RENDERED: APRIL 22, 2022; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2020-CA-0701-WC
LEE HOWARD APPELLANT
PETITION FOR REVIEW OF A DECISION v. OF THE WORKERS’ COMPENSATION BOARD ACTION NOS. WC-19-00183, WC-17-92247, AND WC-17-76944
STERICYCLE, INC.; DANIEL CAMERON, ATTORNEY GENERAL; HONORABLE JOHN B. COLEMAN, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD APPELLEES
OPINION AFFIRMING
** ** ** ** **
BEFORE: GOODWINE, MAZE, AND MCNEILL, JUDGES.
MAZE, JUDGE: Lee Howard (Appellant) appeals from an opinion of the
Workers’ Compensation Board (the Board) entered on April 24, 2020, affirming
the benefits awarded by the administrative law judge (ALJ). As the constitutional
challenges posited by Appellant have recently been rejected by the Kentucky
Supreme Court, we affirm the opinion of the Board. Appellant was in his sixties when he sustained work-related injuries
on February 23, 2017, and June 22, 2017, while employed by Stericycle, Inc.
(Appellee). He filed for workers’ compensation benefits and on December 13,
2019, an opinion, award, and order was entered as to injuries of the right and left
shoulders and denied as to his claim of cumulative trauma. He appealed the ALJ’s
order to the Workers’ Compensation Board, arguing that the 2018 amendment to
KRS1 342.730 (4), terminating his benefits at the age of 70, as well as its
retroactive application were unconstitutional. Although the Board affirmed the
ALJ’s order, it stated that it was without jurisdiction to reach a decision on the
issue of constitutionality.
This appeal followed, in which Appellant claims that KRS 342.730
(4) and its retroactive application constitute violations of the Equal Protection and
Contracts Clauses of the United States and Kentucky Constitutions. However, at
the request of the Kentucky Attorney General, this Court held the matter in
abeyance pending decisions of the Kentucky Supreme Court in Cates v. Kroger,
627 S.W.3d 864 (Ky. 2021), and Dowell v. Matthews Contracting, 627 S.W.3d 890
(Ky. 2021). Following the rendition of those opinions, the parties were permitted
additional time in which to file supplemental briefs. While supplemental briefs
were filed on behalf of Appellee and on behalf of the Attorney General, no
1 Kentucky Revised Statutes. -2- additional materials were filed on behalf of Appellant. As the Court finds that the
Cates and Dowell cases are dispositive of the issues presented by Appellant, we
affirm.
The version of KRS 342.730(4) applied by the ALJ and relied upon
by the Board became effective on July 14, 2018. It states that:
All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee reaches the age of seventy (70), or four (4) years after the employee’s injury or last exposure, whichever last occurs. In like manner all income benefits payable pursuant to this chapter to spouses and dependents shall terminate as of the date upon which the employee would have reached age seventy (70) or four (4) years after the employee’s date of injury or date of last exposure, whichever last occurs.
Subsection (3) of Section 20 of 2018 Ky. Acts ch. 40 specifically
states that the foregoing “shall apply prospectively and retroactively to all claims:
(a) [f]or which the date of injury or date of last exposure occurred on or after
December 12, 1996; and (b) that have not been fully and finally adjudicated, or are
in the appellate process, or for which time to file an appeal has not lapsed, as of the
effective date of this Act.” This subsection was not codified as part of the
Kentucky Revised Statutes.
In Wynn v. Ibold, Inc., 969 S.W.2d 695, 696 (Ky. 1998), a workers’
compensation claimant challenged a 1994 age-related reduction in benefits as
unconstitutional. On appeal, the Court recognized that “acts of the legislature -3- carry a strong presumption of constitutionality and that 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.” The Court
stated that “[a] statute involving the regulation of economic matters or matters of
social welfare comports with both due process and equal protection requirements if
it is rationally related to a legitimate state objective.” Id. In affirming the
decisions of the lower courts, the Court concluded that “avoiding a duplication of
income benefits is a legitimate state objective and sound public policy.” Id. at 697.
Therefore, this rational relationship test has been adopted as the appropriate level
of scrutiny in constitutional challenges involving workers’ compensation claims.
In Parker v. Webster County Coal, LLC (Dotiki Mine), 529 S.W.3d
759 (Ky. 2017), the Court applied this test in determining that the 1996 version of
the statute (in effect at the time of Appellant’s injury) treating older workers who
are eligible for Social Security differently than those who do not constituted an
equal protection violation pursuant to the 14th Amendment of the United States
Constitution and Sections 1, 2, and 3 of the Kentucky Constitution. The Court
reversed the decisions of the lower courts and invalidated the 1996 version of the
statute. The General Assembly then enacted the 2018 version that is at the heart of
this appeal.
