*1 McDOWELL, Appellant, Barbara RECC; W. ENERGY Ronald
JACKSON Judge;
May, Administrative Law Board, Compensation Appel
lees, Energy RECC,
Jackson
Cross-Appellant, McDowell, Cross-Appellee,
Barbara May, Law
Ronald W. Administrative
Judge; and Workers’
Board, Appellees. 2000-SC-0218-WC,
Nos.
2000-SC-0318-WC.
Supreme Kentucky. Court of
Aug. *2 Moak, Stumbo, Moak and
Thomas W. Nunnery, Prestonsburg, Ap- Counsel pellant/Cross-Appellee Barbara McDowell. Ferreri, Fogle, Thomas L. Ferreri and Louisville, Appellee/Cross-Ap- Counsel for pellant Energy Jackson Reco. compen- COOPER, actually against workers’ Justice. received McDo- payable. sation otherwise Appellant/Cross-Appellee Barbara appeals, Energy and Jackson RECC well was born McDowell December Ky. from that decision. cross-appeals employed by Appellee/Cross-Ap- She was *3 § Const. from pellant Energy Jackson RECC Octo- 1997, 1958, 29, 1, until May ber when she I. totally JURAL RIGHTS. permanently
became
disabled
syndrome.
carpal
due to bilateral
tunnel
KRS
McDowell claims
By
opinion and
an
award of
administra-
“jural rights” doc
violates
so-called
the
(ALJ)
judge
tive law
rendered
Febru-
trine,
of
that Sections
premise
the
which is
1999,
ary 16,
compensa-
she was awarded
14, 54,
Kentucky
241 of the
Constitu
permanent
disability.
tion
total
benefits
tion,
together, preclude any
when read
342.730(l)(a). However, the award
KRS
impairs
action in
legislation
right
that
a
of
reach age
noted that McDowell would
65
common
negligence
recognized
that was
18, 2001,
that, pursuant
on December
prior
adoption
1891 Con
law
to the
of the
342.730(4),
to
her entitlement to com-
KRS
generally,
v. Wil
stitution. See
Williams
pensation benefits would terminate on that
son,
(1998);
Ky.,
Ludwig
74
Co.,
Co.,
42,
(2000)(the
Fuller
619,
v. Illinois Cent. R.
138 Ky.
Ky., 13 S.W.3d
law
501,
on the
injury
S.W.
See Shamrock
date of
rights
controls the
Co., Inc., Maride,
parties
Ky.,
respect
Coal
5 S.W.3d
to workers’ com
(1999) (there
claim);
pensation
Maggard
v. Internation
pre-1891
was no
Co., Ky.,
al Harvester
right
common law
of action for category
(1974). McDowell’scause of action did not
pneumoconiosis).
Furthermore,
one
29, 1997,
May
arise until
property
so
rights
McDowell waived her
under Sec-
right that she now has to
workers’ com
tions
and 241 upon
acceptance
her
pensation
benefits is defined
the statu
of the
Compen-
tory
By
scheme
effect on that date.
Daly
sation Act. M.J.
v. Varney, Ky.,
Co.
*4
scheme,
terms of that statutory
she ac
400,
(1985),
695 S.W.2d
403
overruled on
quired a
property right
workers’ com
grounds,
other
United States Fid.
Gty&
pensation
period
only
for the
from
Minerals, Inc.,
v.Co.
Technical
Ky., 934
injury
the date of her
sixty-fifth
until her
266,
(1996).
S.W.2d
269
Mathews,
birthday.
Tatum v.
541 F.2d
Cf.
II. DUE PROCESS.
(6th Cir.1976).
