Opinion
Question Propounded by the Senate in an Order Dated February 6, 1974.
Answered February 27, 1974.
ARMAND A. DUFRESNE, JR. RANDOLPH A. WEATHERBEE CHARLES A. POMEROY SIDNEY W. WERNICK JAMES P. ARCHIBALD THOMAS E. DELAHANTY
SENATE ORDER PROPOUNDING QUESTION
In Senate, February 6, 1974
Whereas, it appears to the Senate of the 106th Legislature that the following is an important question of law, and that the occasion is a solemn one; and
Whereas, it is the desire of the 106th Legislature to enact legislation that would make workmen's compensation coverage mandatory for all employers not specifically exempted; and
Whereas, there is pending before the Senate of the 106th Legislature a Bill entitled "AN ACT Relating to Applicability of Workmen's Compensation Law to Employers," Senate Paper No. 802, Legislative Document No. 2296; and
Whereas, Article I, Section 20 of the Constitution of the State of Maine contains a strong declaration of the right to a trial by jury; and
Whereas, the constitutionality of the proposed bill has been questioned as it relates to said Section of the Constitution; and
Whereas, it is important that the Legislature be informed as to the answer to this important and serious legal question hereinafter raised; now, therefore, be it
Ordered, that the Justices of the Supreme Judicial Court are hereby respectfully requested to give to the Senate, according to the provisions of the Constitution on its behalf, their opinion upon the following question, to wit:
QUESTION:
Do the provisions of Legislative Document No. 2296, an Act now pending before the 106th Legislature (Exhibit A) unconstitutionally impinge upon an employer's right to a trial by jury as declared by Article I, Section 20 of the Constitution of Maine?
In Senate Chamber February 6, 1974 Read and Passed HARRY N. STARBRANCH, Secretary
FIRST SPECIAL SESSION ONE HUNDRED AND SIXTH LEGISLATURE
Legislative Document No. 2296
S.P. 802 In Senate, January 3, 1974
Referred to the Committee on Labor. Sent down for concurrence and ordered sent forthwith.
HARRY N. STARBRANCH, Secretary
Presented by Senator Tanous of Penobscot.
STATE OF MAINE IN THE YEAR OF OUR LORD NINETEEN HUNDRED SEVENTY FOUR AN ACT Relating to Applicability of Workmen's Compensation Law to Employers.
Be it enacted by the People of the State of Maine, as follows:
Sec. I. R.S., T. 39 § 2, sub- § I, amended. Subsection I of section 2 of Title 39 of the Revised Statutes is amended to read as follows:
I. Employer. "Assenting employer Employer" shall include all private employers who have become assenting employers in accordance with sections 21 to 27, and it shall include all towns voting to accept the Act. This Act shall be compulsory as to private employers, the State, counties, cities, water districts and all other quasi-municipal corporations of a similar nature,but said sections 21 to 27 shall not apply thereto or to assenting towns except as hereinafter provided. Sec. 2. R.S., T. 39 § 2, sub- § 6, amended. Subsection 6 of section 2 of Title 39 of the Revised Statutes is amended to read as follows:
6. Employer further defined. "Employer" shall include corporations, partnerships, natural persons, the State, counties, water districts and all other quasi-municipal corporations of a similar nature, cities and such towns as vote to accept this Act; and if the employer is insured, it includes the insurer unless the contrary intent is apparent from the context or it is inconsistent with the purposes of this Act.
Sec. 3. R.S., T. 39 § 2, sub- § 8, amended. Subsection 8 of section 2 of Title 39 of the Revised Statutes is amended to read as follows: 8. Insurance company. "Insurance company" shall mean any casualty insurance company or association authorized to do business in this State which may issue policies conforming to subsection 7. Whenever in this Act relating to procedure the words "insurance company" are used they shall apply only to cases in which the employer has elected to secure secured the payment of compensation and other benefits by insuring such payment under an industrial accident insurance policy, instead of furnishing satisfactory proof of his ability to pay compensation and benefits direct to his employees.
