Kimberly Coffey v. McCreary County Fiscal Court

• Court: Kentucky Supreme Court
• Decided: December 15, 2021
• Docket: 2020 SC 0510
• Status: Unknown

Opinion

IMPORTANT NOTICE NOT TO BE PUBLISHED OPINION

THIS OPINION IS DESIGNATED “NOT TO BE PUBLISHED.” PURSUANT TO THE RULES OF CIVIL PROCEDURE PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C), THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE CITED OR USED AS BINDING PRECEDENT IN ANY OTHER CASE IN ANY COURT OF THIS STATE; HOWEVER, UNPUBLISHED KENTUCKY APPELLATE DECISIONS, RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED DECISION IN THE FILED DOCUMENT AND A COPY OF THE ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE DOCUMENT TO THE COURT AND ALL PARTIES TO THE ACTION. RENDERED: DECEMBER 16, 2021 NOT TO BE PUBLISHED

Supreme Court of Kentucky 2020-SC-0510-WC

KIMBERLY COFFEY APPELLANT

ON APPEAL FROM COURT OF APPEALS V. NO. 2020-CA-0088 WORKERS’ COMPENSATION BOARD NO. WC-16-91920

MCCREARY COUNTY FISCAL COURT; APPELLEES HONORABLE GRANT S. ROARK, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD

MEMORANDUM OPINION OF THE COURT

AFFIRMING

I. BACKGROUND

Kimberly Coffey had worked for the McCreary County Road Department

for eighteen years as a secretary/dispatcher when she suffered a crushing

injury to three toes on March 2, 2016. Coffey testified she had gone into the

garage area to place some paperwork in an ambulance when a hydraulic lift

malfunctioned and dropped the vehicle onto her foot. It took her coworkers five

to ten minutes to pry the lift from Coffey’s foot. As a result of the work injury,

Coffey developed Complex Regional Pain Syndrome with a psychological

component. She filed a workers’ compensation claim against her employer, the McCreary County Fiscal Court. On August 5, 2019, the Workers’

Compensation Administrative Law Judge (ALJ) determined Coffey is

permanently and totally disabled as a result of the work injury. After a petition

for reconsideration was filed, the ALJ ruled that Coffey’s benefits would

terminate at the age of seventy pursuant to Kentucky Revised Statutes (KRS)

342.730(4). The day before the ALJ ruled on the petition for reconsideration,

this Court rendered its decision in Holcim v. Swinford, 581 S.W.3d 37 (Ky.

2019), holding the 2018 amendment to KRS 342.730(4) was retroactive. Coffey

also raised constitutional issues regarding the retroactivity of the statute in her

petition for reconsideration, but the ALJ had no authority to address them and

passed them for further appellate review.

Coffey appealed the ALJ’s decision to the Workers’ Compensation Board

and the Board affirmed, also acknowledging Coffey’s challenge to the

constitutionality of the amendment and its retroactive application. Like the

ALJ, the Board lacked authority to rule on the constitutionality of the statutory

amendment. Coffey then appealed to the Court of Appeals, which affirmed her

award and held KRS 342.730(4) was constitutional as written and as applied to

Coffey’s claim. Coffey now appeals to this Court, arguing: (1) KRS 342.730(4)

violates the equal protection clauses of the United States and Kentucky

Constitutions, as written and as retroactively applied; (2) KRS 342.730(4)

violates Kentucky’s constitutional provisions prohibiting special legislation; (3)

retroactive application of KRS 342.730(4) denies her due process rights; and (4)

KRS 342.730(4) violates her rights under the contracts clauses of the United

2 States and Kentucky Constitutions. For the following reasons, we hold that

KRS 342.730(4) is constitutional as written and as applied and affirm the Court

of Appeals.

II. ANALYSIS

KRS 342.730(4) concerns the termination of workers’ compensation

benefits. In Parker v. Webster Cnty. Coal, LLC (Dotiki Mine), 529 S.W.3d 759

(Ky. 2017), this Court found the then-current 1996 version of KRS 342.730(4)

unconstitutional on equal protection grounds. The 1996 version of the statute

tied the termination of workers’ compensation benefits to the time at which the

employee qualified for old-age Social Security benefits. This Court held this

was an arbitrary distinction with no rational relation to a legitimate state

interest. Id.

In Holcim, 581 S.W.3d at 41, this Court considered whether a 2018

version of KRS 342.730(4) could be applied retroactively. Quoting a Legislative

Research Commission comment beneath the statute, we held in Holcim that the

amendment “applies to those cases which ‘have not been fully and finally

adjudicated, or are in the appellate process, or for which time to file an appeal

[h]as not lapsed, as of the effective date of this Act.’” Id. at 44.

