Parker v. Webster County Coal, LLC

529 S.W.3d 759

• Court: Kentucky Supreme Court
• Decided: April 27, 2017
• Docket: 2014-SC-000526-WC; 2014-SC-000536-WC
• Status: Published

Opinions

OPINION OF THE COURT BY

JUSTICE KELLER

In separate appeals, Marshall Parker challenges the constitutionality of Kentucky Revised Statute (KRS) 342.730(4) and Webster County Coal (Webster County) challenges the Administrative Law Judge’s (ALJ) award of benefits to Parker for a back injury. The Board affirmed the ALJ’s award of benefits but, because it lacks the jurisdiction to do so, the Board did not address Parker’s constitutional claim.¹ The Court of Appeals affirmed the Board and -found that KRS 342.730(4) is constitutional. For the following reasons, we affirm the Court of Appeals regarding Parker’s entitlement to benefits. However, we reverse that Court’s holding that KRS 342.730(4) is constitutional and remand this matter to the ALJ for an award consistent with this opinion.

I. BACKGROUND.

Parker was born on October 5,1939, and he began working as an underground coal miner for Webster County in 1974. On September 8, 2008, Parker slipped while trying to climb over a conveyor belt. He testified that he felt pain in his right knee, right hip, and low back after this incident. Despite his injuries, Parker continued to work for approximately three months. Parker eventually underwent right knee surgery in December 2008 and lumbar spine surgery in June 2011. Following treatment, Parker has continued to have back pain, and he has difficulty walking and climbing stairs. He has not returned to any type of work.

Webster County accepted liability for Parker’s right knee injury and has paid all medical benefits associated with that injury. Because Webster County is hot contesting Parker’s knee injury claim, we do not set forth the medical evidence regarding that claim. However, 'Webster County did contest Parker’s back injury claim básed on medical records containing pre-injury complaints of low back pain and diagnostic testing that showed significant degenerative changes. Therefore, we summarize the medical evidence related to that claim below.

In support of his back injury claim, Parker filed medical records and a report from his spine surgeon, Dr. David Eggers. In his May 20, 2009 office note, Dr. Eggers stated that Parker had suffered from “intractable low back and right radicular leg pain” since an injury in September 2008. In his Form 107 Medical Report—Injury/Hearing Loss/Psychological Condition, Dr. Eggers stated that Parker suffered from displacement of a lumbar disc, spinal stenosis, and- acquired spondylolisthesis. Dr. Eggers related .these conditions to Parker’s injury; however, he did not specify the date of the injury. Furthermore, although he had been asked to do so, Dr. Eggers would not give an opinion regarding what permanent impairment or restrictions Parker has.

Webster County filed records from TriState Orthopedic Surgeons and Dr. James Donley. The Tri-State records showed, in pertinent part, that Parker complained of and sought treatment for low back and leg pain in September 2003, March 2005, and May 2006. It appears from the records that Parker.received at least one epidural steroid injection in late 2005 and one epidural steroid injection in May 2006. Furthermore, Parker’s 2003 lumbar MRI revealed multi-level degenerative. changes with mild to moderate stenosis. Dr. Don-ley’s records reveal, in pertinent part, that Parker complained of aches and pains/ strains but had not received any treatment for back pain in the two years before the work injury.

Webster County also filed reports from Dr. Russell Travis, Dr. Bart Goldman, and Dr. William Gavigan. Dr. Travis,. in his October 9, 2009 report, stated that Parker suffered from right L4 radiculopathy secondary to degenerative spondylolisthesis with a bulging disc at L4-5 and significant degenerative changes throughout the lumbar spine. Dr. Travis concluded that, despite Parker’s significant pre-existing lumbar degenerative .changes, the surgery then being recommended by Dr. Eggers was work-related. In reaching that conclusion, Dr. Travis stated that he had seen “no records that indicate Mr. Parker had significant low back pain and no right lower extremity pain prior to this.” In a November 20, 2009 addendum to his October report, Dr. Travis stated that, upon review of an office note from one of Parker’s physicians dated September 28, 2009, Parker’s “current problem is not related directly to the injury of 9/28/2008, but is clearly a question of pre-existing severe degenerative changes with neural impingement and previous symptomatic problems with his low back.” We note that Dr. Travis had reviewed and summarized the September 28, 2008 office note in his October 2009 report.

