Collins v. American Buslines, Inc.

STRUCKMEYER, Justice

(dissenting).

I agree with the majority of this court in their conclusion that the decedent was regularly employed in the state of Arizona and concur that Industrial Commission v. Watson Bros. Transp. Co., 75 Ariz. 357, 256 P.2d 730, be overruled as to that portion of the opinion which places a contrary interpretation upon the phrase “regularly employed”. However, I cannot agree with the conclusion of the majority that the Arizona Industrial Commission is without jurisdiction to award compensation to the dependents of Adolphus Henry Collins.

Deceased was employed by respondent-employer, American Buslines, Inc., as a bus driver on a run from Los Angeles, California, to Phoenix, Arizona, and return. While driving a bus in the regular course of employment he was killed in an accident occurring in Arizona. An employee, “regu*230larly employed” in Arizona, is compensated by the Arizona law for injuries incurred in the course of his employment; his dependents are compensated in the event of his death. Seemingly in California, if California is the place of employment, an injured employee or his dependents are compensated for injuries or death occurring both inside and outside of the state. Thus the Collins dependents, being covered by the laws of both states, would ordinarily be able to recover compensation in either.

That petitioner has very substantial rights of which she is deprived by the decision in this case becomes apparent in the light of certain additional facts. Petitioner’s claim for compensation filed with the Industrial Commission discloses that decedent’s average monthly wage was approximately $700 and that he left surviving in addition to petitioner, as widow, a child of the approximate age of one month. By Section 56-953, A.C.A.1939, amended by laws of 1954, petitioner as surviving widow is entitled to receive thirty-five per cent of decedent’s average monthly wage until death or remarriage, and the child an additional fifteen per cent until such child reaches the age of eighteen years. Fifty per cent of decedent’s average monthly wage is $350 a month. Under the laws of the state of California the maximum that petitioner and surviving child can receive, assuming they receive the maximum, is $30 per week for 240 weeks, 2 Larson, Workmen’s Compensation, Table 15, page 546. The difference between what the laws of the state of Arizona and the laws of the state of California give to petitioner and her child, if extended to the child’s eighteenth birthday, is nearly $70,000.

This court held in Industrial Commission v. Watson Bros. Transp. Co., supra, hereinafter referred to as the Watson- Bros, case, that if an employer paid a premium under the law of another state to insure employees engaged exclusively:in interstate commerce, it would unduly burden such commerce to permit the extraction of:. a . second premium in this state to cover fife same employees for the risks of the:-same trips. It was assumed without being stated or discussed that Arizona in seeking to collect premiums for its state compensation fund imposed the undue burden upon interstate commerce. That assumption is adhered to by the majority of the court in arriving at a decision in this case, Since it is this basic assumption on which the decisions in both cases rest, it deserves a somewhat extended analysis.

If the Workmen’s Compensation Acts of neither the states of California nor Arizona covered employees engaged in. interstate commerce, no premium would be extracted so that obviously there would be no burden on interstate commerce. If the Workmen’s Compensation Act of either state — and not the other — covered employees engaged in interstate commerce, the extraction of a premium by the law of such state would not unduly burden interstate *231commerce. Hall v. Industrial Commission, 131 Ohio St. 416, 3 N.E.2d 367. If the Workmen’s Compensation Acts of both states afforded coverage to employees engaged in interstate commerce and if both sought to extract a premium for such coverage wherever the employee traveled in interstate commerce, the employer would be compelled by the conjoined effect of the two state laws to pay a double or multiple premium for coverage of the same risk.1 If the employer is unable to escape the payment of such premium, either in one state or the other, an undue burden is imposed upon interstate commerce. In order to avoid this undue burden on interstate commerce either it must be held that both states impose the undue burden or that one but not the other unduly burdens interstate commerce. To hold that both states impose the burden leads to the undesirable result that employees engaged exclusively in interstate commerce are without coverage of any kind. The problem is therefore resolved to the determination of which state’s laws should be given effect for if one has a greater or superior right to the enforcement of its Workmen’s Compensation Act, then it is the other which imposes the burden.