Whereas the pre-Parker version of KRS 342.730(4) linked workers’

compensation benefit termination to the time at which the worker qualified for

old-age Social Security benefits (and thereby violated an individual’s right to

equal protection under the law by arbitrarily treating similarly-situated

individuals differently), the 2018 version of the statutory subsection links the

3 termination of benefits to the injured employee attaining a particular age.

Under the amendment, a claimant’s benefits terminate on his or her seventieth

birthday or four years after his or her work injury or exposure, whichever

occurs later. Coffey argues this statute is constitutionally infirm on multiple

grounds.

A. Equal Protection

Coffey first argues the amendment to KRS 342.730(4) violates her rights

to equal protection under the law, as guaranteed by the United States and

Kentucky Constitutions. The basis for her argument is that the amendment

treats older injured workers and younger injured workers differently.

The 14th Amendment of the United States Constitution and Sections 1,

2, and 3 of the Kentucky Constitution contain the respective federal and state

equal protection clauses. Their “goal . . . is to ‘keep[ ] governmental decision

makers from treating differently persons who are in all relevant respects alike.’”

Vision Mining, Inc. v. Gardner, 364 S.W.3d 455, 465 (Ky. 2011) (quoting

Nordlinger v. Hahn, 505 U.S. 1, 10 (1992)). Because “[w]orkers’ compensation

statutes concern matters of social and economic policy,” if a rational basis or

substantial and justifiable reason supports the classifications they create, we

must uphold it. Id. at 466 (citing Cain v. Lodestar Energy, Inc., 302 S.W.3d 39,

42 (Ky. 2009)). “In sum, we will uphold the age limitation here so long as it

rationally relates to a legitimate state objective.” Cates v. Kroger, 627 S.W.3d

864, 871 (Ky. 2021).

4 As this Court has stated, “acts of the legislature carry a strong

presumption of constitutionality.” Wynn v. Ibold, Inc., 969 S.W.2d 695, 696

(Ky. 1998). “Doubts regarding constitutionality must be resolved in favor of

upholding the law.” Cates, 627 S.W.3d at 870. Furthermore, “the principle of

reducing workers’ compensation benefits at an age when workers typically

become eligible for alternative forms of income replacement is not new to

Kentucky.” Wynn, 969 S.W.2d at 696.

We took up the constitutionality of the 2018 amendment to KRS

342.730(4) in Cates, holding, “the current version of KRS 342.730(4) is not

violative of the Equal Protection Clause because the age classification is

rationally related to a legitimate state purpose.” 627 S.W.3d at 871. We do not

depart from that recent holding today.

As this Court held in Parker, “[t]he rational bases for treating younger

and older workers differently [are]: (1) it prevents duplication of benefits; and

(2) it results in savings for the workers' compensation system.” 529 S.W.3d at

768. Four years later, we stated, “we remain convinced that preventing a

duplication of wage-loss protection programs and promoting the solvency of the

workers’ compensation system are legitimate state interests.” Cates, 627

S.W.3d at 870. We are unpersuaded to deviate from this position by Coffey’s

arguments that KRS 342.730(4) does not prevent duplicative income

replacement benefits, avoid duplicative governmental benefits, or provide a

savings for the workers’ compensation system; nor are we convinced that

savings to the workers’ compensation system is not a valid basis to uphold a

5 statute in the face of an equal protection argument. Again, today, we hold the

statute passes the rational basis test as it “treats alike all those who receive

workers’ compensation benefits.” Id. at 871.

Coffey argues that even if the statutory amendment were constitutional

on equal protection grounds (as we have held), it is unconstitutional to apply

the statute retroactively to her claim, as her injury occurred before the effective

date of the amendment. However, “[t]he legislature ‘may amend the law and

make the change applicable to pending cases, even when the amendment is

outcome determinative.’” Id. (quoting Bank Markazi v. Peterson, 578 U.S. 212

(2016)). Here, this Court declared one version of the statutory subsection

unconstitutional and the legislature passed a new subsection, providing for

retroactive effect—and the legislature was within constitutional bounds in so

doing.

B. Special Legislation

Coffey next argues KRS 342.730(4) violates Kentucky’s constitutional

provisions regarding special legislation. Specifically, she points to the

prohibitions in Section 59 of the Kentucky Constitution, which state, in

pertinent part:

The General Assembly shall not pass local or special acts concerning any of the following subjects, or for any of the following purposes, namely:

....