Dr. Goldman stated that Parker suffered from degenerative retrolisthesis at L3-4 which pre-existed the September 8, 2008 work-injury. According to Dr. Goldman, the surgery performed by Dr. Eggers was to alleviate an active pre-existing condition, not because of Parker’s work injury.

Dr. Gavigan made diagnoses of severe degenerative disc disease that actively preexisted the work injury. He opined that all of Parker’s back treatment was related to that pre-existing active condition and not to the work injury. Finally, Dr. Gavigan, who imposed no restrictions, assigned Parker a 22% impairment rating, all of which he attributed to the pre-existing active condition.

Based on the preceding evidence, the ALJ found that Parker suffered a lower back injury on September 8, 2008 and that none of Parker’s back-related impairment was the result of a pre-existing active “disability/impairment of the back under the holding in Finley (supra).”² The ALJ also determined that Parker is not totally disabled and awarded income benefits based on Parker’s 4% knee impairment and his 22% lumbar spine impairment for a combined permanent impairment rating of 26%. However, because Parker had already received two years of temporary total disability income benefits, the ALJ found that Webster County did not have liability for payment of any additional income benefits pursuant to KRS 342.730(4). The Board and the Court of Appeals affirmed.

As noted above, both Webster County and Parker have appealed from the Court .of Appeals’s opinion. Webster County argues that the evidence did not support the ALJ’s award of benefits related to Parker’s low back condition. Parker appeals the ALJ’s termination of income benefits pursuant to KRS 342.730(4). We set forth additional necessary background information below.

II. STANDARD OF REVIEW.

The ALJ has the sole discretion to determine the quality, character, and substance of the evidence and may reject any testimony and believe or disbelieve various parts of the evidence regardless of whether it comes from the same witness or the same party’s total proof. Paramount Foods, Inc. v. Burkhardt, 695 S.W.2d 418, 419 (Ky. 1985). Parker had the burden of proving that his back condition is related to the work injury. Gibbs v. Premier Scale Company/Indiana Scale Co., 50 S.W.3d 754, 763 (Ky. 2001), as modified on denial of reh’g (Aug. 23, 2001). Because he was successful before the ALJ, the question for us on appeal is whether the ALJ’s finding of work relatedness is supported by substantial evidence. Whittaker v. Rowland, 998 S.W.2d 479, 481 (Ky. 1999). “Substantial evidence has been defined as some evidence of substance and relevant consequence, having the fitness to induce conviction in the minds of reasonable men.” Id. at 481-82. Thus, the determinative question to be answered on review is whether the ALJ’s finding that Parker’s back condition is related to the work injury “is so unreasonable under the evidence that it must be viewed as erroneous as a matter of law.” KRS 342.285; Ira A. Watson Dept. Store v. Hamilton, 34 S.W.3d 48, 52 (Ky. 2000).

While we give great deference to the ALJ’s factual findings, questions of law, i.e., whether KRS 342.370(4) is constitutional, we review de novo. See U.S. Bank Home Mortgage v. Schrecker, 455 S.W.3d 382, 384 (Ky. 2014). With the preceding standards in mind, we first address Webster County’s argument that the ALJ’s finding that Parker suffered a work-related back injury is not supported by the evidence. We then address Parker’s argument that KRS 342.730(4) is unconstitutional.

III. ANALYSIS.

A. Whether Parker suffered a work-related back injury.

Webster County argues that there was not sufficient evidence to support a finding that Parker suffered a work-related back injury. It notes that Drs. Gavigan, Travis, and Goldman all opined that Parker’s back condition actively pre-existed his September 2008 injury. It also notes that, although Dr. Eggers referred to an injury as being the cause of Parker’s back condition in his Form 107, he did not specify which injury. Finally, Webster County notes that Parker’s medical records and his testimony indicate that he had complaints of low back pain for several years preceding the September 2008 injury.