It is my opinion that where as in this case the deceased was regularly employed in Arizona and the accident occurred in Arizona and the laws of the state of Arizona specifically provide compensation, it ought not to be held that the state of Arizona is unable to, does not have the jurisdiction to award compensation, for the result is to hold that the constitution and the laws of the state of Arizona in Arizona become and are subordinate to the laws of the state of California. The laws of the state of Arizona operating within the territorial limits of Arizona should be held to be paramount and superior to the laws of the state of California having extra-territorial effect. Clearly the decision in this case, having the opposite result, abdicates a portion of the sovereignty of the State to the legislature of another state and in so doing must have disregarded sound legal principles which ought to control its disposition.

The constitution of this state unequivocally demands the payment of compensation to the deceased’s dependents:

“The legislature shall enact a Workmen’s Compensation Law applicable to workmen engaged in manual or mechanical labor * * * by which compensation shall be required to be paid to any such workman in case of his injury and to his dependents * * in case of his death, * * * ”. (Emphasis supplied.) Article 18, Section 8, Constitution of Arizona.

*232There are no conditions attached to this constitutional mandate. The compensation must be paid to the employees designated •by the legislature. That designation is equally explicit and mandatory:

“Every employee,2 3 hereinbefore designated, who is injured, and the dependents of every such employee who is killed, by accident arising out of and in the course of his employment, wheresoever such injury has occurred, unless purposely self-inflicted, shall be entitled to receive, and shall be paid such compensation for loss sustained on account of such injury or death, and such medical, nurse and hospital services and medicines, and such amount of funeral expenses, in case of death, as are herein provided.” (Emphasis supplied.) Section 56-931, A.C.A.1939.

The compulsory and mandatory nature of the constitution and implementing statutes has been recognized by this court in positive and unequivocal language:

“ * * * This act, so far at least as the employer is concerned, is compulsory in its nature; he has no option as to whether he shall accept or reject it, and the whole language both of the constitutional amendment authorizing it and of the act itself shows clearly that they were based, * * * upon the inherent right of the state, recognized by the Supreme Court of the United States in the cases above cited, by virtue of its police power to establish certain rules regulating the status of employer and employee. We therefore hold that the present Arizona Workmen’s Compensation Act is neither elective nor contractual in its nature, ' but, on the contrary, that it rests upon the police power to regulate the status of employer and employee within the state of Arizona, and that no contract, express or implied, made within or without the state of Arizona, unless expressly so authorized by our law, can of itself affect the rights and duties of such status. It is governed, so far as this subject is concerned, solely by the provisions of the Arizona statutes, and nothing else. The right of Goodson to recover compensation, so far as the Arizona tribunals are concerned, therefore, was governed by the Workmen's Compensation Act of Ari*233zona, and the California statute would apply only in so far as the Arizona statute expressly allowed it to do so.” (Emphasis supplied.) Ocean Accident and Guarantee Corporation v. Industrial Commission, 32 Ariz. 275, 282, 257 P. 644, 646.

Since, by the explicit language of the constitution, the statute and prior judicial construction, it cannot be denied that petitioner is entitled to compensation in Arizona for the death of her husband, it would seem to follow logically that the Industrial Commission of this state has jurisdiction to award such compensation and it must be awarded unless the state of Arizona or its laws be held subordinated to the state of California or its laws within the territorial borders of Arizona. Such a result is contrary to the public policy of this state and conflicts with accepted judicial construction. The doctrine of comity by which foreign laws are given effect yields to the positive law of the forum where the governmental interest of the forum is superior to the interests of the foreign jurisdiction.