161, 165
Regardless, pro
process
preclude
cedural due
does not
ter
McDowell’s Due
argu
Process
mination of benefits but
342.730(4)
termination
ment is that
deprives
her
of
prior
benefits without
notice and hear
property right
of her
compen
267-68,
ing. Goldberg Kelly,
v.
at
supra,
sation benefits to which she otherwise
Id. at
75 re benefits” (1997), “retirement compen- “[w]orkers’ S.W.2d 696 952 Case, 250, statute,” 675 Tobin’s ceived); 424 Mass. a sation is creature (benefits “[wjhen employer employee 781, submit terminate 783 N.E.2d act, eligible to the 65 and themselves is over when claimant rights liabilities are henceforth private or security “benefits” for social terms the act.” by measured to be entirely part or in paid pension benefits also Morrison v. Carbide 698; Id. see employee es can employer, unless 746, Corp., Ky. and Carbon Chemicals injury would but for the tablish that he/she 547, A constitu- 129 S.W.2d market); in the labor remained active have challenge protection tional Services, Fargo Guard Vogel Wells dis- statute is grounds presupposes (benefits (Tenn.1996) ter thus, unfair. criminatory, perceptually 65); age. claimant reaches minate when compensa- the statute is a workers’ When Indus., Labor and Dept. v. State Harris statute, whether tion the issue becomes P.2d 120 Wash.2d perceived there is rational basis (1993) (benefits by amount so reduced Enterprises Steven Lee discrimination. re “retirement benefits” cial *5 (2000). 391, Varney, Ky., 36 S.W.3d 395 Belcher, ceived). v. And in Richardson note at the outset that We KRS 254, 78, 30 231 92 L.Ed.2d 404 U.S. S.Ct. only place the is not first or statute to (1971), Supreme Court the United States limitations on the duration of workers’ rejected equal protection challenge 1973, compensation awards. the Until (42 Act Security 224 of the section perma- maximum duration awards of 424a), provides § an offset U.S.C. total disability nent benefits was arbitrari- disability benefits for social (re- ly set at 425 weeks. KRS 342.095 compensation state workers’ bene against Acts, 36, 78, § ch. eff. pealed, Ky. 1972 (Disability benefits converted fits. 1, 1973). January That is the maxi- still 65.) at into retirement benefits permanent mum duration for benefits for Larson, supra, questions why all states partial fifty disability awards less than provide form of offset do not some 342.730(l)(d). percent. KRS compensation so- against benefits workers’ authority law of foremost cial benefits: reports compensation workers’ that seven- odd, may seem with the intense It teen states and the District of Columbia costs, that compensation about concern compensation their offset benefits exploit slow states have been so in against benefits some com- way to reduce their this obvious constitutionality of manner and that Although federal burden. pensation provisions upheld has been largely these in present form was enacted in its offset Ar- against protection challenges. 1965, that there would be ensuring thus 9 Lar- Larson, K. thur Larson and Lex and combined benefits ceiling on the Law son’s Workers’ Security program (b) 1997). that the federal Social 97.35(a) (Matthew § Bender from the elim- reap all the benefit See, e.g., Injured would Kansas v. Workers of overlap, by 1975—10 Franklin, ination of the 840, 591, 942 609- 262 Kan. P.2d had (benefits only states countered three 14 offset later — their offset own: Col- private pension “retirement benefits” Then, Montana, orado, Minnesota. H.R. benefits); Berry v. plan retirement (Me.1994) Sons, number rapidly, grew rather Beal & A.2d 649 1101 (benefits 16, more than two-thirds by 50% of amount of about but with reduced Belcher,
of the states still forgoing this cost-cut- supra, Richardson re- ting opportunity. verse offset of retirement compensa- state workers’ 97.35(a), § Id. at 18-42-43. Larson con- tion benefits. cludes that the answer in is found the 1981 424a, § amendment of 42 U.S.C. the Social From 1980 had a Security disability benefits statute. statute, 1980 version of KRS turn, government The federal in belated- 342.730(1)(b), provided perma ly awakening to the fact that the states partial nent disability “shall not be beginning were to enjoy shifting part of paid employee after the eligible becomes burden to the Social normal old benefits under the fed Security system, legislation enacted ef- eral age, old survivors and disability insur fectively ruling out adoptions future , Acts, ance Ky. act.” ch. [against disability offsets benefits] 15(1)(b) Acts, § (repealed, Ky. ch. state end. 23(1)(b)). § A constitutional chal Larson, 97.35(a), § at 18^3. The 1981 statute, lenge to that virtually which had § amendment of 424a U.S.C. limited language identical to that now found state “reverse offset” statutes 342.730(4), rejected Brooks those already states that had such statutes Co., Island Ky.App., Creek Coal place 18,1981: February as of doubt, No the 1980 (d) The required reduction of benefits Assembly language General inserted that
by this section shall not be made
342.730(1)(b)
very
for the
reason
if
plan
law or
described
subsection
Larson,
And,
suggested by
supra.
