November 3 2009
DA 08-0307
IN THE SUPREME COURT OF THE STATE OF MONTANA
2009 MT 368
CATHERINE SATTERLEE,
Petitioner and Appellant,
v.
LUMBERMAN’S MUTUAL CASUALTY COMPANY,
Insurer for BUTTREY FOOD & DRUG,
Employer and Appellee.
-----------------------------------------------------------------------------------------
JAMES ZENAHLIK,
Petitioner and Appellant,
v.
MONTANA STATE FUND, Insurer for
EAGLE ELECTRIC,
Employer and Appellee.
-----------------------------------------------------------------------------------------
JOSEPH FOSTER,
Petitioner and Appellant,
v.
MONTANA STATE FUND, Insurer for
ALLEN ELECTRIC,
Employer and Appellee.
APPEAL FROM: Workers’ Compensation Court,
Cause No. WC 2003-0840
Honorable James Jeremiah Shea, Presiding Judge
COUNSEL OF RECORD:
For Appellants:
James G. Hunt (argued); Hunt Law Firm; Helena, Montana
Thomas J. Murphy (argued); Murphy Law Firm; Great Falls, Montana
For Appellees:
Michael P. Heringer, Jon A. Wilson; Brown Law Firm, P.C.;
Billings, Montana (for Lumberman’s Mutual Casualty Company)
Steven W. Jennings; Crowley, Haughey, Hanson, Toole & Dietrich,
PLLP; Billings, Montana (for Intervening Insurers)
Bradley J. Luck (argued); Garlington, Lohn, & Robinson, PLLP;
Missoula, Montana (for Montana State Fund)
Oliver H. Goe; Browning, Kaleczyc, Berry, & Hoven; Helena, Montana
(for Montana Municipal Insurance Authority, Montana Association of
Counties and Montana Schools Group Insurance Authority)
For Amici Curiae:
Jon. W. Bennion; Attorney at Law; Helena, Montana (for Montana
Chamber of Commerce, Montana Contractors’ Association, Inc., and
the National Federation of Independent Business Small Business Legal
Center)
Argued: June 10, 2009
Submitted: June 16, 2009
Decided: November 3, 2009
Filed:
__________________________________________
Clerk
2
Justice W. William Leaphart delivered the Opinion of the Court.
¶1 Appellant Satterlee appeals from the Montana Workers’ Compensation Court’s
(WCC) November 15, 2006 “Order Denying Petitioners’ Motion to Allow Discovery and
Granting Respondents’ Cross-Motion for Partial Summary Judgment” and the WCC’s
June 4, 2008 “Order Granting Respondent Montana State Fund’s Motion for Partial
Summary Judgment.”
¶2 We consider the following issues on appeal:
¶3 Did the Worker’s Compensation Court err in determining that § 39-71-710, MCA,
does not violate Satterlee’s right to equal protection?
¶4 Did the Workers’ Compensation Court err in determining that § 39-71-710, MCA,
does not violate Satterlee’s substantive due process right?
FACTUAL AND PROCEDURAL BACKGROUND
¶5 Three individuals, Catherine Satterlee, James Zenahlik and Joseph Foster
(collectively Satterlee) all suffered work-related injures, which resulted in permanent
total disability (PTD). Because of the injuries, Satterlee began to receive PTD benefits.
When Satterlee became eligible for Social Security Retirement Insurance (SSRI),
pursuant to § 39-71-710, MCA, the PTD benefits terminated.
¶6 Satterlee first challenged the constitutionality of § 39-71-710, as it applied to PTD
benefits, in 2005 in the WCC. In its 2005 “Order Denying Motion for Partial Summary
Judgment,” the WCC held the statute to be constitutional as applied to PTD benefits.1
1
Satterlee v. Lumberman’s Mut. Cas. Co. et al., 2005 MTWCC 55
3
Satterlee appealed and this Court dismissed the appeal without prejudice because the
order fell short of a final judgment2 and identified two remaining unresolved issues to be
decided by the WCC: 1) Whether § 39-71-710, MCA, violates Satterlee’s right to due
process; and 2) Whether § 39-71-710, MCA, unconstitutionally or impermissibly
discriminates against Satterlee based on age.
