Cates v. Kroger

• Decision Date: 26 August 2021
• Docket Number: 2020-SC-0275-WC, 2020-SC-0277-WC
• Citation: 627 S.W.3d 864
• Court: United States State Supreme Court — District of Kentucky
• Parties: Cheryl CATES, Appellant v. KROGER ; Commonwealth of Kentucky, ex rel. Daniel Cameron, Attorney General; Honorable Jeff V. Layson, Administrative Law Judge; and Workers’ Compensation Board, Appellees Ronnie Bean, Appellants v. Collier Electrical Service; Commonwealth of Kentucky ex rel. Daniel Cameron, Attorney General; Honorable John H. McCracken, Administrative Law Judge; and Workers’ Compensation Board, Appellees

627 S.W.3d 864

Cheryl CATES, Appellant

v.KROGER ; Commonwealth of Kentucky, ex rel. Daniel Cameron, Attorney General; Honorable Jeff V. Layson, Administrative Law Judge; and Workers’ Compensation Board, Appellees

Ronnie Bean, Appellants

v.Collier Electrical Service; Commonwealth of Kentucky ex rel. Daniel Cameron, Attorney General; Honorable John H. McCracken, Administrative Law Judge; and Workers’ Compensation Board, Appellees

2020-SC-0275-WC, 2020-SC-0277-WC

Supreme Court of Kentucky.

AUGUST 26, 2021

COUNSEL FOR APPELLANT, CHERYL ROBERTS : Jeffery Allen Roberts, Murray.

COUNSEL FOR APPELLANT, RONNIE BEAN: Geordie Dean Garatt, Paducah, Houseman, Garatt & Duncan, PLLC.

COUNSEL FOR APPELLEE, KROGER: Sharlott Kay Higdon, Whitlow, Roberts, Houston & Straub, PLLC, Paducah.

COUNSEL FOR APPELLEE, COLLIER ELECTRICAL SERVICE, INC.: Richard Brent Vasseur, Boswell Sims & Vasseur, Paducah.

COUNSEL FOR APPELLEE COMWEALTH OF KENTUCKY EX REL. ATTORNEY GENERAL DANIEL J. CAMERON : Stephen Chad Meredith, Matthew Franklin Kuhn, Brett Robert Nolan, Office of the Solicitor General, Office of the Attorney General.

ADMINISTRATIVE LAW JUDGES: Jeffrey Vimont Layson, III, John Hampton McCracken.

WORKERS’ COMPENSATION BOARD: Michael Wayne Alvey.

OPINION OF THE COURT BY CHIEF JUSTICE MINTON

We consolidated these two workers’ compensation appeals to address their common controlling issue: the constitutionality of the 2018 amendment to Kentucky Revised Statute (KRS) 342.730(4), which terminates workers’ compensation income benefits when the recipient reaches the age of 70 or four years from the date of injury or last injurious exposure, whichever event occurs last.

Cheryl Cates and Ronnie Bean brought separate appeals in which they argue this amendment is unconstitutional under the state and federal Equal Protection Clauses because it discriminates based on the income-benefits recipient's age. They also argue the statute is unconstitutional special legislation because it applies only to older income-benefits recipients.

In both cases, panels of the Court of Appeals upheld the constitutionality of the statute's age classification on equal protection grounds as being rationally related to a legitimate state interest in preventing workers’ compensation income-benefits recipients from receiving duplicate payments in the form of retirement benefits. The panels also rejected the special-legislation challenges to the statute, holding that the statute treated all older income-benefits recipients alike. We agree with the Court of Appeals and affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Cates

Cheryl Cates, at age 66, suffered a work-related injury at Kroger on August 15, 2015, for which she filed a workers’ compensation claim. On February 8, 2019, Administrative Law Judge (ALJ) Jeff V. Layson awarded Cates permanent-partial disability benefits. Because at the time the ALJ issued this award this Court had invalidated the version of KRS 342.730(4) in effect at the time of Cates's work-related injury,¹ to calculate the duration of Cates's benefits the ALJ applied the prior version of the statute.²

Cates and Kroger both appealed the ALJ's decision to the Workers’ Compensation Board. While the case was pending before the Board, the General Assembly enacted the 2018 version of KRS 342.730(4), which became effective July 14, 2018. Kroger argued to the Board that the 2018 version should apply to Cates's benefit award. Cates responded that the 2018 version was unconstitutional and otherwise inapplicable to her claim because her claim was governed by the law in effect at the time of her injury. In its decision rendered June 8, 2018, the Board upheld the ALJ's application of the 1994 version of the statute, ruling that the 2018 amendment did not affect Cates's award as it was not effective at the time of Cates's injury and would not be effective as of the date of rendition of its decision. The Board declined to address Cates's constitutionality argument.

