Stephen Flynn v. Buyers Paradise Furniture, Inc.

• Court: Kentucky Supreme Court
• Decided: December 15, 2021
• Docket: 2020 SC 0468
• Status: Unknown

Opinion

IMPORTANT NOTICE NOT TO BE PUBLISHED OPINION

THIS OPINION IS DESIGNATED “NOT TO BE PUBLISHED.” PURSUANT TO THE RULES OF CIVIL PROCEDURE PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C), THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE CITED OR USED AS BINDING PRECEDENT IN ANY OTHER CASE IN ANY COURT OF THIS STATE; HOWEVER, UNPUBLISHED KENTUCKY APPELLATE DECISIONS, RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED DECISION IN THE FILED DOCUMENT AND A COPY OF THE ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE DOCUMENT TO THE COURT AND ALL PARTIES TO THE ACTION. RENDERED: DECEMBER 16, 2021 NOT TO BE PUBLISHED

Supreme Court of Kentucky 2020-SC-0468-WC

STEPHEN FLYNN APPELLANT

ON APPEAL FROM COURT OF APPEALS V. NO. 2020-CA-0201 WORKERS’ COMPENSATION BOARD NO. WC-18-98128

BUYERS PARADISE FURNITURE, INC.; APPELLEES COMMONWEALTH OF KENTUCKY, EX REL. DANIEL CAMERON, ATTORNEY GENERAL; HONORABLE STEPHANIE KINNEY, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD

MEMORANDUM OPINION OF THE COURT

AFFIRMING

I. BACKGROUND

Stephen Flynn worked for Paradise Furniture, Inc., as a warehouse

supervisor. On December 29, 2017, Flynn was operating a “picker” to retrieve

a piece of furniture from a warehouse shelf. The picker is a forklift-like piece of

equipment with a caged outside platform on which an individual may stand to

be elevated to the shelves above. As Flynn stood inside the picker’s cage and

elevated himself to the appropriate shelf, he placed his left hand on top of the

cage, with his fingers outside. Flynn was looking in a different direction when his left hand was caught between a ceiling beam and the cage. Flynn’s work

injury required surgery, and his first two fingers were each partially

amputated.

On August 12, 2017, the Workers’ Compensation Administrative Law

Judge (ALJ), Stephanie L. Kinney, determined Flynn is permanently partially

disabled as a result of his work injury and awarded him weekly benefits which

would terminate at the age of seventy pursuant to KRS 342.730(4). Flynn filed

a motion for reconsideration, which the ALJ denied. He then appealed to the

Workers’ Compensation Board, arguing the amendment of KRS 342.730(4) was

not retroactive. The Board affirmed the ALJ’s decision pursuant to Holcim v.

Swinford, 581 S.W.3d 37 (Ky. 2019), which held the 2018 amendment to KRS

342.730(4) applied retroactively. Flynn also argued the subsection was

unconstitutional for various reasons. The Board acknowledged it lacked

jurisdiction to determine the statute’s constitutionality.

Flynn appealed the Board’s decision to the Court of Appeals, which

affirmed his award and held KRS 342.730(4) and its retroactive application

were constitutional. Flynn now appeals to this Court, arguing: (1) KRS

342.730(4) violates the equal protection clauses of the United States and

Kentucky Constitutions, as written and as retroactively applied; (2) retroactive

application of KRS 342.730(4) violates the contracts clauses of the United

States and Kentucky Constitutions; and (3) KRS 342.730(4) violates Kentucky’s

constitutional provisions regarding special legislation. The Attorney General

filed a motion to intervene to defend the constitutionality of the statute, which

2 we granted. For the following reasons, we hold that KRS 342.730(4) is

constitutional and affirm the Court of Appeals.

II. ANALYSIS

KRS 342.730(4) concerns the termination of workers’ compensation

benefits. In Parker v. Webster Cnty. Coal, LLC (Dotiki Mine), 529 S.W.3d 759

(Ky. 2017), this Court found the then-current 1996 version of KRS 342.730(4)

unconstitutional on equal protection grounds. The 1996 version of the statute

tied the termination of workers’ compensation benefits to the time at which the

employee qualified for old-age Social Security benefits. This Court held this

was an arbitrary distinction with no rational relation to a legitimate state

interest.