¶7 In January 2006, Satterlee moved for reconsideration of the WCC’s 2005 order
denying Satterlee’s motion for partial summary judgment. The WCC granted Satterlee’s
motion for reconsideration and granted Satterlee leave to file a motion and brief
requesting additional discovery, pursuant to M. R. Civ. P. 56(f). However, in its order
granting Satterlee leave, the WCC noted that its previous analysis of the constitutionality
of § 39-71-710, MCA, as it related to PTD benefits, “was not grounded on the specific
economic analyses proffered by [Lumberman’s].” However, the WCC noted that it did
factor into its analysis that “providing PTD benefits to injured workers beyond the time
they were eligible for retirement benefits had a general negative economic impact on the
workers’ compensation system.” After entertaining arguments regarding whether
additional discovery pertaining to specific economic impacts of a ruling on the
constitutionality of § 39-71-710, MCA, in its 2006 order, the WCC denied Satterlee’s
motion to allow discovery and granted Lumberman’s cross-motion for partial summary
judgment. The WCC explained that its previous constitutional analysis “was not
grounded on the specific economic analyses proffered by [Satterlee]” and it was not
2
See M. R. Civ. P. 54(b)
4
persuaded that additional discovery regarding economic costs would preclude summary
judgment in favor of Lumberman’s.
¶8 Montana State Fund then moved the WCC for partial summary judgment on the
two remaining issues identified by this Court. In 2008, the WCC granted Montana State
Fund’s motion for summary judgment.3 Satterlee appeals.
STANDARD OF REVIEW
¶9 In reviewing the WCC’s grant or denial of summary judgment, this Court uses the
same standard used in ruling upon a motion for summary judgment; we determine
whether there is an absence of genuine issues of material fact and whether the moving
party is entitled to judgment as a matter of law. Otteson v. Mont. State Fund, 2005 MT
198, ¶ 8, 328 Mont. 174, 119 P.3d 1188.
¶10 The issues before us involve questions of constitutional law. The standard for
reviewing conclusions of law is whether they are correct. Henry v. State Compen. Ins.
Fund, 1999 MT 126, ¶ 10, 294 Mont. 448, 982 P.2d 456.
The constitutionality of a legislative enactment is prima facie presumed,
and every intendment in its favor will be presumed, unless its
unconstitutionality appears beyond a reasonable doubt. The question of
constitutionality is not whether it is possible to condemn, but whether it is
possible to uphold the legislative action which will not be declared invalid
unless it conflicts with the constitution, in the judgment of the court,
beyond a reasonable doubt.
Powell v. State Compen. Ins. Fund, 2000 MT 321, ¶ 13, 302 Mont. 518, 15 P.3d 877.
The party challenging the constitutionality of a statute bears the burden of proving the
3
Satterlee v. Lumberman’s Mut. Cas. Co., et al., 2008 MTWCC 29
5
statute unconstitutional beyond a reasonable doubt. Henry, ¶ 11. If any doubt exists, it
must be resolved in favor of the statute. Powell, ¶ 13.
DISCUSSION
¶11 The issue before the Court is the constitutionality of § 39-71-710, MCA. Satterlee
claims the statute is unconstitutional because it denies PTD benefits to Satterlee and other
similarly situated individuals on the basis of their age. Satterlee argues that, based on our
holding in Reesor v. Mont. State Fund, 2004 MT 370, 325 Mont. 1, 103 P.3d 1019, “the
Court should find that § 39-71-710, MCA, violates the Equal Protection and Substantive
Due Process Clauses of the Montana Constitution and illegally discriminates based on
age.” Appellee insurance companies urge this Court to uphold the WCC’s decision
finding § 39-71-710, MCA, to be constitutional, as it is applied to PTD benefit recipients
who become eligible for SSRI benefits.
