No. 14641 IN THE SUPREME COURT OF THE STATE OF MONTANA 1979
HAROLD J. McCLANATHAN, Claimant and Appellant,
ED SMITH, Employer, and STATE COMPENSATION INSURANCE FUND, Defendant and Respondent.
Appeal from: Workers' Compensation Court Honorable William E. Hunt, Judge presiding. Counsel of Record: For Appellant: Kelly and Foley, Billings, Montana William Kelly argued, Billings, Montana For Respondent: Tim Reardon argued, Helena, Montana
For Amicus Curiae: Stephen Williams, Butte, Montana Marra, Wenz, Iwen and Johnson, Great Falls, Montana Gene A. PicotFe, Clancy, Montana , - , r , -I ) . , ' I, , , - , &
Submitted: November 5, 1979 Decided: JAN 2 3 1c -Q 4
Filed: JR 2 A I1-,*f7 Mr. Justice John Conway Harrison delivered the Opinion of the Court.
c his is a cross-appeal on a petition for an emergency hearing concerning appellant's termination of disability
benefits under the Workers' Compensation Act. From an order
of the Workers' Compensation Court in which disability benefits for appellant were partially reinstated, both
parties appeal. Amicus curiae briefs were filed by Gene A. Picotte, Alaska Pacific Assurance Company, Industrial Indem-
nity Company, and Anaconda Copper Company. Respondent is the State Compensation Insurance Fund, an insurance carrier under the Workers' Compensation Act.
Appellant is a former painter who was severely injured in an industrial accident on February 26, 1974. Appellant's
employer carried workers' compensation insurance with respon-
dent. The accident occurred when a scaffold collapsed beneath appellant, and appellant fell a distance of approximately 15 to 20 feet, landing on his head. As a result of the accident, appellant sustained permanent brain damage and was
unable to resume work as a painter. At the time of the accident, appellant was married and
had two dependents. Since that time appellant has become divorced. He now lives in Kentucky, and his ex-wife and minor children live in Maryland. Shortly after appellant's accident, appellant applied for and received Social Security disability benefits from the Federal Social Security ~dministration for himself and his dependents. Appellant's injuries were also deemed compensable under the Montana Workers' compensation Act. The benefits under the state Act, however, were terminated
by respondent pursuant to section 92-702.1, RCM (1947). T h a t s t a t u t e p r o v i d e d t h a t , where a c l a i m a i n t s i m u l t a n e o u s l y r e c e i v e d d i s a b i l i t y b e n e f i t s under t h e state workers' corn- p e n s a t i o n f u n d and t h e S o c i a l S e c u r i t y A c t , weekly b e n e f i t s
from t h e s t a t e fund would b e r e d u c e d by a n amount e q u a l t o
t h e weekly b e n e f i t s r e c e i v e d u n d e r t h e f e d e r a l s y s t e m . In
a p p e l l a n t ' s case, t h e o f f s e t amounted t o 100 p e r c e n t o f t h e
f u n d s h e was e l i g i b l e t o r e c e i v e u n d e r t h e S t a t e Act.
S e c t i o n 92-702.1, RCM (1947) h a s s i n c e been amended (now
s e c t i o n 39-71-702, MCA) t o provide t h a t b e n e f i t s received
u n d e r t h e s t a t e A c t s h a l l b e r e d u c e d by 50 p e r c e n t o f t h e
b e n e f i t s received under t h e S o c i a l S e c u r i t y A c t .
Appellant p r o t e s t e d t h e termination of h i s workers'
c o m p e n s a t i o n b e n e f i t s by a p e t i t i o n f i l e d i n t h e Workers'
Compensation C o u r t . On November 4 , 1977, a h e a r i n g was h e l d
on a p p e l l a n t ' s c o n t e n t i o n s c o n c e r n i n g t h e r i g h t t o a d d i t i o n a l
compensation. The c o u r t t o o k t h e m a t t e r u n d e r c o n s i d e r a t i o n
and b r i e f s w e r e f i l e d by b o t h p a r t i e s . On J u l y 21, 1978,
t h e c o u r t i s s u e d f i n d i n g s o f f a c t s , c o n c l u s i o n s o f l a w , and
a judgment c o n c e r n i n g t h e matter. The c o u r t h e l d t h a t t h e
1 0 0 p e r c e n t o f f s e t s t a t u t e , which was i n e f f e c t a t t h e t i m e
of t h e i n j u r y , w a s u n c o n s t i t u t i o n a l . The c o u r t t h e n a p p l i e d
t h e 50 p e r c e n t o f f s e t s t a t u t e t o t h e m a t t e r . A p p e l l a n t made a n a p p l i c a t i o n f o r r e h e a r i n g o f t h e
matter, b u t t h e c o u r t denied t h e request except f o r a g r a n t
o f a t t o r n e y f e e s made by o r d e r o f December 1 9 , 1978. On
D e c e m b e r 26, 1978, a p p e l l a n t a p p e a l e d , and on J a n u a r y 2,
1979, r e s p o n d e n t c r o s s - a p p e a l e d .
