RENDERED: APRIL 15, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-0657-WC
JOANN CONN APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-18-82691
INGRAM MICRO; HONORABLE
JONATHAN R. WEATHERBY,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION
BOARD APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, GOODWINE, AND LAMBERT, JUDGES.
LAMBERT, JUDGE: JoAnn Conn has petitioned this Court for review of the
decision of the Workers’ Compensation Board (the Board) affirming the opinion
and order of the Administrative Law Judge (ALJ) awarding her permanent, partial
disability benefits pursuant to the 2018 version of Kentucky Revised Statutes
(KRS) 342.730(4). The sole issue on appeal addresses the constitutionality of this
statute, including whether it may be retroactively applied. Because the Supreme
Court of Kentucky has upheld the constitutionality and retroactive application of
the 2018 version of KRS 342.730(4), we affirm.
Conn, who was born on August 29, 1952, began working for Ingram
Micro in 2008. She injured her right shoulder in a work-related accident on March
31, 2018, after which she developed compensatory symptoms in her left shoulder.
She filed an application for resolution of her injury claim on March 24, 2020. At
the time she filed her claim, Conn continued to work for Ingram Micro. Following
the benefit review conference, the contested issues were the amount of benefits
Conn was entitled to be awarded, the constitutionality of KRS 342.730(4), and
whether she was entitled to a multiplier. The ALJ found that Conn had sustained a
13% whole person impairment due to her shoulder impairments and that she was
permanently, partially disabled as a result. The ALJ also found that Conn did not
retain the ability to perform the same type of work that she did prior to the injury.
Therefore, Conn was entitled to the three multiplier pursuant to KRS
342.730(1)(c)1. By application of the 2018 version of KRS 342.730(4), the ALJ
stated that Conn’s permanent, partial disability (PPD) benefits were to terminate as
of the date she reached the age of 70.
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Conn appealed the constitutionality issue to the Board, which affirmed
in an opinion entered May 14, 2021. Conn argued that she was entitled to 425
weeks of PPD benefits pursuant to the 1994 version of KRS 342.740 as the
Supreme Court found the 1996 version, which included an old age Social Security
cutoff, to be unconstitutional in Parker v. Webster County Coal, LLC (Dotiki
Mine), 529 S.W.3d 759 (Ky. 2017), superseded by statute as stated in Cates v.
Kroger, 627 S.W.3d 864 (Ky. 2021). Retrospective application of the 2018
version of the statute, she argued, violated her equal protection rights and the
contracts clause of the United States and Kentucky Constitutions. The Board noted
that the Supreme Court of Kentucky had determined in Holcim v. Swinford, 581
S.W.3d 37 (Ky. 2019), that the amended 2018 version of KRS 342.730(4) had
retroactive application. Therefore, it affirmed the ALJ’s award of benefits subject
to the 2018 version of the statute. This petition for review now follows.
On appeal, Conn seeks review of the constitutionality of the 2018
amendment to KRS 342.730(4) and its retroactive application. She argues that the
version of KRS 342.730(4) in effect at the time of her injury controlled and that
her rights had become fixed and vested on that date. Ingram Micro disputes
Conn’s arguments and also asserts that she failed to properly preserve the
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constitutionality issue by not joining the Attorney General until she filed her brief
with the Board.1
This Court’s standard of review in workers’ compensation appeals is
well-settled in the Commonwealth. “The function of further review of the [Board]
in the Court of Appeals is to correct the Board only where [the] Court perceives the
Board has overlooked or misconstrued controlling statutes or precedent, or
committed an error in assessing the evidence so flagrant as to cause gross
injustice.” Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).
While this petition was pending, the Supreme Court rendered two
opinions addressing the current version of KRS 342.730(4). In Cates v. Kroger,
627 S.W.3d 864 (Ky. 2021), and Dowell v. Matthews Contracting, 627 S.W.3d 890
(Ky. 2021), the Supreme Court upheld the constitutionality of the current version
and its retroactive application as we shall set forth below.
In Cates, the Supreme Court set forth the legislative and legal history
of the amendments to KRS 342.730(4) to provide a context to its analysis:
Before we undertake our analysis, we review for
context two of our recent holdings addressing the
General Assembly’s efforts to establish an outer limit on
the receipt of workers’ compensation income benefits. In
Parker v. Webster County Coal, LLC, a majority of this
Court invalidated the 1996 version of KRS 342.730(4).
That statute read:
1
Any error in preservation is moot as the Supreme Court has spoken on this issue.
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All income benefits payable pursuant to this
chapter shall terminate as of the date upon
which the employee qualifies for normal
old-age Social Security retirement benefits
under the United States Social Security Act,
42 U.S.C. secs. 301 to 1397f, or two (2)
years after the employee’s injury or last
exposure, whichever last occurs.