While Dr. Eggers’s Form 107 may have been deficient regarding causation, he related Parker’s back condition to the work injury in his initial office note. Furthermore, Dr. Travis’s two reports are arguably inconsistent. Initially, Dr. Travis, who listed and summarized the medical records he reviewed, opined that Parker’s back condition was related to the work injury. In his second report, Dr. Travis listed and summarized those same medical records as supporting his opinion that Parker’s back condition actively pre-existed the work injury. The ALJ was free to consider all of Dr. Eggers’s records and to believe Dr. Travis’s initial report and to disbelieve his second report. That evidence was substantive and sufficient to support the ALJ’s finding of work-relatedness.

Furthermore, although Parker did complain of and receive treatment for low back pain prior to the work injury, he made no such complaints nor received any such treatment in the two years preceding the September 2008 work injury. In fact, Parker worked an average of 70 hours per week in that two-year period, and Webster County produced no evidence that any physician had assigned Parker an impairment rating or imposed permanent restrictions on Parker’s work activities as a result of his pre-injury complaints of back pain. As stated in Finley v. DBM Techs., 217 S.W.3d 261, 265 (Ky. App. 2007):

a pre-existing condition that is both asymptomatic and produces no impairment prior to the work-related injury constitutes a pre-existing dormant condition. When a pre-existing dormant condition is aroused into disabling reality by a work-related injury, any impairment or medical expense related solely to the pre-existing condition is compen-sable. A pre-existing condition may be either temporarily or permanently aroused. If the pre-existing condition completely reverts to its pre-injury dormant state, the arousal is considered temporary. If the pre-existing condition does not completely revert to its pre-injury dormant state, the arousal is considered permanent, rather than temporary.

The ALJ’s finding that Parker’s back condition did not actively pre-exist the work injury but is related to that injury is supported by both the evidence and the law. We cannot say the ALJ’s finding was erroneous as a matter of law, and we therefore affirm , it. See Ira A. Watson Dept. Store, 34 S.W.3d at 48.

B. Whether KRS 342.730(4) is constitutional. ,

KRS 342.730(4) states in pertinent part-that:

All income benefits payable pursuant to this chapter shall terminate as of the daté upon which the employee qualifies for normal old-age Social Security retirement benefits under the United States Social Security Act, 42 U.S.C. secs. 301 to 1397f, or two (2) years after the .employee’s injury or last exposure, whichever last occurs.

At the time of his injury, Parker was 68 years of age and qualified for “normal old-age Social Security retirement benefits.”. Under KRS 342.730(4), the ALJ found that Parker, who had received two years of temporary total .disability benefits, was not entitled to any additional income benefits related to his permanent disability. Parker argues that KRS 342.730(4) unconstitutionally infringes on his right to due process, abrogates his jural rights, and violates the Equal Protection Clauses of the United States and Kentucky Constitutions. Webster County argues that, based on this Court’s precedent, Parker’s argument is without merit.

At the outset, we note that this Court previously determined that KRS 342.730(4) as it presently exists is constitutional.³ See McDowell v. Jackson Energy RECC, 84 S.W.3d 71 (Ky. 2002); and Keith v. Hopple Plastics, 178 S.W.3d 463 (Ky. 2005), as corrected (Dec. 13, 2005). We also are cognizant of the strong presumption of constitutionality afforded to legislative acts. Id. at 468. However, having reviewed our prior opinions, we now determine that they were incorrectly decided regarding the issue of equal protection. In doing so, we áre:

as always, mindful of the value of precedent and the doctrine of stare decisis. The doctrine of stare decisis “is the means by which we ensure that the law will, not merely change erratically, but will develop in a principled and intelligible fashion.” Changing the “ebb and flow of settled law” is not something we take lightly, and we do so only after careful consideration. While stare decisis “permits society to presume that bedrock principles are founded in the law rather than in the proclivities' of individuals,” it does not necessitate that this Court “unquestioningly follow priQr decisions” when we are otherwise compelled. This Court is not assigned the duty of maintaining the watch as the law ossifies,

Osborne v. Keeney, 399 S.W.3d 1, 16-17 (Ky. 2012) (footnotes omitted).