Kroger then appealed to the Court of Appeals, arguing that the 2018 amendment applied to Cates. The Court of Appeals held the appeal in abeyance pending finality of our opinion in Holcim v. Swinford³ in which we held that the 2018 Amendment to KRS 342.730(4) applied retroactively to all pending appeals.⁴ Cates then argued that the 2018 amendment was arbitrary and an unconstitutional violation of equal protection guarantees, and due process guarantees.

The Court of Appeals’ panel found the 2018 amendment did not create an arbitrary age classification; therefore, it did not violate the federal or state equal protection clauses. The panel also reasoned that because the new statute applied with equal force to an entire class of people, it was not unconstitutional special legislation. Finally, the panel held that the retroactive application was constitutional because Cates had no vested right to benefits other than those allowed under the 2018 amendment to the statute. Because of our decision in Holcim and because the panel rejected the constitutional challenges Cates raised, the panel then held the 2018 amendment applicable to Cates and remanded the case to the ALJ to calculate Cates's benefits under the 2018 amendment. The appeal to this Court followed.

Cates argues to this Court the ALJ's original award, which she calculates to allow greater benefits under the 1994 version of the statute than she can receive under the 2018 version, must be reinstated for the same reasons she argued in the Court of Appeals.

B. Bean

Ronnie Bean filed a workers’ compensation claim for a work-related injury he suffered at age 68 while working for Collier Electrical Service. ALJ John H. McCracken heard this claim on July 25, 2018. The ALJ awarded Bean permanent-partial disability benefits and applied the 2018 amendment, which took effect on July 14, 2018. In a petition for reconsideration, Bean argued the ALJ's award was not supported by substantial evidence and application of the 2018 amendment was unconstitutional. Collier argued that the ALJ erred in his calculation of the benefits award. On reconsideration, the ALJ declined to address the constitutionality of the 2018 amendment but amended the calculation of Bean's benefits.

Bean appealed to the Board arguing the unconstitutionality of the amendment and the absence of substantial evidence to support the ALJ's award. The Board declined to address the constitutionality of the statute, affirmed the ALJ's application of the 2018 amendment, and found substantial evidence supported the benefits award.

Bean then appealed to the Court of Appeals raising the same issues he argued to the Board. The Court of Appeals panel affirmed the ALJ's award and addressed the constitutionality of KRS 342.730(4), rejecting all constitutional challenges to the 2018 amendment. This appeal followed.

II. ANALYSIS

A. This Court's previous rulings on the 1996 version of KRS 342.730(4) and 2018 amendment to the statute.

Before we undertake our analysis, we review for context two of our recent holdings addressing the General Assembly's efforts to establish an outer limit on the receipt of workers’ compensation income benefits. In Parker v. Webster County Coal, LLC ,⁵ a majority of this Court invalidated the 1996 version of KRS 342.730(4). That statute read:

All income benefits payable pursuant to this chapter shall terminate as of the date 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.

The majority in Parker found the statute unconstitutional for two reasons: (1) the statute created an arbitrary classification because the benefit cut-off date was dependent upon when the recipient received old-age social security benefits and (2) the statute was special legislation because it favored those who would not receive old-age social security benefits and disfavored those who would receive such benefits.⁶ Importantly, even though Parker invalidated the 1996 version of the statute, it reaffirmed this Court's prior precedent in which we 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.⁷ We said in Parker ,

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.⁸

Shortly after our holding in Parker , the General Assembly in 2018 enacted a new version of KRS 342.730(4) to read:

All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee reaches the age of seventy (70), or four (4) years after the employee's injury or last exposure, whichever last occurs. In like manner all income benefits payable pursuant to this chapter to spouses and dependents shall terminate as of the date upon which the employee would have reached age seventy (70) or four (4) years after the employee's date of injury or date of last exposure, whichever last occurs.⁹

This change purported to rectify the shortcomings of the 1996 version as identified in Parker by untethering the cessation of a claimant's workers’ compensation income benefits from the receipt of old-age social security retirement benefits, a benefit that Parker identified as not available to Kentucky's retired teachers.¹⁰ The new statute now limits the duration of benefits by linking cessation for all income beneficiaries to the later of two events (1) reaching age 70, or (2) four years after injury or last injurious exposure.

In ...