¶12 The declaration of policy supporting the Workers’ Compensation Act (WCA)
states:
[a]n objective of the Montana workers’ compensation system is to provide,
without regard to fault, wage-loss and medical benefits to a worker
suffering from a work-related injury or disease. Wage-loss benefits are not
intended to make an injured worker whole but are intended to assist a
worker at a reasonable cost to the employer. Within that limitation, the
wage-loss benefit should bear a reasonable relationship to actual wages lost
as a result of a work-related injury or disease. § 39-71-105(1), MCA.
Section 39-71-710, MCA, provides:
[T]ermination of benefits upon retirement. (1) If a claimant is receiving
disability or rehabilitation compensation benefits and the claimant receives
social security retirement benefits or is eligible to receive or is receiving
full social security retirement benefits or retirement benefits from a system
6
that is alternative to social security retirement, the claimant is considered to
be retired. When the claimant is retired, the liability of the insurer is ended
for payment of permanent partial disability benefits other than the
impairment award . . . and medical benefits. (2) If a claimant who is
eligible under subsection (1) to receive retirement benefits and while
gainfully employed suffers a work-related injury, the insurer retains
liability for temporary total disability benefits, any impairment award, and
medical benefits.
¶13 Workers become eligible for SSRI when they reach full retirement age and have
enough social security earnings to be fully insured. 20 C.F.R. § 404.310 (2009). Full
retirement age has traditionally been 65 years. However, this age is gradually being
increased based on an individual’s date of birth. Under the current regulatory scheme,
the full retirement age for individuals born after January 1, 1960 is 67 years. 20 C.F.R.
§ 404.409(a) (2009). Therefore, for the purposes of applying § 39-71-710, MCA, an
individual will reach the age of “retirement” between the ages of 65 and 67 depending on
his or her date of birth. With this understanding of the interplay between SSRI and PTD
benefits we now turn to the issues at bar.
¶14 1. Did the Workers’ Compensation Court err in determining that § 39-71-710,
MCA, does not violate Satterlee’s right to equal protection?
¶15 Article II, Section 4 of the Montana Constitution provides that “[t]he dignity of the
human being is inviolable. No person shall be denied the equal protection of the laws.”
“The basic rule of equal protection is that persons similarly situated with respect to a
legitimate governmental purpose of the law must receive like treatment.” Rausch v. State
Compen. Ins. Fund, 2005 MT 140, ¶ 18, 327 Mont. 272, 114 P.3d 192 (Rausch II) (citing
Powell, ¶ 22). In addressing an equal protection challenge, this Court follows a three-
7
step process. Henry, ¶ 27. First, we must identify the classes involved and determine
whether they are similarly situated. Henry, ¶ 27. The WCC adopted the Reesor court’s
classification, which identified the two classes in Reesor as “(1) PPD eligible claimants
who receive or are eligible to receive social security retirement benefits; and (2) PPD
claimants who do not receive and are not eligible to receive social security retirement
benefits.” Reesor, ¶ 10. The parties do not dispute this approach to classification. Thus,
we agree with the WCC’s determination that, for the purposes of an equal protection
analysis, the two classes represented here are defined as: (1) PTD eligible claimants who
receive or are eligible to receive social security retirement benefits; and (2) PTD
claimants who do not receive and are not eligible to receive social security retirement
benefits. Having identified the classes we must now determine whether they are similarly
situated. Henry, ¶ 27.