The dissent questions our decision to revisit McDowell, stating that the only change that has occurred since that opinion is to the composition of this Court. We do not disagree that the composition of the Court has changed; however, we note that the Court was closely divided on this issue in McDowell, Furthermore, this Court determined in 2011 that there was no rational basis for applying a different evidentiary standard to employees who contracted coal workers’ pneumoconiosis than that applied to workers who contracted non-coal workers’ pneumoconiosis. See Vision Mining, Inc. v. Gardner, 364 S.W.3d 456 (Ky. 2011). This Court did so despite previously holding that a rational basis existed for treating those two groups differently. See Kentucky Harlan Coal Co. v. Holmes, 872 S.W.2d 446 (Ky. 1994).⁴

It is undisputed that, because of KRS 342.730(4), injured older workers are treated differently from their younger counterparts. When a statutory provision results in disparate treatment, we look to the 14th Amendment of the United States Constitution and to Sections 1, 2, and 3 of the Kentucky Constitution. The goal of those constitutional provisions “is to ‘keep[ ] governmental decision . makers from treating differently persons who are in all relevant respects alike’ ” while recognizing that “nearly all legislation differentiates in some manner between different classes of persons.” Vision Mining, 364 S.W.3d at 465 (citation and footnote omitted). In order to maintain the necessary balance between the goals of the constitutional provisions and legislative reality, the Courts apply different levels of scrutiny depending “on the classification made in the statute and the interest affected by it.” Id.

Currently, there are three levels of-review applicable to an equal protection challenge. Strict or intermediate scrutiny applies whenever a statute makes a classification on the basis of a “suspect” or “quasi-suspect” class, respectively. Conversely, “if the statute merely affects social or economic policy, it is subject” to a less searching form of judicial scrutiny, i.e. the “rational basis” test.

Vision Mining, Inc. v. Gardner, 364 S.W.3d 455, 465-66 (Ky. 2011)(citations and footnotes omitted)^ “Workers’ compensation statutes concern matters of social and economic policy. As a result, such a statute is not subject to strict or [intermediate] scrutiny and therefore must be upheld if a ‘rational basis’ or ‘substantial and justifiable reason’ supports the classifications that it creates.” Id. at 466 (citation omitted).⁵ Proving the absence of a rational basis or of a substantial and justifiable reason for a statutory provision is a steep burden; however, it is not an insurmountable one. Id. at 468-69.

The focus of the parties ' (and of' the majorities in our prior decisions) is on the perceived discrimination between injured older workers and injured younger workers. This focus is understandable because, under the statute, a worker who is injured more than 425 weeks (or 520 weeks under certain circumstances) before he or she reaches normal Social Security retirement age will receive all of the permanent partial disability income benefits to which he or she is entitled.⁶ A worker who is injured less than 425 weeks before he or she reaches normal Social Security retirement age will not receive all of the permanent partial disability income benefits to which he or she is entitled. The rational bases for treating younger and older workers differently is: (1) it prevents duplication of benefits; and (2) it results in savings for the workers’ compensation system. Undoubtedly, both of these are rational bases for treating those who, based on their age, have qualified for normal Social Security retirement benefits differently from those who, based on their age, have yet to do so.

However, the equal protection problem with KRS 342.730(4) is that it treats injured older workers who qualify for normal old-age Social Security retirement benefits differently than it treats injured older workers who do not qualify. As Justice Graves noted in his dissent in McDowell, “Kentucky teachers ... have a retirement program and do not participate in social security.” 84 S.W.3d at 79. Thus, a teacher who has not had any outside employment and who suffers a work-related injury will not be subject to the limitation in KRS 342.730(4) because that teacher will never qualify for Social Security retirement benefits. There is no rational basis for treating all other workers in the Commonwealth differently than teachers. Both sets of workers will qualify for retirement benefits and both have contributed, in part, to their “retirement plans.” However, while teachers will receive all of the workers’ compensation income benefits to which they are entitled, nearly every other worker in the Commonwealth will not. This disparate treatment does not accomplish the goals posited as the rational bases for KRS 342.730(4). The statute does prevent duplication of benefits, but only for non-teachers because, while nearly every other worker is foreclosed from receiving “duplicate benefits,” teachers are not.