“ * * * A rigid and . literal enforcement of the full faith and credit clause, without regard to the statute of the forum, would lead to the absurd result that, wherever the conflict arises, the statute of each state must be enforced in the courts of the other, but cannot be in its own. Unless by force of that clause a greater effect is thus to be given to a state statute abroad than the clause permits it to have at home, it is unavoidable that this Court determine for itself the extent to which the statute of one state may qualify or deny rights asserted under the statute of another. [Citing cases.]
“The necessity is not any the less whether the statute and policy of the forum is set up as a defense to a suit brought under the foreign statute or the foreign statute is set up as a defense to a suit or proceedings under the local statute. In either case, the conflict is the same. In each, rights claimed under one statute prevail only by denying effect to the other. In both the conflict is to be resolved, not by giving automatic effect to the full faith and credit clause, compelling the courts of each state to subordinate its own statutes to those of the other, but by appraising the governmental interests! of each jurisdiction, and turning the scale of decision according to their weight.
“The enactment of the present statute of California was within state power and infringes no constitutional provision. Prima facie every state is ■entitled to enforce in its own courts its own statutes, lawfully enacted. One who challenges that right, because of the force given to a conflicting statute of another state by the full faith and credit clause, assumes the burden of showing, upon some rational basis» *234that of the conflicting interests involved those of the foreign state are superior to those of the forum. * * ” Alaska Packers Association v. Industrial Accident Commission, 294 U.S. 532, 55 S.Ct. 518, 523, 79 L.Ed. 1044.

And see Buckingham Transp. Co. v. Industrial Commission, 93 Utah 342, 72 P.2d 1077.

The conflict of laws is to be resolved in favor of the state where the injury occurs:

“ * * * Under these circumstances, the governmental policy of California weighs more heavily in the scale of decision than the law of Massachusetts, and the conflict in laws must be resolved in favor of the state where the injury occurred.” Pacific Employers Insurance Co. v. Industrial Accident Commission, 10 Cal.2d 567, 75 P.2d 1058, 1063;

affirmed in the Supreme Court of the United States:

’ “Full faith and credit does not here enable one state to legislate for the other or to project its laws across state lines so as to preclude the other from prescribing for itself the legal consequences of acts within it.” Pacific Employers Insurance Co. v. Industrial Accident Commission, 306 U.S. 493, 59 S.Ct. 629, 634, 83 L.Ed. 940;

andáis in accord with the experts in the field.of workmen’s compensation:

“In short, so long as there are conflicting but real governmental interests in two jurisdictions, the worker ordinarily has Ms choice of collection in either the place of hire or place of injury or place of business localization. This is a valuable right, as in one state the medical rights might be limited to $400 and his compensation rights to $5,000, whereas in the other, medical bills and compensation might be unlimited and could amount to over $15,-000 each. The employee’s or dependent’s rights, if based upon a real interest, depend on the law of the forum which he voluntarily chooses. The full faith and credit clause of the federal constitution is usually held not to be a bar to the employee’s choice or election so long as it is obnoxious to the law of the forum to refuse him the local remedy or to refer him to the other state.” Horovitz, Injury and Death under Workmen’s Compensation Laws, p. 39.
“ * * * The view that, whatever other arrangements it may make about applicability, each state should unreservedly take responsibility for injuries within its borders rests not upon any survival of delictual conflicts rules but on simple statutory construction, on the unavoidable interest of the state in an injury which may affect its own citizens more than those of any other state, and on the desirability of providing a backstop liability to which claimant can turn when he finds himself on the wrong side of all other extraterri*235torial rules.” 2 Larson, Workmen’s Compensation, 385, Sec. 87.25.

Not only does the public policy of this state, require that a workman be compensated for injuries or that his dependents be compensated in case of his death, but it requires that the compensation be in the manner and in the amount as the laws of this state provide. Anything less or different is not only in derogation of and contrary to the avowed general welfare of this sovereignty but denies to an injured employee or his dependents, as the case may be, the equal protection of laws required by the constitution of this state, Article 2, Section 13, and the constitution of the United States.