¶16 The WCC determined that the two classes were similarly situated because “both
classes have suffered work-related injuries, are unable to return to their time-of-injury
jobs, have permanent physical impairment ratings, and must rely on section 39-71-702,
MCA, as their exclusive remedy under Montana law.” Satterlee agrees with the WCC’s
determination and asserts that “[f]or equal protection purposes, the Reesor classes and the
Satterlee classes are identical. The single discriminating factor between the classes in
both cases is age.” While several of the Appellee insurers agree with the WCC’s
determination that the classes are similarly situated, Montana State Fund argues that age
is not the only differentiating factor because “[m]any claimants over age 65 do and will
8
continue to receive PTD benefits.” While it may be that some individuals will continue
to receive PTD benefits after reaching age 65, it does not follow that both classes are not
similarly situated. Those individuals who are able to maintain their PTD benefits do so
only because they do not have enough social security earnings to be considered insured
for the purposes of qualifying for SSRI. Here, just as in Reesor, both classes have
suffered work-related injuries, are unable to return to their time-of-injury jobs, have
permanent physical impairment ratings, and must rely on § 39-71-702, MCA, as their
exclusive remedy under Montana Law. Although § 39-71-710, MCA, does not specify a
particular age, it is still triggered by operation of SSRI regulations that do. In short, it
applies only to claimants who are “retired,” which is defined as a claimant who “receives
social security retirement benefits or is eligible to receive or is receiving full social
security retirement benefits or retirement benefits from a system that is an alternative to
social security retirement . . . .” Section 39-71-710, MCA. Under this framework, the
claimant’s age, as defined by the eligibility requirements of receiving SSRI benefits, is
the only identifiable differentiating factor between the two classes. As such, we agree
with the WCC’s determination that the classes are similar.
¶17 The next step in addressing an equal protection challenge is to determine the
appropriate level of scrutiny to apply to the challenged legislation. Henry, ¶ 29. In doing
so, we must determine whether a suspect classification is involved or whether the nature
of the individual interest involves a fundamental right, either of which would trigger a
strict scrutiny analysis. Henry, ¶ 29. We have previously stated:
9
[t]he right to receive Workers’ Compensation benefits is not a fundamental
right which would trigger a strict scrutiny analysis of equal protection. Nor
does this statute infringe upon the rights of a suspect class. When a right
determined to be less than fundamental is infringed upon by a
classification, the test applied by this Court is the rational relationship test.
That is, does a legitimate governmental objective bear some identifiable
rational relationship to a discriminatory classification.
Stratemeyer v. Lincoln Co., 259 Mont. 147, 151, 855 P.2d 506, 509 (1993)
(Stratemeyer I) (citing Cottrill v. Cottrill Sodding Serv., 229 Mont. 40, 42-43, 744
P.2d 895, 897 (1987)). As described above, rational basis review is the traditional
level of scrutiny applied to equal protection analyses of workers’ compensation
statutes. Satterlee, however, urges us to apply a middle-tier analysis “given the
rare combination of age discrimination and the total loss of workers’
compensation benefits found in the present statute.” We apply middle-tier
scrutiny when the legislation at issue infringes upon a right that “has its origin in
the Montana Constitution, but is not found in the Declaration of Rights . . . .”
Powell, ¶ 18. The statute at issue here does not infringe upon the rights of a
suspect class or involve fundamental rights. See Henry, ¶ 32; Powell, ¶ 21. While
we are sympathetic to any worker who suffers a loss of income, it would be
inappropriate for us to disregard the well established principle that rational basis
review applies to workers’ compensation claims. We do not agree with Satterlee’s
contention that the facts presented justify a heightened level of scrutiny. Thus,
rational basis is the appropriate level of scrutiny to apply to the instant case.
10
¶18 The final step in our equal protection analysis is to apply the appropriate level of
scrutiny to evaluating the constitutional challenge. Henry, ¶ 32. The rational basis test
requires that (1) the statute’s objective was legitimate, and (2) that the statute’s objective
bears a rational relationship to the classification used by the legislature. Stated another
way, the statute must bear a rational relationship to a legitimate governmental interest.
Henry, ¶ 33.
¶19 Satterlee argues that we should follow the holding we arrived at in Reesor and
determine that there is no rational basis to justify discrimination between the two classes.
More specifically, Satterlee contends that “PPD and PTD benefits are legally
indistinguishable” as they relate to § 39-71-710, MCA, and “[a]s with PPD benefits, PTD
benefits should not automatically terminate at a specific age.”