The dissent indicates that our analysis should be limited to determining if the “overall statutory scheme unlawfully discriminates on the basis of age.” According to the dissent, we have wrongly viewed this matter through the “lens” of teacher retirement and have concluded that “there is no rational basis for treating teachers differently from all other workers in the Commonwealth.” To the contrary, what we have concluded is that there is no rational basis for treating all other workers in the Commonwealth differently from teachers.

The dissent also states that we have undertaken to reverse the Court of Appeals based on a reason not presented on appeal. However, we note that Parker has challenged the constitutionality of KRS 342.730(4) on equal protection grounds at every level. While he has not specifically mentioned the disparate treatment between teachers and all 'other employees in the Commonwealth, he has challenged the disparate treatment between those who qualify for normal old age social security retirement and those who do not. Thus, we believe that is sufficient to preserve the issue for our review.

As to the alleged savings to the workers’ compensation program, we discern no rational basis for this disparate treatment. In Vision Mining, we addressed the eviden-tiary standard and claims’ processing procedures that were being applied in coal workers’ pneumoconiosis claims. We concluded that there was no rational basis for treating coal workers suffering from pneu-moconiosis differently from other workers suffering from pneumoconiosis. 364 S.W.3d at 473. In doing so, we rejected the employer’s argument that the disparate treatment was justified because it resulted in monetary savings to the workers’ compensation system. Id. at 472. (“The state would save more money by subjecting all occupational pneumoconiosis claimants to the more exacting procedure and higher rebuttable standard.”)(emphasis in original). Furthermore, we noted that “[i]n considering an equal protection challenge, a court does not engage in accounting of debits and credits; rather the court must examine whether similarly situated individuals have been treated differently ... and, if so, whether or not such treatment is rationally related to a legitimate state interest.” Id. at 474. Here, injured older workers who qualify for normal old-age Social Security retirement benefits are treated differently than injured older workers who do not. There is no rational basis for treating these two groups of injured older workers differently.

The dissent states that KRS 342.730(4) is constitutional, despite its disparate treatment of older workers, because the exclusion of teachers from its benefit limitation is an example of acceptable “underinclusiveness.” We agree with the dissent that a statutory scheme need not attack “every aspect of a problem” in order to pass constitutional muster; however such a statute must be “free from invidious discrimination.” Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970).⁷ The problem with KRS 342.730(4) is not that it fails to attack every aspect of the “problem” of injured workers collecting workers’ compensation benefits and retirement benefits. The problem with KRS 342.730(4) is that it invidiously discriminates against those who qualify for one type of retirement benefit (social security) from those who do not qualify for that type of retirement -benefit but do qualify for another type of retirement benefit (teacher retirement).⁸ Based on the dissent’s interpretation of underin-clusiveness, this Court erred when it determined that it is unconstitutional to treat those who suffer from coal workers’ pneu-moconiosis differently from those who suffer from non-coal workers’ pneumoconio-sis. We discern no reason to reconsider the wisdom of that decision.

Finally, although Parker did not argue it, KRS 342.730(4) violates the prohibition against special legislation found in Section 59 of the Kentucky Constitution. “A special law is legislation which arbitrarily or beyond reasonable justification .discriminates against some persons or objects and, favors others.” Board of Ed. of Jefferson County v. Board of Ed. of Louisville, 472 S.W.2d 496, 498 (Ky. 1971). As set forth above, KRS 342.730(4) favors those who will not qualify for normal.old-age Social Security retirement while discriminating against those who do qualify.

Because we have found KRS 342.730(4) to be constitutionally infirm on equal protection grounds, we need not address the other arguments raised by Parker.

IV. CONCLUSION.

Having reviewed the record and the arguments- of the parties, we discern no rational. basis or substantial and justifiable reason for the disparate treatment of two groups of injured older workers. Thus, KRS 342.730(4) violates the right to equal protection and is constitutionally infirm. Our opinions to the contrary are hereby overruled, and this matter is remanded to the AL J for entry of an opinion and award consistent with this opinion.

