Rosa v. Warner Elec. Contracting

• Decision Date: 31 January 1994
• Docket Number: No. 92SC689,92SC689
• Citation: 870 P.2d 1210
• Parties: , Unempl.Ins.Rep. (CCH) P 14239B Steven L. ROSA (Deceased), Christina Rosa, Joshua Rosa, Amber Rosa, and Nathaniel Rosa, Petitioners, v. WARNER ELECTRICAL CONTRACTING, Colorado Compensation Insurance Authority, and the Industrial Claim Appeals Office of the State of Colorado, Respondents.
• Court: Colorado Supreme Court

Page 1210

870 P.2d 1210

44 Soc.Sec.Rep.Ser. 133, Unempl.Ins.Rep. (CCH) P 14239B

Steven L. ROSA (Deceased), Christina Rosa, Joshua Rosa, Amber Rosa, and Nathaniel Rosa, Petitioners, v. WARNER ELECTRICAL CONTRACTING, Colorado Compensation

Insurance Authority, and the Industrial Claim

Appeals Office of the State of Colorado,

Respondents.

No. 92SC689.

Supreme Court of Colorado,

En Banc.

Jan. 31, 1994.

Rehearing Denied Feb. 28, 1994.

Wilcox & Ogden, P.C., Ralph Ogden, Denver, Steven U. Mullens, P.C., Steven U. Mullens, Colorado Springs, for petitioners.

Michael J. Steiner, Denver, for respondents Warner Elec. Contracting and Colo. Compensation Ins. Authority.

Gale A. Norton, Atty. Gen., Raymond T. Slaughter, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., Paul Farley, Deputy Atty. Gen., Mary Karen Maldonado, First Asst. Atty. Gen., John D. Baird, Asst. Atty. Gen., Denver, for respondent Indus. Claim Appeals Office.

Justice ERICKSON delivered the Opinion of the Court.

We granted certiorari to review Rosa v. Warner Electrical Contracting, 849 P.2d 845 (Colo.App.1992), which held that section 8-50-103, 3B C.R.S. (1986) (now codified with changes at section 8-42-114, 3B C.R.S. (1993 Supp.)), does not violate the Supremacy Clause of the United States Constitution. We agree with the court of appeals that section 8-50-103 is not preempted by the Social Security Act.

I

Steven L. Rosa (Rosa) was electrocuted while working in the course and scope of his employment. Rosa's employer, Warner Electrical Contracting Company, and its insurer, Colorado Compensation Insurance Authority (collectively the respondents), admitted liability for the death. At the time of his death, Rosa's wife and three children (collectively the petitioners) were totally dependent on him for support. Because Rosa was killed in the course and scope of his employment, petitioners are eligible for workers' compensation death benefits in the amount of $1,385 per month. § 8-50-103, 3B C.R.S. (1986) (now codified with changes at section 8-42-114, 3B C.R.S. (1993 Supp.)). ¹

Pursuant to 42 U.S.C. § 402(d) (1988), the Social Security Administration awarded each of Rosa's children "children's benefits" in the amount of $356 per month. ² Pursuant to 42 U.S.C. § 402(g) (1988), Rosa's widow was awarded $356 per month in "mother's benefits." ³

On September 14, 1987, an administrative law judge (ALJ) for the Division of Labor entered an order regarding the petitioners' workers' compensation benefits. Because the petitioners received $1,424 per month in social security survivors' benefits, and because this exceeded the $1,385 per month payable under the Workers' Compensation Act, the ALJ reduced the petitioners' workers' compensation benefits to zero pursuant to the offset provision in section 8-50-103. This order was not appealed. Subsequently, however, Rosa's wife and children retained counsel and objected to the offset. As a result, the Director of the Division of Labor entered an order reopening the claim to allow the petitioners to address the constitutionality of the offset.

An ALJ conducted a hearing regarding the offset and ruled that she did not have the authority to address whether the offset was constitutional. Therefore, the ALJ allowed the offset to stand. The petitioners appealed the ALJ's order to the Industrial Claim Appeals Office (ICAO) which affirmed the ALJ stating that the ICAO had no jurisdiction to consider the constitutionality of the statute.

The petitioners appealed the decision of the ICAO and the court of appeals held that because 42 U.S.C. § 424a(d) (1988) permits a state to offset workers' compensation benefits, section 8-50-103 does not violate the Supremacy Clause of the United States Constitution. We granted certiorari to determine whether section 8-50-103 violates the Supremacy Clause. Both parties concede that section 42 U.S.C. § 424a(d) relates to disability benefits and does not apply to survivors' benefits. Although we affirm the result reached by the court of appeals, we disagree with the court of appeals analysis.

