RENDERED: DECEMBER 16, 2021
TO BE PUBLISHED
Supreme Court of Kentucky
2020-SC-0262-WC
MICHAEL O’BRYAN APPELLANT
ON APPEAL FROM COURT OF APPEALS
V. CASE NO. 2018-CA-1284
WORKERS’ COMPENSATION BOARD
NO. WC-15-80377
ZIP EXPRESS (CORRECTLY IDENTIFIED AS APPELLEES
RAMP LOGISTICS, LLC); COMMONWEALTH
OF KENTUCKY, EX REL. DANIEL
CAMERON, ATTORNEY GENERAL;
HONORABLE JONATHAN R. WEATHERBY,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS’ COMPENSATION BOARD
OPINION OF THE COURT
AFFIRMING
I. BACKGROUND
Michael O’Bryan was in an automobile accident in the course of his
employment for Zip Express on June 11, 2015. He was sixty-five years of age
at the time. O’Bryan sustained numerous injuries in the accident, leading to
his disability. An administrative law judge (ALJ) found O’Bryan to be
permanently totally disabled and awarded him benefits which would continue
so long as he remained disabled.
Both O’Bryan and Zip Express filed several petitions for rehearing from
the ALJ’s orders based on the termination of benefits pursuant to this Court’s
decision in Parker v. Webster Cnty. Coal, LLC, 529 S.W.3d 759 (Ky. 2017).
Parker held the then-effective 1996 version of KRS 342.730(4) (concerning the
termination of workers’ compensation benefits) unconstitutional on equal
protection grounds.
Once the Parker opinion became final, O’Bryan argued the 1994 version
of KRS 342.730(4)—which provided no cap in benefits based on a claimant’s
age—should apply to his case. After the parties filed petitions for
reconsideration based on the application of the 1994 statute, the ALJ entered
his final order on February 21, 2018, ordering that O’Bryan’s benefits continue
as long as he remains disabled, regardless of age. On March 22, 2018, Zip
Express appealed to the Workers’ Compensation Board, arguing the newly-
amended version of KRS 342.730(4) applied to O’Bryan’s benefits and they
should terminate when he attained the age of seventy. The statute had an
effective date of July 14, 2018; though the appeal was filed before the statute’s
effective date, Zip Express argued the new statute should apply in the case.
O’Bryan argued that the new statute was unconstitutional on several grounds,
but the Board (as an administrative body) lacked authority to consider the
constitutionality of the statute.
The Board issued its opinion on July 27, 2018—after the new statute’s
effective date. The Board held the amended statute controlled the case, as it
applied to all claims “that have not been fully and finally adjudicated” and “for
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which a date of injury . . . occurred on or after December 12, 1996.” Therefore,
the Board vacated the ALJ’s order and remanded the claim back to him to
enter an award terminating O’Bryan’s benefits at age seventy.
O’Bryan appealed the Board’s decision to the Court of Appeals. The
appellate court considered O’Bryan’s constitutional arguments, held the
statute was constitutional, and affirmed the Board. O’Bryan now appeals to
this Court, arguing KRS 342.730(4) is unconstitutional both on its face and as
retroactively applied to his claim, as the statute: (1) denies him equal
protection under the law; (2) denies his due process rights; (3) amounts to an
absolute and arbitrary power; (4) constitutes prohibited special legislation; and
(5) violates the requirement that all bills be read before each house in the
Kentucky Legislature. For the following reasons, we affirm the Court of
Appeals.
II. ANALYSIS
In Parker, 529 S.W.3d 759, this Court found the then-current version
of KRS 342.730(4) unconstitutional on equal protection grounds. The version
of the statute in effect at that time tied the termination of workers’
compensation benefits to the time at which the employee qualified for old-age
Social Security benefits. This Court found this was an arbitrary distinction
with no rational relation to a legitimate state interest. Id.
In Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019), this Court considered
whether a newly-amended version of KRS 342.730(4) could be applied
retroactively. Quoting a Legislative Research Commission comment beneath
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the statute, we held the amendment “applies to those cases which ‘have not
been fully and finally adjudicated, or are in the appellate process, or for which
time to file an appeal [h]as not lapsed, as of the effective date of this Act.’” Id.
at 44.
Whereas the pre-Parker version of KRS 342.730(4) linked workers’
compensation benefit termination to the time at which the worker qualified for
old-age Social Security benefits (and thereby violated an individual’s right to
equal protection under the law by arbitrarily treating similarly-situated
individuals differently), the new version of the statutory subsection links the
termination of benefits to the injured employee attaining a particular age.
Under the amendment, a claimant’s benefits terminate on his or her seventieth
birthday or four years after his or her work injury or exposure, whichever
occurs later. O’Bryan argues this statute is constitutionally infirm on multiple
grounds.
A. Equal Protection
O’Bryan first argues the amendment to KRS 342.730(4) violates his
rights to equal protection under the law, as guaranteed by the United States
and Kentucky Constitutions. The basis for his argument is that the
amendment treats older injured workers and younger injured workers
differently.