The majority in Parker found the statute
unconstitutional for two reasons: (1) the statute created
an arbitrary classification because the benefit cut-off date
was dependent upon when the recipient received old-age
social security benefits and (2) the statute was special
legislation because it favored those who would not
receive old-age social security benefits and disfavored
those who would receive such benefits. Importantly,
even though Parker invalidated the 1996 version of the
statute, it reaffirmed this Court’s prior precedent in which
we 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. We said in
Parker,
The rational bases for treating younger and
older workers differently is (1) it prevents
duplication of benefits; and (2) it results in
savings for the workers compensation
system. Undoubtedly both of these are
rational bases for treating those who, based
on their age, have qualified for normal
Social Security retirement benefits
differently from those who, based on their
age, have yet to do so.
[Parker, 529 S.W.3d at 768.]
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Shortly after our holding in Parker, the General
Assembly in 2018 enacted a new version of KRS
342.730(4) to read:
All income benefits payable pursuant to this
chapter shall terminate as of the date upon
which the employee reaches the age of
seventy (70), or four (4) years after the
employee’s injury or last exposure,
whichever last occurs. In like manner all
income benefits payable pursuant to this
chapter to spouses and dependents shall
terminate as of the date upon which the
employee would have reached age seventy
(70) or four (4) years after the employee’s
date of injury or date of last exposure,
whichever last occurs.
This change purported to rectify the shortcomings
of the 1996 version as identified in Parker by untethering
the cessation of a claimant’s workers’ compensation
income benefits from the receipt of old-age social
security retirement benefits, a benefit that Parker
identified as not available to Kentucky’s retired teachers.
The new statute now limits the duration of benefits by
linking cessation for all income beneficiaries to the later
of two events (1) reaching age 70, or (2) four years after
injury or last injurious exposure.
In Holcim v. Swinford[, 581 S.W.3d at 42,] we
addressed retroactive application of the 2018 amendment.
While not explicitly stated in the statute as codified, we
found a clear legislative intent that the amendment apply
retroactively to all claims where (1) the injury occurred
after December 1997 and (2) has not been fully and
finally adjudicated through the appellate process, or for
which time to file an appeal has not lapsed, as of the
effective date of the Act, July 14, 2018. We declined to
address the constitutionality of its effect, or the
constitutionality of the amendment’s text because those
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issue[s] were not argued until after the Court of Appeals
had rendered its opinion. The cases at hand now present
the issue remaining after Holcim, which is the
constitutionality of the amendment and its retroactive
application.
Cates, 627 S.W.3d at 868-70 (footnotes omitted).
The Cates Court first held that the 2018 amendment to KRS
342.730(4) did not violate the equal protection clause under either the 14th
Amendment to the United States Constitution or §§ 1, 2, and 3 of the Kentucky
Constitution:
[W]e find the 2018 amendment classifies recipients based
only on age, entirely unrelated to their old-age social-
security eligibility. This age classification prevents a
duplication of benefits, which we have found, to be a
legitimate state interest and applies to all those receiving
workers’ compensation equally. So 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.
Cates, 627 S.W.3d at 871. The Court then held that the retroactive application of
the 2018 amendment to KRS 342.730(4) did not create an arbitrary class of
litigants:
We find here no arbitrary exercise of legislative
authority in the retroactive application of the amendment.
After Parker, the General Assembly acted swiftly to
amend the statute to fill the statutory gap with
constitutional norms. The legislature “may amend the
law and make the change applicable to pending cases,
even when the amendment is outcome determinative.”
Because the 1996 version had been invalidated and a new
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version enacted, the General Assembly was left to decide
if pending claims would be governed by the 1994 version
of the statute – a statute that had not been in effect for
over 20 years – or to allow for current claims to be
decided under the new amendment. The legislative body
apparently chose the latter, and that choice was its
prerogative.
Id. 871-72 (footnotes omitted).
In Dowell, the Supreme Court addressed whether the 2018
amendment to KRS 342.730(4) violated the federal and state contracts clause.
Adams and Dowell both argue that applying the
current version of KRS 342.730(4) to their claims
violates the Contracts Clause of both the United States
and Kentucky Constitution. Article 1, Section 10, Clause
2 of the United States Constitution reads:
No State shall enter into any Treaty,
Alliance, or Confederation; grant Letters of
Marque and Reprisal; coin Money; emit
Bills of Credit; make any Thing but gold and
silver Coin a Tender in Payment of Debts;
pass any Bill of Attainder, ex post facto
Law, or Law impairing the Obligation of
Contracts, or grant any Title of Nobility.
Similarly, Section 19 of the Kentucky Constitutions
provides, “No ex post facto law, nor any law impairing
the obligation of contracts, shall be enacted.”
627 S.W.3d at 894. However, the Supreme Court did not perform a Contracts
Clause analysis in this case “because the Workers’ Compensation Act (WCA) does
not constitute a contract between Kentucky workers and their employers or the
state. Instead, the WCA is a statutory scheme that may be amended as the General
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Assembly chooses, provided it fits within our constitutional framework.” Id. at
894-95.
