Harris v. Department of Labor & Industries

law, the major- essentially rewriting Besides prisoners. financial destruction flirts with the rationalization ity's frame- the delicate and jeopardizes the LCP-MI program I dissent. of other DSHS services. work January 1993.] En Banc. [No. 57875-3. Appellant, Harris, Alice Respondent. Industries,

of Labor and Schroeter, S. Sidney Royer, Goldmark & Bender and appellant. General, and Maureen A O. Gregoire, Attorney

Christine Assistant, Mannix, for respondent. Harnetiaux, N. Bloom Whaley, Gary P. Robert H.

Bryan Association, Trial Lawyers State Washington on behalf for appellant. amicus curiae Harris, Alice the widow J. The appellant,

Utter, work- Harris, a reduction in her husband's challenges Jack to RCW 51.32.225. ers' benefits pursuant 51.32.225(1) for a reduction workers' com- provides for those retire- receiving benefits pensation It contains an to the reduction exception ment benefits. total was "receiving permanent where a worker 1986." Harris this court July urges prior benefits as workers actu- exception including this construe but also those ally receiving perma- are determined to have sustained subsequently who also argues to that date. She nently disabling injuries prior of the fed- statute clauses violates the equal protection as the vested constitutions, rights eral and state as well state constitution. In clause, article 23 of the section Lawyers State Trial Associa- addition, Washington amicus (hereafter WSTLA) federal law contends that preempts tion RCW 51.32.225. court's conclusion that trial with the agree

We to the offset exception provision.1 does not fall within trial court's conclusion that RCW 51.32- We also affirm the vested clause of our state rights neither .225 violates of the state equal protection clauses constitution nor In addition, we hold that federal constitutions. and federal the offset in RCW 51.32- contained law does not preempt husband, Harris, an industrial Jack filed The appellant's caused injuries 1979 for work-related claim in June insurance ambiguity interpretation suggests an in the trial court's there is 1Harris 51.32.225(1). provision exception When read offset RCW of the to the Appeals' context, agreed with the Board of Industrial Insurance the trial court disability only receiving permanent exception: total interpretation those of that 1986, exempt July 1, from the offset. before are benefits and Indus of Labor Department to asbestos. The by exposure (hereafter and his claim accepted the Department) tries disability payments, total temporary Harris began paying time-loss Until he received recently, orders. known as also numerous times from Harris was examined those payments.2 stated him repeatedly 1986. The doctor who examined 1979 to and that he did not expect his condition was permanent Harris Although that Harris would be able to return to work. 51.32.055(2) to initiated an under RCW have might inquiry total to receive permanent determine whether he was entitled benefits, disability he did not do so. 51.32.225(1), effective July which became

provides: receiving persons compensation temporary the per- For for title, disability under this compensation

manent total by the an department shall be reduced allow offset for social the federal social security retirement under payable benefits survivors, security, age act, old insurance any apply U.S.C. This reduction shall not receiving worker who is permanent total 1986. debate, two

Dining legislative major justifications limiting offset benefits and emerged: avoiding duplicative the cost of industrial insurance. House floor remarks King reading Chandler and on second Representatives (Feb. 1986). SHB 49th effective, At the time RCW 51.32.225 became Harris was old. He both Federal Social years collecting was retirement benefits and state total temporary disability pay- 11,1986, ments. On issued an order August the amount of payments by Harris's reducing he receiving. retirement benefits was order to the Board appealed Department's Board). (hereafter Industrial Insurance Appeals of RCW statutory Board considered construction 51.32.225. The reserved the to raise parties right questions in further of fact or other legal jurisdictional questions attorney day argument the court that Jack Harris's informed 2The before oral plaintiff/appellant. substituted as he is now dead. Alice Harris was The industrial proceedings. appeals judge affirmed the De- decision to reduce Harris's total dis- partment's temporary benefits the of Social ability by amount Harris He found benefits was that the receiving. exception 51.32.225(1) the offset in RCW provision only to contained applied actually to those who were receiving permanent July total as of 1986. Harris disability sought benefits by review the full Board. On March the Board affirmed that of RCW 51.32.225 a 2-to-l interpretation by vote.

Harris the Board's decision the appealed Superior The Department Court for Mason and Harris filed County. summary judgment. cross motions for that argued 51.32.225(1) to the offset contained in RCW exception should be construed as those including receiving 1, 1986, total as of permanent disability payments but injured also those to that date who would subse- deemed for such Harris also quently eligible payments. be that RCW 51.32.225 argued unconstitutionally abrogated rights protection guaranties vested and violated equal the federal and state constitutions. No preemption both was made to the trial court. Harris also coun- argument tered contention reconsideration Department's time-loss orders are barred res unappealed by judicata. On granted November Court Superior It rejected motion. Department's summary judgment affirmed the Board's challenges, interpre- constitutional and unappealed tation of the statute. It also found that depart- ment orders benefit levels are final determining disability and reconsideration of them is barred res Har- judicata. review, ris direct in this court. We sought accepted review affirm and the trial court. now

II have governments attempted Both federal and state to workers. In the federal paid coordinate state and federal bene- government, fearing duplicative and discourage fits would erode state and federal programs coor- work, legislation passed returning from workers law 65, federal provides those under For benefits. dinate and old- total of Federal compen- to state or local workers' benefits, when added age (1) 80 higher if exceed the sation, they be reduced will (2) total of salary of the worker's former percent 42 U.S.C. insurance benefits. old-age § federal 424a(a). Court a chal- rejected States Supreme The United on due process offset program to this federal lenge Belcher, 404 U.S. in Richardson grounds protection equal (1971). 231, 92 S. Ct. 254 L. Ed. 2d 78, 30 have what states, including Washington, passed Several effec- called "reverse offset which provisions" are sometimes reducing government by shift costs back the federal tively Federal benefits to account for compensation state workers' Practice Security 2 Social Law and benefits. (1987). the of RCW validity 26:66 This court has upheld § in which reduced state 51.32.220, enacted originally for those under 65 who were benefits compensation workers' survivors or benefits. old-age, federal receiving Indus., 108 Wn.2d Labor & Ravsten v. Department of (1987). added Legislature In 1986 the 148-49, 736 P.2d 265 case. It allows 51.32.225, statute at issue in this reduced the amount by benefits to be workers' a worker of Federal Social Washington's extended effect, In RCW 51.32.225 receives. federal those 65 and older who receive reverse offset to cover retirement benefits.

