MSM Hauling, Inc. v. Department of Labor & Industries

771 P.2d 1147, 112 Wash. 2d 450, 1989 Wash. LEXIS 44
CourtWashington Supreme Court
DecidedMay 4, 1989
DocketNo. 55027-1
StatusPublished
Cited by2 cases

This text of 771 P.2d 1147 (MSM Hauling, Inc. v. Department of Labor & Industries) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MSM Hauling, Inc. v. Department of Labor & Industries, 771 P.2d 1147, 112 Wash. 2d 450, 1989 Wash. LEXIS 44 (Wash. 1989).

Opinion

Smith, J.

MSM Hauling, Inc. (MSM) appeals a decision of the Board of Industrial Insurance Appeals, affirmed by the Thurston County Superior Court, ordering MSM to pay insurance premiums on payroll that could not be segregated between intrastate and interstate hauling. Because we find that MSM and its employees were at all pertinent times subject to the protection of the Industrial Insurance Act, we affirm.

The issue in this case is whether businesses employing workers in "combination" interstate and intrastate commerce are subject to mandatory participation in industrial insurance coverage when their payrolls are not segregable by type of activity and when Congress has not yet otherwise provided for liability or compensation.

The parties have stipulated to the following facts:

During the period January 1, 1982, through December 31, 1984, MSM engaged in both intrastate and interstate hauling but paid no industrial insurance premiums for any employee. MSM estimated that 10.42 percent of its hauling during this time was intrastate. However, the payroll of workers engaged in intrastate hauling was not clearly separable from the payroll of workers engaged in interstate hauling.

On January 29, 1985, the Department of Labor and Industries (Department) audited MSM's records and subsequently determined that premiums of $13,751.28 were due.

The Department ordered payment of the premiums on March 29, 1985. The order was affirmed by the Board of Industrial Insurance Appeals on September 11, 1986, and by the Thurston County Superior Court on March 30, 1988. We granted direct review on January 10, 1989.

RCW Title 51, the Industrial Insurance Act (Act), provides that all employees in Washington State are covered by industrial insurance unless specifically excluded. RCW 51.12.020. MSM relies upon RCW 51.12.090 to provide the requisite exclusion. That statute provides, in relevant part:

[452]*452The provisions of [Title 51] shall apply to employers and workers . . . engaged in intrastate and also in interstate or foreign commerce, for whom a rule of liability or method of compensation now exists under or may hereafter be established by the congress of the United States, only to the extent that the payroll of such workers may and shall be clearly separable and distinguishable from the payroll of workers engaged in interstate or foreign commerce: Provided, That as to workers whose payroll is not so clearly separable and distinguishable the employer shall in all cases be liable in damages for injuries to the same extent and under the same circumstances as is specified in the case of railroads in the first proviso of RCW 51.12.080 . . .

The Department cites State ex rel. Washington Motor Coach Co. v. Kelly, 192 Wash. 394, 74 P.2d 16 (1937), for its contention that the statute quoted encompasses all workers except those for whom Congress has preempted the field with its own compensation act. The Department further interprets the case as indicating that, even after preemption, the Act would apply to those workers whose payroll was clearly assignable to intrastate activities. The language relied upon is:

The interstate employees excepted from the operation of the section were those only
"... for whom a rule of liability or method of compensation has been or may be established by the Congress of the United States"; . . . and as to them
"... only to the extent that their mutual connection with intrastate work may and shall be clearly separable and distinguishable from interstate or foreign commerce,

(Italics ours. Original italics omitted.) Washington Motor Coach, at 407.

The quote above seems to limit the employees excepted from the Act by federal preemption to those with no connection to intrastate commerce. The statute, however, does not say it "excepts" anyone; it says the "provisions . . . shall apply . . . only to the extent" that the payrolls of [453]*453workers engaged in commerce comprised of mixed intrastate, interstate and foreign commerce "may and shall be clearly separable" from the payroll of workers engaged exclusively in interstate or foreign commerce. See Laws of 1911, ch. 74, § 18, p. 367.1 Thus the only "exception" is of workers engaged in neither purely intrastate nor in the combination of intrastate and interstate commerce. Moreover, the consideration of "exception" under this section does not become operative unless Congress has enacted "a rule of liability or method of compensation".

This conclusion is compelled by examination of the grammatical structure of the statute. "The provisions [noun] . . . apply [verb] to employers and workers [object] . . . engaged in intrastate and also in interstate or foreign commerce, [restrictive clause limiting the class of employers and workers] for whom a rule of liability . . . may [454]*454hereafter be established by the congress [restrictive clause limiting the class of employers and workers] . . ., only to the extent that the payroll of such workers may and shall be clearly separable [adverbial phrase modifying "apply" and limiting the application of the provisions of RCW Title 51 to the object "workers"] . . See RCW 51.12.090. Therefore any lack of clarity in Washington Motor Coach does not alter our disposition of this case.

Appellant MSM generally analyzes the grammar of the statute correctly in support of its contentions. However, it overlooks the fact that RCW 51.12.090 concerns itself only with workers engaged in at least some activities for which Congress has established an alternative to state industrial insurance coverage. Appellant also cites State v. Postal Telegraph-Cable Co., 101 Wash. 630, 172 P. 902, adhered to on rehearing, 104 Wash. 693, 176 P. 346 (1918) and Plastino v. Seattle, 119 Wash. 195, 205 P. 404 (1922) in support of its analysis. However, as both those cases antedate Washington Motor Coach, they are not controlling authority on the points for which they are cited. Indeed, this court has said that "[t]he act of the 1919 legislature (Rem.Rev.Stat., § 7695) removed whatever basis there was for our construction of the earlier law in State v. Postal Telegraph-Cable Co." Washington Motor Coach, at 409. Since Plastino relied on Postal Telegraph-Cable Co. for its analysis, whatever precedential value the 1922 case may have had on the question before us was also invalidated by the 1937 decision in Washington Motor Coach.

The essence of the holding of Washington Motor Coach

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Related

Stelter v. Department of Labor & Industries
147 Wash. 2d 702 (Washington Supreme Court, 2002)
Stelter v. Department of Labor and Industries
57 P.3d 248 (Washington Supreme Court, 2002)

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Bluebook (online)
771 P.2d 1147, 112 Wash. 2d 450, 1989 Wash. LEXIS 44, Counsel Stack Legal Research, https://law.counselstack.com/opinion/msm-hauling-inc-v-department-of-labor-industries-wash-1989.