Sec. 4. R.S., T. 39 § 4, amended. The 4th and 5th sentences of section 4 of Title 39 of the Revised Statutes are amended to read as follows:
Section 3 shall not apply to actions to recover damages for the injuries aforesaid or for death resulting from such injuries, sustained by employees of an employer who has become subject to this Act by securing secured the payment of compensation in conformity with sections 21 to 27. Such assenting employersexcept as provided by section 28 shall be exempt from civil actions because of such injuries either at common law or under sections 141 to 148 or under Title 18, sections 2551 to 2553.
Sec. 5. R.S., T. 39 § 2I, amended. Section 2I of Title 39 of the Revised Statutes, as amended, is further amended to read as follows:
§ 2I. Liability of employer
Every private employer shall be subject to this Act who has secured and shall secure the payment of compensation in conformity with sections 2I to 27 shall be conclusively presumed to be an assenting employer with respect to employees other than those engaged in domestic service or in agriculture as seasonal or casual farm laborers, subject to the provisions hereinafter stated.
Any private employer who has elected not to be an assenting employer by not securing secured the payment of compensation under sections 2I to 27 shall, in a civil action brought by the employee other than one engaged in domestic service or in agriculture as a seasonal or casual farm laborer to recover for personal injuries or death sustained after such election by the employer arising out of and in the course of his employment, not be entitled to the defenses set forth in section 3 and the employee of any such employer may in lieu of bringing such a civil action claim compensation from such employer under the provisions of this Act. Any employer whose assent is thus presumed may cease to be an assenting employer effective upon the first day of any month, provided said employer gives to the commission at its office in Augusta written notice in such form as the commission approves, not less than 30 days prior to the date on which said employer desires his election to cease to be an assenting employer to become effective, and provided that said employer shall post in conspicuous places in his several places of employment written or printed notices to the effect that on and after the first day of the month upon which such election shall become effective, said employer will not be subject to this Act, which notices shall be posted at least 30 days prior to the date such election shall become effective and shall be kept continuously posted thereafter in sufficient places frequented by the employees of said employer to reasonably notify such employees of such election. Any private employer who has thus elected not to be an assenting employer may thereafter at any time become an assenting employer by filing with the commission at its office in Augusta his written notice in such form as the commission approves withdrawing his election not to be an assenting employer and by securing the payment of compensation in conformity with sections 21 to 27. Sec. 6. R.S., T. 39 § 23, sub- §§ I and 2, amended. The first paragraph and subsection I and 2 of section 23 of Title 39 of the Revised Statutes are amended to read as follows:
Every assenting employer subject to this Act shall secure such compensation and other benefits to his employees in one or more of the following ways:
I. By insuring and keeping insured the payment of such compensation and other benefits under an industrial accident insurance policy. The insurance company shall file with the commission notice, in such form as the commission approves, of the issuance of any industrial accident policy to an assenting employer. Such insurance shall not be cancelled within the time limited in such policy for its expiration until at least 30 days after mailing to the commission and to the employer a notice of the cancellation of such insurance. In the event that the employer has obtained an industrial accident policy from another insurance company, or has otherwise secured compensation as provided in this section, and such insurance or other security becomes effective prior to the expiration of said 30 days, cancellation shall be effective as of the effective date of such other insurance or receipt of security.
2. By furnishing satisfactory proof to the commission of his solvency and financial ability to pay the compensation and benefits, and deposit cash, satisfactory securities or a surety bond, in such sum as the commission may determine; such bond to run to the Treasurer of State and his successor in office, and to be conditional upon the faithful performance of this Act relating to the payment of compensation and benefits to any injured employee. In case of cash being deposited, it shall be placed at interest by the Treasurer of State, and the accumulation of interest on said cash or securities so deposited shall be paid to the employer depositing the same. The commission may at any time in its discretion deny to an assenting employer the right to continue in the exercise of the option granted by this section.