Ill argument address the federal preemption We first had the author- it the issue of whether the raises to enact RCW 51.32.225. ity

A first time the argument raises for the Amicus WSTLA clause of violates the supremacy that RCW 51.32.225 does not consider generally This court federal constitution. Gonzalez, amicus. State v. raised an only by issues that are 468 (1988); Coburn v. n.2, P.2d 925

110 Wn.2d (1984); P.2d 173 see also 270, 279, Seda, 101 Wn.2d 12.1(a). however, authority have inherent do,We RAP if necessary by parties raised not consider issues WPPSS, Wn.2d v. decision. Alverado a proper reach denied, 490 U.S. 1004 (1988), cert. P.2d 427 424, 429-30, 759 12.1(b). Alverado decided This court (1989); see also RAP raised issue preemption consider a federal con the legal about is no dispute there noting parties, 429-30. Alverado, at federal doctrine. preemption tours of case, however, preemption the Alverado Unlike this court Generally, court. the trial issue was not raised at at the trial was not raised an issue that does not consider Power Water Washington Co. Holding Meadows court. New RAP (1984); see also P.2d 212 Co., 102 Wn.2d 2.5(a). This to consider however, have discretion does, court Environmental court. Obert v. at the trial issues not raised P.2d 340 Corp., & Dev. Research issue preemption to consider It is appropriate currently cases are similar inasmuch as numerous this case RCW 51.32.225. validity challenge pending B federal law expressly Amicus WSTLA of RCW 51.32.225. the offset provision preempts implicitly did not Congress that assumption "basic start with the We Louisiana, 451 v. Maryland state law." displace intend to (1981). 576, S. Ct. 2114 Ed. 2d 101 725, 746, 68 L. U.S. a mat largely is state action law preempts federal Whether Tribe, American Constitu L. construction. statutory ter (2d 1988). ed. 6-26, at 480 Law tional § 42 U.S.C. is that § argument core of amicus's The state 424a(d) intent to preempt congressional evidence of is for In order benefits. retirement offsets of federal reverse must find this we theory, this under court to find preemption in congressional evinces a statute clearly "the federal ours.) (Italics Williams, State v. law". state preempt tent

469 1191 1012, 24 A.L.R.4th 531, 538, 617 P.2d Wn.2d 424a(d) 42 U.S.C. provides: § shall not by this section required of benefits The reduction (a)(2) of this in subsection plan made if the law or described

be payable provides periodic benefit section under which to benefits anyone is entitled reduction thereof when the under this wages and self- the basis of subchapter on under entitled to benefits income of an individual employment section 423 of this provided so on title, plan and such law 18, February 1981. 424a(d). states to create a This allows provision 42 U.S.C. § under payable for federal benefits reverse offset its impose will not 42 U.S.C. 423. The federal government § offset program reduction if the state had its reverse own 42of U.S.C. 1981. The February purpose as operation 424a(d) Bowen, v. offset. Sciarotta is to avoid a double § (3d 1988) Schweiker, v. Swain (quoting F.2d Cir. (11th L. denied, 459 U.S. Cir.), cert. 676 F.2d 543 (1982)). this provi The effect of Ed. 2d 103 S. Ct. shift to the federal sion is that it allows the state to costs through program. its reverse offset government 424a(d) allows states Amicus that 42 U.S.C. § Be- reverse offsets for federal disability payments. to enact 424a(d) of reverse 42 U.S.C. makes no mention cause § benefits, amicus concludes offsets for federal them. intended to prohibit Congress cases where has other benefits preemption Unlike intent law is found, preempt state congressional been Police, v. Arkansas State in Rose example, here. For lacking (1986) 107 S. Ct. 334 1, 93 L. Ed. 2d 479 U.S. death attempts reduce state held that Arkansas's Court act the amount by under its workers' Benefits Safety Officers Death under the Public received statute provided federal explicitly Act preempted. were other benefits. any in addition to the benefit was to be (7th 3796(e). Moran, 684 F.2d In Raskin 42 U.S.C. § which that a Wisconsin statute 1982), the court held Cir. equal salaries an amount "reserve" judges' reduced state Social retirement benefits conflicted with any Security to 403(f)(3), pro federal in 42 U.S.C. which policy expressed § in over Security persons hibits reduction Social contrast, 42 U.S.C. age By 70 who continue to earn income. 424a does not contain clear evidence of congressional § Federal Social intent state reverse offsets of preempt retirement benefits. We decline to infer Security preemption from Congress's silence.3 addition,

In extended state reverse offsets RCW 51.32.225 Federal Social to include those 65 and older who receive The federal retirement benefits. offset provisions in 42 U.S.C. 424a a federal offset to only apply contained § under 65. has no Accordingly, Congress expressed those on state reverse offsets for federal or retire policy ment benefits for those over 65.4 Alverado,

