M & M Wood Working Co. v. State Indus. Acc. Commission

• Decision Date: 17 June 1954
• Parties: M & M WOOD WORKING CO. v. STATE INDUSTRIAL ACC. COMMISSION et al.
• Court: Oregon Supreme Court

Page 1082

271 P.2d 1082

201 Or. 603

M & M WOOD WORKING CO. v. STATE INDUSTRIAL ACC. COMMISSION et al.

Supreme Court of Oregon.

Argued and Submitted Feb. 24, 1954

Decided June 17, 1954.

Gordon Moore, Portland, argued the cause for appellants. On the brief were Wilbur, Mautz, Souther & Spaulding, Portland.

Ray H. Lafky, Asst. Atty. Gen., argued the cause for respondents. With him on the brief were Robert Y. Thornton, Atty. Gen., Green, Richardson & Green, and Paul T. Bailey, Portland, and Allan G. Carson, Salem.

Before LATOURETTE, C. J., and WARNER, ROSSMAN, LUSK, BRAND and PERRY, JJ.

BRAND, Justice.

This is a suit for a declaratory judgment. The plaintiffs seek a declaration that Section 4 of Chapter 343, Oregon Laws 1951 is unconstitutional and pray for an order enjoining the defendants, State Industrial Accident Commission and other officials, from enforcing that chapter. A general demurrer was filed and sustained and judgment was rendered to the effect that no constitutional rights of the plaintiffs are violated by said Chapter 343. The prayer for injunction was denied, the suit dismissed, and plaintiffs appeal. The amended complaint alleges that each of the plaintiffs employs numerous workmen, operate power-driven machinery, are subject to the Factory Inspection Law, are engaged in hazardous occupations within the meaning of the Workmen's Compensation Law and have filed the statement as authorized by law declaring their intention not to contribute to the State Industrial Accident Fund. The plaintiffs allege that they have

'established and maintained a comprehensive safety program for the protection of the employees of the respective plaintiffs and other persons who have occasion to be in and about the respective establishments of the respective plaintiffs and for said purpose each of said plaintiffs has for a number of years last past, availed itself or himself of the services of private insurance carriers, the same being organizations operating and carrying on insurance businesses in the State of Oregon for the purpose of looking after the prevention of accidents and safety programs for employers engaged in hazardous occupations. Said private insurance carriers employ engineers and others who are highly skilled in making plants, mills, factories and workshops and other places of employment safe for employees working therein and in protecting employees and others from accidents and exposure to occupational diseases, and each plaintiff herein uniformly follows the reports, recommendations and findings of said experts and others so employed to carry on such programs, and each plaintiff herein has expended a large amount of money in the establishment and carrying on of such respective programs and in making its establishments and places of business safe places in which to work and the place of business of each of the plaintiffs herein is, so far as possible, a safe place in which to work. The safety programs so carried on by the respective plaintiffs herein at their respective establishments and places of business are each more adequate than that required by the Department of Labor of the State of Oregon and the State Industrial Accident Commission.'

The complaint then sets forth Chapter 343, Laws of 1951 which is codified as a part of the Factory Inspection Law, ORS 654.205 to 654.275 inclusive. For convenience we shall cite the statute as codified:

'As used in ORS 654.205 to 654.275, unless the context requires otherwise:

'(1) 'The commission' means the State Industrial Accident Commission.

'(2) 'The Factory Inspection Law' means ORS 654.205 to 654.275 and subsections (3) and (4) of ORS 654.990.

'(3) 'Place of business' means the premises at which work of an employer subject to the Factory Inspection Law is carried on. Each separate general location where logging operations are conducted under the same conditions, and each separate location of other work shall be considered a place of business.' ORS 654.205.

Sections 654.210 to 654.220 inclusive impose rules for persons operating factories, mills and workshops where machinery is used. ORS 654.225 provides for inspection by the State Industrial Accident Commission, hereafter referred to as the Commission. Other sections establish enforcement provisions with which we are not now concerned. ORS 654.255 reads as follows:

'Every employer subject to the Factory Inspection Law shall pay to the commission annually on January 1 for each place of business operated by him in which are regularly employed:

'(1) Not more than two persons, $2.

'(2) Not less than three nor more than seven persons, $1 per person employed.

