendment to KRS 342.730(4) is clearly a substantive change in the law for Mr. Pickett's injury. It is not remedial in that it directly affects Mr. Pickett's vested rights per the Workers['] Compensation Act. The change takes away benefits from Mr. Pickett. . . .
Although HB 2 specifically provides retroactive application, such a retroactive application may still not infringe upon an injured workers [sic] rights and constitutional protections that vested on the date of his or her injury. As such, the 2018 version of KRS 342.730(4) violates prohibitions on retroactive application and should be found by the Court of Appeals to be unconstitutional.
It is true that the "rights of the parties in respect to compensation for injuries [become] fixed and vested on the date of the injury." Schmidt v. South Central Bell, 340 S.W.3d 591, 594 (Ky. App. 2011) (quoting Thomas v. Crummies Creek Coal Co., 179 S.W.2d 882, 883 (Ky. 1944)). Herein, it is undisputed that Pickett's work-related shoulder injury occurred on July 13, 2015. On that date, the version of KRS 342.730(4) in effect provided that income benefits terminated when the claimant "qualified for normal old-age social security retirement benefits" or two years after the claimant's injury, whichever occurred later in time. Under the amended version of KRS 342.730(4), income benefits terminate when the claimant reaches seventy years old or four years after the claimant's injury, whichever occurs later in time. Therefore, Pickett is actually entitled to benefits of a longer duration under the amended version of KRS 342.730(4). And, contrary to Pickett's assertion, Pickett did not have a vested right to income benefits unhampered by any version of KRS 342.730(4). Therefore, we hold that no vested right of Pickett's was adversely impaired by the retroactive application of KRS 342.730(4).
Pickett further asserts that the amended KRS 342.730(4) violated the constitutional prohibition as to special legislation contained in Kentucky Constitution Sections 59 and 60. In support thereof, Pickett maintains that KRS 342.730(4) applies to older injured workers but not to younger injured workers, thus creating the unconstitutional special legislation.
The Kentucky Supreme Court defines special legislation as "arbitrary and irrational legislation that favors the economic self-interest of the one or the few over that of the many." Zuckerman v. Bevin, 565 S.W.3d 580, 599 (Ky. 2018) (citation omitted). It has been recognized that "[a] statute which relates to persons or things as a class is a general law, while a statute which relates to particular persons or things of a class is special." Id. (citations omitted).
Here, the amended KRS 342.730(4) limits the duration of income benefits for injured workers who are seventy years old or older if their injury/disease occurred after December 12, 1996. As such, we believe the amended KRS 342.730(4) treats older workers similarly, and, as before determined, there exists a reasonable basis for the classification. We, thus, conclude the amended KRS 342.730(4) does not constitute special legislation.
We view any remaining contentions of error as moot or without merit.
In sum, we are of the opinion Pickett failed to demonstrate that the amended KRS 342.730(4) is unconstitutional. In accordance with Parker, 529 S.W.3d 759, the newly amended version of KRS 342.730(4) retroactively applies to Pickett's claim. Upon remand, the ALJ shall determine income benefits in accordance with the amended KRS 342.730(4).
For the foregoing reasons, the opinion of the Workers' Compensation Board in Appeal No. 2018-CA-000415-WC is vacated and remanded for proceedings consistent with this Opinion. Likewise, the opinion in Cross-Appeal No. 2018-CA-000551-WC is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT/CROSS-
APPELLEE FORD MOTOR
COMPANY (LAP): George T. T. Kitchen, III
Louisville, Kentucky BRIEF FOR APPELLEE/CROSS-
APPELLANT RAY HENRY
PICKETT: Ched Jennings
Louisville, Kentucky