Fisher v. Reiser

Decision Date28 November 1979
Docket NumberNo. 77-2715,77-2715
Citation610 F.2d 629
PartiesGladys FISHER, on behalf of herself and all others similarly situated, Plaintiff-Appellant, v. John R. REISER, Chairman of Nevada Industrial Commission, in his official capacity; Claude Evans, Commissioner, Nevada Industrial Commission; James S. Lorigan, Commissioner, Nevada Industrial Commission; the Nevada Industrial Commission; and Mike Mirabelli, State Treasurer of Nevada, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Gill Deford, Los Angeles, Cal., argued, for plaintiff-appellant.

J. M. Landish, F. King, Las Vegas, Nev., argued, for defendants-appellees.

Appeal from the United States District Court for the District of Nevada.

Before HUFSTEDLER and KENNEDY, Circuit Judges, and EAST, * District judge.

KENNEDY, Circuit Judge:

This appeal presents us with a challenge to certain Nevada workers' compensation statutes and raises equal protection and right of travel issues. Nevada maintains a workers' compensation program for persons who sustain industrial injuries during their employment in Nevada. Compensation benefits are payable to injured employees and their survivors regardless of where they reside after the injury. In 1973 and in 1975, the Nevada Legislature granted cost-of-living increases to workers' compensation beneficiaries who continued to reside in Nevada, but it denied the increased benefits to the beneficiaries who were not Nevada residents. The district court rejected plaintiffs' constitutional challenge to these statutes, and we affirm.

Before addressing the background of the plaintiffs' case, we summarize the controlling statutes. Under the Nevada Industrial Insurance Act (Nev.Rev.Stat. § 616.010 Et seq. (1977)), Nevada employers must insure workers against the risk of industrial injuries. The Nevada Industrial Commission ("NIC") administers a state insurance fund, financed by employer premiums, which is used to pay workers' compensation benefits to injured workers. Employees injured in accidents "arising out of and in the course of employment" with a covered employer are entitled to certain benefits under the program.

To be eligible for benefits, the injured employee must have been working in Nevada for a covered employer at the time of the injury. Workers hired or regularly employed in Nevada are also eligible for benefits if they are injured while working for their employer temporarily outside the state. (Nev.Rev.Stat. § 616.520). 1 Workers hired outside Nevada are eligible for benefits unless they are only temporarily working in the state and are covered by another state's workers' compensation program. (Nev.Rev.Stat. § 616.260). Compensation benefits are payable to injured employees and their survivors wherever they may reside after the injury. 2

The level of benefits available to the injured worker or to his survivors depends on the nature of the injury and the average wage of the worker at the time of the injury. Permanently and totally disabled workers are entitled to monthly payments of two-thirds of their average wage at the time of their injury, until their death. (Nev.Rev.Stat. § 616.580). The surviving spouse of an employee whose death was caused by a job-related accident is entitled to monthly payments of two-thirds of the employee's average wage at the time of the injury. Death benefits are paid until the surviving spouse dies or remarries. (Nev.Rev.Stat. § 616.615).

Because the benefits received are based on a percentage of wages earned by the covered worker at the date of the injury, compensation recipients have been particularly hurt by inflation. In 1973, the Legislature responded to the beneficiaries' plight by granting flat percentage increases in permanent total disability and death benefits, but the Legislature limited these cost-of-living increases to those beneficiaries who were living in Nevada. Death benefits based upon industrial injuries occurring before July 1, 1973, and permanent total disability benefits from injuries occurring before April 9, 1971, were increased by 10 percent. (Nev.Rev.Stat. §§ 616.628, 616.626). In 1975, the same benefit adjustment was increased to 20 percent, and the increase was likewise limited to Nevada residents only. 3 Limitation of the increases to residents only gives rise to the constitutional questions presented here.

The NIC was reimbursed from general estate funds for the cost of the initial 10 percent cost-of-living increase in disability and death benefit pensions. When the cost-of-living supplement was increased to 20 percent in 1975, the Legislature directed that the increase be paid from a newly-created silicosis and disabled pension fund. The latter fund was established by an appropriation from general revenues when the Legislature extended workers' compensation to persons injured by exposure to silicon dioxide dust. (Nev.Rev.Stat. §§ 617.323, 617.460). The fund is used to reimburse NIC for payment of silicosis claims and for the cost-of-living supplements in disability and death benefit cases.