In other 111 Wn.2d at we noted several First, if in which federal law can state law. ways preempt field, occupy given any indicates an intent Congress Second, state law within that field is falling preempted. if it actually will be conflicts with state law also preempted that state law is preempted we said Finally, federal law. 828, 835, Eikenberry, 111 Wn.2d 766 P.2d 438 cites Kreidler 3The dissent (1980) (1989) Williams, support and State v. Congress, argument its failure to mention state offsets for retirement its benefits, prohibit portions them. The intended to relevant of both these cases principle statutory construction, namely only "expressio with a dealt (express thing implies alterius" est exclusio mention of one exclusion unius another). apply considering preemption The rules we federal issues are differ- normally ent, require expression congressional we intent before clear preemption. find we will 424a(d) correctly applies largess of 42 U.S.C. § 4Amicus notes that the federal February only programs 1981. to state reverse offset enacted Larson, (1987); 4 A. Workmens Com § Law and Practice 26:65 97.35(a) (1990). 51.32.220, provision, pensation first offset § The State's insists, however, that RCW was enacted before the cutoff date. Amicus in 1986. Amicus runs afoul the time limit because it was enacted 51.32.225 note, however, applies to offsets for those § fails to that 42 U.S.C. 424a Therefore, to offset no effect on state efforts under 65. this limitation has Furthermore, paid limit the time con federal benefits to those 65 and older. 424a(d) disability benefits, only applies in 42 U.S.C. to state offsets of § tained offsets of retirement benefits. not state it would of the when hinder accomplishment purposes Alverado, of federal 111 Wn.2d at objectives law. 431. Amicus solely focuses on 42 U.S.C. 424a to support § an its That does not preemption argument. statute express fact, intent to the field of benefits. In occupy coordinating 424a(d) U.S.C. for some of state reverse provides types § offsets, thus indicating congressional sharing interest in the field benefit coordination. Amicus also has not pointed to a conflict the between federal and state An statutes. actual conflict occurs where state federal are and statutes contradictory on their face and with im both is compliance Growers, Florida & possible. Paul, Lime Avocado Inc. v. 132, 142-43, 929, 10 U.S. L. Ed. 2d S. Ct. (1963).5

Finally, amicus has not shown that RCW is at 51.32.225 odds and objectives with federal After purposes law. all, on, the statute relies 424a, amicus 42 U.S.C. clear is § of Congress's evidence interest in to coordinating benefits avoid duplication.6 VI(B), As indicated in below section Therefore, RCW 51.32.225 also avoids duplicative benefits. RCW 51.32.225 is consistent with policy. federal

Congress has not made its intent in preempt to state law Therefore, this area clear. we federal hold that law does not preempt RCW 51.32.225.

IV forth reductions setting temporary After and perma- nent for who disability those receive Social 5Recently, Supreme the United States Court has stated that the situation purposes objectives law is at where a state odds with of federal law should preemption through also be deemed a form of Pub. actual conflict. Wisconsin (1991). Mortier,_U.S._, 2476, 2482 Intervenor 115 L. Ed. 2d 111 S. Ct. disability application 6The dissent of an to offset Harris's state goal "assuring conflicts with benefits the overall of the Social Act of Dissent, that workers receive their retirement benefits." at 488. The dissent does mention the fact the level of retirement Harris's benefits remains (7th 1982) Moran, distinguishable unaltered. Raskin v. 684 F.2d 472 Cir. is Congress expressly there be no stated that there reduction in Security payments past Congress age for income earned 70. said has not thing disability payments. the same about state 51.32.225(1) benefits, an provides those total "receiving permanent for exception July 1, though 1986." Even prior permanent as actually were not received disability payments total fall Harris claims that she should within July on the the offset. Her claim based statutory exception permanent disabling fact that her husband's allegedly sustained 1986. were injuries duty court's statutes is primary interpreting This intent. WPPSS v. General Legislature's effect to give face, P.2d its Co., 288, 778 On Elec. It unambiguous. simply statutory exception appears who receiving permanent makes an those are exception To receive is to "take benefits as of a certain date. Webster's Third New delivery something. of" possession Jack Harris was not International Dictionary disability bene taking possession delivery permanent total July 1, only receiving fits on 1986. He was temporary had even re on that date. He disability payments as to whether he was permanently determination quested 51.32.055(2). peti RCW the Essentially, disabled under us the term "receive" to mean "sub would have read tioner receive". This would eligible determined to sequently the statute.7 language stretch the improperly addition, Appeals In as the Board of Industrial Insurance indicated, if had wanted to broaden the class Legislature the the subject that were not to of individuals July 1, to prior to include those who were injured offset to disabled permanently totally but not found be date, similar to it could have used language until after that demonstrating ambiguous, argues provision is without how 7The dissent this "receiving" differently. It from a fun- interpret term deviates one could statutory unam- principle that we will not construe construction: damental King Cy. Cy., biguous language King Taxpayers 104 Wn.2d in a statute. (1985). Only ambiguous be able to if would we P.2d 1143 the statute injured employ of the worker. a liberal construction to it for benefit Appeals the Board Industrial Insurance and one member of language by construing clear and which is the same as the dissent made error unambiguous. 51.32.220(7). In re Social Retirement that RCW (Board Cases of Industrial Insurance at 7. Appeals), Offset 51.32.220(1) to raised the age The 1982 amendments RCW limit offset from 62 to 65. The age age also that in the law "shall provided change whose entitlement to respect with workers apply effective total after 1983." disability compensation begins January (Italics ours.) 51.32.220(7). result, As a even when a 1,1983, on the rolls January was person placed pension after but that effective date of total was person's 1, 1983, he or she would from January still be exempt Therefore, expanded disability offset. had the Legislature intended to include those who are determined to eligible be to receive benefits it subsequent could have 51.32.220(7). used similar to that in RCW language We are not persuaded by Harris's three counterarguments. First, argues she Ashenbrenner v. Department of Indus., (1963), Labor & this court held that workers' vest at the time of rights their injuries. She also that the of industrial argues language insurance legislation is to be construed in favor of a liberally claimant. Finally, Harris this court should defer statute, to the Department's interpretation of which coin- cides with her own Given the fact that interpretation. statute ambiguous, is not these are not arguments persua- sive.

