Over the last three decades the U.S. Constitution has furnished the rationale for decision in a growing group of workers' compensation cases in Montana. Workers' compensation benefits have been fine-tuned to the requirements of the Constitution's equal protection and due process clauses.
Constitutional litigation from the worker's perspective has resulted in 1) improving benefits for persons suffering from occupational diseases, 2) granting additional benefits (impairment awards) previously denied to persons permanently totally disabled, and 3) improving benefits for working seniors. All this has occurred while the Montana legislature has been scaling back benefits in every biennial legislative session since 1987.
Constitutional rulings on the Occupational Disease Act (ODA):
Henry v. State Fund was the first successful challenge to the stark differences between the Workers' Compensation Act and the Occupational Disease Act. The issue in Henry arose from the 1987 Montana legislature's redefinition of "injury". Under the new definition, the only difference between an occupational disease and an injury was that an injury had to occur on a single day, in a single work shift, at a particular moment in time, while a work-related "occupational disease" became any injury that took more than one day to develop. Previous occupational disease (OD) definitions, which focused the meaning of "occupational disease" on particular types of maladies, were thrown out.
In Henry, the Montana Supreme Court used the 1987 definition change to put occupational disease (OD) sufferers and injury victims on the same constitutional footing, and rehabilitation benefits that had been denied to OD sufferers were held constitutionally mandated for OD cases to the same extent as in WC cases.
Then in Stavenjord v. State Fund, the court held that a compensation cap applicable to OD sufferers but not injury victims was unconstitutional. OD partial disability benefits had been capped at $10,000.00, while workers' comp benefits could rise to $30,000.00 or more, and the court determined that there was no rational basis for the distinction.
In Schmill v. Liberty Northwest, the final large difference in the Occupational Disease Act was tossed out when it was determined that OD sufferers and injury victims in work-related matters should be in the same position with regard to apportionment of causation. Historically, the Occupational Disease Act (ODA) had allowed only a fractional share of damages to the OD sufferer in situations where non-work factors were partially to blame for the symptoms. This reduction of benefits for non-work-related conditions was absent from the workers' compensation act, and the court determined that there was no rational basis for the distinction between the two programs.
Denial of Impairment ratings to the Permanently Totally Disabled
In Rausch I, the Workers' Compensation Court had held that the denial of an impairment award to PTD (permanent total) claimants did not violate the equal protection clause. On appeal, the supreme court avoided the constitutional question but concluded based on a review of statutes that PTD claimants were entitled to an impairment award for the loss of physical functioning resulting from work-related injuries under recent versions of the Act, and that the award was payable upon receipt of an undisputed impairment rating.
In Rausch III, however, the supreme court declined to apply equal protection principles to backdate its ruling in Rausch I, noting that PPD (permanent partial) and PTD (permanent total) benefits are different; PPD compensates for a partial disability by a smaller impairment award, and supplements the wages earned by the claimant upon return to work, whereas PTD benefits do not contemplate a return to work, but, rather, give a continuous, higher benefit which is paid over the work life of the totally disabled claimant. The court then concluded that PPD claimants and PTD claimants are not similarly situated, and that the claimant's equal protection challenge to the failure to pay an impairment award to PTD claimants failed.
Constitutional rulings on the Retirement statute
More recently, the focus has been on the retirement benefits statute. In Reesor v. State Fund, the supreme court held that there was no rational basis for denying to a 65-year-old worker an impairment award when a 40 year-old worker who received the same injury would be entitled to it. Reaching retirement age was held to not be a rational basis for distinguishing between claimants on impairment awards.
The result was different in Satterlee v. Lumbermen's Mutual, where the court held that termination of cash benefits to permanently totally disabled workers at retirement age was not unconstitutional, as federal social security benefits kick in at that time, and the termination of wage replacement benefits in coordination with social security was a rational means of achieving wage replacement. The difference in character between PPD (permanent partial) and PTD (permanent total) was at the heart of the constitutional analysis, just as it was in Rausch I.
Most recently, in Caldwell v. MACO Workers Compensation Trust, the Montana Supreme Court held that it was unconstitutional to deny a component of the partial disability benefit, rehabilitation benefits, to a retiree. Just as certain other partial disability benefits were payable to a retiree, so rehabilitation benefits should likewise be paid.
The Quid Pro Quo - the next constitutional challenge?
Certain types of injuries have long been opposed by workers compensation insurers. Mental shock, short term chemical exposures, pulmonary and heart trauma are examples. In Stratemeyer v. MACO Workers Compensation Trust, the Supreme Court held that the exclusion in workers compensation of mental claims for such things as PTSD rationally relates to the reduction of costs in the workers' compensation field. Disallowing mental and/or emotional stress claims occurring without a physical component, while quite unfortunate for some, did not, the Montana Court said in 1993, violate equal protection of the law.
In Stratemeyer the court noted that the workers compensation system's quid pro quo, where workers give up the chance at large-scale damages in exchange for a reliable wage replacement and medical coverage system was not violated by cutting off mental claims. But the question remains, what type of scale-backs in benefits will cross the line and be held to violate the "quid pro quo"?
Now there are new restrictions in the workers compensation system enacted by the 2011 Montana legislature. Among other things the new laws purport to take away the injured worker's personal choice of physician and allow the insurer to pick the worker's treating physician.
Also, the 2011 legislation eliminates impairment benefits for an estimated 50% of workers that were previously getting benefits for permanent physical impairments caused by workplace injuries.
These changes will spur more constitutional challenges, just as previous restrictions have done. Will this result in one or more due process or equal protection adjustments? It seems likely. Stay tuned. And for more information on workers compensation in Montana, contact us at call our office at (406) 728-4682, or contact us through our website at www.howardtoolelaw.net.