Several issues a r e raised f o r our consideration:
1. I s M o n t a n a ' s o f f s e t s t a t u t e , s e c t i o n 39-71-702, MCA
( f o r m e r l y s e c t i o n 92-702.1, RCM ( 1 9 4 7 ) ) , i n e f f e c t i v e b e c a u s e
i t o n l y r e f e r s t o a f e d e r a l s t a t u t e which d o e s n o t p r o v i d e f o r d i s a b i l i t y i n s u r a n c e b e n e f i t s and which h a s been r e p e a l e d ?
2. Should Montana's o f f s e t s t a t u t e be d e c l a r e d n u l l
and v o i d b e c a u s e i t c o n f l i c t s w i t h t h e l e g i t i m a t e p u r p o s e s
o f t h e f e d e r a l government?
3. Is Montana's o f f s e t s t a t u t e an u n c o n s i t u t i o n a l
d e n i a l o f e q u a l p r o t e c t i o n b e c a u s e c l a i m a n t s w i t h depen-
d e n t s , such as a p p e l l a n t , r e c e i v e less b e n e f i t s than s i m i l a r -
l y s i t u a t e d claimants without dependents?
4. Is Montana's o f f s e t s t a t u t e u n c o n s t i t u t i o n a l because
it d i s c r i m i n a t e s a g a i n s t a p p e l l a n t on t h e b a s i s o f h i s
s o c i a l c o n d i t i o n a s a permanent and t o t a l l y d i s a b l e d p e r s o n ?
5. Does M o n t a n a ' s o f f s e t s t a t u t e v i o l a t e f e d e r a l and
s t a t e c o n s t i t u t i o n a l p r o h i b i t i o n s a g a i n s t ex p o s t f a c t o
laws?
Respondent r a i s e s t h e f o l l o w i n g i s s u e a s a c r o s s -
appeal: Is M o n t a n a ' s f o r m e r o f f s e t s t a t u t e , s e c t i o n 92-
702.1, RCM ( 1 9 4 7 ) , c o n s t i t u t i o n a l l y v a l i d and e n f o r c e a b l e ?
On t h i s a p p e a l w e a r e p r e s e n t e d w i t h d e t e r m i n i n g t h e v a l i d i t y
and e n f o r c e a b i l i t y o f two s t a t u t e s . The f i r s t i s M o n t a n a ' s
f o r m e r o f f s e t s t a t u t e , s e c t i o n 92-702.1, RCM ( 1 9 4 7 ) , which
p r o v i d e d f o r a 1 0 0 % o f f s e t o f S o c i a l S e c u r i t y b e n e f i t s and
which was i n e f f e c t a t t h e t i m e o f a p p e l l a n t ' s i n j u r y . The
second i s M o n t a n a ' s p r e s e n t o f f s e t s t a t u t e , s e c t i o n 39-71-
702, MCA, which p r o v i d e s f o r a 50% o f f s e t o f S o c i a l S e c u r i t y
benefits. Those s t a t u t e s s t a t e :
" I n c a s e s where i t i s d e t e r m i n e d t h a t p e r i o d i c b e n e f i t s g r a n t e d by t h e S o c i a l S e c u r i t y A c t , 42 U.S.C. 301 ( 1 9 3 5 ) , a r e p a y a b l e b e c a u s e o f t h e i n j u r y , t h e weekly b e n e f i t s p a y a b l e u n d e r t h i s s e c t i o n s h a l l b e r e d u c e d by t h e amount o f f e d e r a l p e r i o d i c b e n e f i t s f o r s u c h week." S e c t i o n 97-702.1, RCM ( 1 9 4 7 ) . " I n c a s e s where i t i s d e t e r m i n e d t h a t p e r i o d i c b e n e f i t s g r a n t e d by t h e S o c i a l S e c u r i t y A c t , 42 U.S.C. 301 ( 1 9 3 5 ) , a r e p a y a b l e b e c a u s e o f t h e i n j u r y , t h e weekly b e n e f i t s p a y a b l e u n d e r t h i s s e c t i o n a r e r e d u c e d , b u t n o t below z e r o , by a n amount e q u a l , a s n e a r l y a s p r a c t i c a l , t o one-naif o f t h e f e d e r a l p e r i o d i c bene- f i t s f o r s u c h week." S e c t i o n 39-71-702, MCA.
The f i r s t i s s u e i n t h i s case c o n c e r n s w h e t h e r M o n t a n a ' s
o f f s e t s t a t u t e , s e c t i o n 39-71-702, MCA, is ineffective
b e c a u s e i t makes s p e c i f i c r e f e r e n c e t o o n l y o n e p a r t i c u l a r
s u b c h a p t e r o f t h e S o c i a l S e c u r i t y A c t , s e c t i o n 301. That
s e c t i o n d e a l s w i t h o l d a g e and m e d i c a l a s s i s t a n c e b e n e f i t s
and h a s been r e p e a l e d . Appellant maintains t h a t the s p e c i f i c
r e f e r e n c e t o s e c t i o n 301 i n d i c a t e s t h a t t h e s t a t u t e i s
l i m i t e d e x c l u s i v e l y i n i t s a p p l i c a t i o n t o s e c t i o n 301 and
does n o t a p p l y t o any o t h e r subchapters of t h e S o c i a l Secur-
i t y Act. Because s e c t i o n 301 h a s been r e p e 3 i e d , a p p e l l a n t
contends t h a t t h e s t a t u t e i s thereby rendered i n e f f e c t i v e .
Appellant f u r t h e r submits t h a t t h e s t a t u t e cannot apply
b e c a u s e s e c t i o n 301 d e a l s w i t h b e n e f i t s d i f f e r e n t from t h o s e
r e c e i v e d by a p p e l l a n t . Appellant's benefits a r e d i s a b i l i t y
b e n e f i t s , which a r e s e t f o r t h i n s e c t i o n s 401 t h r o u g h 434 o f
the Socia1,Security Act.
Respondent a r g u e s t h a t t h e s t a t u t e i s e f f e c t i v e and
t h a t such l i m i t e d a p p l i c a t i o n i s n o t proper. Respondent
submits t h a t t h e l e g i s l a t u r e , i n adopting t h e s t a t u t e ,
intended t o incorporate a l l of t h e r e l e v a n t subchapters of
t h e S o c i a l S e c u r i t y A c t i n t o t h e s t a t u t e and m e r e l y r e f e r r e d
t o s e c t i o n 301 f o r p u r p o s e s o f c o n v e n i e n c e s i n c e i t was t h e
beginning subchapter of t h e A c t .
I n r e s o l v i n g t h i s i s s u e , w e are f a c e d w i t h c o n s t r u i n g
t h e s t a t u t e . I n t h i s connection, we note s e v e r a l w e l l -
established principles of construction. F i r s t , provisions of t h e Workers' Compensation A c t a r e t o b e l i b e r a l l y con-
strued. S e c t i o n 39-71-104, MCA. Second, where t h e r e i s
d o u b t a b o u t t h e meaning o f a p h r a s e i n a s t a t u t e , t h e s t a t u t e
i s t o b e c o n s t r u e d i n i t s e n t i r e t y and t h e p h r a s e must b e
g i v e n a r e a s o n a b l e c o n s t r u c t i o n which w i l l e n a b l e it t o b e
harmonized w i t h t h e e n t i r e s t a t u t e . Dean v . B r a n d j o r d
( 1 9 3 9 ) , 1 0 8 Mont. 447, 457, 92 P.2d 273, 277. Third, s t a t u -
t o r y c o n s t r u c t i o n s h o u l d n o t l e a d t o a b s u r d r e s u l t s where
reasonable c o n s t r u c t i o n w i l l avoid it. Keller v . Smith
( 1 9 7 6 ) , 1 7 0 Mont. 399, 407, 553 P.2d 1002, 1007. F i n a l l y ,
where a s t a t u t e i s ambiguous, t h e i n t e n t i o n o f t h e l e g i s -
l a t u r e is the controlling consideration. S e c u r i t y Bank v .
Connors ( 1 9 7 6 ) , 170 Mont. 59, 66, 550 P.2d 1 3 1 3 , 1317.
W e f i n d t h a t t h e o f f s e t s t a t u t e h e r e i s ambiguous and
t h a t i t was t h e i n t e n t i o n o f t h e l e g i s l a t u r e t o i n c o r p o r a t e
a l l of t h e r e l e v a n t subchapters of t h e S o c i a l S e c u r i t y A c t
into the statute. While i t i s t r u e t h a t t h e s t a t u t e o n l y
s p e c i f i c a l l y r e f e r s t o s e c t i o n 301, i t i s a l s o t r u e t h a t t h e
s t a t u t e d e s c r i b e s o t h e r p a r t s of t h e S o c i a l S e c u r i t y A c t i n
more g e n e r a l t e r m s . The s t a t u t e r e f e r s t o t h e " S o c i a l
S e c u r i t y A c t " and " b e n e f i t s p a y a b l e b e c a u s e o f t h e i n j u r y . "
The i n f e r e n c e t o be made i s t h a t t h e s t a t u t e c o v e r s more
t h a n s i m p l y s e c t i o n 301 o f t h e S o c i a l S e c u r i t y A c t . That
t h i s i s t h e i n t e n t i o n of t h e l e g i s l a t u r e i s f u r t h e r confirmed
by t h e l a n g u a g e o f t h e f o r e r u n n e r o f t h e o f f s e t s t a t u t e ,
which d e s c r i b e s t h e S o c i a l S e c u r i t y A c t i n t e r m s o f i t s
subchapters. I n 1971, s e c t i o n 92-701, RCM ( 1 9 4 7 ) , s t a t e d :
" I n c a s e s where i t i s d e t e r m i n e d t h a t p e r i o d i c d i s a b i l i t y b e n e f i t s g r a n t e d by t h e f e d e r a l , old a g e , s u r v i v o r s , and d i s a b i l i t y i n s u r a n c e a c t a r e p a y a b l e o n a c c o u n t o f s u c h i n j u r y , t h e weekly b e n e f i t s payable pursuant t o t h i s s e c t i o n s h a l l b e r e d u c e d , b u t n o t below z e r o , by a n amount e q u a l , a s n e a r l y a s p r a c t i c a l , t o one-half of s u c h f e d e r a l p e r i o d i c b e n e f i t s f o r s u c h week." (Emphasis added. ) ~ i m i t i n gt h e s t a t u t e , a s a p p e l l a n t s u g g e s t s , would l e a d t o a v e r y n a r r o w i n t e r p r e t a t i o n and d e f e a t i t s meaning and
purpose. I t would c r e a t e a n a b s u r d r e s u l t where a r e a s o n a b l e
c o n s t r u c t i o n would a v o i d i t . F i n a l l y , i t would r u n c o n t r a r y t o t h e l e g i s l a t i v e mandate t h a t p r o v i s i o n s o f t h e Workers'
Compensation A c t be l i b e r a l l y c o n s t r u e d .
We find, therefore, that the offset statute is effective
and t h a t , d e s p i t e t h e r e p e a l o f s e c t i o n 301, f e d e r a l d i s -
a b i l i t y i n s u r a n c e b e n e f i t s a r e covered under t h e s t a t u t e .
The s e c o n d i s s u e r a i s e d by a p p e l l a n t i n v o l v e s d e t e r m i n i n g
whether Montana's o f f s e t s t a t u t e c o n f l i c t s w i t h t h e l e g i t i m a t e
p u r p o s e s o f t h e f e d e r a l government and w h e t h e r , upon t h e
b a s i s o f t h e Supremacy C l a u s e o f t h e U n i t e d S t a t e s C o n s t i t u -
t i o n , t h e s t a t u t e s h o u l d b e d e c l a r e d n u l l and v o i d .
A p p e l l a n t m a i n t a i n s t h a t Montana's o f f s e t s t a t u t e
c o n f l i c t s w i t h f e d e r a l law i n t h a t t h e o f f s e t d e p r i v e s a
c l a i m a n t o f a s u b s t a n t i a l p o r t i o n of c o s t - o f - l i v i n g increases
p r o v i d e d by t h e S o c i a l S e c u r i t y A c t . Respondent c o n t e n d s
t h a t t h e o f f s e t s t a t u t e d o e s n o t c o n f l i c t w i t h f e d e r a l law
6 b e c a u s e C o n g r e s s , i n e n a c t i n g s e c t i o n 42 ~ . ~ . ~ . : 4 2 4 ? d ) ,
s p e c i f i c a l l y authorized states t o pass such o f f s e t s t a t u t e s .
W e f i n d , however, t h a t Montana's o f f s e t s t a t u t e s h o u l d
n o t be a p p l i e d t o t h a t p o r t i o n o f a p p e l l a n t ' s s o c i a l s e c u r i t y
benefits a t t r i b u t a b l e t o cost-of-living i n c r e a s e s a l l o w e d by
t h e f e d e r a l government. The r e a s o n f o r o u r h o l d i n g i s found
i n the federal statutes.
Cost-of-living increases i n social security benefits o r
d i s a b i l i t y b e n e f i t s come a b o u t by v i r t u e o f P u b l i c Law 92-
336, 86 S t a t . 406, 412 ( e n a c t e d i n 1 9 7 3 ) and amendments
t h e r e t o s i n c e ( 4 2 U.S.C. 4 1 5 ( i ) ( l ) , e t seq.). under t h e s e
s t a t u t o r y p r o v i s i o n s , t h e f e d e r a l government computes from year to year increases, if any, in the Consumer Price Index
and if the increase exceeds 3%, the primary benefits to which an individual is entitled are increased accordingly.
It is important to note that such cost-of-living increases occur under 42 U.S.C. 5415.
The federal law also provides in 42 U.S.C. 5424,that where an individual receives disability benefits under the Social Security program, and provides payments for such disability under a Workers' Compensation program, his disa- bility benefits may be reduced so his total benefits amount
to 80% of his "average current earnings" under the Social Security Act. The same section also provides however, that the federal government will not offset Workers' Compensation
benefits in these circumstances: " (d) The reduction of benefits required by this section shall not be made if the workmen's compensation law or plan under which a periodic benefit is payable provides for reduction there- of when anyone is entitled to benefits under this subchapter on the basis of the wages and self-employment income of an individual entitled to benefits under section 423 of this title." Therefore, if Montana does not act to offset Workers'
Compensation benefits in such cases, the federal act will control. The disabled person will have reduced benefits in
any event. However, it is not equitable or necessary that the State reduce his benefits based on cost-of-living increases
granted under the federal act. This is recognized, I think, in the provisions of 42 U.S.C. §424(d) quoted above, which refers to "benefits under section 423 of this title." The benefits to which appellant is entitled under 42 U.S.C. 5423 are disability benefits, not cost-of-living benefits, and are defined as "equal to his primary insurance amount for such month" calieulated as though he had attained age 62. I t i s e v i d e n t t h a t t h e p r o v i s i o n s of 42 U.S.C.
§424.(d) a l l o w i n g t h e s t a t e s t o p r o v i d e an o f f s e t c o n t e m p l a t e o n l y t h e b e n e f i t s r e c o v e r a b l e under 4 2 U.S.C. 5423, r e l a t i n g
t o t h e i n d i v i d u a l ' s primary insurance b e n e f i t s . Therefore, we h o l d t h a t t h e s t a t e o f f s e t may n o t be used t o r e d u c e t h e
b e n e f i t s a c c r u i n g t o t h e a p p e l l a n t under t h e c o s t - o f - l i v i n g
i n c r e a s e s p r o v i d e d i n 4 2 U.S.C. S415.
A s t o t h e i s s u e r a i s e d on c r o s s - a p p e a l , however, we
f i n d t h a t Montana's former o f f s e t s t a t u t e , s e c t i o n 92-702.1,
RCM ( 1 9 4 7 ) , which p r o v i d e d f o r a 100% o f f s e t of S o c i a l
Security b e n e f i t s , i s c o n s t i t u t i o n a l l y unenforceable. The
s t a t u t e i s i n t o t a l opposition t o federal l e g i s l a t i o n , i n
t h a t i t d e p r i v e s a c l a i m a n t of b e n e f i t s p r o v i d e d by S o c i a l
S e c u r i t y l e g i s l a t i o n , and i t d o e s n o t g i v e a l i b e r a l con-
s t r u c t i o n t o t h e Workers' Compensation Act s o t h a t i t s
humane p u r p o s e s may be g i v e n e f f e c t .