The court in Ashenbrenner held it would pre- sume the in effect on an injury law the date of controls the of a worker clear rights legislative absent intent to the contrary. That can opinion suggests Legislature change this rule if it an intent to do retrospectively clearly expresses Ashenbrenner, so. 26-27; 62 Wn.2d at see also Bodine v. Indus., 879, 889, Department Labor & 29 Wn.2d 190 P.2d (1948) (statutes construed an intent "unless prospectively to the has been manifested the most clear and contrary Unlike the amendments at issue unequivocal expression"). Ashenbrenner, in the terms total disa- "receiving permanent in indicate bility unambiguously benefits" RCW 51.32.225 injury should intend that the date did not applies. exception Therefore, govern the offset an whether misplaced. on Ashenbrenner is Harris's reliance ambiguity argues exists Next, that where an Harris language legislation, be is to in industrial insurance citing liberally Sacred claimant, in favor of the construed 631, P.2d Carrado, 635, 600 v. 92 Wn.2d Heart Med. Ctr. (1979). unambiguous, find RCW 51.32.225 Because we simply apply statute, must and we cannot construe the we Edwards, 94 Wn.2d Credit Union v. Tacoma TelcoFed. it. (1980); Lowry Department see also 666, 669, 619 P.2d (1944) Indus., & 21 Wn.2d Labor (acknowledging in favor of beneficiaries liberal construction refusing compensation act, to con but the workers' under unambiguous). that is strue a statute Department's argues Finally, own Harris policy will not retirement offset that the Social was perma applied is that an individual where it determines be nently 30, 1986. An administrative after June disabled agency's interpretation statute, however, is not relevant of a unambig determining legislative a statute is intent where P.2d 308 Jacobs, uous. Lee v. nor deter neither considered In this case the totally permanently dis Harris was mined whether Therefore, hold that Harris we 1986. abled provision exception to the offset not fall within does 51.32.225(1).8 in RCW contained

V abrogates vested RCW 51.32.225 next Harris Const, § rights art. which violation contractual post "[n]o law, or law provides attainder, ex facto bill of solely being penalized suggests "based on wrongly that Harris 8The dissent always option Dissent, had beyond at 483. Jack [his] control." factors injury permanent. RCW 51.32.055. was of whether his to seek a determination that those though does not "mandate” RCW 51.32.055 failed to do so. Even He disability, provides permanent it seek a determination who are disabled rights may to a level of whereby injured his or her worker secure an mechanism compensation. contracts shall ever be passed." of obligations impairing a worker has a vested nutshell, In a the issue is whether level of workers' compensation contractual to a certain right at time of an injury. rule what general regarding have stated the

We are rights vested: must be right, protection legislation, A entitled to from vested expectation upon a mere based an antici- something more than law; existing continuance of the it must have become a pated title, present enjoyment or legal equitable, to future demand,

property, legal exemption a or a a demand from another. State, 959, 963, v. 84 Wn.2d Godfrey to the offset for those exception receiving permanent 1, 1986, disability July total benefits to eliminates prior any all, After rights. actually vested workers infringement upon disability total benefits to receiving permanent date, their do not have benefits offset. As of that initiated an into he Harris had not even whether inquiry was and disabled. Where the permanently totally Depart ment has neither considered nor determined whether a disabled, worker has permanently totally is worker benefits, a future not a vested right.9 expectation to a rights But Harris counters that workers' level vest at the time of on Ashen- compensation injury, relying Indus., brenner v. Labor & Department of (1963). As noted already, P.2d 730 we have Ashenbrenner that the make its intent clear that Legislature required its was meant It does legislation operate retrospectively. that an individual's proposition right stand for vests at the time of an compensation workers' benefits context, In a different this court has stated that with injury. 9Admittedly, essentially the same for 7 Jack Harris's condition remained receiving temporary years, yet It he was still total benefits. is years, arguable receiving "temporary" person for 7 has that after however, argument, expectation is of future benefits. Such an more than a mere requested perma- unpersuasive because Harris could have a determination 51.32.055(2). any during period. He failed to do nent at time this so. to industrial insurance "the

regard rights, an other than a able effective date perfectly designate Dist. date of it to do so." Seattle Sch. injury when chooses Indus., & Labor Wn.2d (1991). Therefore, right P.2d 621 we find that a worker's injury. does not vest at the time of addition, In of other states' offset constitutionality against impair- has been as provisions consistently upheld Larson, 4 A. s Compensa- ment contract attacks. Workmen 97.35(b) (1990) Co. v. American Bankers Ins. (citing tion § (Fla. List Clark Little, 1980)); 2d Baker v. & 393 So. 1063 (1977). Co., 222 563 431 While Harris Constr. Kan. P.2d from other states that work- suggesting does cite some cases none a at the time of of them involved rights injury, ers' vest reverse offsets. constitutional state challenge 51.32.225(1) does not abro- Therefore, we hold that RCW neither rights Department vested where gate worker's that worker was perma- considered nor determined whether to the of that nently totally passage disabled prior legislation.