“The equal protection clauses of the 14th Amendment and the state constitution have for all practical purposes the same- effect. They constitute a guaranty that all persons subject to ■state legislation shall be treated alike under similar circumstances and conditions in the privileges conferred and liabilities imposed.” Valley National Bank of Phoenix v. Glover, 62 Ariz. 538, 554, 159 P.2d 292, 299.
"The equal protection of the laws is ‘a pledge of the protection of equal láws’. Yick Wo v. Hopkins, 118 U.S. 356, 369, 6 S.Ct. 1064, 1070, 30 L.Ed. 220 [226]. Manifestly, the obligation of the State to give the protection of equal laws can be performed only where its laws operate, that is, within its own jurisdiction. It is there that the equality of legal right must be maintained. That obligation is imposed by the Constitution upon the states severally as governmental entities,— each responsible for its own laws establishing the rights and duties of persons within its borders. It is an obligation the burden of which cannot be cast by one State upon another, and no State can be excused from performance by what another State may do or fail to do. That separate responsibility of each State within its own sphere is of the essence of statehood maintained under our dual system. It seems to be implicit in respondents’ argument that if other States did not provide courses for legal education, it would nevertheless be the constitutional duty of Missouri when it supplied such courses for white students to make equivalent provision for negroes. But that plain duty would exist because it rested upon the State independently of the action of other States. We find it impossible to conclude that what otherwise would be an unconstitutional discrimination, with respect to the legal right to the enjoyment of opportunities within the State, can be justified by requiring resort to opportunities elsewhere. That resort may mitigate the inconvenience of the discrimination but cannot serve to validate it.” State of Missouri ex rel. Gaines v. Canada, 305 U.S. 337, 59 S.Ct. 232, 236, 83 L.Ed. 208.

*236The consequence of the majority holding in both this and the Watson Bros, case leads to the absurd result, in the language of Alaska Packers Association v. Industrial Accident Commission of California, supra, that the statutes of this state cannot be enforced in this state or in the courts of this state because of an obligation claimed to be incurred under the statutes of the state of California. The people of Arizona acting through their legislature, so long as these decisions stand unreversed, are barred from the exercise of the right inherent in every sovereignty — to pass laws for the internal regulation and government of the state necessary to preserve the public order and promote the general welfare. Workmen within Arizona engaged in interstate commerce become victims of the whims and .vagaries of the various legislatures of the remaining forty-seven states depending upon where the employer procures his insurance. And: ■

“ * * *' As the Pacific Employers cáse held, the physical presence of the injured man within the state must' concern the state. His medical and' hospital bills are owed to local residents, who should not be required to go to foreign states for payment; the witnesses to the accident are within the state, and most of the best evidence bearing on the circumstances of the injury; the state’s safety laws and standards may be involved'; and, as the Alaska Packers case stressed, the mere presence of a disabled and desti--tute human being within a state’s borders is a social problem of concern to that state since the man may become a public charge if not provided for by compensation law.” 2 Larson, Workmen’s Compensation, 382, Section 87.23.

It therefore appears that the assumption in the Watson Bros, case that Arizona would unduly burden interstate commerce in enforcing its Workmen’s Compensation Act by requiring the payment of premiums to the state compensation fund is unsound. That unsoundness has contaminated the opinion in this case leading to the complete denial of petitioner’s rights as expressed in the constitution and laws of this state. A decision so unsound in principle and so harsh and unjust in result should be positively and unambiguously reversed.

Now, I have said that it is my opinion that the Watson Bros, case should be reversed but since the principle established is being adhered to as the law of this jurisdiction, a recognition of the limitations of the' holding therein will do much to limit the' pernicious effect. The Watson Bros, case was an action to restrain the collection of premiums' to be paid to the state compensation fund. The premiums sought to be collected were admittedly in an amount sufficient to insure the employees of Watson- Bros. Transportation Co. for the hazards of the entire trip both within and without the state. The court .did not hold that the extraction of a lesser' premium in *237an amount sufficient to compensate an injured workman or his dependents for the difference between what the laws of the state of Arizona allowed and the laws of the foreign jurisdiction allowed constituted an undue burden on interstate commerce, and did not hold that an employer was not compelled to otherwise comply with the Workmen’s Compensation Act of this state under circumstances where a double premium was not imposed. If these limitations are recognized, this court can give full effect to the statutes of the state of Arizona.