The 14th Amendment of the United States Constitution and Sections 1,
2, and 3 of the Kentucky Constitution contain the respective federal and state
equal protection clauses. Their “goal . . . is to ‘keep[ ] governmental decision
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makers from treating differently persons who are in all relevant respects alike.’”
Vision Mining, Inc. v. Gardner, 364 S.W.3d 455, 465 (Ky. 2011) (quoting
Nordlinger v. Hahn, 505 U.S. 1, 10 (1992)). Because “[w]orkers’ compensation
statutes concern matters of social and economic policy,” if a rational basis or
substantial and justifiable reason supports the classifications they create, we
must uphold them. Id. at 466 (citing Cain v. Lodestar Energy, Inc., 302 S.W.3d
39, 42 (Ky. 2009)). “In sum, we will uphold the age limitation here so long as it
rationally relates to a legitimate state objective.” Cates v. Kroger, 627 S.W.3d
864, 871 (Ky. 2021).
As this Court has stated, “acts of the legislature carry a strong
presumption of constitutionality.” Wynn v. Ibold, Inc., 969 S.W.2d 695, 696
(Ky. 1998). “Doubts regarding constitutionality must be resolved in favor of
upholding the law.” Cates, 627 S.W.3d at 870. Furthermore, “the principle of
reducing workers’ compensation benefits at an age when workers typically
become eligible for alternative forms of income replacement is not new to
Kentucky.” Wynn, 969 S.W.2d at 696.
We took up the constitutionality of the 2018 amendment to KRS
342.730(4) in Cates, 627 S.W.3d at 871, holding, “the current version of KRS
342.730(4) is not violative of the Equal Protection Clause because the age
classification is rationally related to a legitimate state purpose.” We do not
depart from that recent holding today.
As this Court held in Parker, “[t]he rational bases for treating younger
and older workers differently [are]: (1) it prevents duplication of benefits; and
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(2) it results in savings for the workers' compensation system.” 529 S.W.3d at
768. Four years later, we stated, “we remain convinced that preventing a
duplication of wage-loss protection programs and promoting the solvency of the
workers’ compensation system are legitimate state interests.” Cates, 627
S.W.3d at 870. We are unpersuaded to deviate from this position by O’Bryan’s
arguments that KRS 342.730(4) does not prevent duplicative income
replacement benefits, avoid duplicative governmental benefits, or provide a
savings for the workers’ compensation system; nor are we convinced that
savings to the workers’ compensation system is not a valid basis to uphold a
statute in the face of an equal protection argument. Again, today, we hold the
statute passes the rational basis test as it “treats alike all those who receive
workers’ compensation benefits.” Id. at 871.
O’Bryan argues that even if the statutory amendment were constitutional
on equal protection grounds (as we have held), it is unconstitutional to apply
the statute retroactively to his claim, as his injury occurred before the effective
date of the amendment. However, “[t]he legislature ‘may amend the law and
make the change applicable to pending cases, even when the amendment is
outcome determinative.’” Id. (quoting Bank Markazi v. Peterson, 578 U.S. 212
(2016)). Here, this Court declared one version of the statutory subsection
unconstitutional and the legislature passed a new subsection, providing for
retroactive effect—and the legislature was within constitutional bounds in so
doing.
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O’Bryan also contends the statute is unconstitutional because it leads to
the disparate treatment of similarly-situated individuals based upon whether
their cases were appealed. O’Bryan argues Zip Express appealed, seeking the
application of the new version of KRS 342.730(4), “for the sole purpose of
keeping the case alive until after July 14, 2018,” when the new statute would
become effective. We have no way of discerning the intentions of the parties in
the case—nor do we need to. As we held in Holcim, the statute “applies to
those cases which ‘have not been fully and finally adjudicated, or are in the
appellate process, or for which time to file an appeal [h]as not lapsed, as of the
effective date of this Act.’” 581 S.W.3d at 44. The legislature did not limit this
directive only to cases which had been appealed; rather, it applied to all cases
for which the appeals period had not lapsed. While this may lead to different
treatment of similar parties whose cases were initially decided by an ALJ at the
same time (one whose case was in the appellate process when KRS 342.730(4)
became effective and the other whose case was not appealed and became final
before the effective date), this does not present a constitutional infirmity. As
we have recognized:
As the United States Supreme Court opined, “[t]he ‘task of
classifying persons for . . . benefits . . . inevitably requires that
some persons who have an almost equally strong claim to favored
treatment be placed on different sides of the line,’ Mathews v.
Diaz, 426 U.S. 67, 83-84 (1976), and the fact the line might have
been drawn differently at some points is a matter for legislative,
rather than judicial, consideration.” [U.S. R.R. Retirement Bd. v.]
Fritz, 449 U.S. [166,] 179 [(1980)].
Teco/Perry Cnty. Coal v. Feltner, 582 S.W.3d 42, 48 (Ky. 2019).
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B. Due Process
O’Bryan next argues the retroactive application of KRS 342.730(4)
stripped him of his property right to workers’ compensation benefits in
violation of his due process rights, as he did not receive prior notice or a
hearing. He asserts the amendment was substantive, rather than remedial,
and, therefore, amounts to an unconstitutional deprivation of due process. We
addressed this issue in Cates, holding the claimants had no vested right in the
duration and amount of their benefits “until they have received a final
judgment in their favor.” 627 S.W.3d at 873. The same is true here. Because
O’Bryan had no vested right in the duration of his benefits, a statute
terminating them at a specific age did not deny him due process.