VI of RCW 51.32- argues provision Harris also that offset both the federal and .225 violates under equal protection Const, 14, 1; Const. amend. art. state constitutions. U.S. § argu of Harris's equal protection 12.10 The main thrust § to Social Secu is provision applies ment that offset benefits, but not to other benefits support rity disa reducing Harris that state addition, argues income. In does retirement benefits bility benefits to account federal governmental purpose. legitimate not further a

A determining is step protection analysis The first in equal 329, 610 Smith, Wn.2d of review. State v. 93 the standard suggest precedents pointed Washington that would 10 Harris has neither case, greater protection has he provides in this nor state constitution Gunwall, 76 106 720 P.2d set forth in State v. Wn.2d briefed the factors (1986). issue the state constitutional We will therefore not address A.L.R.4th 517 (1990). Mota, briefing. P.2d In re Wn.2d without such (1980). denied, 449 U.S. 873 P.2d cert. to the scrutiny ought apply intermediate or strict RCW 51.32.225. by classifications created legislative on, Macias heavily case which she relies most (1983), is 263, 668 P.2d Indus., Labor & 100 Wn.2d In Macias workers from this case. easily distinguishable seasonal workers alleged required that a statute which earn from each to be for workers' employer eligible $150 In analyzing violated equal protection. claims, workers' this court strict equal protection applied effect, it a worker's funda scrutiny penalized, Macias, Harris, mental to travel. 100 Wn.2d at 273. right however, has not shown that fundamental any right affected offset RCW 51.32- provision .225. is also where a "sus Heightened scrutiny appropriate Gould, classification is involved. Darrin v. pect" 859, 865-66, 540 P.2d alleged Harris has not RCW 51.32.225 creates a on classification based suspect race, alienage, or national origin.

Because RCW 51.32.225 is economic which legislation neither sets a class nor affects a fundamental up suspect rational basis review is Richardson v. right, appropriate. Belcher, 78, 81, 404 2d U.S. 30 L. Ed. 92 S. Ct. 254 (1971); 410, 416-17, Conklin v. 107 Wn.2d Shinpoch, (1986); Indus., P.2d 643 v. Labor & Standing Department of 463, 467, (1979); 92 Wn.2d 598 P.2d 725 Sanchez v. Depart Indus., 80, 88, ment Labor & 692 P.2d 192 App. Wn. (1985). (1984), denied, review 103 Wn.2d 1039 B three in analyzing equal protection We ask questions claims under the rational basis test:

1. Does the classification alike to all members apply

within the class? designated 2. Do reasonable exist to a distinction grounds support each class? and

between those within and without to the relationship" 3. Does the class have a "rational of the purpose legislation? Indus., & Labor 107 Wn.2d Motel v.

Skagit Department of (1987). third Only 734 P.2d 478 the second and are raised in this analysis of the Motel questions Skagit case.11 by arguing raises the second question in provision equal protection

offset RCW 51.32.225 violates benefits, but to Social by applying from not income received another support setoffs, however, have withstood equal pro- source. Similar Belcher, v. For in Richardson example, tection attacks. (1971), Ed. Ct. 254 the Court U.S. 30 L. 2d S. offset did government's provision held that the federal In the Court declined violate Richardson equal protection. a argument: to consider similar occasion, We no within our limited function under have Constitution, Congress might offset legitimate purposes whether the consider applying same have been better served recipients private insurance .... in of Richardson at 84. We the reasoning U.S. approved Indus., 108 Wn.2d Labor & Ravsten v. Comm'n, v. also Boehm Industrial See 1987). (Colo. 738 P.2d 806-07 Ct. App. is similar to in Richardson reasoning

The Court's cases: in recognizes equal protection a this court principle a piecemeal a may problem address equal an individual's under violating rights fashion without Labor Corp. Department Crown Zellerbach protection. (1982). Therefore, 102, 653 P.2d 626 Indus., & it protection not violate provision equal offset does 3-part 11 Briefing argument presented case rational in this under was accordingly apply 3-part Skagit test in this case. test basis Motel. We will note, applied 1-part however, recently has rational basis this court We clause, equal protection this 1- and that in a decided under the federal test case Foley Department precedent. v. part See test more consistent with federal of (1992) (citing Fisheries, 783, Burlington v. 14 Northern R.R. P.2d 119 Wn.2d (1992)); Ford,_U.S._, also Ct. see Ed. 2d 112 S. L. (1992)). however, would, 171-72, Coria, We v. 839 P.2d State test. the result in this case under either reach same benefits, not and to Social applies of or other sources benefits. pensions private Harris, however, Ravsten distinguish attempts those cases involved state by arguing Richardson cases, In both benefits. disability federal efforts to offset disability of duplication to avoid efforts governmental The legitimate legislative purposes. benefits deemed were that avoiding of RCW legislative history suggests 51.32.225 was a fac- dipping" major benefits or "double duplication by Representa- tor the statute. House floor remarks behind of SHB King, reading tives Chandler and on second (Feb. 1986). Harris that RCW argues 49th considered in Ravsten and 51.32.225, unlike the statutes to account Richardson, reduces state payments pur- Harris for federal retirement benefits. are distinct. of and retirement benefits poses Thus, concludes RCW 51.32.225 does not serve it does not avoid legitimate purpose duplication benefits. this raises the third Essentially, question protection analysis: Motel Does classifica- Skagit equal of the statute? purpose tion have a rational relation legitimacy "dupli- Other state courts have considered rationales for offsets or reductions cation benefits" contexts, in similar and have reached different Court of Florida in Sasso example, Supreme results. For dismissed, (Fla.), 452 So. 2d 932 Property Mgt., appeal Ram (1984) validity of a Florida stat- 469 U.S. 1030 considered when ute benefits terminated wage-loss which provided court affirmed the 65. The employee age an reached injured over 65 was that the exclusion of those trial court's conclusion dipping" of "double related to the rationally prevention do not serve the retirement benefits because Social Sasso, So. 2d at 934 as benefits. purpose wage-loss same however, there other Sasso, found that were n.3. court benefits, as such for termination legitimate purposes decline with productivity to reflect a reducing fiinge benefits retire, inducing older workers to and the cost of age, reducing 452 So. 2d at 934 premiums. workers' n.3. hand, On the in other Brown v. Tire & Goodyear Rubber Co., 3 Kan. App. (1979), 2d aff'd, dismissed, Kan. 608 P.2d appeal 449 U.S. 914 (1980), the court found that termination of state benefits from the date a claimant becomes entitled to old- age Social benefits did an Security not create clas- arbitrary sification justification. rational in lacking court Brown characterized the disability benefits as a form of wage-loss and protection, found termination of those benefits to abe rational of way also avoiding duplicative benefits. See Baker Co., v. List 130-32, & Clark Constr. 222 Kan. 563 P.2d (1977) (holding 434-35 that reduction in workers' com- due pensation dependents of deceased employee if dependents are receiving also Social benefits did equal not violate The Brown and Baker protection). deci- sions are consistent with the of view a treatise on leading workers' compensation: Wage-loss legislation designed is restore to the worker a portion, two-thirds, such as wages one-half to lost due to the major three of wage-loss: physical disability, causes economic unemployment, and age. operative old The crucial fact is that loss; wage wage the cause merely of the loss dictates the category legislation a applicable. Now if workman under- wage conditions, a all