Sec. 7. R.S., T. 39 § 23, sub- § 3, repealed. Subsection 3 of section 23 of Title 39 of the Revised Statutes is repealed, as follows:
3. The effective date of the assent of an employer shall be the date of the insurance policy filed or in the case of a self insurer the date of the bond or the receipt of the securities required. Sec. 8. R.S., T. 39 § 24, amended. Section 24 of Title 39 of the Revised Statutes, as amended, is further amended to read as follows:
§ 24. Voluntary election
Any private employer, any of whose employees are exempt, may become an assenting employer subject to this Act with respect to his employees and the act of the employer in securing the payment of compensation to such employee or class of employees in conformity with the sections 21 to 27 shall constitute as to such employer his election to become subject to this Act an assenting employer without any further act on his part, but only with respect to that employee or that class of employees with respect to whom the employer has secured compensation as provided in sections 21 to 27, provided that, as to any employer who secures compensation by making a contract of industrial accident insurance, such election shall be deemed to have been made on the effective date of the insurance policy. Such election to be an assenting employer shall be deemed to continue as long as compensation continues to be secured as provided. Sec. 9. R.S., T. 39 § 28, amended. The first paragraph of section 28 of Title 39 of the Revised Statutes is amended to read as follows:
An employee of an employer, who shall have secured the payment of compensation assented to become subject to this Act as provided in sections 21 to 27 shall be held to have waived his right of action at common law to recover damages for the injuries sustained by him, and under the statutes specified in section 4if he shall not have given his employer at the time of his contract of hire notice in writing that he claimed such right, and within 10 days thereafter have filed a copy thereof with the commission; or, if the contract of hire was made before the employer so elected, if the employee within 10 days after knowledge by him of such assent shall not have given said notice and filed a copy thereof with the commission. Such waiver of common law and statutory rights shall continue in force for the term of one year, and thereafter without further act on his part for successive terms of one year each, unless the employee shall at least 60 days prior to the expiration of such first or any succeeding year, give his employer notice of claim of such rights and file a copy thereof with the commission. Sec. 10. R.S., T. 39 § 104-A, amended. Section 104-A of Title 39 of the Revised Statutes, as enacted by chapter 155 of the public laws of 1971, is amended by adding at the end a new paragraph to read as follows:
If an employer who is required to secure the payment to his employees of the compensation provided for by this Act, fails to do so, he shall be punished by a fine of not more than $1,000 or by imprisonment for not more than one year, or by both. Failure of an employer, after imposition of the foregoing penalty, to secure the payment of compensation under this Act after notice by the commission to such employer to do so shall, as to each such notice, be deemed a further violation in respect thereof and the same penalty shall be imposed. If such employer is a corporation, the president or treasurer, or both, shall be liable for such penalty.
STATEMENT OF FACT
The purpose of this bill is to make Workmen's Compensation coverage mandatory for all employers not specifically exempted.
ANSWER OF THE JUSTICES
To the Honorable Senate of the State of Maine:
In compliance with the provisions of Section 3 of Article VI of the Constitution of Maine, we, the undersigned Justices of the Supreme Judicial Court, have the honor to submit the following answer to the question propounded on February 6, 1974.
QUESTION: Do the provisions of Legislative Document No. 2296, an Act now pending before the 106th Legislature (Exhibit A) unconstitutionally impinge upon an employer's right to a trial by jury as declared by Article I, Section 20 of the Constitution of Maine?
ANSWER: We answer in the negative.
Article I, Sec. 20, of the Constitution of Maine provides:
"In all civil suits, and in all controversies concerning property, the party shall have a right to a trial by jury, except in cases where it has heretofore been otherwise practiced: the party claiming the right may be heard by himself and his counsel, or either, at his election."
The Maine Workmen's Compensation Law was enacted by P.L. 1915, c. 295, approved April 1, 1915.