no
*6
(a)(2) of
peri-
this section under which a
doubt, the 1996
Assembly
General
rein
odic
payable provides
benefit is
342.730(4)
language
serted that
in KRS
reduction
anyone
when
is enti-
thereof
the same reason.
tled to
under this
subchapter
benefits
Ibold,
Wynn
Ky.,
state statute a reverse offset of discrimination the statute. Id. at 697. against retirement benefits applies The same rationale to this chal- compensation state workers’ benefits. 843 lenge to the 1996 version of KRS P.2d at purposes 1060-61. For of an 342.730(4). protection analysis, “rational basis” we perceive no suggests distinction between an offset of McDowell enact (42 (2000) state workers’ benefits ment of Public Law 106-182 benefits, 403(f)(8)(E)), Security disability U.S.C. the “Senior Citizens 2000,” that KRS Having determined to Work Freedom Act which unconstitutional, to we af from 70 65 the which not reduced is applied re- earnings respect test would not be to to Appeals firm the with Court benefits, supports duce her appeal. also reverse McDowell’s direct We to equal protection challenge respect to Jack the Court of 342.730(4). Her seems to be argument cross-appeal. The Energy son RECC’s that, 106-182, Public employed under Law no ba affords language of KRS persons age 65 now entitled to a over only provides for a that it sis construction whereas, duplication of under benefits for an of social benefits offset 342.730(4), not. in- she is Earned compensation benefits. against workers’ however, come, benefit, is so not a welfare clearly states that workers’ statute a dupli- Law 106-182 not create Public did terminate” benefits “shall simply cation of “benefits.” It extended qualifies se employee when the for social persons employed over same curity retirement benefits. right to receive intent, a legislative To determine court un- previously that was extended in enact- must refer to “the words used employed persons age 65. In that over surmising rather ing the than statute passage its anti-discriminato- respect, was may what have been intended but was nature, ry purpose its obvious ... expressed.” Similarly, not court encourage qualified older workers “may interpret statute at variance not in the work in a remain force then-boom- language.” with its stated ing economy there were more Combs, Ky., Hale jobs than “high-tech” available skilled Allen, (quoting Commonwealth v. fill in passing workers to them. noteWe (1998)). Ky., Put 980 S.W.2d that one rational for precluding basis du- way, presume another “courts that a must plication of welfare avoid legislature says in a what it statute means unemployment lucrative making so as to ... says in a statute what it means discourage potential workers from re- the words of a statute are [and][w]hen *7 turning to the work force. then, unambiguous, this canon is first also Public Law did not to 106-182 extend ” ‘judicial complete.’ inquiry last: persons unemployed age right over 65 to Germain, Bank Connecticut Nat’l 503 income, receive earned for which workers’ 249, 253-54, 117 U.S. S.Ct. compensation benefits are intended as a L.Ed.2d 391 substitute, but to employed extended JOHNSTONE, STUMBO, and persons age right over to receive WINTERSHEIMER, JJ., concur. social retirement benefits in addi- tion earned Nor it to income. did n GRAVES, J., separate dissents by purport anyone right to extend to LAMBERT, C.J., opinion, draw workers’ benefits. KELLER, J., joining that dissent. Thus, act had on no effect McDowell already to draw who was entitled social Justice, GRAVES, dissenting. Specifically, benefits at 65. it age I must Respectfully, dissent. right did confer her the draw not 342.730(4)1 requires which that compensation benefits addition workers’ benefits terminate retirement benefits. 