Romero v. Industrial Claim Appeals Office of State of Colo.

• Decision Date: 23 February 1995
• Docket Number: No. 93CE0018,93CE0018
• Citation: 902 P.2d 896
• Parties: Jennie ROMERO, Petitioner, v. The INDUSTRIAL CLAIM APPEALS OFFICE OF the STATE OF COLORADO; Miller Stockman; and the Colorado Compensation Insurance Authority, Respondents. . I
• Court: Colorado Court of Appeals

Page 896

902 P.2d 896

Jennie ROMERO, Petitioner, v. The INDUSTRIAL CLAIM APPEALS OFFICE OF the STATE OF COLORADO; Miller Stockman; and the Colorado Compensation Insurance Authority, Respondents.

No. 93CE0018.

Colorado Court of Appeals,

Div. I.

Feb. 23, 1995.

Rehearing Denied March 23, 1995.

Certiorari Granted Aug. 28, 1995.

Jean E. Dubofsky, P.C., Jean E. Dubofsky, Boulder, Pepe J. Mendez & Associates, P.C., Pepe J. Mendez, Denver, for petitioner.

Gale A. Norton, Atty. Gen., Stephen K. ErkenBrack, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., John D. Baird, First Asst. Atty. Gen., Denver, for respondent Indus. Claim Appeals Office.

Colorado Compensation Ins. Authority, Michael J. Steiner, Vaughan, Reeves & DeMuro, David R. DeMuro, Denver, for respondents Miller Stockman and Colorado Compensation Ins. Authority.

Opinion by Judge CRISWELL.

This appeal by claimant, Jennie Romero, from an order of the Industrial Claim Appeals Office (Panel) denying her permanent total disability benefits for an injury arising out of and in the course of her employment with Miller Stockman, requires us to consider the constitutional validity of § 8-42-111(5), C.R.S. (1994 Cum.Supp.), which disqualifies an employee aged 65 or older from receiving any compensation for permanent total disability. Because we conclude that this statutory provision offends against the equal protection requirements of the Fourteenth Amendment and Colo. Const. art. II, § 25, we set aside the Panel's order and remand the cause to it for its further consideration.

The facts upon which claimant grounds her claim for benefits are undisputed and were the subject of a stipulation by the parties. That stipulation establishes that claimant suffered an industrial injury on April 8, 1992, on which date she was 64 years of age. As a result of that injury, claimant is now permanently and totally disabled within the meaning of the Workers' Compensation Act (the Act), i.e., she is "unable to earn any wages" from her former or other employment. See § 8-40-201(16.5)(a), C.R.S. (1994 Cum.Supp.); McKinney v. Industrial Claim Appeals Office, 894 P.2d 42 (Colo.App.1995).

Some four months prior to her injury, claimant had begun to receive old-age retirement benefits under the federal old-age, survivors, and disability insurance program of the Social Security Act. However, the amount of such monthly old-age retirement benefits was only $471, and because those benefits were claimant's only source of funds (other than wages), she had continued to work for Miller Stockman after she began to receive such benefits. But for her serious industrial injury, she would have continued to work. As a result of this injury, however, she is unable to earn any wages from any source.

If an employee, such as claimant, suffers permanent total disability as a result of an industrial injury, that employee is normally entitled to receive a "disability indemnity ... payable as wages," see § 8-42-103(1), C.R.S. (1994 Cum.Supp.), equal to 66 2/3% of that employee's average weekly wage, subject to a specified maximum weekly amount. Section 8-42-111(1), C.R.S. (1994 Cum.Supp.).

In 1991, however, the Colorado General Assembly adopted Colo.Sess.Laws 1991, ch. 219, § 8-42-111(5) at 1313, which provided that:

For injuries occurring on and after July 1, 1991, compensation payable [as permanent total disability benefits] shall cease when the employee reaches the age of sixty-five years.

In 1994, this statute was amended to make its provisions applicable only to injuries occurring "on and after July 1, 1991, and before July 1, 1994." Colo.Sess.Laws 1994, ch. 322, § 8-42-111(5) at 2002-2003. And, the Panel's denial of permanent total disability benefits to claimant here was grounded solely upon the provisions of this statute.

Claimant argues that, because the sole criterion for denial of benefits under § 8-42-111(5) is the age of the employee, an arbitrary classification of workers is created, rendering the statute violative of the equal protection guarantees of the Fourteenth Amendment and Colo. Const. art. II, § 25. She also asserts that, to the extent that this statute may be designed to effect an offset against workers' compensation disability benefits of any social security old-age retirement benefits, the operation of the statute is pre-empted by the Social Security Act. Because we agree that this statute violates claimant's right to equal protection, we do not address her claim of pre-emption.