The purpose of both Workmen’s Compensation Acts can be fully carried out if an employer doing business in the state of Arizona is required to carry that amount of insurance sufficient to compensate his employees for the difference, if any, between what the foreign state and what the state of Arizona will pay. The employee in the case of his injury or his dependents in case of his death can obtain compensation in the place of his employment and Arizona can pay the difference between the two states,' if any. It is now accepted in leading jurisdictions that an award in one state does not bar a further and subsequent award in the second based on the difference in the amounts allowed in the two states. Industrial Commission of Wisconsin v. McCarthy 330 U.S. 622, 67 S.Ct. 886, 91 L.Ed. 1140, 169 A.L.R. 1179; Industrial Indemnity Exchange v. Industrial Accident Commission, 80 Cal.App.2d 480, 182 P.2d 309; Cline v. Byrne Doors, Inc., 324 Mich. 540, 37 N.W. 2d 630, 8 A.L.R.2d 617; Spietz v. Industrial Commission, 251 Wis. 168, 28 N.W.2d 354; Sorenson v. Standard Construction Co, Inc, 238 Minn. 68, 55 N.W.2d 630; Cook v. Minneapolis Bridge Construction Co, 231 Minn. 433, 43 N.W.2d 792; Baduski v. S. Gumpert Co, Inc, 277 App.Div. 591, 102 N.Y.S.2d 297.

“Award already had under the Workmen’s Compensation Act of another state will not bar a proceeding under an applicable Act, unless the Act where the award was made was designed to preclude the recovery of an award under any other Act, but the amount paid on a prior award in another state will be credited on the second award.” Restatement of the Law, Conflict of Laws, 1948 Supplement, Section 403.

By the recognition of this principle an employee regularly employed in Arizona engaged in interstate commerce will be in the position of being assured that the state of Arizona is providing a “backstop” liability to which he may turn in the event he finds himself on the wrong side of extraterritorial rules. This state will have unreservedly taken on its responsibility for injuries which affect the general welfare of the people within the borders of the state and the employees will be compensated, if not in accord with the spirit, at least with the general tenor of the law. This does not shift the burden of employees injured in Arizona to compensation funds of other states for the reason that other states hav*238ing laws extra-territorial in coverage must have established a rate consistent with the hazards involved. The premium paid in the foreign jurisdiction is presumptively based upon the statutory compensation allowed there and the premium in this jurisdiction need only be that which is necessary to provide compensation for the difference. The payment of the additional premium in Arizona by an employer necessary to compensate for the additional amount allowed is not a double premium for the reason that the employer is not insuring against the same loss in. two states.

There is yet another and greater reason why the majority err in denying the Industrial Commission the jurisdiction to enter an award in .petitioner’s favor under the circumstances of this case. By statute, Section 56-932, A.C.A.1939, it is provided in part as follows:

“Securing Compensation — Alternative Methods — Regulations.-—Employers, but not including the state or • its legal subdivisions, shall secure com-^ - pensation to their employees- in one of the following ways:
■ “1. By insuring and keeping insured the payment of such compensation with the state compensation fund;
“2. By insuring and keeping insured • the payment of such compensation, with a corporation or association authorized to transact the business of workmen’s - compensation insurance in the state
“3. By furnishing- to the commission satisfactory proof of financial ability to pay direct the compensation in the amount and manner and when due as herein provided, * * * ”

The statute gives an employer the choice of three methods to insure that his employees are' compensated. He may insure with the state compensation fund, insure with a private insurance carrier or become a self-insurer. He is not compelled to adopt any particular method but is permitted to choose the method which is least burdensome. The choice allowed by the statute removes the claimed undue burden on interstate commerce because it provides a means by which an employer can avoid the payment of a double premium.