'(3) Not less than eight nor more than 20 persons, $12.50.

'(4) Not less than 21 nor more than 40 persons, $20.

'(5) Not less than 40 nor more than 100 persons, $25.

'(6) Not less than 100 nor more than 500 persons, $50.

'(7) Not less than 500 nor more than 1,000 persons, $75.

'(8) More than 1,000 persons, $100.'

Section 4 of Chapter 343, Oregon Laws 1951, which is under attack as unconstitutional is now ORS 654.270. It reads as follows:

'The commission may waive payment of the fees provided for in ORS 654.255 by any employer subject to the workmen's compensation law if there is a comparable inspection and payment therefor at least equal to such fees.'

The last section of the Factory Inspection Act is as follows:

'There hereby is established in the General Fund of the State Treasury the Safety Inspection Account. All moneys collected under ORS 654.255 to 654.270 and all fines collected for violations of the Factory Inspection Law shall be paid by the commission to the State Treasurer and by him credited to the Safety Inspection Account. All payments so made hereby are appropriated for the purpose of carrying out the Factory Inspection Law.'

The complaint alleges the defendants have demanded that the plaintiffs pay the fees imposed by ORS 654.255 and have threatened enforcement action if the fees are not paid. It is alleged that the defendants threaten to send inspectors to examine the plaintiff's plants and exercise dominion and control so as to force plaintiffs to become contributors to the State Industrial Accident Commission. The plaintiffs have refused to comply with the statute or have complied only under protest for the reason that the statute is deemed to be unconstitutional. The particulars in which the act is alleged to be unconstitutional are (1) that it constitutes an unconstitutional delegation of legislative power; (2) that there is no adequate standard fixed by statute for determining what is a 'comparable inspection' (see ORS 654.270 supra); (3) that the act deprives plaintiffs of liberty and property without due process of law, abridges their privileges and immunities and deprives them of equal protection of law 'in that the fee provided for in Section 3 of the purported Act [ORS 654.255] is not to apply equally to employers subject to the Workmen's Compensation Act and to employers who have elected not to be subject to said * * * Act, and said classification is wholly unreasonable and treats employers who have rejected said * * * Act differently than employers who have accepted said Act.' In substance it is alleged that the act creates an arbitrary classification. Similar contentions are made under the provisions of Oregon constitution, Article I, § 20, which provides:

'No law shall be passed granting to any citizen or class of citizens privileges, or immunities, which, upon the same terms, shall not equally belong to all citizens.'

It is alleged that a controversy exists between the parties and that a declaration of rights is necessary.

The first ground for demurrer was that the court was without jurisdiction. The trial court, however, found that a justiciable controversy existed and it therefore took jurisdiction of the case. Both parties have presented the case in this court on the merits. The only issue presented is the one raised by the general demurrer in support of which plaintiffs challenge the constitutionality of ORS 654.270 which authorizes the commission to waive payment of fees provided for in ORS 654.255 by any employer subject to the Workmen's Compensation Act if there is a comparable inspection and payment therefor at least equal to such fees.

The allegations of the complaint which purport to show a justiciable controversy are to the effect that the defendant commission threatens to compel the plaintiffs to pay the fees imposed by ORS 654.255 of the Factory Inspection Law, yet the plaintiffs allege that they are subject to that law. If ORS 654.270 (the waiver section) had been omitted from the statute, the plaintiffs would have had no ground on which to challenge the act. All who came within the purview of the statute would be compelled to pay the fees and the plaintiffs could not avoid payment of those statutory fees merely by voluntarily purchasing similar service from private insurance carriers. Their voluntary action could not derogate from the power of the state to require inspection; to insure compliance with the law. The fact that the plaintiffs are now employing private insurance carriers and maintaining adequate safety programs is immaterial so far as it concerns their duty to pay the fees imposed by the Factory Inspection Act. The provision imposing inspection fees is clearly valid unless that provision is rendered unconstitutional, because of the section authorizing the waiver of those fees as to employers other than the plaintiffs who are operating under the compensation act.

We are advised that the defendants moved the court for an order directing that the complaint be made more definite and certain by setting forth the number of places of business and the number of employees employed and the occupations in which they are engaged and the wages paid 'in order that it may appear from the complaint whether plaintiff's fee payments pursuant to the factory inspection law would result...