All sitting. Cunningham, Keller, Venters and Wright, JJ., concur. Minton, C.JÍ, concurs in part and dissents in part by separate opinion, in which Hughes and VanMeter, JJ., join.

1 . The Board noted in its opinion that Webster County filed a number of medical fee disputes while the appeal was pending and that the ALJ had issued an order joining additional parties after the notice of appeal had been filed. Because the ALJ lost jurisdiction once the notice of appeal was filed, the Board vacated his order. Furthermore, the Board remanded tire medical fee disputes for a determination on the merits and on .the necessity of joining additional parties. Neither parly has contested this portion of tire Board's opinion; therefore, we do not address it.

2 . Finley v. DBM Techs., 217 S.W.3d 261 (Ky. App. 2007).

3 . In 1994, the legislature added paragraph (4) to KRS 342.730, which provided that workers’ compensation income benefits would be reduced by 10% when an employee reached age 65 and by 10% every year thereafter until the employee reached age 70. In Wynn v. Ibold, Inc., 969 S.W.2d 695 (Ky. 1998), we held that version of KRS 342.730(4) was constitutional, The legislature adopted the current version of KRS 342.730(4) in 1996,

4 . We recognize that the Court in Holmes specifically addressed the different basis for awarding benefits to employees who have contracted coal workers' vs. non-coal workers’ pneumoconiosis, while the Court in Vision Mining was addressing the standard of proof and the consensus process. However, the dissent in Vision would have relied on Holmes to support affirming the disparate evi-dentiary standards and the consensus process. Regardless, the fact remains that this Court has revisited its decisions regarding the constitutionality of portions of KRS 342 when appropriate to do so.

5 . We note that, while federal case law may be instructive regarding issues of equal protection, we are not bound to follow federal equal protection analysis. As we noted in Elk Horn Coal Corp. v. Cheyenne Resources, Inc., 163 S.W.3d 408, 418 (Ky. 2005), "the Kentucky Constitution’s equal protection provisions ... are much more detailed and specific than the Equal Protection Clause of the United States Constitution.” The analysis employed by our federal counter-parts acts as a floor, below which we may not fall, not as a ceiling, above which we may not rise. Id. In fact, "we have construed our Constitution as requiring a ‘reasonable basis' or a ‘substantial and justifiable reason' for discriminatory legislation in areas of social and economic policy.” Id. at 418-19. In this case however, the preceding distinction, while important, is one without a difference, because KRS 342.730(4) does not pass the less stringent rational basis test.

6 . This does not take into account any payment of temporary total disability income benefits, which could, as it did here, alter the number of weeks of entitlement to permanent disability benefits.

7 . In Dandridge, the plaintiffs, who had large families, challenged the Maryland Department of Public Welfare maximum cap on AFDC benefits. 397 U.S. at 474-75, 90 S.Ct. 1153. The Court determined that the cap did not violate equal protection. Id. at 487. Dan-dridge differs from the case herein because the Maryland statute treated all AFDC recipients the same because all were subject to the cap. Here, KRS 342.730(4) treats two different groups of elderly workers differently.

8 . The dissent also cites to Minnesota v. Clover Leaf Creamery Co., 449 U.S. 456, 101 S.Ct. 715, 66 L.Ed.2d 659 (1981) to support its underinclusiveness argument. However, as with Dandridge, Clover Leaf Creamery is distinguishable. In Clover Leaf Creamery, the state of Minnesota passed legislation regulating the sale of milk in plastic containers but permitting the sale of milk in cardboard containers. 449 U.S. at 456, 101 S.Ct. 715. The Court held that the statute bore a rational relationship to that state's goals of reducing landfill and reducing energy consumption. Id. at 458, 101 S.Ct. 715. The Minnesota statute treated different containers differently, but it treated all plastic containers, or containers of the same "class,” the same. Here, KRS 342.730(4) treats younger and elderly workers differently, which is acceptable. However, it does not treat workers of the same "class,” elderly workers, equally.