It was embodied in the Revised Statutes of 1916, Chapter 50, sections 1 to 48, and was reenacted with modifications as Chapter 238, Public Laws of 1919.
It is now 39 M.R.S.A. § 1 et seq.
The Act was first challenged as to its constitutionality in Mailman's Case, 118 Me. 172, 106 A. 606 (1919). The Court in that case, speaking through Mr. Justice Deasy (later Chief Justice) said in part:
". . . in causes arising under The Workman's Compensation Act the chairman of the Industrial Accident Commission is by statute made the trier of facts and his decrees are, in the absence of fraud, final.
"The constitutionality of a law vesting such a power in a tribunal not a court with a jury and which is partly and perhaps primarily administrative has been questioned.
"The Maine Workman's Compensation Act is elective. No employer or employee is bound to submit to it without his assent, actively or passively manifested. Substantially similar statutory provisions have been upheld generally by courts. (Citations omitted) For reasons which are in these cases mobilized in compelling force, we hold that the Maine Compensation Act is not violative of the Constitution in respect to the method by it provided for the exclusive determination of issues of fact." 118 Me. at 175, 106 A. at 607.
Legislative Document No. 2296 differs from the Laws of Maine, 1915, Chapter 295, and the present law, 39 M.R.S.A. § 1, et seq., in the critically important respect that it is not elective, and thus no waiver principle can be invoked.
By its terms it covers all employers (with exceptions not here material) and all employees (with exceptions not here material).
The Act applies to every employer without regard to his assent or lack of it. Each employer subject to the Act is required to secure compensation and other benefits to his employees by either,
(a) insuring and keeping insured the payment of such compensation and other benefits under an industrial accident insurance policy, or
(b) furnishing satisfactory proof to the Commission of his solvency and financial ability to pay the compensation and benefits, and deposit cash, satisfactory securities or a surety bond in such sum as the Commission may determine; such bond to run to the Treasurer of State and his successor in office, and to be conditioned upon the faithful performance of this Act relating to the payment of compensation and benefits to an injured employee.
Section 10 of the proposed Act would impose a criminal penalty upon any employer who is required to secure the payment to his employees of the compensation provided for by the Act and fails to do so.
The proposed Act further provides that any private employer who has not secured payment of compensation under sections 21 to 27 shall not be entitled to the defenses set forth in section 3 of the proposed Act in any civil action brought by the employee (with exceptions not here material) to recover for personal injuries or death arising out of and in the course of his employment.
Moreover, the employee of such employer may, in lieu of bringing such a civil action, claim compensation from such employer under the Act.
Section 9 of the proposed Act makes provision that whenever the employer shall have secured the payment of compensation as provided in sections 21 to 27 the employee shall be held to have waived his right of action at common law and under the statute specified in section 4 of the proposed Act to recover damages for the injuries sustained by him.
The Workmen's Compensation Act was enacted pursuant to the police power of the State. Its purpose is to lift the burden of industrial accidents from injured workmen and their dependents and place it on industry, and finally through insurance premiums, distribute it to society as a whole.
The Act thus gave a new remedy for victims of industrial accidents and created a new tribunal of the administration of such remedy, i.e., the Industrial Accident Commission.
As Mr. Justice Morrill, concurring in Nadeau v. Caribou Water, Light Power Co., 118 Me. 325, 333, 108 A. 190, 194, said:
"That act did not create any new cause or form of action; it did not give an injured employee a new remedy in the courts of the State; but it did give a new and wider remedy for securing compensation for industrial injuries, by a procedure in which negligence has no place and which is designed to charge compensation for injuries received by employees in industry upon the industry itself. That procedure is entirely outside the common-law courts, and is only reviewable in equity to a limited extent."
The Justices of the Supreme Court of the Commonwealth of Massachusetts were asked to express their opinion concerning the constitutionality of a compulsary new Workmen's Compensation statute in Massachusetts. Opinion of the Justices to the Senate and House of Representatives, 309 Mass. 571, 34 N.E.2d 527 (1941).