12, 1996, provides as 1. the statute follows: As amended effective December recipient qualifies manent, when the for normal old- disability 30, 1997, total May as of age social security, violates the United and awarded income begin benefits to Kentucky States and Constitutions be that day and terminate when she reached cause it denies equal protection of the age law 65. ruling as to termination was to the Commonwealth’s older 342.730(4), workers. based on KRS as amended ef- Furthermore, changing nature of the fective Appellant December 1996. ap- federal social security regime pealed demon claiming that the statute was un- strates that the statute’s rationale is not to constitutional. The Board affirmed the provide compensation ALJ, wages. for lost Appeals, as did the Court of
upheld constitutionality statute, of the I. FACTS determining provided that it for an offset This case an amount arises from a Court of to that of age decision old affirming the views of both the benefits that claimant would be Board and an Ad- entitled to receive on ministrative her 65th Judge birthday. Appellant Law that Ap- argues awarded pellant 14, 54, Barbara the statute permanent, McDowell violates Sections to- tal disability that would Constitution by terminate when de- priving right she reached her the Appellant fully compen- 65. to be began working injury. sated for her Energy argues Jackson She further RECC as a billing provision clerk and cashier violates the Fifth Her Fourteenth repetitive duties involved the Amendments to use of her the United fingers and States years. by taking property hands for 39 Constitution Eventual- ly she from her in began experience pain violation of her process and numb- due right compensation, to fair ness her hands that and in interfered with her violation of her right equal protection work and for which conservative medical under the treatment law. was ineffective. Throughout
her of employment, she had an
excellent
history.
work
Ultimately, she
II. STRUCTURE OF THE
surgery
underwent
carpel
bilateral
tun-
BENEFITS PROGRAMS
syndrome
nel
in May 1997. Although her
As Professor Larson
*8
in order to be eligible for full retirement
quite
is
common.” Larson’s
benefits.
(Lexis
Law 157-1
ed.2001).
The Administrative Law Judge deter-
In trying
impose
to
some after-
Appellant
mined that
had
per-
schemes,
sustained a
the-fact coordination on these
payable pursuant
All income benefits
chapter
spouses
to this
ant
depen-
to this
to
and
chapter
upon
shall terminate as of the date
spouses
dents shall terminate when such
employee qualifies
which the
for normal
dependents qualify
for benefits under
old-age
Security
Social
retirement benefits
Security
by
the United States Social
Act
Act,
Security
under the United States Social
reason
the
upon
fact that the worker
42 U.S.C. secs. 301 to
two
1397f or
earnings
whose
entitlement is based would
employee's injury
after the
or last
qualified
old-age
have
for normal
Social
exposure, whichever occurs last.
In like
Security retirement benefits.
payable pursu-
manner all income benefits
RATIONAL BASIS
have
III.
jurisdictions
split, based
their
intent,
legislative
on whether an
views
primary
This
has stated that the
Court
eligible for
injured,
may
older worker
be
of KRS
purpose for
enactment
security
compen-
social
and workers’
both
342.730(4)
duplication
minimize
was to
benefits.
sation
However,
previous
all
cases
of benefits.
required by
most
are
fed-
While
workers
that
social
issue
state that
exploring this
security
in
participate
law to
the social
eral
than
form of
security
no more
another
is
by
old-age
and are
program
covered
before
income
were rendered
replacement,
security
not.
all are
Cer-
program,
social
to
Securi-
the 2000 amendments
the Social
types
employment
exempt,
tain
are
Act,
security
to social
law as
ty
and relate
employees
government
and local
are
state
it
the amendments. When
existed before
only to
the extent of
state’s
covered
written,
security
KRS
social
agreement
218”
with
federal
“Section
persons
not
could
laws mandated
may require employ-
A state
government.
