RENDERED: APRIL 22, 2022; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-0627-WC
GREGG ROBERTS APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-17-55817
COMMONWEALTH DODGE;
DANIEL CAMERON, ATTORNEY
GENERAL; HONORABLE
JONATHAN WEATHERBY,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION
BOARD APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, LAMBERT, AND K. THOMPSON, JUDGES.
LAMBERT, JUDGE: Gregg Roberts has petitioned this Court for review of the
April 10, 2020, opinion of the Workers’ Compensation Board (the Board)
affirming the May 28, 2019, opinion and award of the Administrative Law Judge
(ALJ). The ALJ directed that Roberts’ award of permanent, partial disability
(PPD) benefits would terminate pursuant to the 2018 version of Kentucky Revised
Statutes (KRS) 342.730(4). We affirm.
Roberts, who has a date of birth of January 16, 1955, began working
as an auto parts driver for Commonwealth Dodge in August 2015. Roberts
sustained an injury to his abdominal area during the course of his employment on
October 3, 2017, when he was lifting a part, which caused him to develop a hernia.
He filed an application for resolution of his injury claim on October 19, 2018.
Contested issues after the benefit review conference included the duration of
benefits pursuant to KRS 342.730.
The ALJ entered an opinion and award on May 28, 2019, finding that
Roberts had a 9% impairment due to his work injury and awarded him PPD
benefits along with a three-multiplier pursuant to KRS 342.730(1)(c)1. because he
was no longer able to return to the same type of work. The benefits were to
“terminate pursuant to KRS 342.730(4).” The ALJ did not address the
constitutionality issue that had been raised as he lacked the authority to do so. On
Roberts’ petition for reconsideration, the ALJ entered an amended award and order
on June 18, 2019. This order provided that Roberts would receive PPD benefits
for 425 weeks but that “[a]ll benefits shall terminate pursuant to KRS 342.730(4)
as amended by House Bill 2 effective July 14, 2018.”
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Roberts appealed the ALJ’s decisions to the Board, naming the
Attorney General as a respondent. On Roberts’ motion, the Board placed the
appeal in abeyance pending a final decision by the Supreme Court of Kentucky in
Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019). The matter was later removed
from abeyance, and the parties filed supplemental briefs. On April 10, 2020, the
Board affirmed the ALJ’s decision, holding that Roberts had failed to properly
preserve his constitutional argument at the benefits review conference as this was
not specifically listed as a contested issue and that the Attorney General was not
provided with the required notice prior to the entry of the ALJ’s decision pursuant
to KRS 418.075. Even if the issue had been preserved, the Board stated it would
have affirmed the ALJ’s decision based upon the holding in Holcim, in which the
Supreme Court held that the 2018 version of KRS 342.730(4) had retroactive
application. This petition for review now follows.1
On appeal, Roberts argues that the ALJ erred in finding that his PPD
award was subject to the current version of KRS 342.730(4) by applying it
retroactively as doing so violated the Contracts Clause of the United States and
Kentucky Constitutions and constituted an exercise of arbitrary power. In addition,
he argued that the ALJ erred in finding he had not preserved his arguments. Both
1
The petition was held in abeyance to permit the Supreme Court of Kentucky to reach a final
decision in Adams v. Excel Mining, LLC, 2020-SC-0137-WC, which was decided together with
Dowell v. Matthews Contracting, 627 S.W.3d 890 (Ky. 2021).
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Commonwealth Dodge and the Attorney General argue that the ALJ properly
applied the current version of KRS 342.730(4) to Roberts’ award based upon the
relevant caselaw.
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): Cates v. Kroger, 627
S.W.3d 864 (Ky. 2021), and Dowell v. Matthews Contracting, 627 S.W.3d 890
(Ky. 2021). As stated in the Attorney General’s response, the Supreme Court has
now upheld the constitutionality of the current version of this statute as well as its
retroactive application, as 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 [(Dotiki Mine), 529
S.W.3d 759 (Ky. 2017),] a majority of this Court
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invalidated the 1996 version of KRS 342.730(4). That
statute read:
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.
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[Parker, 529 S.W.3d at 768.]
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 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
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the constitutionality of its effect, or the constitutionality
of the amendment’s text because those issued 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.”
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Because the 1996 version had been invalidated and a new
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. at 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
[1] 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.”
Dowell, 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
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employers or the state. Instead, the WCA is a statutory scheme that may be
amended as the General 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 on 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.
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
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long held “that where a suit has been instituted under a
statute giving a cause of action and a right to maintain
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.” 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, [617 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 Roberts’ injury occurred after 1996 and his award of benefits is
still being litigated, the 2018 amendment to KRS 342.730(4) controls in this case.
Based upon our holding, we need not address the preservation issue.
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
COMMONWEALTH DODGE:
Wayne C. Daub
Louisville, Kentucky Felicia A. Snyder
Lexington, Kentucky
BRIEF FOR APPELLEE DANIEL
CAMERON, ATTORNEY
GENERAL OF KENTUCKY:
Matthew F. Kuhn
Brett R. Nolan
Alexander Y. Magera
Frankfort, Kentucky
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