Fifth: To regulate the limitation of civil or criminal causes.

6 Twenty-fourth: To regulate labor, trade, mining or manufacturing.

Coffey links this argument to her equal protection argument—essentially

arguing the legislation discriminates against older workers and favors business

owners in an attempt to save employers money on workers’ compensation

insurance premiums. She also argues older workers are discriminated against

because, if they receive permanent partial disability benefits, they will not

receive the entirety of their awards, unlike younger injured workers. This is

another attempt at making the same argument under a different veil. We reject

it, too, as all injured workers’ benefits terminate at age seventy under the

amendment.

This Court addressed a similar special legislation argument in Cates,

holding the amended statutory subsection was not special legislation as it did

not apply “to a particular individual, object or locale.” 627 S.W.3d at 872

(citing Calloway Cnty. Sheriff's Dep’t v. Woodall, 607 S.W.3d 557, 573 (Ky.

2020)). In Cates, we stated “[t]he argument that the statute differentiates

between older and younger workers is a classification argument, which is

properly considered under sections 1, 2, and 3 of the Kentucky Constitution.”

Id. And, just as in Cates, we reiterate: “KRS 342.730(4) is simply not special

legislation.” Id.

C. Due Process

Coffey also argues the retroactive application of KRS 342.730(4) stripped

her of her property right to workers’ compensation benefits in violation of due

process rights, as she did not receive prior notice or a hearing. We addressed

7 this issue in Cates, holding the claimants had no vested right in the duration

and amount of their benefits “until they have received a final judgment in their

favor.” 627 S.W.3d at 873. The same is true here. Because Coffey had no

vested right in the duration of her benefits, a statute terminating them at a

specific age did not deny her due process.

D. Contracts Clause

Finally, Coffey argues the retroactive application of KRS 342.730(4)

denies her rights under the contracts clauses of the federal and state

constitutions. Both the Constitution of the United States and the Kentucky

Constitution protect citizens of our Commonwealth from the state’s

infringement on their right to contract. Article 1, Section 10, Clause 2 of the

United States Constitution reads, in pertinent part, “[n]o State shall . . . pass

any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of

Contracts . . . .” Likewise, Section 19 of the Kentucky Constitution provides,

“[n]o ex post facto law, nor any law impairing the obligation of contracts, shall

be enacted.” Coffey argues KRS 342.730(4) violates these contracts clauses.

In Dowell v. Matthews Contracting, 627 S.W.3d 890, 895 (Ky. 2021), this

Court stated if “the fundamental premise of a Contracts Clause analysis—the

existence of a contract—is absent . . . our analysis ends.” See Gen. Motors

Corp. v. Romein, 503 U.S. 181, 190 (1992) (holding Contracts Clause

inapplicable because the employer and employee did not assent to specific

statutory terms). Therefore, we must first determine whether a contract exists

in this case.

8 Coffey “point[s] to no contract or place within the statutory scheme where

[she is] guaranteed certain benefits that were mutually assented to and

bargained for.” Dowell, 627 S.W.3d at 895. This Court has held “the Workers’

Compensation Act (WCA) does not constitute a contract between Kentucky

workers and their employers or the state.” Id. at 894. Rather than providing

contractual rights, we explained, “the WCA is a statutory scheme that may be

amended as the General Assembly chooses, provided it fits within our

constitutional framework.” Id. at 894–95. “The workers’ compensation system

is controlled by the state and is governed by legislative enactments. It is not a

contract . . . between employers and their employees. Changes to the relevant

statutes, therefore, do not create a Contracts Clause issue.” Id. at 896.

Since the Workers’ Compensation Act does not constitute a contract, “a

complete Contracts Clause analysis is unnecessary.” Id. at 894. The

protections of the clauses simply do not apply. “Because the WCA does not

form a contract, there are no contractual rights that the amendment to KRS

342.730(4) could infringe.” Id. at 895. Just as in Dowell, we hold there was no

contracts clause violation.

III. CONCLUSION

For the foregoing reasons, we affirm the Court of Appeals.

All sitting. All concur.

9 COUNSEL FOR APPELLANT:

Mark D. Knight

COUNSEL FOR APPELLEE:

Marcel Smith Fogel Keller Walker, PLLC

ADMINISTRATIVE LAW JUDGE:

Hon. Grant S. Roark

WORKERS’ COMPENSATION BOARD:

Michael W. Alvey Chairman