¶20 Lumberman’s and Montana State Fund argue that Reesor is inapposite. They
assert that because Reesor dealt with PPD benefits and not PTD benefits we should
distinguish the instant case and adopt the WCC’s analysis. Relying on our thorough
differentiation of PPD and PTD benefits in Rausch II, Lumberman’s and Montana State
Fund argue that § 39-71-710, MCA, satisfies the rational basis test “because different
rationales underlie PPD benefits and PTD benefits.”
¶21 In the WCC’s order denying Satterlee’s motion for summary judgment, the Court
stated that “when determining whether a rational basis exists for the specific portion of
[§] 39-71-710, MCA, at issue in this case, the Court believes the analysis must differ
from the analysis in Reesor because the rationale for PPD benefits and PTD benefits is
11
different.” Because the statutory objective of § 39-71-710, MCA, is vital to our method
of constitutional analysis, we now examine the purposes of the statute in detail.
¶22 PPD and PTD designations, and the benefits associated with each, vary in several
relevant ways. First, the definition of each classification is markedly different. The
WCA defines PPD as “a physical condition in which a worker, after reaching maximum
medical healing: (a) has a permanent impairment established by objective medical
findings; (b) is able to return to work in some capacity but the permanent impairment
impairs the worker’s ability to work; and (c) has an actual wage loss as a result of the
injury.” Section 39-71-116(24), MCA. PTD on the other hand, is defined as “a physical
condition resulting from injury as defined in this chapter, after a worker reaches
maximum medical healing, in which a worker does not have a reasonable prospect of
physically performing regular employment.” Section 39-71-116(25), MCA. Under this
scheme, a claimant defined as PPD is in a very different situation from a claimant defined
as PTD. While a PPD claimant will presumably be able to return to work and earn an
income, a PTD claimant will not. This distinction is important because it underlies the
second relevant difference between PPD and PTD benefits-namely, the purpose of the
statute itself.
¶23 As we pointed out in Rausch II, the purposes of PPD and PTD differ greatly.
Specifically, PPD benefits serve to restore the claimant to a pre-accident wage level for a
limited amount of time while PTD benefits are meant to assist the claimant for his or her
work life. Rausch II, ¶ 23.
12
[T]he PPD claimant, who is able to return to work, is entitled to wage
supplement benefits, which serve to restore the claimant to a pre-accident
wage level if the claimant has suffered a decrease in wages upon return to
work. Additionally, the PPD claimant is entitled to an impairment award,
which compensates the claimant for the permanent loss of physical
function. This benefit is smaller than the total disability benefit, and is paid
over a shorter period of time, but is designed to compensate a claimant who
is able to return to work and re-commence earning a wage. The payment of
an award to a claimant who returns to work is consistent with the Act’s
stated purpose of returning injured workers to the work force.
Rauch II, ¶ 23. As this Court pointed out, PTD benefits are not meant to supplement a
claimant’s wages rather they are intended to assist the worker who will never be able to
return to work. Rausch II, ¶ 25.
[T]he statutory framework of the Act reveals the distinctly different
purposes served by PPD and PTD benefits. PPD benefits compensate the
worker for sustaining a partial disability by a smaller impairment award,
and supplements the wages earned by the claimant upon return to work.
PTD benefits do not contemplate a return to work, but, rather, provides a
continuous, higher benefit which is paid over the work life of the totally
disabled claimant. With these distinctions in mind, it would be
inappropriate for this Court to make comparisons between these
dissimilarly situated classes and then to order that either class is entitled to
a benefit designed for a different class here, that PTD claimants are entitled
to an impairment award. We conclude, therefore, that PPD and PTD
claimants are not similarly situated . . . .
Rauch II, ¶ 25.
¶24 We agree with the WCC that the distinctions between PPD and PTD benefits are
significant and thus require a different approach. As such, in the instant case we decline
to follow Reesor to the extent that it dealt with PPD not PTD benefits. The two benefit
classes are simply too different and serve such divergent purposes that equating the two
13
would be inappropriate. Thus, we will analyze the statute’s constitutionality by
examining the governmental interests that are relevant to PTD benefits only.
¶25 Lumberman’s and Montana State Fund argue that the WCA in general and § 39-
71-710, MCA, in particular, are rationally related to several legitimate interests. To make
this argument they rely first on the public policy statement associated with the WCA that
“[w]age-loss benefits are not intended to make an injured worker whole but are intended
to assist a worker at a reasonable cost to the employer. Within that limitation, the wage-
loss benefit should bear a reasonable relationship to actual wages lost . . . .” Section 39-
71-105(1), MCA. In short, Lumberman’s and Montana State Fund assert that the
government has a legitimate interest in assisting the worker at a reasonable cost to the
employer and in providing wage-loss benefits that bear a reasonable relationship to actual
wages lost. In addition, Lumberman’s also argues that § 39-71-710, MCA, bears a
rational relationship to protecting the financial viability of the workers’ compensation
system.
¶26 Satterlee on the other hand, disputes any correlation between a legitimate
government interest and § 39-71-710, MCA. Relying on Reesor, Satterlee contends that
§ 39-71-710, MCA, arbitrarily terminates their PTD benefits and that there is therefore no
rational relationship between the government’s interests and the statute. Satterlee also
argues that the WCC improperly relied on cost containment in reaching its decision and
that such reliance violates the Equal Protection Clause. We will examine each of these
arguments in turn.
14
¶27 We begin with Satterlee’s argument that Reesor requires a finding that § 39-71-
710, MCA, is arbitrary and therefore unconstitutional. As we have explained here, as
well as in Rausch II, PPD benefits and PTD benefits serve very different purposes and
employ very different entitlement schemes. Therefore, we do not equate Reesor with the
case at bar. Of most relevance to our discussion here is the difference between the
timeframes over which PPD and PTD benefits are meant to serve. PPD benefits are
temporary and are meant to terminate after a limited number of weeks. PTD benefits
however, are meant to assist the worker over the course of his or her work life. Rausch
II, ¶ 25. This difference is particularly important because it demonstrates the rationality
of terminating PTD benefits at “retirement.” Simply put, when an individual is
considered retired, they have, by definition, ended their work life. In order to achieve the
stated purpose of PTD benefits, which the legislature explained to be the provision of
wage-loss benefits that bear a reasonable relationship to actual wages lost, it is
sufficiently rational that such benefits would terminate when actual wages would
normally terminate-upon retirement. The fact that retirement is statutorily defined at a
given age for purposes of terminating PTD entitlements does not make the statute per se
irrational.
¶28 As the WCC pointed out, “in the absence of § 39-71-710’s limitations, [PTD
benefits] would become a lifetime benefit.” Satterlee v. Lumberman’s Mut. Cas. Co. et
al., 2005 MTWCC 55. Indeed, without the statute, PTD benefits would run on until the
claimant’s death. Conversely, PPD benefits do terminate after a statutorily defined
15
number of weeks. As such, § 39-71-710, MCA, was irrational as it applied to PPD
benefits because it disparately impacted similarly situated classes without serving any
legitimate government interest. The termination of PTD based on SSRI eligibility on the
other hand, is a sufficiently rational means of ensuring that PTD benefits do not become a
lifetime benefit. As Lumberman’s and Montana State Fund explained during oral
arguments, nearly two-thirds of people who reach the age of 66 are no longer working,
while seventy-five percent are no longer employed at age 70. With the statutory intent
of § 39-71-710, MCA, in mind, it is rational for the workers’ compensation system to
terminate PTD benefits at a time when, statistically, most people’s work-lives have
ended. While this may not always seem fair, it is not unconstitutional. By acting to
terminate benefits as it does, § 39-71-710, MCA, rationally advances the governmental
purpose of providing wage-loss benefits that bear a reasonable relationship to actual
wages lost.
¶29 We now turn to the second part of Satterlee’s equal protection argument in which
they assert that the WCC erred in its reliance on cost containment. We readily concede
that cost alone is insufficient to justify the disparate treatment of similar classes.