There as here, the question was raised as to whether or not the proposed statute impinged on the constitutionally guaranteed right to trial by jury under Part I, article 15, of the Constitution of the Commonwealth of Massachusetts.
The Justices answered at page 601, 34 N.E.2d at page 545:
"So far as proceedings under the workmen's compensation law are concerned the law 'creates rights and remedies and procedure all its own, not previously known to the common or statutory law,' and to parties properly within its terms 'it abolishes old legal rights and obligations and creates a new relation with its peculiar statutory incidents.' (Citations omitted) If 'the parties are subject to the act then all their rights arising under it are to be settled by the agencies there provided and not as in actions at common law.' (Citations omitted) This principle is applicable to the right to trial by jury. Employers insuring under the workmen's compensation law are subject to no liability at common law for personal injuries sustained by employees not reserving their common law rights. Such employers are not harmed by being relieved from such liability and in our opinion the substitution, in the manner provided by the workmen's compensation law as changed by the proposed law, for the common law liability of employers insuring under that law to employees not reserving their common law rights, of a system of workmen's compensation insurance to be administered in the manner provided by the workmen's compensation law as so changed is not open to constitutional objection on the ground that in such administration there is to be no trial by jury."
The Massachusetts Court earlier had explained its reasoning in Opinion of the Justices, 309 Mass. 562 at 568, 35 N.E.2d 1 at 4, as follows:
"The existing workmen's compensation law as amended by the bill would not provide a new remedy to enforce a common law liability, but rather, in the exercise of the police power, would attach new incidents to the relationship of employer and employee, to be enforced by a procedure analogous to equitable procedure. See Devine's Case, 236 Mass. 588, 593, 129 N.E. 414; Green v. Cohen, 298 Mass. 439, 443, 11 N.E.2d 492. No such right in an employee as the right to workmen's compensation was known to the law at the time the Constitution was adopted and the new right is created in recognition of the fact that 'the remedies afforded by actions of tort at common law and under the Employers' Liability Act were inadequate.' Greem v. Cohen, 298 Mass. 439, 443, 11 N.E.2d 492, 494. See also Young v. Duncan, 218 Mass. 346, 349, 106 N.E. 1. With respect to the enforcement of an employee's common law rights when reserved by him, we find nothing in the bill that excludes trial by jury on any issue involved, including the issue whether the employer was insured. See Young v. Duncan, 218 Mass. 346, 348, 106 N.E. 1; Mountain Timber Co. v. Washington, 243 U.S. 219, 235, 37 S.Ct. 260, 61 L.Ed. 685. The new right conferred by the bill upon an employee, in substitution for his common law rights, is not a right to property as damages, but a right to protection by insurance. See G.L. c. 152 § 26. As between an employee waiving his common law rights and an insured employer there is no controversy concerning property. As between such an employer and such an employee the existing law as amended by the bill 'leaves nothing to be tried by jury.' Mountain Timber Co. v. Washington, 243 U.S. 219, 235, 37 S.Ct. 260, 264, 61 L.Ed. 685. And an insurer by electing to insure an employer consents to the procedural provisions of the existing law as amended by the bill. See Ahmed's Case, 278 Mass. 180, 183, 179 N.E. 684."
The Massachusetts Court concluded by quoting from Mountain Timber Co. v. Washington, 243 U.S. 219, 235, 37 S.Ct. 260, 264, 61 L.Ed. 685, as follows:
"As between employee and employer, the act abolishes all right of recovery in ordinary cases, and therefore leaves nothing to be tried by jury."
We approve of this rationale and the opinions resulting therefrom.
We, therefore, advise you that Legislative Document No. 2296, if enacted into law, would not be violative of Article I, Section 20, Constitution of Maine.
Dated at Portland, Maine, this twenty-seventh day of February, 1974.
Respectfully submitted: