Michael O'Bryan v. Zip Express, Correctly Identified as Ramp Logistics, Llc.

• Court: Kentucky Supreme Court
• Decided: December 15, 2021
• Docket: 2020 SC 0262
• Status: Unknown

Opinion

RENDERED: DECEMBER 16, 2021 TO BE PUBLISHED

Supreme Court of Kentucky 2020-SC-0262-WC

MICHAEL O’BRYAN APPELLANT

ON APPEAL FROM COURT OF APPEALS V. CASE NO. 2018-CA-1284 WORKERS’ COMPENSATION BOARD NO. WC-15-80377

ZIP EXPRESS (CORRECTLY IDENTIFIED AS APPELLEES RAMP LOGISTICS, LLC); COMMONWEALTH OF KENTUCKY, EX REL. DANIEL CAMERON, ATTORNEY GENERAL; HONORABLE JONATHAN R. WEATHERBY, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD

OPINION OF THE COURT

AFFIRMING

I. BACKGROUND

Michael O’Bryan was in an automobile accident in the course of his

employment for Zip Express on June 11, 2015. He was sixty-five years of age

at the time. O’Bryan sustained numerous injuries in the accident, leading to

his disability. An administrative law judge (ALJ) found O’Bryan to be

permanently totally disabled and awarded him benefits which would continue

so long as he remained disabled. Both O’Bryan and Zip Express filed several petitions for rehearing from

the ALJ’s orders based on the termination of benefits pursuant to this Court’s

decision in Parker v. Webster Cnty. Coal, LLC, 529 S.W.3d 759 (Ky. 2017).

Parker held the then-effective 1996 version of KRS 342.730(4) (concerning the

termination of workers’ compensation benefits) unconstitutional on equal

protection grounds.

Once the Parker opinion became final, O’Bryan argued the 1994 version

of KRS 342.730(4)—which provided no cap in benefits based on a claimant’s

age—should apply to his case. After the parties filed petitions for

reconsideration based on the application of the 1994 statute, the ALJ entered

his final order on February 21, 2018, ordering that O’Bryan’s benefits continue

as long as he remains disabled, regardless of age. On March 22, 2018, Zip

Express appealed to the Workers’ Compensation Board, arguing the newly-

amended version of KRS 342.730(4) applied to O’Bryan’s benefits and they

should terminate when he attained the age of seventy. The statute had an

effective date of July 14, 2018; though the appeal was filed before the statute’s

effective date, Zip Express argued the new statute should apply in the case.

O’Bryan argued that the new statute was unconstitutional on several grounds,

but the Board (as an administrative body) lacked authority to consider the

constitutionality of the statute.

The Board issued its opinion on July 27, 2018—after the new statute’s

effective date. The Board held the amended statute controlled the case, as it

applied to all claims “that have not been fully and finally adjudicated” and “for

2 which a date of injury . . . occurred on or after December 12, 1996.” Therefore,

the Board vacated the ALJ’s order and remanded the claim back to him to

enter an award terminating O’Bryan’s benefits at age seventy.

O’Bryan appealed the Board’s decision to the Court of Appeals. The

appellate court considered O’Bryan’s constitutional arguments, held the

statute was constitutional, and affirmed the Board. O’Bryan now appeals to

this Court, arguing KRS 342.730(4) is unconstitutional both on its face and as

retroactively applied to his claim, as the statute: (1) denies him equal

protection under the law; (2) denies his due process rights; (3) amounts to an

absolute and arbitrary power; (4) constitutes prohibited special legislation; and

(5) violates the requirement that all bills be read before each house in the

Kentucky Legislature. For the following reasons, we affirm the Court of

Appeals.

II. ANALYSIS

In Parker, 529 S.W.3d 759, this Court found the then-current version

of KRS 342.730(4) unconstitutional on equal protection grounds. The version

of the statute in effect at that time tied the termination of workers’

compensation benefits to the time at which the employee qualified for old-age

Social Security benefits. This Court found this was an arbitrary distinction

with no rational relation to a legitimate state interest. Id.

In Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019), this Court considered

whether a newly-amended version of KRS 342.730(4) could be applied

retroactively. Quoting a Legislative Research Commission comment beneath

3 the statute, we held 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 new version of the statutory subsection links the

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. O’Bryan argues this statute is constitutionally infirm on multiple

grounds.

A. Equal Protection

O’Bryan first argues the amendment to KRS 342.730(4) violates his

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

and Kentucky Constitutions. The basis for his 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

4 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 them. 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).

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, 627 S.W.3d at 871, 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.” 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

5 (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 O’Bryan’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

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.

O’Bryan 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 his claim, as his 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.

6 O’Bryan also contends the statute is unconstitutional because it leads to

the disparate treatment of similarly-situated individuals based upon whether

their cases were appealed. O’Bryan argues Zip Express appealed, seeking the

application of the new version of KRS 342.730(4), “for the sole purpose of

keeping the case alive until after July 14, 2018,” when the new statute would

become effective. We have no way of discerning the intentions of the parties in

the case—nor do we need to. As we held in Holcim, the statute “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.’” 581 S.W.3d at 44. The legislature did not limit this

directive only to cases which had been appealed; rather, it applied to all cases

for which the appeals period had not lapsed. While this may lead to different

treatment of similar parties whose cases were initially decided by an ALJ at the

same time (one whose case was in the appellate process when KRS 342.730(4)

became effective and the other whose case was not appealed and became final

before the effective date), this does not present a constitutional infirmity. As

we have recognized:

As the United States Supreme Court opined, “[t]he ‘task of classifying persons for . . . benefits . . . inevitably requires that some persons who have an almost equally strong claim to favored treatment be placed on different sides of the line,’ Mathews v. Diaz, 426 U.S. 67, 83-84 (1976), and the fact the line might have been drawn differently at some points is a matter for legislative, rather than judicial, consideration.” [U.S. R.R. Retirement Bd. v.] Fritz, 449 U.S. [166,] 179 [(1980)].

Teco/Perry Cnty. Coal v. Feltner, 582 S.W.3d 42, 48 (Ky. 2019).

7 B. Due Process

O’Bryan next argues the retroactive application of KRS 342.730(4)

stripped him of his property right to workers’ compensation benefits in

violation of his due process rights, as he did not receive prior notice or a

hearing. He asserts the amendment was substantive, rather than remedial,

and, therefore, amounts to an unconstitutional deprivation of due process. We

addressed 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

O’Bryan had no vested right in the duration of his benefits, a statute

terminating them at a specific age did not deny him due process.

C. Absolute and Arbitrary Power

O’Bryan also contends KRS 342.730(4) is an exercise of absolute and

arbitrary power in conflict with his rights pursuant to Sections 1, 2, and 3 of

Kentucky’s Constitution. Specifically, Section 2 of the Kentucky Constitution,

reads, “[a]bsolute and arbitrary power over the lives, liberty and property of

freemen exists nowhere in a republic, not even in the largest majority.” Courts

in this Commonwealth have recognized for half a century that when a

“legislative body acts in a purported policy-making or law-making function . . .

the concept of what is ‘arbitrary’ is much more narrowly constricted . . . .” City

of Louisville v. McDonald, 470 S.W.2d 173, 178 (Ky. 1971). Such an action is

only “arbitrary if there is no rational connection between that action and the

purpose for which the body’s power to act exists. Where the existence of such

8 rational connection is ‘fairly debatable’ the action will not be disturbed by a

court.” Id.

This Court has “consistently held that treating older injured workers

differently from younger injured workers is rationally related to the legitimate

government interests in preventing a duplication of benefits and saving money

for the workers’ compensation system.” Cates, 627 S.W.3d at 869. KRS

342.730(4) does not amount to an absolute and arbitrary exercise of power.

D. Special Legislation

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

provisions regarding special legislation found in Sections 59 and 60, as only

certain statutes amended in the bill containing the legislation were made

retroactive. He asserts the amendment applies only to injured older workers

rather than all injured workers. Section 59 of the Kentucky Constitution

states, 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.

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

O’Bryan links this argument to his equal protection argument—

essentially arguing the legislation’s retroactivity is arbitrary. He also makes the

argument that older workers are discriminated against because, if they receive

9 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, 627

S.W.3d at 872, holding the amended statutory subsection was not special

legislation as it did not apply “to a particular individual, object or locale.”

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

2020)). We held in Cates, “[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.

E. Three Readings Requirement

Finally, O’Bryan argues the amendment to KRS 342.730(4) violated

Section 46 of the Kentucky Constitution, as it was not “read at length on three

different days” in the House of Representatives after the Senate amended the

bill. While he does not point the Court to the specific changes in the statute

between the readings in the House of Representatives and the bill’s passage in

the Senate, O’Bryan refers to them as “significant.” In fact, the original bill

read in the House specified that benefits would terminate at age sixty-seven or

two years after an accident or final injurious exposure. After the amendments

made in the House and Senate and the Senate’s Committee Substitute, the

10 final bill did not terminate benefits until age seventy or four years after an

accident or exposure. While this is, in fact, “significant” in the respect that it

has the potential to entitle workers to three more years’ benefits, this change

was not so significant as to require the bill be re-read three times in the House.

As this Court has stated, “[o]f course, legislators may amend the text of a

bill between its readings without running afoul of § 46.” Bevin v.

Commonwealth ex rel. Beshear, 563 S.W.3d 74, 91 (Ky. 2018). The Legislature

did not have to read House Bill 2 into the record three more times in order to

comport with Section 46. Here, “the revised text is some variation of the

original text and remains consistent with the theme reflected in the title of the

bill.” Id.

III. CONCLUSION

For the foregoing reasons, we affirm the Court of Appeals and remand

this matter to the ALJ for further proceedings consistent with this opinion.

All sitting. All concur.

11 COUNSEL FOR APPELLANT:

Derek P. O’Bryan Louisville, Kentucky

COUNSEL FOR APPELLEE:

R. Christion Hutson Whitlow, Roberts, Houston & Straub, PLLC

COUNSEL FOR APPELLEE, COMMONWEALTH OF KENTUCKY, EX REL. DANIEL CAMERON, ATTORNEY GENERAL:

Matthew F. Kuhn Brett R. Nolan Alexander Y. Magera

ADMINISTRATIVE LAW JUDGE:

Hon. Jonathan R. Weatherby

WORKERS’ COMPENSATION BOARD:

Michael W. Alvey Chairman