IMPORTANT NOTICE
NOT TO BE PUBLISHED OPINION
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PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C),
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RENDERED: DECEMBER 16, 2021
NOT TO BE PUBLISHED
Supreme Court of Kentucky
2020-SC-0364-WC
DEBRA SUE DARNELL APPELLANT
ON APPEAL FROM COURT OF APPEALS
V. NO. 2020-CA-0451
WORKERS’ COMPENSATION BOARD
NO. WC-16-89179
SAPUTO DAIRY; COMMONWEALTH OF APPELLEES
KENTUCKY, EX REL. DANIEL CAMERON,
ATTORNEY GENERAL; HONORABLE GREG
HARVEY, ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION BOARD
MEMORANDUM OPINION OF THE COURT
AFFIRMING
I. BACKGROUND
Debra Darnell had worked for Saputo Dairy for thirteen years. On March
16, 2016, Darnell was cleaning the piece of machinery that places caps on
bottles when the employer-provided stepstool on which she stood broke,
causing her to sustain injuries to her left hip and lower back when she fell to
the floor. She had worked in her position as a “capper” for more than two
years when the stool broke. As a result of the work injury, Darnell had surgery
to fuse her sacroiliac joint (which connects the hip bones to the sacrum).
On January 25, 2019, the Workers’ Compensation Administrative Law
Judge (ALJ) determined Darnell is permanently and totally disabled as a result
of her work injury and awarded her weekly benefits which would terminate at
the age of seventy pursuant to KRS 342.730(4). Darnell appealed to the
Workers’ Compensation Board, arguing the amendment of KRS 342.730(4) was
not retroactive. The Board affirmed the ALJ’s decision pursuant to Holcim v.
Swinford, 581 S.W.3d 37 (Ky. 2019), which held the 2018 amendment to KRS
342.730(4) applied retroactively. Darnell also argued the subsection was
unconstitutional for various reasons. The Board acknowledged it lacked
jurisdiction to determine the statute’s constitutionality.
Darnell appealed the Board’s decision to the Court of Appeals, which
affirmed her award and held KRS 342.730(4) and its retroactive application
were constitutional. Darnell now appeals to this Court, arguing: (1) KRS
342.730(4) violates the equal protection clauses of the United States and
Kentucky Constitutions, as written and as retroactively applied; (2) KRS
342.730(4) violates Kentucky’s constitutional prohibition against special
legislation; (3) retroactive application of KRS 342.730(4) denies her due process
rights; and (4) retroactive application of KRS 342.730(4) violates the contracts
clauses of the United States and Kentucky Constitutions. The Attorney
General filed a motion to intervene to defend the constitutionality of the
statute, which we granted. For the following reasons, we hold that KRS
342.730(4) is constitutional as written and as applied and affirm the Court of
Appeals.
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II. ANALYSIS
KRS 342.730(4) concerns the termination of workers’ compensation
benefits. In Parker v. Webster Cnty. Coal, LLC (Dotiki Mine), 529 S.W.3d 759
(Ky. 2017), this Court found the then-current 1996 version of KRS 342.730(4)
unconstitutional on equal protection grounds. The 1996 version of the statute
tied the termination of workers’ compensation benefits to the time at which the
employee qualified for old-age Social Security benefits. This Court held this
was an arbitrary distinction with no rational relation to a legitimate state
interest. Id.
In Holcim, 581 S.W.3d at 41, this Court considered whether a 2018
version of KRS 342.730(4) could be applied retroactively. Quoting a Legislative
Research Commission comment beneath the statute, we held in Holcim that 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 2018 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 last injurious exposure,
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whichever occurs later. Darnell argues this statute is constitutionally infirm
on multiple grounds.
A. Equal Protection
Darnell argues the amendment to KRS 342.730(4) violates her rights to
equal protection under the law, as guaranteed by the United States and
Kentucky Constitutions. The basis for her 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
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 it. 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
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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
(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 Darnell’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.
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Darnell 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 her claim, as her 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.
B. Special Legislation
Darnell next argues KRS 342.730(4) violated Kentucky’s constitutional
provisions regarding special legislation. Specifically, she points to the
prohibitions in Section 59 of the Kentucky Constitution, which state, 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.
Darnell links this argument to her equal protection argument—
essentially arguing the legislation discriminates against older workers and
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favors business owners in an attempt to save employers money on workers’
compensation insurance premiums. She also makes the argument that older
workers are discriminated against because, if they receive 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.
C. Due Process
Darnell also argues the retroactive application of KRS 342.730(4)
stripped her of her property right to workers’ compensation benefits in violation
of due process rights, as she did not receive prior notice or a hearing. 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.” Cates, 627 S.W.3d at 873. The same is true here.
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Because Darnell had no vested right in the duration of her benefits, a statute
terminating them at a specific age did not deny her due process.
D. Contracts Clause
Finally, Darnell argues the retroactive application of KRS 342.730(4)
denies her rights under the contracts clauses of the federal and state
constitutions. Both the Constitution of the United States and the Kentucky
Constitution protect citizens of our Commonwealth from the state’s
infringement on their right to contract. Article 1, Section 10, Clause 2 of the
United States Constitution reads, in pertinent part, “[n]o State shall . . . pass
any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of
Contracts . . . .” Likewise, Section 19 of the Kentucky Constitutions provides,
“[n]o ex post facto law, nor any law impairing the obligation of contracts, shall
be enacted.” Darnell argues KRS 342.730(4) violates these contracts clauses.
In Dowell v. Matthews Contracting, 627 S.W.3d 890, 895 (Ky. 2021), this
Court stated if “the fundamental premise of a Contracts Clause analysis—the
existence of a contract—is absent . . . our analysis ends.” See Gen. Motors
Corp. v. Romein, 503 U.S. 181, 190 (1992) (holding Contracts Clause
inapplicable because the employer and employee did not assent to specific
statutory terms). Therefore, we must first determine whether a contract exists
in this case.
Darnell “point[s] to no contract or place within the statutory scheme
where [she is] guaranteed certain benefits that were mutually assented to and
bargained for.” Dowell, 627 S.W.3d at 895. This Court has held “the Workers’
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Compensation Act (WCA) does not constitute a contract between Kentucky
workers and their employers or the state.” Id. at 894. Rather than providing
contractual rights, we explained, “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 . . . between employers and their employees. Changes to the relevant
statutes, therefore, do not create a Contracts Clause issue.” Id. at 896.
Since the Workers’ Compensation Act does not constitute a contract, “a
complete Contracts Clause analysis is unnecessary.” Id. at 894. The
protections of the clauses simply do not apply. “Because the WCA does not
form a contract, there are no contractual rights that the amendment to KRS
342.730(4) could infringe.” Id. at 895. Just as in Dowell, we hold there was no
contracts clause violation.
III. CONCLUSION
For the foregoing reasons, we affirm the Court of Appeals.
All sitting. All concur.
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COUNSEL FOR APPELLANT:
Jeffery A. Roberts
COUNSEL FOR APPELLEE, Saputo Dairy:
Stephanie D. Ross
Reminger Co., LPA
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. Greg Harvey
WORKERS’ COMPENSATION BOARD:
Michael W. Alvey
Chairman
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