II

The preemption doctrine is derived from the Supremacy Clause in Article VI, Clause 2 of the United States Constitution. There are several ways Congress can preempt state law. Congress can expressly declare that states are precluded from legislating in an area of law. When Congress does not expressly preclude state legislation, state legislation may be preempted as a result of implied preemption or conflict preemption. See Pacific Gas & Elec. Co. v. State Energy Resources Conservation & Dev. Comm'n, 461 U.S. 190, 203-204, 103 S.Ct. 1713, 1722, 75 L.Ed.2d 752 (1983). The petitioners do not claim that express language exists anywhere in the Social Security Act which prohibits a state from offsetting social security survivors' benefits against workers' compensation death benefits. Instead, the petitioners maintain that Congress implicitly forbids states from offsetting social security survivors' benefits against workers' compensation death benefits and that the Colorado law interferes with, or contradicts, federal policy.

Preemption will be implied if the federal regulatory scheme is so pervasive, or the federal interest is so dominant, that state law must be assumed to be preempted. Implied preemption is sometimes referred to as a congressional intent to "occupy the field." Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 748, 105 S.Ct. 2380, 2393, 85 L.Ed.2d 728 (1985). To determine if a federal law implicitly preempts a state statute, a court must ascertain Congress' intent in enacting the federal statute. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 95, 103 S.Ct. 2890, 2899, 77 L.Ed.2d 490 (1983); see also CSX Transp., Inc. v. Easterwood, 507 U.S. 658, ----, 113 S.Ct. 1732, 1737, 123 L.Ed.2d 387 (1993) (stating that courts must seek "evidence of pre-emptive purposes ... in the text and structure of the statute"). Similarly, in determining whether a state law conflicts with a federal law: "The purpose of Congress is the ultimate touchstone." Retail Clerks Int'l Assoc., Local 1625 v. Schermerhorn, 375 U.S. 96, 100, 84 S.Ct. 219, 221, 11 L.Ed.2d 179 (1963).

An analysis of federal preemption issues begins with "the basic assumption that Congress did not intend to displace state law." Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 2129, 68 L.Ed.2d 576 (1981). When Congress legislates "in a field which the States have traditionally occupied" courts will not apply preemption unless that is the "clear and manifest purpose of Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947).

The petitioners contend that two provisions of the Social Security Act, 42 U.S.C. § 402 and 42 U.S.C. § 407, set forth a policy that is inconsistent with the Colorado offset provision in section 8-50-103 and thus Congress implicitly preempted the Colorado statute. Neither section 402 nor section 407 indicates that Congress intended to prohibit states from offsetting social security survivors' benefits against workers' compensation death benefits.

A

The petitioners assert that because Congress addressed the interrelationship between social security disability benefits and workers' compensation disability benefits, but was silent with regard to the interrelationship between social security survivors' benefits and workers' compensation death benefits, Congress intended to forbid states from offsetting survivors' benefits. ⁴

Section 424a allows the federal government to offset state workers' compensation disability benefits against social security disability benefits. 42 U.S.C. § 424a (1988). Congress also provided that if a state offsets federal social security benefits, the state offset prevails. Id. Therefore, the federal government is allowed to offset benefits unless the state enacts a reverse offset. ⁵ The petitioners contend that because 42 U.S.C. § 402 does not address the issue of federal or state offsets of benefits, Congress intended to prohibit states from offsetting survivors' benefits.

The petitioners rely on Raskin v. Moran, 684 F.2d 472 (7th Cir.1982), which addressed the issue of whether a Wisconsin statute was preempted by the Social Security Act. The state statute reduced the salaries of state reserve judges by an amount equal to their federal social security retirement benefits. The reserve judges contended that the statute was preempted by 42 U.S.C. § 403(f)(3) (1988). Section 403(f)(3) provides that any income earned after an individual's seventieth birthday will not be used to reduce his social security benefits. The Seventh Circuit held that the state statute was preempted by section 403(f)(3) and stated that although the state statutory offset did not directly affect the reserve judges' right to receive social security benefits, the effect of the offset was "the financial equivalent" of such a deprivation, and it represented "a clear frustration" of the purpose of the federal statute. Raskin, 684 F.2d at 479-80. The court based its decision on the "quite apparent underlying goals of the federal statute." Id. at 480.

Raskin held that section 403(f)(3) sets forth a clear statement of Congress' intent to prohibit offsetting social security retirement benefits against earned income. Courts that have interpreted Raskin have required an equally clear expression of Congress' intent before preempting a state statute. See Barnes v. District of Columbia, 611 F.Supp. 130, 134 (D.D.C.1985) (holding that a District of Columbia statute that reduced individuals' salaries dollar for dollar by the amount of their military pensions was not preempted because Congress did not express a "clear goal of protecting federal benefits"); Harris v. State Dep't of Labor & Industries, 120 Wash.2d 461, 843 P.2d 1056, 1060 (1993) (declining to infer preemption from Congress' silence because "42 U.S.C. § 424a does not contain clear evidence of...