-4- Later, in Holcim v. Swinford, 581 S.W.3d 37, 44 (Ky. 2019), the Court
addressed the issue of statutory retroactivity specifically as applied to KRS
342.730(4). The Court concluded that the Legislative Research Commission was
not required to codify the retroactivity provision of the Act since it was
“temporary,” because “once cases arising during that time frame are fully
adjudicated, it will be unnecessary.” 581 S.W.3d at 44.
Most recently, in Cates v. Kroger, 627 S.W.3d 864 (Ky. 2021), the
appellant challenged the constitutionality of the statute as amended in 2018 as well
as its retroactivity. The Court applied the rational basis standard and found that the
classification based on age as set forth in the statute furthers a matter of “social and
economic policy” because it prevents “a duplication of income benefits.” See
Wynn, 969 S.W.2d at 696.
Additionally, the Court found that the General Assembly’s decision to
make the amendment retroactive was not an arbitrary one. The Court concluded
that, “[b]ecause the 1996 version had been invalidated and a new version enacted,
the General Assembly was left to decide if pending claims would be governed by
the 1994 version of the statute – a statute that had not been in effect for over 20
years – or to allow for current claims to be decided under the new amendment.
The legislative body apparently chose the latter, and that choice was its
prerogative.” Cates, 627 S.W.3d at 871-72.
-5- In Dowell v. Matthews Contracting, 627 S.W.3d 890, 894 (Ky. 2021),
the Court addressed the Appellant’s second argument herein, whether the
application of the 2018 version of KRS 342.730
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RENDERED: APRIL 22, 2022; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2020-CA-0701-WC
LEE HOWARD APPELLANT
PETITION FOR REVIEW OF A DECISION v. OF THE WORKERS’ COMPENSATION BOARD ACTION NOS. WC-19-00183, WC-17-92247, AND WC-17-76944
STERICYCLE, INC.; DANIEL CAMERON, ATTORNEY GENERAL; HONORABLE JOHN B. COLEMAN, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD APPELLEES
OPINION AFFIRMING
** ** ** ** **
BEFORE: GOODWINE, MAZE, AND MCNEILL, JUDGES.
MAZE, JUDGE: Lee Howard (Appellant) appeals from an opinion of the
Workers’ Compensation Board (the Board) entered on April 24, 2020, affirming
the benefits awarded by the administrative law judge (ALJ). As the constitutional
challenges posited by Appellant have recently been rejected by the Kentucky
Supreme Court, we affirm the opinion of the Board. Appellant was in his sixties when he sustained work-related injuries
on February 23, 2017, and June 22, 2017, while employed by Stericycle, Inc.
(Appellee). He filed for workers’ compensation benefits and on December 13,
2019, an opinion, award, and order was entered as to injuries of the right and left
shoulders and denied as to his claim of cumulative trauma. He appealed the ALJ’s
order to the Workers’ Compensation Board, arguing that the 2018 amendment to
KRS1 342.730 (4), terminating his benefits at the age of 70, as well as its
retroactive application were unconstitutional. Although the Board affirmed the
ALJ’s order, it stated that it was without jurisdiction to reach a decision on the
issue of constitutionality.
This appeal followed, in which Appellant claims that KRS 342.730
(4) and its retroactive application constitute violations of the Equal Protection and
Contracts Clauses of the United States and Kentucky Constitutions. However, at
the request of the Kentucky Attorney General, this Court held the matter in
abeyance pending decisions of the Kentucky Supreme Court in Cates v. Kroger,
627 S.W.3d 864 (Ky. 2021), and Dowell v. Matthews Contracting, 627 S.W.3d 890
(Ky. 2021). Following the rendition of those opinions, the parties were permitted
additional time in which to file supplemental briefs. While supplemental briefs
were filed on behalf of Appellee and on behalf of the Attorney General, no
1 Kentucky Revised Statutes. -2- additional materials were filed on behalf of Appellant. As the Court finds that the
Cates and Dowell cases are dispositive of the issues presented by Appellant, we
affirm.
The version of KRS 342.730(4) applied by the ALJ and relied upon
by the Board became effective on July 14, 2018. It states that:
All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee reaches the age of seventy (70), or four (4) years after the employee’s injury or last exposure, whichever last occurs. In like manner all income benefits payable pursuant to this chapter to spouses and dependents shall terminate as of the date upon which the employee would have reached age seventy (70) or four (4) years after the employee’s date of injury or date of last exposure, whichever last occurs.