goes not period of loss due to three it does follow he should receive three sets of benefits simul- taneously thereby and wage. recover more than his actual He and, experiencing only wage any logical system, one loss wage-loss should receive one . . . benefit. (Footnote omitted.) Larson, 4 A. Compensation Workmens § 97.10 We find analysis persuasive. Larson's State disability benefits and federal old-age bene- fits serve the same to restore purpose: earnings wage due to — loss. The cause of loss wage whether it be old disabil- age, — ity, unemployment is irrelevant. RCW 51.32.225 serves legitimate of benefits. In purpose avoiding duplication addition, discussion of bill in the during State Legisla- ture other legitimate reasons for the offset were mentioned. Saving money reducing state fund industrial legislators. premiums on the minds were also insurance King, Representatives Chandler remarks House floor supra. legitimate

There several reasons for were violate enact 51.32.225. RCW 51.32.225 does not equal protection consti- clauses of the state and federal tutions.

VII have trial court should not temporary judicata unappealed res effect determined disability payments, orders, known time-loss also as total responded Department not The has which Harris received. parties argument. this Harris that the entered to stipulation be to the effect that this issue would reserved stipu litigation on was resolved. The until the other issues parties suggest this lation does that the intended reserve summary argued this on Nevertheless, issue. Harris issue judgment appear the court It not from at trial level. does petitioner objected to trial con the record that the court Generally, sidering at issue. issues not raised the trial this Holding appeal. court cannot be raised on New Meadows Washington 498, Co., 495, Co. v. Water Power 102 Wn.2d 2.5(a). (1984); Because did see also RAP object unappealed of time- to consideration the effect of this court, the decline to consider loss orders at trial we argument. recently legislator's from floor of that a comments the 12 Wehave cautioned legislative necessarily v. intent. See Wilmot are not indicative the (1991) (citing Corp., P.2d 18 & 118 Wn.2d 821

Kaiser Aluminum Chem. Servs., 315, 326-27, Corp., 759 Coast Air Ltd. v. Grumman North (1988)). emphasize not rest conclusion that RCW We that we do our P.2d 405 legislators. solely Unlike on floor remarks of constitutional the 51.32.225 is Servs., upon being floor called to use Coast Air we are not Wilmot and North Instead, determine whether interpret we use them to a statute. remarks by RCW any justification created for the classification there was conceivable involved, a are finite state resources have stated that where 51.32.225. We reasonably any statutory if not be set aside state discrimination "will of facts ” Dep't, Employment Wn.2d may justify Caughey Sec. 81 it.' v. be conceived (1972) Williams, Dandridge 460, (quoting A.L.R.3d 513 503 P.2d (1970)). L. 2d S. Ct. U.S. Ed. affirm judg- We the trial court's decision granting summary ment for Department. J., C.

Dore, Brachtenbach, Dolliver, Andersen, Dur- Smith, JJ., ham, concur. — J. holds

Johnson, (dissenting) majority may injured State reduce an worker's if that worker also I Security receives Social retirement funds. dis- First, from sent holding three reasons. because the majority selects the date for wrong determination perma- disability, nent the majority’s of the relevant interpretation Second, statutes works an injustice injured on workers. our In- majority ignores interpret mandate statutory (Act) dustrial Insurance Act in favor liberally injured worker. Finally, the conflicts with the con- majority's holding gressional Act, behind the Social which I purpose would hold the state statute. preempts

I In concluding that Labor and Indus- (Department) may tries reduce Harris's workers' compensa- tion benefits the amount receives,

funds Harris an on majority injustice works Harris and similarly all situated workers. Harris injured totally became disabled in 1979 because of work-related 68 years to asbestos. He was old at the time of his exposure and, disability disability the never despite fact his was adjudicated permanent, as it is clear from the evaluations of his doctor that as of 1981 Harris would never August 464-65; See at at In majority, recover. Clerk's 127. Papers, 51.32.225, the pursuant to RCW reduced Department, month, Harris's award the amount disability by per $213.60 that he received. The reduction left Harris a award with month. disability per $955.09 Clerk's at The 77. of that Papers, majority today approves reduction because Harris simply yet was not receiv- actually a total as of 1986. ing permanent disability award June workers who unfairly penalizes the doing, majority In so to that date. prior in fact disabled permanently were Harris and situ- prohibits similarly The others majority they were litigating question per- ated from the whether to the manently prior According disabled the cutoff date. the question injured the relevant whether majority, receiving, actually by Department adjudication worker was 30, 1986. order, disability as of June permanent payments work- This leads the absurd result two interpretation disabled on the date ers who were same permanently fact solely drastically compensation could receive different based if factors their control. For the beyond example, Depart- on adju- ment had acted on a claim and did not slowly particular date, after the cutoff that worker permanency dicate until less than a whose claim would receive worker permanently even if both became quickly adjudicated, was if the on the date. A similar result would occur disabled same denied worker's claim. In Department initially wrongfully a case, offset, a thus subject such a worker would be to the compensation, solely receive less Department his or her entitlement to those litigate forced that worker to unlikely so as to avoid benefits. Statutes should be construed Acres, Cy., Ski Inc. v. Kittitas consequences. or absurd Therefore should we Wn.2d as Act to such absurd results avoid interpret potentially those described above. worker any in RCW 51.32.225 exemption applies 1986. was in fact disabled permanently