Although eligibility for disability and death benefits is based upon industrial injury in Nevada, without regard to the residence of the injured employee or his survivors, the cost-of-living increases to the beneficiaries are provided only to those recipients who remain residents of Nevada. As of February 1, 1977, the NIC was administering 583 pensions that qualified for the 20 percent cost-of-living increases. Recipients of 363 of those pensions were receiving the 20 percent supplement because they were still residing in Nevada. The recipients of 220 pensions were not receiving the same income supplements solely because they resided outside Nevada.

Gladys Fisher is a recipient of one of the 220 pensions that were not supplemented. She is an 80 year old widow who lives in Applegate, California. She and her deceased husband, Charles, formerly lived in Las Vegas, Nevada, where he was employed in the city metal shop. On September 25, 1962, he suffered severe brain damage in a work-related accident that left him totally disabled. Mr. Fisher qualified for the receipt of permanent total disability benefits under the Nevada compensation scheme. He began receiving disability benefits effective from the date of his injury.

In March, 1963, Mr. and Mrs. Fisher moved to California, where their children could help Mrs. Fisher care for Mr. Fisher. After they settled in California, the Fishers continued to receive monthly disability benefit payments from the NIC. On May 10, 1972, Mr. Fisher died. Although the disability benefits terminated on Mr. Fisher's death, Mrs. Fisher became eligible for death benefits under the Nevada compensation program because her husband's death resulted from the injuries he sustained in a covered accident. (Nev.Rev.Stat. § 616.615). She began receiving monthly benefits of $167.50, one-half of her husband's average wage at the time of his injury. 4

Apart from her monthly benefits from the NIC, Mrs. Fisher's only other source of income has been a Social Security payment of $178.30 per month. She has had great difficulty living on her meager income. When she learned that Nevada had approved cost-of-living increases in compensation benefits, she wrote to the NIC and explained her circumstances. Although the Commission expressed sympathy for Mrs Fisher, the Commission informed her that the 20 percent cost-of-living supplements were paid only to persons residing in Nevada. She was told that if she moved back to Nevada, her monthly benefits would be increased by 20 percent, but, so long as she resided outside Nevada, she could never receive more than her $167.50 monthly benefit.

When a program of free legal services for the elderly was initiated in her community, Mrs. Fisher saw a lawyer about her problem. Thereafter, a class action was filed on her behalf and on behalf of those similarly situated against the Commissioners of the NIC and the Nevada State Treasurer. Invoking federal jurisdiction under 42 U.S.C. § 1983, the action sought declaratory and injunctive relief to redress alleged deprivations of equal protection and the right to travel based upon Nevada's denial of cost-of-living increases to those beneficiaries who were residing outside Nevada.

The district court certified a class consisting of all recipients of permanent total disability and death benefit pensions under the Nevada program who did not receive cost-of-living increases solely because they resided outside Nevada. The case was tried on stipulated facts, and judgment was entered for the defendants. The district court refused to apply strict scrutiny to the Nevada program because it did not perceive any infringement of the constitutional right to travel. The district court held that the Nevada scheme involved a simple residency requirement that, unlike durational residency requirements, fell outside the purview of the right to travel. The Nevada program survived the equal protection challenge because the district court held that the eligibility limitation was rationally related to Nevada's legitimate interests in protecting the health and welfare of its own citizens while limiting the state's general revenue expenditures. We turn now to the legal issues in the case.

The appellants' constitutional premise is that the Nevada statutory classification must be subject to strict scrutiny because it penalizes their right to travel, as did the classifications in Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969); Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); and Memorial Hospital v. Maricopa County, 415 U.S. 250, 94 S.Ct. 1076, 39 L.Ed.2d 306 (1974). We do not agree. We conclude the appellants' right to travel was not penalized, and thus strict scrutiny of Nevada's statutory classification is not required. The cases cited by appellants do not support the proposition that a classification...

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