The workers’ compensation system is controlled
by the state and is governed by legislative enactments. It
is not a contract . . . between employers and their
employees. Changes to the relevant statutes, therefore,
do not create a Contracts Clause issue. While changes to
statutes may result in other constitutional issues, such as
a violation of due process or constitute special
legislation, a Contracts Clause issue is impossible in this
matter because there is simply no contract or contractual
right for the statutory amendment to impair.
Id. at 896 (footnote omitted).
The Supreme Court then addressed the retroactivity issue in the
context of a claimant’s right to a certain duration or amount of benefits received.
Dowell and Adams argue that applying the new
version of KRS 342.730(4) is unconstitutional because
they have a vested right to the benefits assigned to them
by the ALJ and Workers’ Compensation Board. We
have also briefly addressed this argument in a companion
opinion, also rendered today, Cates v. Kroger. We will
address it here to clarify that litigants like Adams and
Dowell do not have a vested right to certain benefits.
While they have a vested right to some benefits by
statute, they do not have a vested right to “certain”
benefits until their claim for benefits has been determined
by final order.
A benefits-recipient’s right to compensation
becomes fixed and vests on the date of the injury. The
right to receive benefits is a substantive issue and the
injury date is controlling under substantive law. We have
long held “that where a suit has been instituted under a
statute giving a cause of action and a right to maintain
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such action, and once the action has been prosecuted to
final judgment, and the rights of the parties fixed, such
rights then become vested in the judgment, and thereafter
a legislature can pass no law which impairs the validity
of the vested right thus obtained.” [City of Paris v.
Kentucky Utils. Co., 280 Ky. 492, 133 S.W.2d. 559, 561
(1939).] So, Dowell and Adams have a vested,
substantive right to litigate their benefits, a right that
cannot be taken away by statutes that have since come
into existence since filing their claim. But in contrast,
their right to a certain duration or amount of benefits has
not vested and will not do so until they receive a final
decision of their claims. So, the 2018 amendment to
KRS 342.730(4) “[does] not create new or take away
vested rights” of plaintiffs like Adams and Dowell, and
its retroactive application is constitutional.
Because Adams’s and Dowell’s benefits have not
been completely litigated, their potential awards must
conform with the changes in the applicable law effective
during the litigation process. And in Holcim we found
that the legislature intended the law to apply to all claims
currently pending. So the 2018 amendment applies to
Dowell and Adams even though the only issue left to
litigate is the effect of the 2018 amendment on the
duration of their benefits. While we agree with Adams
that the 2018 amendment impairs his benefits award,
Adams had no vested right in the outcome of his claim
before the ALJ or the Board. As we stated in Martin v.
Warrior Coal, LLC, [671 S.W.3d 391, 397-98 (Ky.
2021),] the legislature intended for the 2018 amendment
of KRS 342.730(4) to apply to all pending appeals, and
Adams’s appeal was pending when the Court of Appeals
ruled. In fact, the case is still not fully litigated.
Likewise, Dowell’s benefits claim was decided
after we had invalidated the 1996 amendment and the
ALJ and the Board resurrected the 1994 version of the
statute as applicable to Dowell’s claim. By the time
Dowell’s appeal reached the Court of Appeals, the 2018
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amendment had become effective, and we had
determined the statute applied retroactively. So Dowell’s
benefits were not final then and are not now. Because
Dowell’s award is still being litigated, we find the 2018
amendment to KRS 342.730([4]) controls.
As we stated in Cates v. Kroger, “we reiterate our
holding in Holcim that the legislature intended for the
new amendment to apply to all pending appeals with
injury dates occurring after December 1996.” We are
bound by the text of the statute and unless it conflicts
with a constitutional provision, we must uphold the laws
the legislature has enacted. Neither Adams nor Dowell
had a vested right to certain benefits, only a right to some
benefits that are to be determined under current law.
Dowell, 627 S.W.3d at 897-98 (footnotes omitted).
The above-cited cases constitute binding authority of the Supreme
Court of Kentucky, which this Court must follow pursuant to Supreme Court Rule
(SCR) 1.030(8)(a) (“The Court of Appeals is bound by and shall follow applicable
precedents established in the opinions of the Supreme Court and its predecessor
court.”). Because Conn’s injury occurred after 1996 and her award of benefits is
still being litigated, the 2018 amendment to KRS 342.730(4) controls in this case.
For the foregoing reasons, the opinion of the Workers’ Compensation
Board affirming the ALJ’s award is affirmed.
ALL CONCUR.
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BRIEF FOR APPELLANT: BRIEF FOR APPELLEE INGRAM
MICRO:
Stephanie N. Wolfinbarger
Louisville, Kentucky Rodney J. Mayer
Louisville, Kentucky
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Joann Conn v. Ingram Micro
Combined Opinion