who court must first determine lb this apply exemption, I hold that such occurs. would permanent disability when injury as deter- should focus on the worker's determination by permanent mined medical evaluation when — holds, not, as the when majority occurs disability. permanent question eventually adjudicates consideration recognizes practical My interpretation claims, major- a consideration drives all which all of the claim. aspects itself injury controls ity ignores: reports the medical determined Thus benefits should be which in would substantiate the worker's condition deter- the date of mining permanent disability, by date of adjudication.

My interpretation is consistent with our longstanding mandated that: statutorily policy construing the guiding principle provisions in of the Industrial Insurance Act is that the is remedial in Act nature is to liberally be in purpose provid- construed order achieve its of ing compensation injured to all in employees covered their employment, with doubts in favor resolved of the worker. Indus., Dennis v. & Wn.2d Department Labor ("This (1987); also RCW see 51.12.010 title liberally shall be for the purpose reducing construed to a minimum the arising and economic loss from suffering injuries ... in the course employment."). majority by dismisses liberal construction mandate concluding that the statute is not See at ambiguous. 473.1 dis- majority, agree.

A statute is if its ambiguous language susceptible to more than one Yakima v. International Ass'n meaning. Fire Local Fighters, 818 P.2d Wn.2d (1991). The record reflects that the Department previously interpreted applied RCW 51.32.225 much the same as way it should be See interpreted. Depart- (Dec. ment on Retirement Policy Application of Offset 1986); Papers, Additionally, Clerk's at 64. the Board of In- (BIIA) dustrial Appeals split Insurance 2 to on how to interpret the statute. at Papers, Clerk's 39. These two facts are clear evidence that the statute is ambiguous.

My of the interpretation statute recognizes reality procedures administrative within which the statute operates. Administrative is built delay system. into the It is not uncommon for the to take Department several months to adjudicate a Clerk's 39. Papers, claim. at This is true cases especially involving self-insured employers, since the bulk of the administrative work in those cases is done employer. workers not be Injured penal- should ized for administrative delay. Accordingly, the worker on the for procedures placing has established retro- at 39. This retroactively. Papers, Clerk's rolls pension fair and treatment just for a necessaiy activity procedure are not insures that workers worker, and it of the disabled delay. for administrative unfairly penalized both however, undermines The majority's interpretation, That interpretation and the Act. retroactivity the procedure disabled prior worker who was permanently the penalizes extended delay beyond if the administrative to July the administra- Thus, the majority ignores cutoff date. unfairly system the disability pension tive reality control. the workers' delays beyond workers for penalizes seek a Harris did not The that because majority implies under RCW 51.32- of permanent determination .055(2) 1, 1986, argue cannot now appellant that disabled before that Harris was fact permanently majority's reasoning at 475 n.9. The majority, date. See a had no reason to seek such the fact that Harris ignores for "time loss" checks receiving He had been determination. that it never notified Harris several The years. Department not seek a of his award if he did would reduce the amount He thus had no rea- disability. of permanent determination disability. of permanent to seek a determination son is that the majority's argument result of practical request because he did not is reduced Harris's The statute disability. of permanent a determination Harris to seek on, however, does not require relies majority This statute provides such a determination. may make a worker, self-insurer employer, or [e]ither the disability] or such permanent a determination of

request [for [of director may initiated inquiry be own motion. on his or her Industries] Labor and 51.32.055(2). (Italics mine.) statutory a matter of As RCW to seek failing Harris for cannot penalize we interpretation, the statute when of permanent a determination extent do so. To the mandate that he does not rule of then under our on anyone, a burden places statute the Depart- be on that burden should construction liberal There is no justification concluding ment. 51.32.055(2) a worker determination of requires request or face the permanent disability consequences reduced under the Social offset.

II I disagree also with conclusion on the majority's pre issue. laws emption preemption Federal state occurs when there is a ever conflict between state federal statutes that the is an such state law obstacle to full accomplish of Congressional objectives. Fidelity ment Fed. Sav. & Loan Cuesta, 664, 102 Ass'n de la 458 U.S. 73 L. Ed. 2d Tribe, 3014 (1982); S. Ct. see L. generally American Constitu (2d 1988). Law through tional 6-25 6-26 ed. RCW 51.32- §§ is it .225 because conflicts with both the preempted federal reverse offset and the overall of provision purposes the Social Security Act. amicus, Association,