Subsection (3) of Section 20 of 2018 Ky. Acts ch. 40 specifically
states that the foregoing “shall apply prospectively and retroactively to all claims:
(a) [f]or which the date of injury or date of last exposure occurred on or after
December 12, 1996; and (b) that have not been fully and finally adjudicated, or are
in the appellate process, or for which time to file an appeal has not lapsed, as of the
effective date of this Act.” This subsection was not codified as part of the
Kentucky Revised Statutes.
In Wynn v. Ibold, Inc., 969 S.W.2d 695, 696 (Ky. 1998), a workers’
compensation claimant challenged a 1994 age-related reduction in benefits as
unconstitutional. On appeal, the Court recognized that “acts of the legislature -3- carry a strong presumption of constitutionality and that 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.” The Court
stated that “[a] statute involving the regulation of economic matters or matters of
social welfare comports with both due process and equal protection requirements if
it is rationally related to a legitimate state objective.” Id. In affirming the
decisions of the lower courts, the Court concluded that “avoiding a duplication of
income benefits is a legitimate state objective and sound public policy.” Id. at 697.
Therefore, this rational relationship test has been adopted as the appropriate level
of scrutiny in constitutional challenges involving workers’ compensation claims.
In Parker v. Webster County Coal, LLC (Dotiki Mine), 529 S.W.3d
759 (Ky. 2017), the Court applied this test in determining that the 1996 version of
the statute (in effect at the time of Appellant’s injury) treating older workers who
are eligible for Social Security differently than those who do not constituted an
equal protection violation pursuant to the 14th Amendment of the United States
Constitution and Sections 1, 2, and 3 of the Kentucky Constitution. The Court
reversed the decisions of the lower courts and invalidated the 1996 version of the
statute. The General Assembly then enacted the 2018 version that is at the heart of
this appeal.
-4- Later, in Holcim v. Swinford, 581 S.W.3d 37, 44 (Ky. 2019), the Court
addressed the issue of statutory retroactivity specifically as applied to KRS
342.730(4). The Court concluded that the Legislative Research Commission was
not required to codify the retroactivity provision of the Act since it was
“temporary,” because “once cases arising during that time frame are fully
adjudicated, it will be unnecessary.” 581 S.W.3d at 44.
Most recently, in Cates v. Kroger, 627 S.W.3d 864 (Ky. 2021), the
appellant challenged the constitutionality of the statute as amended in 2018 as well
as its retroactivity. The Court applied the rational basis standard and found that the
classification based on age as set forth in the statute furthers a matter of “social and
economic policy” because it prevents “a duplication of income benefits.” See
Wynn, 969 S.W.2d at 696.
Additionally, the Court found that the General Assembly’s decision to
make the amendment retroactive was not an arbitrary one. The Court concluded
that, “[b]ecause the 1996 version had been invalidated and a new version enacted,
the General Assembly was left to decide if pending claims would be governed by
the 1994 version of the statute – a statute that had not been in effect for over 20
years – or to allow for current claims to be decided under the new amendment.
The legislative body apparently chose the latter, and that choice was its
prerogative.” Cates, 627 S.W.3d at 871-72.
-5- In Dowell v. Matthews Contracting, 627 S.W.3d 890, 894 (Ky. 2021),
the Court addressed the Appellant’s second argument herein, whether the
application of the 2018 version of KRS 342.730(4) violates the Contracts Clause of
the United States and Kentucky Constitutions. In Article 1, Section 10, Clause 1,
the former provides that:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Section 19 of the Kentucky Constitution states that “[n]o ex post facto
law, nor any law impairing the obligation of contracts, shall be enacted.” In
Dowell, the Court found that “a complete Contracts Clause analysis is unnecessary
because the Workers’ Compensation Act (WCA) does not constitute a contract
between Kentucky workers and their employers or the state.” 627 S.W.3d at 894.
The Court concluded that “the benefits an employee may receive following a
work-related injury are not a result of a bargained-for exchange following an offer,
acceptance, and consideration, but are the result of a statutory scheme intended to
provide a form of insurance for Kentucky employees in case of injury. Because
the WCA does not form a contract, there are no contractual rights that the
amendment to KRS 342.730(4) could infringe; thus, the fundamental premise of a
-6- Contracts Clause analysis – the existence of a contract – is absent, and our analysis
ends.” Id. at 895.
Accordingly, we affirm the opinion of the Workers’ Compensation
Board.
ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE STERICYCLE, INC.: Stephanie N. Wolfinbarger Louisville, Kentucky Jo Alice Van Nagell Ryan D. Thompson Brian W. Davidson Lexington, Kentucky
BRIEF FOR APPELLEE DANIEL CAMERON, ATTORNEY GENERAL:
Daniel J. Cameron Attorney General of Kentucky
Matthew F. Kuhn Brett R. Nolan Alexander Y. Magera Frankfort, Kentucky
-7-