receiving
security
work
social
bene-
while
by
not
a
or
ees who are
covered
state
local
fits,
solely
replace-
benefit
a
making the
system participate
retirement
in social
a
for
lost in
To
wages
ment
retirement.
whereas,
who
security;
employees
are cov-
in a
large
this rationale resulted
extent
by a state or
retirement system
ered
local
compensation,
duplication of workers’
required
participate
be
in
cannot
social
work-
replaced wages
lost due to
security
majority
unless a
of them
vote
injury.
related
Since the enactment
Security
such coverage.
favor of
Social
342.730(4), however,
changes
KRS
recent
Security
Administration’s
Hand-
Social
citi-
law now allow older
social
(13th ed.1997)
1000-1019. Ken-
book
sees.
zens not
to work but also to receive
teachers,
tucky
example,
for
have a retire-
benefits.
program
participate
do not
ment
government’s re-
of the federal
security.
groups may partici-
Other
Because
availability
of social
pate
programs
both retirement
and so- vised stance on
security.
recipient,
cial
the working
benefits to
relationship
longer
a
no
exists between
By basing a
entitlement
in-
worker’s
342.730(4) and the
Commonwealth’s
reaching
come benefits
after
“normal”
duplication
avoiding
interest in
of bene-
old-age
retirement
rationale
the source of
fits. Both the
qualifies
whether
worker
for so-
funding
legis-
the two
of social
behind
sets
security,
unfairly
cial
dis-
above,
overlap.
noted
lation belie their
As
injured
criminates
workers who
earning
compensation replaces
required
participate
are
social securi-
most
capacity.
now
is
no
ty, particularly those who have
other
in-
closely
to a return on monies
equated
qualify
Those
not
pension.
who do
wage-
ais
vested. Workers’
old-age
guar-
“normal”
injured on the
given
persons
loss benefit
anteed
income
commensurate
through
job,
employers
financed
state
occupational disability,
but those
*9
tort
possible
in lieu of a
program,
state
old-age
for
qualify
who
“normal”
This ar-
employer.
action
contrast,
security are not.
In
those who
injury
the burden of the
rangement puts
types
public
or
are entitled
other
in the best
industry
on the
because it is
private pensions may receive both a work-
in the
and to encour-
position to factor
cost
compensation income benefit and their
ers’
security
oper-
pension.
age
safety. Social
public
private
or
worker
by
ated
government
the federal
and can
being
no
more like a contractual benefit. For
longer be viewed as a wage-loss benefit in those who continue to work after reaching
light of the fact that
the “normal”
gainfully employed
age,
retirement
the benefit
persons
provides
supplement,
are also allowed to
income
draw social
amount of
which is based
security
solely upon
prior
based
their
age.
their
This
contributions to
security pro-
the social
view has been
by
taken
various
states
gram.
When social
Arkansas,
years,
recent
including
Colora-
eclipse
benefits,
do, and
Virginia.
West
Golden v. Westark
there’s a disincentive for those 65 or older
41,
Community College, 333 Ark.
to work. This is due to the utter void of
154,
(1998);
158-60
Industrial
wage-loss
benefits available
the event of
Romero,
Claim
912 P.2d
Office
workplace
injury. The end result of this
(Colo.1996);
Richardson,
67-68
State v.
discrimination is that older workers are
198 W.Va.
manners.
The amount of a upon recipient’s is aver-
benefit based (or weekly average state’s week- wage whereas,
ly wage) injury; the time amount benefit recipient’s aggregate
based notes his work- somewhat, improved hands she was unable compensation treatise, ers’ “[s]ince most to return to work and filed a workers’ legislation in the United States has compensation claim. She testified that she appeared in fragments, unrelated lack of hoped had to be able to work until resulting coordination in cumulation of