The Washington Lawyers State Trial correctly points out that limitation of the Congress's use reverse offsets to the field of law RCW disability preempts 51.32.225. Federal authorizes to law states reduce state work- ers' by amount federal disability 424a(d). benefits a claimant receives. See 42 U.S.C. That § authorize, mention, statute does not even does not offsets Furthermore, for federal retirement benefits. only 424a § injured under of 65. does applies age workers Thus it not, face, on its a state for like who, authorize offset those Harris, are expressly over 65. Because authorized Congress reverse offsets disability benefits and for only recip- 65, under ients of we can infer that it did not age intend states allow to offset federal retirement benefits. See Kreidler (1989) v. Eikenberry, Wn.2d P.2d 438 mention of one a statute (express thing implies the exclu- Williams, sion other not v. things mentioned); State (1980) (when Wn.2d a statute specifi- cally designates one class of which it it things upon operates, can inferred be intended to omit all other legis- clear would defeat an interpretation unless such classes 424a(d) intent). clearly of 42 U.S.C. The language § lative for state offset to only provide intent congressional expresses state any it preempts I hold benefits, and would of disability of federal benefits. types offsets to other to extend attempt view is how we would on preemption easy question failed to it adopt had if the Legislature 51.32.225 424a(d). 42 U.S.C. allowed § the "window" period within did not Congress that since would be certainly The answer than those enacted offsets other any allow state specifically fail would such 18, 1981, any legislation February and Practice Law § 2 Social due to preemption. did Congress 26:65, Similarly, at 43-44 disability compensa- other than one for offset any authorize tion, preempted. RCW 51.32.225 of 42 U.S.C. the enactment underlying § The purposes The overall purpose § support interpretation. 424a (Italics benefits". to avoid "duplication 424a is mine.) Sess., reprinted 1st Cong., S. No. 89th Rep. Congress 1944. 1965 U.S. Code & Ad. News Cong. both state who collected was concerned that an employee if he money more than and federal receive disability might no incentive to therefore have or she were working Belcher, 404 Richardson rehabilitate and return work. (1971). Those 82-83, 231, 92 S. Ct. 254 30 L. Ed. 2d U.S. retired workers such in the case of concerns are not present bene- collecting duplicate Harris is not as Harris. and federal retire- disability benefits fits. He receives state to both. benefits, and he is entitled ment benefits conclusion majority's pur- same for offset essentially are retirement benefits historical at majority, ignores important see poses, Federal of benefits. types the two differences between policy been a part have benefits, age security", or "old retirement See in the 1930's. since its inception the Social Act Security States: the United Stevens, History Statutory R. generally were not added benefits Disability Security Income at 505. Retirement benefits Statutory History, until 1956. a aged right are "to assure for the as designed support than as a and in amounts which will public charity, rather subsistence but some of the comforts of life merely insure (Economic Bill), Security . . .." H.R. No. 74th Rep. Cong., (1935), in at Statutory History, 1st Sess. 147. Disabil- quoted hand, were added to the Social benefits, on the other ity concern that state workers' compensa- Act out of a injured work- inadequate compensate tion benefits were Thus, at 501. the two Statutory History, ers for their loss. and different pur- of benefits have different histories types in ignore This court should not those differences poses. justify RCW 51.32.225. attempting authorized Congress specifically reverse offsets Because, as the acknowledges, benefits. majority cover Washington's RCW 51.32.225 extends reverse offset to benefits, at that statute conflicts majority, retirement 424a(d), and is preempted. with 42 U.S.C. § it also conflicts with RCW 51.32.225 is preempted Act. Federal law the overall of the Social goals to the full accom any state law that is an obstacle preempts Sav., Fed. plishment congressional objectives. Fidelity federal objective establishing U.S. at 153. in Congress's was to assure retired workers of an ade income. The retirement should be construed quate program ano, v. liberally favor of the retired worker. Tsosie Calif (10th Celebrezze, F.2d F.2d 1981); Cir. Delno (9th 1965). 159, 162 Cir. Thus we should start with to his or her federal premise worker is entitled retirement benefit exception clearly applies. unless specific case, no such Because exists in this RCW 51.32.225 exception the full accomplishment congressional objec hinders of the assuring workers receive their retirement bene tive of fits. (7th 1982) Moran, 684 this F.2d 472 Cir. supports

Raskin v. a Wisconsin plaintiffs challenged conclusion. The Raskin certain salaries an amount judges' statute that reduced they retirement benefits Security to the Federal Social equal Seventh Circuit ruled The Court of for the Appeals received. conflicted the of the goals statute with the Wisconsin Raskin, Act, at and was therefore Security preempted. Social conflicted the court held that the statute 477. Specifically, any of the Act that Security prohibits a Social provision with past reduction in Social benefits for income earned Security not, Raskin, of 70. at 478. The Social Act did age Security the however, of the Wisconsin expressly prohibit application statute did not statute, directly prevent impede and that Instead, Raskin, of the at 476-77. benefits. receipt thwarted the federal because the policy Wisconsin statute of federal benefits. effectively deprived recipients statute the Social Act Raskin, at 477-78. The purposes "the federal government put[] money were thwarted because took] in the left while state plaintiffs' pocket precisely [the from their money right solely amount of equal pocket received the social money through security pro- was Raskin, at 479-80. This to our analysis equally gram." applies case. Secu- 51.32.225 thwarts the of the Social objectives to receive

rity Act. intended for workers Congress qualified retirement, federal their unless upon specific provi- Act otherwise. The chal- provide sions of statute allows the state to take from the worker's lenged what the federal in the left right pocket government put authorized by Because action is not pocket. specifically the federal act and RCW 51.32.225 conflicts with Congress, is preempted.

Conclusion federal I hold that RCW 51.32.225 is preempted would from law, and that is therefore prohibited I would Alternatively, federal retirement benefits. offsetting be inter- to RCW 51.32.225 should exemption hold were they to all workers who can apply prove preted case, I 1, 1986. In either disabled permanently motion for the Department's would reverse the granting summary judgment remand for further con- proceedings sistent with this opinion. January

[No. 1993.] 58725-6. En Banc. of K.O. Petitioners, Jordan, al, Estate et Indemnity Hartford Accident Company, Respondent.

Case Details

Case Name: Harris v. Department of Labor & Industries

Court Name: Washington Supreme Court

Date Published: Jan 21, 1993

Citation: 843 P.2d 1056

Docket Number: 57875-3

Court Abbreviation: Wash.