In Holcim, 581 S.W.3d at 41, this Court considered whether a 2018

version of KRS 342.730(4) could be applied retroactively. Quoting a Legislative

Research Commission comment beneath the statute, we held in Holcim that 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 2018 version of the statutory subsection links the

termination of benefits to the injured employee attaining a particular age.

3 Under the amendment, a claimant’s benefits terminate on his or her seventieth

birthday or four years after his or her work injury or last injurious exposure,

whichever occurs later. Flynn argues this statute is constitutionally infirm on

multiple grounds.

A. Equal Protection

Flynn 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

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 it. 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

4 (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

(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 Flynn’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

5 statute passes the rational basis test as it “treats alike all those who receive

workers’ compensation benefits.” Id. at 871.

Flynn 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.

B. Special Legislation

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

provisions regarding special legislation. Specifically, he points to the

prohibitions in Section 59 of the Kentucky Constitution, which state, 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.

6 Flynn links this argument to his equal protection argument—essentially

arguing the legislation discriminates against older workers and favors business

owners in an attempt to save employers money on workers’ compensation

insurance premiums. He also argues older workers are discriminated against

because, if they receive 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)). In Cates, we stated “[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.

C. Due Process

Flynn also argues the retroactive application of KRS 342.730(4) stripped

him of his property right to workers’ compensation benefits in violation of due

process rights, as he did not receive prior notice or a hearing. We addressed

this issue in Cates, holding the claimants had no vested right in the duration

7 and amount of their benefits “until they have received a final judgment in their

favor.” Cates, 627 S.W.3d at 873. The same is true here. Because Flynn had

no vested right in the duration of his benefits, a statute terminating them at a

specific age did not deny him due process.

D. Contracts Clause

Finally, Flynn argues the retroactive application of KRS 342.730(4)

denies his rights under the contracts clauses of the federal and state

constitutions. Both the Constitution of the United States and the Kentucky

Constitution protect citizens of our Commonwealth from the state’s

infringement on their right to contract. Article 1, Section 10, Clause 2 of the

United States Constitution reads, in pertinent part, “[n]o State shall . . . pass

any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of

Contracts . . . .” Likewise, Section 19 of the Kentucky Constitution provides,

“[n]o ex post facto law, nor any law impairing the obligation of contracts, shall

be enacted.” Flynn argues KRS 342.730(4) violates these contracts clauses

In Dowell v. Matthews Contracting, 627 S.W.3d 890, 895 (Ky. 2021), this

Court stated if “the fundamental premise of a Contracts Clause analysis—the

existence of a contract—is absent . . . our analysis ends.” See Gen. Motors

Corp. v. Romein, 503 U.S. 181, 190 (1992) (holding Contracts Clause

inapplicable because the employer and employee did not assent to specific

statutory terms). Therefore, we must first determine whether a contract exists

in this case.

8 Flynn “point[s] to no contract or place within the statutory scheme where

[he is] guaranteed certain benefits that were mutually assented to and

bargained for.” Dowell, 627 S.W.3d at 895. This Court has held “the Workers’

Compensation Act (WCA) does not constitute a contract between Kentucky

workers and their employers or the state.” Id. at 894. Rather than providing

contractual rights, we explained, “the WCA is a statutory scheme that may be

amended as the General Assembly chooses, provided it fits within our

constitutional framework.” Id. at 894–95. “The workers’ compensation system

is controlled by the state and is governed by legislative enactments. It is not a

contract . . . between employers and their employees. Changes to the relevant

statutes, therefore, do not create a Contracts Clause issue.” Id. at 896.

Since the Workers’ Compensation Act does not constitute a contract, “a

complete Contracts Clause analysis is unnecessary.” Id. at 894. The

protections of the clauses simply do not apply. “Because the WCA does not

form a contract, there are no contractual rights that the amendment to KRS

342.730(4) could infringe.” Id. at 895. Just as in Dowell, we hold there was no

contracts clause violation.

III. CONCLUSION

For the foregoing reasons, we affirm the Court of Appeals.

All sitting. All concur.

9 COUNSEL FOR APPELLANT:

Mark D. Knight

COUNSEL FOR APPELLEE, BUYERS PARADISE FURNITURE, INC.:

J. Gregory Allen Jones & Walter, 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. Stephanie L. Kinney

WORKERS’ COMPENSATION BOARD:

Michael W. Alvey Chairman