A p p e l l a n t ' s t h i r d i s s u e r a i s e s t h e q u e s t i o n of whether
t h e Montana o f f s e t s t a t u t e i s a n u n c o n s t i t u t i o n a l d e n i a l of
equal protection. A p p e l l a n t s u b m i t s t h a t t h e s t a t u t e pro-
v i d e s f o r d i f f e r e n t t r e a t m e n t of c l a s s e s w i t h o u t a r a t i o n a l
basis. Appellant argues t h a t a claimant with dependents,
f o r example, r e c e i v e s less b e n e f i t s under t h e Montana o f f s e t
p r o v i s i o n t h a n a s i m i l a r l y s i t u a t e d c l a i m a n t w i t h o u t depen-
dents. Respondent c o n t e n d s t h a t t h e r e i s no d e n i a l of e q u a l
p r o t e c t i o n , s i n c e t h e d i f f e r e n c e i n treatment i s supported
by a r a t i o n a l b a s i s . Respondent s t a t e s t h a t t h e l e g i s l a t u r e ,
within its prerogative, drafted the legislation t o benefit
t h e employer and a v o i d a d u p l i c a t i o n of b e n e f i t s .
Montana's o f f s e t s t a t u t e d o e s i n d e e d p r o v i d e f o r a
d i f f e r e n c e i n t r e a t m e n t w i t h r e s p e c t t o d i f f e r e n t c l a s s e s of
persons. A c l a i m a n t w i t h two d e p e n d e n t s , s u c h a s a p p e l l a n t , f o r example, r e c e i v e s less i n d i v i d u a l b e n e f i t s t h a n a s i m i -
l a r l y s i t u a t e d claimant without dependents. The c l a i m a n t
w i t h two d e p e n d e n t s , however, r e c e i v e s a p p r o x i m a t e l y $130
more t o t a l b e n e f i t s t h a n h i s c o u n t e r p a r t . I l l u s t r a t i v e of
t h i s d i f f e r e n c e i n treatment a r e the following figures:
C l a i m a n t w/two d e p e n d e n t s C l a i m a n t w/no d e p e n d e n t s :
Social Security Benefits: Claimant: 318.20 2 Dependents: 262.60 Total Benefits 580.80
Workers' Compensation B e n e f i t s : Before O f f s e t 440.00 440.00 Offset 292.40 159.10 After Offset 147.60 280.90
Total Benefits 728.40 Benefits t o claimant 465.80
I n o u r a n a l y s i s o f t h i s i s s u e , w e must b e g i n w i t h t h e
p r o p o s i t i o n t h a t , i n challenges of c o n s t i t u t i o n a l i t y , a
s t a t u t e i s g i v e n a s t r o n g presumption of c o n s t i t u t i o n a l
validity. S t a t e e x r e l . Hammond v . Hager ( 1 9 7 2 ) , 160 Mont.
"We commence i n q u i r y i n t o t h e c o n s t i t u t i o n a l question with the well-settled r u l e t h a t when t h e c o n s t i t u t i o n a l i t y o f a s t a t u t e i s u n d e r s c r u t i n y , t h e s t a t u t e i s presumed t o b e c o n s t i t u t i o n a l and t h a t t h e p a r t y a t t a c k - i n g i t h a s t h e burden o f p r o v i n g i t s i n v a l i d - ity. [ C i t a t i o n s omitted.] T h i s presumption of v a l i d i t y a p p l i e s t o a l l l e g i s l a t i v e enact- ments and i t i s t h e d u t y o f t h e C o u r t t o r e s o l v e a l l conceivable doubts i n favor of v a l i d i t y whenever p o s s i b l e . [Citations omitted.]" Reeves v. I l l e E l e c t r i c Co. ( 1 9 7 6 ) , 170 Mont. 1 0 4 , 1 0 9 , 551 P.2d 647, 650.
The t e s t i n e q u a l p r o t e c t i o n c h a l l e n g e s i s w h e t h e r t h e
c l a s s i f i c a t i o n i s s u p p o r t e d by a r a t i o n a l b a s i s . Richardson
v. B e l c h e r ( 1 9 7 1 ) , 404 U.S. 78, 92 S.Ct. 254, 30 L.Ed.2d
231; Dandridge v . W i l l i a m s ( 1 9 7 0 ) , 397 U.S. 471, 90 S . C t .
1153, 25 L.Ed.2d 491. I n S t a t e v . J a c k ( 1 9 7 5 ) , 167 Mont.