I. Standard of review.

The standard pursuant to which a statute is to be tested for equal protection purposes varies depending upon the nature of the classification created. If the classification is one involving a "suspect class," such as one based on race or national origin, or if it has an impact upon a fundamental right, the state has the burden of demonstrating that the statute is necessarily related to a compelling governmental interest and that the classification is specially fashioned and narrowly tailored to further its legitimate objective. See San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 28, 93 S.Ct. 1278, 1294, 36 L.Ed.2d 16, 40 (1973) (a "suspect class" is one that is "saddled with such disabilities, or subjected to such a history of purposeful unequal treatment, or relegated to such a position of political powerlessness as to command extraordinary protection from the majoritarian political process.").

If, on the other hand, no suspect class or fundamental right is implicated, it is generally true that the party challenging the statute must demonstrate that the classification does not have a factual basis or that it is not related to a legitimate state purpose. San Antonio Independent School District v. Rodriguez, supra; Higgs v. Western Landscaping & Sprinkler Systems, Inc., 804 P.2d 161 (Colo.1991); Naiden v. Epps, 867 P.2d 215 (Colo.App.1993). There is an "intermediate" standard of review which has also been used, under which the state has the burden of proving that the statutory classification serves an important government objective and that it is substantially related to the achievement of that objective. However, this third standard has so far been applied only to classifications based upon gender, Craig v. Boren, 429 U.S. 190, 97 S.Ct. 451, 50 L.Ed.2d 397 (1976), alienage, Foley v. Connelie, 435 U.S. 291, 98 S.Ct. 1067, 55 L.Ed.2d 287 (1978), or illegitimacy, Trimble v. Gordon, 430 U.S. 762, 97 S.Ct. 1459, 52 L.Ed.2d 31 (1977).

Claimant argues, however, that this intermediate standard of review should be used to test the statute's validity here. We disagree.

The United States Supreme Court has not applied this intermediate standard to an age-based claim. See Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 96 S.Ct. 2562, 49 L.Ed.2d 520 (1976) (state does not violate Fourteenth Amendment by requiring state police to retire at age 50). See City of Cleburne v. Cleburne Living Center, 473 U.S. 432, 105 S.Ct. 3249, 87 L.Ed.2d 313 (1985) (citing Murgia with approval in concluding that persons who are mentally retarded are not such a class as to mandate the application of the intermediate standard).

We are bound by the Murgia determination of the standard of review for Fourteenth Amendment purposes. Hence, the fact that the statutory classification here is based upon age does not require the use of the intermediate standard.

Likewise, we reject claimant's argument that, because § 8-42-111(5) was allegedly adopted as a part of "reform" legislation in reaction to an "insurance crisis," the intermediate standard of review must be employed. See Carson v. Maurer, 120 N.H. 925, 424 A.2d 825 (1980) (because right to recover for personal injuries is an important right, intermediate standard will be used in reviewing "tort reform" legislation).

Our supreme court has applied the rational relationship standard of review to legislation limiting recovery for personal injuries, Lee v. Colorado Department of Health, 718 P.2d 221 (Colo.1986), and it has specifically rejected the argument that an intermediate standard of review should be applied to such statutes. State v. DeFoor, 824 P.2d 783 (Colo.1992); Dove v. Delgado, 808 P.2d 1270 (Colo.1991). In our view, the considerations applicable in these types of actions are equally applicable here. See Duran v. Industrial Claim Appeals Office, 883 P.2d 477 (Colo.1994) (applying rational relationship standard to claim that provision of Act violates equal protection).

We conclude, therefore, that for Fourteenth Amendment purposes we must apply the rational relationship standard to the statute here in question. And, we shall apply the same standard for testing its validity under the state constitution. See Central Colorado Water Conservancy District v. Simpson, 877 P.2d 335 (Colo.1994) (standards of review under 14th Amendment are generally applicable to review under Colo. Const. art. II, § 25.)

Hence, in order to determine that § 8-42-111(5) violates claimant's rights to equal protection, we must be convinced beyond a reasonable doubt either that the statute is not designed to achieve a legitimate state purpose or that the classifications created by it are not rationally related to the achievement of that purpose.

II. Effect of challenged statute on the Act as a whole.

While the Act has undergone substantive amendments in recent years, the essential principles of its application have remained constant since its adoption in 1919. If an employee suffers an injury arising out of and in the course of employment, that employee will be deemed to have waived all common law and statutory claims against the employer, except for claims for compensation provided for by the Act. See §§ 8-41-102 and 8-41-103, C.R.S. (1994 Cum.Supp.).

In return for this waiver, the employee is entitled to receive from the employer, without consideration of fault for the injury, several specified benefits. Frohlick Crane Service,...