C. Absolute and Arbitrary Power
O’Bryan also contends KRS 342.730(4) is an exercise of absolute and
arbitrary power in conflict with his rights pursuant to Sections 1, 2, and 3 of
Kentucky’s Constitution. Specifically, Section 2 of the Kentucky Constitution,
reads, “[a]bsolute and arbitrary power over the lives, liberty and property of
freemen exists nowhere in a republic, not even in the largest majority.” Courts
in this Commonwealth have recognized for half a century that when a
“legislative body acts in a purported policy-making or law-making function . . .
the concept of what is ‘arbitrary’ is much more narrowly constricted . . . .” City
of Louisville v. McDonald, 470 S.W.2d 173, 178 (Ky. 1971). Such an action is
only “arbitrary if there is no rational connection between that action and the
purpose for which the body’s power to act exists. Where the existence of such
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rational connection is ‘fairly debatable’ the action will not be disturbed by a
court.” Id.
This Court has “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.” Cates, 627 S.W.3d at 869. KRS
342.730(4) does not amount to an absolute and arbitrary exercise of power.
D. Special Legislation
O’Bryan next argues KRS 342.730(4) violates Kentucky’s constitutional
provisions regarding special legislation found in Sections 59 and 60, as only
certain statutes amended in the bill containing the legislation were made
retroactive. He asserts the amendment applies only to injured older workers
rather than all injured workers. Section 59 of the Kentucky Constitution
states, in pertinent part:
The General Assembly shall not pass local or special acts
concerning any of the following subjects, or for any of the following
purposes, namely:
....
Fifth: To regulate the limitation of civil or criminal causes.
....
Twenty-fourth: To regulate labor, trade, mining or manufacturing. . . .
O’Bryan links this argument to his equal protection argument—
essentially arguing the legislation’s retroactivity is arbitrary. He also makes the
argument that older workers are discriminated against because, if they receive
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permanent partial disability benefits, they will not receive the entirety of their
awards, unlike younger injured workers. This is another attempt at making
the same argument, under a different veil. We reject it, too, as all injured
workers’ benefits terminate at age seventy under the amendment.
This Court addressed a similar special legislation argument in Cates, 627
S.W.3d at 872, holding the amended statutory subsection was not special
legislation as it did not apply “to a particular individual, object or locale.”
(Citing Calloway Cnty. Sheriff's Dep’t v. Woodall, 607 S.W.3d 557, 573 (Ky.
2020)). We held in Cates, “[t]he argument that the statute differentiates
between older and younger workers is a classification argument, which is
properly considered under sections 1, 2, and 3 of the Kentucky Constitution.”
Id. And, just as in Cates, we reiterate: “KRS 342.730(4) is simply not special
legislation.” Id.
E. Three Readings Requirement
Finally, O’Bryan argues the amendment to KRS 342.730(4) violated
Section 46 of the Kentucky Constitution, as it was not “read at length on three
different days” in the House of Representatives after the Senate amended the
bill. While he does not point the Court to the specific changes in the statute
between the readings in the House of Representatives and the bill’s passage in
the Senate, O’Bryan refers to them as “significant.” In fact, the original bill
read in the House specified that benefits would terminate at age sixty-seven or
two years after an accident or final injurious exposure. After the amendments
made in the House and Senate and the Senate’s Committee Substitute, the
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final bill did not terminate benefits until age seventy or four years after an
accident or exposure. While this is, in fact, “significant” in the respect that it
has the potential to entitle workers to three more years’ benefits, this change
was not so significant as to require the bill be re-read three times in the House.
As this Court has stated, “[o]f course, legislators may amend the text of a
bill between its readings without running afoul of § 46.” Bevin v.
Commonwealth ex rel. Beshear, 563 S.W.3d 74, 91 (Ky. 2018). The Legislature
did not have to read House Bill 2 into the record three more times in order to
comport with Section 46. Here, “the revised text is some variation of the
original text and remains consistent with the theme reflected in the title of the
bill.” Id.
III. CONCLUSION
For the foregoing reasons, we affirm the Court of Appeals and remand
this matter to the ALJ for further proceedings consistent with this opinion.
All sitting. All concur.
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COUNSEL FOR APPELLANT:
Derek P. O’Bryan
Louisville, Kentucky
COUNSEL FOR APPELLEE:
R. Christion Hutson
Whitlow, Roberts, Houston & Straub, PLLC
COUNSEL FOR APPELLEE, COMMONWEALTH OF KENTUCKY, EX REL.
DANIEL CAMERON, ATTORNEY GENERAL:
Matthew F. Kuhn
Brett R. Nolan
Alexander Y. Magera
ADMINISTRATIVE LAW JUDGE:
Hon. Jonathan R. Weatherby
WORKERS’ COMPENSATION BOARD:
Michael W. Alvey
Chairman
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