456, 461, 539 P.2d 726, 729, t h i s C o u r t s t a t e d : "Where the challenge extends to the more general legislative classifications, the judicial inquiry must be limited to determining whether the dis- tinction is justified by a rational basis. Stated another way, we can determine only whether the law has a sufficiently reasonable relation to a proper legislative purpose so as not to be deemed arbi- trary. [Citations omitted.] In connection with this standard, a classification having some rea- sonable basis does not deny equal protection merely because it is n'ot made with precise mathe- matical nicety or results in some inequality." In applying the test, this Court must not be concerned with
the expediency of the statute:
"What a court may think as to the wisdom or ex- pediency of the legislation is beside the ques- tion and does not go to the constitutionality of the statute. We must assume that the legisla- ture was in a position and had the power to pass upon the wisdom of the enactment, and in the ab- sence of an affirmative showing that there was no valid reason behind the classification, we are powerless to disturb it." State ex rel. Hammond v. Hager, supra, at 399, 503 P.2d at 56. Respondent urges that Montana's offset statute should
be declared constitutional because the legislature, in adopting the statute, attempted to avoid a duplication of benefits and benefit the employer. Both of these legislative purposes have been previously deemed sufficient for upholding the constitutionality of federal and state offset statutes. Richardson v. Belcher, supra; Horton v. Fleming Co. (1979),
3 Kan.App.2d 121, 590 P.2d 596; Estate of Baker (1977), 222 Kan. 127, 563 P.2d 431. In Richardson, the United States Supreme Court held
that the federal offset statute was constitutional because it avoided a duplication of benefits. The Supreme Court stated: . ". . In response to renewed criticism of the overlap between workmen's compensation and the Social Security disability insurance programs, Congress re-examined the problem in 1965. Data submitted to the legislative committee showed that in 35 of the 50 states, a typical worker injured in the course of his employment and eli- gible for both state and federal benefits re- ceived compensation for his disability in excess of his take home pay prior to the disability . . . The legislative response was section 224, (42 U.S.C. 424a) which, by limiting total state and federal benefits to 80% of the employee's average earnings prior to the disability reduced the duplication inherent in the programs and at the same time allowed a supplement to workmen's compensation where state payments were inade- quate." Richardson, supra at 82-83, 92 S.Ct. at 258, 30 L.Ed.2d at 235-236. Appellant argues, however, that the rationale employed in Richardson cannot apply to Montana's statute because the
method for the computation of the offset is different from the federal statute and is in no way rationally related to avoid a duplication of benefits. Under the Montana statute,
the offset is simply computed as one-half of the benefits received under the Social Security Act. Under the federal statute, the offset is computed with reference to a claimant's prior earnings. Whereas the amount received in Montana
depends upon such things as a claimant's age or contribution
to Social Security, benefits under the federal act depend upon the amount of wages received prior to the claimant's disability. We believe, however, that this argument relates more to
the expediency than its constitutionality. As such, it is not a judicial concern here. In applying the equal protection
clause to social and economic legislation, great latitude is given to state legislatures in making classification. Levy v. Louisiana (1968), 391 U.S. 68, 20 L.Ed.2d 436, 88 S.Ct. 1509. Perfection in making classifications is neither possible nor necessary. Neither is mathematical nicety or perfect equality. Rather, where the goals of a classifica- tion are legitimate, and the classification is rationally related to the achievement of those goals, the statute should be constitutionally upheld. Here, the avoidance of duplication or overlapping of benefits is indeed a reasonable and permissive legislative objective. Though there are
results in inequality to some, the statute is rationally related to the accomplishment of that objective. The statute
is applied to individuals uniformly and equally, the difference in treatment relating only to differences in factual situations between individuals. The fact that appellant lives apart from his dependents creates some unfortunate results in this
case. In adopting this position, we note that Kansas has
passed upon a similar question, addressing essentially the same argument presented by appellant in this appeal. In the Estate of Baker, supra, the Kansas Supreme Court upheld a - state offset statute for social security death benefits, for which there was no equivalent offset at the federal level.
The statute provided that benefits received under the state Workers' Compensation Act would be reduced by an amount
equal to one-half of the death benefits payable to a claimant's dependents under the Social Security Act. The Kansas Special Committee on Employer-Employee Relations had recommended the offset, because it "would provide substantial protection at
a lower cost to the employer than if workmen's compensation benefits were to duplicate social security benefits."