By the provisions of sub-section two an employer may select an insurance carrier qualified to do business in both Arizona and California, thereby insuring" against the' risks occasioned by the employment in both states. While it is undoubtedly true that a private insurance carrier would require the payment of a higher premium to insure against the risks of doing business in Arizona because the statutes of this state afford to the employee greater compensation than do the statutes of the state of California, interstate commerce would not-thereby be unduly burdened. It is not every burden which is an undue burden.

“Protection against accidents, as against crime, presents ordinarily a local problem. Regulation to ensure *239safety is an exercise of the police power. It is primarily a state function, whether the locus be private property or the public highways. Congress has not dealt with the subject. Hence, even where the motorcars are used exclusively in interstate commerce, a state may freely exact registration of the vehicle and an operator’s license, (citing cases) ; may require the appointment of an agent upon whom process can be served in an action arising out of operation of the vehicle within the state, (citing cases) ; and may require carriers to file contracts providing adequate insurance for the payment .of judgments recovered for certain injuries resulting from their operations, (citing cases). The State may exclude from the public highways vehicles en.gaged exclusively, in interstate commerce, if of a size deemed dangerous . to the public safety, (citing cases). Safety may require that no additional • vehicle be admitted to the highway. • The Commerce Clause is not violated - by denial, of the certificate to the appellant, if upon adequate evidence denial ■ is deemed necessary to promote the public safety. * * Bradley v. Public Utilities Commission, 289 U.S. 92, 53 S.Ct. 577, 578, 77 L.Ed. 1053.

Similarly by the provisions of sub-section three an employer as a self-insurer can wholly avoid the payment of any premium.

It should be pointed out again that the holding of the Watson Bros.- case was limited to the facts presented in that case, namely, that an attempt was being made to collect a premium for the state compensation fund. That case did not consider the question of whether an interstate employer could disregard completely all the other applicable provisions of the Workmen’s Compensation Act of this state. The majority opinion, in denying petitioner an award, permits an employer to escape all responsibility under the Workmen’s Compensation Act in doing business in this state and the very evil which was so clearly foreseen by this court shortly after the adoption of the Act has come to pass: :

“ * * * If we accept the construction placed by petitioner upon the law, it will be entirely possible for large employers of labor to select a state where the benefits of the Compensation Law are extremely small, and by making their contracts of employment in that state, reduce to a great extent the benefits which the public policy of this state has declared should accrue to the injured workman. We do not think a ' construction making such a'thing even ' possible is one which'should be adopted ' unless it is unavoidable. The rule which we have laid down will make ■ benefits for injuries of the same kind arising under the same circumstances uniform and certain,-and insure that all ,; persons holding the status- of employee - *240within this state will be insured the protection of its beneficent laws.” Ocean Accident and Guarantee Corporation v. Industrial Commission, supra [32 Ariz. 275, 257 P. 647].

For the foregoing reasons and each of them I dissent.

. I have used the phrases “double premiums” and “multiple premiums” as meaning two or more premiums all suffieiently large to afford compensation for the risk of the entire trip.

. It has been assumed by counsel throughout that respondent-employer, American Buslines, Inc., is an employer whose employees are subject to the Workmen’s Compensation Act of this state:

“Employers Subject to Law. (a) Employers subject to the provisions of this article are: 1. the state, 2. each county, city, town, municipal corporation, and school district, and, 3. every person wbo has in his employ three or more workmen or operatives regularly employed in the same business or establishment, under contract of hire, except agricultural workers not employed in. the use of machinery, and domestic servants; * * * ”. Section 56-928, A.O.A. 1939, as amended by Laws of 1945, Chapter 33, Section 1.