Estate - Ba.ker, 563 P.2d at 435. of In upholding the statute, the court stated: "The appellant's equal protection argument is es- sentially that the classification created by K.S.A. 1975 Supp. 44-510b(j) is arbitrary and unreasonable. She contends that the 'setoff' provision which re- duces payments under the Workmen's Compensation Act to widows with minor children, but not to widows without minor children or recipients of disability benefits, constitutes a denial of equal protection of the law. "Based upon t h e f o r e g o i n g , w e c o n c l u d e K.S.A. 1975 Supp. 4 4 - 5 1 0 b ( j ) d o e s n o t o f f e n d t h e e q u a l p r o t e c - t i o n g u a r a n t e e . When t h e s y s t e m o f w a g e - l o s s p r o t e c t i o n Ls viewed a s a whole, a v o i d i n g d u p l i c a t i o n o r overlapping of b e n e f i t s appears t o be a reasonable l e g i s l a t i v e o b j e c t i v e . It may b e s a i d t h a t t h e c l a s s i f i c a t i o n c r e a t e d by t h e s t a t u t e h a s a r a t i o n a l b a s i s , i s n o t a r b i t r a r y , and a f f o r d s l i k e t r e a t m e n t t o p e r - sons s i m i l a r l y situated." E s t a t e - Baker, of 563 P.2d a t 434-435.
W e hold, t h e r e f o r e , t h a t Montana's o f f s e t s t a t u t e d o e s
not v i o l a t e the equal protection clause.
Appellant's n e x t i s s u e concerns t h i s s t a t e ' s c o n s t i t u t i o n a l
p r o h i b i t i o n a g a i n s t d i s c r i m i n a t i o n on t h e b a s i s o f o n e ' s
s o c i a l condition. A r t i c l e 11, S e c t i o n 4 , o f t h e 1972 Montana
Constitution, s t a t e s i n pertinent part:
". . . N e i t h e r t h e s t a t e nor any person, f i r m , corporation, o r i n s t i t u t i o n s h a l l discriminate a g a i n s t any person i n t h e e x e r c i s e o f h i s c i v i l o r p o l i t i c a l r i g h t s on a c c o u n t o f race, c o l o r , sex, culture, s o c i a l o r i g i n - condition, o r poli- or t i c a l o r religious ideas." (Emphasis a d d e d . )
Appellant contends t h a t t h e o f f s e t s t a t u t e d i s c r i m i n a t e s
a g a i n s t him upon t h e b a s i s o f h i s s o c i a l c o n d i t i o n a s a
p a r e n t and t o t a l l y d i s a b l e d p e r s o n . In considering t h i s
i s s u e , w e have d i f f i c u l t y i n u n d e r s t a n d i n g how a p p e l l a n t ' s
s t a t u s a s a p a r e n t and t o t a l l y d i s a b l e d p e r s o n may b e c a l l e d
a " s o c i a l c o n d i t i o n " w i t h i n t h e meaning o f t h e C o n s t i t u t i o n .
Like t h e d e l e g a t e s a t t h e c o n s t i t u t i o n a l convention, w e
b e l i e v e t h a t t h e words " s o c i a l c o n d i t i o n " w e r e i n t e n d e d t o
i n c l u d e and r e f e r t o " d i s c r i m i n a t i o n s b a s e d on s t a t u s o f
income and s t a n d a r d o f l i v i n g . " See t r a n s c r i p t o f 1972
Montana C o n s t i t u t i o n a l C o n v e n t i o n , a t 5059-60. "Social
c o n d i t i o n " r e l a t e s t o o n e ' s economic s t a t u s o r r a n k i n
s o c i e t y , and t h e t y p e o f d i s c r i m i n a t i o n which i s s o u g h t t o
be p r o h i b i t e d by t h e C o n s t i t u t i o n i s , f o r example, t h a t t y p e
o f d i s c r i m i n a t i o n which r e s u l t s s o l e l y b e c a u s e o n e i s p o o r . A s such, a p p e l l a n t ' s s t a t u s here does n o t f a l l within t h e
protections of the provision.
A p p e l l a n t ' s l a s t i s s u e concerns whether Montana's
o f f s e t provision v i o l a t e s p r o h i b i t i o n s a g a i n s t ex p o s t f a c t o
laws. W e note t h a t a p p e l l a n t has submitted t h i s i s s u e
w i t h o u t c i t i n g any s u p p o r t i v e a u t h o r i t y . The i s s u e l a c k s
m e r i t a n d n e e d s no f u r t h e r d i s c u s s i o n .
The judgment o f t h e D i s t r i c t C o u r t i s a f f i r m e d i n p a r t
and remanded t o comply w i t h t h e p r o v i s i o n s o f t h i s o p i n i o n
allowing cost-of-living increases.
W e concur:
% Justices