However, our jurisprudence does not go so far as to say cost to the workers’
compensation fund may never be considered. Heisler v. Hines Motor Co., 282 Mont.
270, 283, 937 P.2d 45, 52 (1997). It is well established that the control of workers’
compensation costs is a legitimate government interest that may constitutionally be
pursued by the legislature. Stratemeyer I, 259 Mont. at 155, 855 P.2d at 511; Heisler,
16
282 Mont. at 284, 937 P.2d at 52. As long as cost containment is not the sole reason for
disparate treatment and it is achieved by a rational means the legislature may attempt to
improve the viability of the workers’ compensation system without offending the Equal
Protection Clause. Stratemeyer I, 259 Mont. at 155, 855 P.2d at 511; Powell, ¶ 30. The
WCC’s discussion of cost in this case was appropriate.
¶30 While the parties dispute the precise economic impact striking down § 39-71-710,
MCA would have on the workers’ compensation system no party contends that it would
not be measureable.4 While this alone cannot justify disparate treatment, the WCC
appropriately relied on additional factors in reaching its conclusion. Namely, the WCC
pointed to the government’s interest in assisting the worker at a reasonable cost to the
employer as well as to the interest in providing benefits that bear a reasonable
relationship to actual wages lost. Because the WCC’s cost containment analysis is
rational and more importantly, because it was coupled with a finding that additional
legitimate interests are served by the statute we conclude that the WCC did not err when
it relied in part on cost containment in its analysis.
¶31 Thus, with regard to Satterlee’s equal protection claim, we conclude that § 39-71-
710, MCA, satisfies the Montana Constitution. As we have discussed, the statute is
rationally related to the legitimate government interest in assisting the worker at a
4
There is some discussion in the parties’ briefs as to the financial impact § 39-71-710, MCA, has
on the viability of the workers’ compensation fund. However, for the purposes of this prong of
our analysis the precise amount is not relevant. It is well established that the workers’
compensation fund’s financial viability is a legitimate government interest. Stratemeyer I, 259
Mont. at 155, 855 P.2d at 511 (1993).
17
reasonable cost to the employer so that the wage-loss benefit bear a reasonable
relationship to actual wages lost. We now turn to Satterlee’s claim that § 39-71-710,
MCA, violates their right to substantive due process. In doing so we will address
Satterlee’s argument that § 39-71-710, MCA, terminates benefits based on age as well as
the assertion that affirming the WCC will result in an absurdity.
¶32 2. Did the Workers’ Compensation Court err in determining that § 39-71-710,
MCA, does not violate Satterlee’s substantive due process right?
¶33 “Substantive due process analysis requires a test of the reasonableness of a statute
in relation to the State’s power to enact legislation.” Powell, ¶ 29 (citing Newville v.
State, Dept. of Family Serv., 267 Mont. 237, 250, 883 P.2d 793, 801 (1994)). “Since the
State cannot use its power to take unreasonable, arbitrary or capricious action against an
individual, a statute enacted by the legislature must be reasonably related to a permissible
legislative objective in order to satisfy guarantees of substantive due process.” Powell,
¶ 29 (citations omitted).
¶34 In both the briefs and at oral argument Satterlee questioned the reasonableness of
the statute’s application with respect to PTD claimants over the age of 65 who are
eligible to receive SSRI. In doing so, Satterlee asserts that there is an inconsistency in
allowing claimants who have worked less, and therefore do not qualify for SSRI, to
continue to collect PTD benefits while terminating those claimants who have worked
more, and are therefore eligible SSRI. While we are mindful of this issue we do not think
it rises to the level of an absurdity so that we would be required to hold § 39-71-710,
18
MCA, unconstitutional. We have long held that “[t]he power of the legislature to fix
amounts, time and manner of payment of workers’ compensation benefits is not
doubted.” Ingraham v. Champion Intl., 243 Mont. 42, 48, 793 P.2d 769, 772 (1990).
This principle coupled with the constitutional role of this Court to presume the statute to
be constitutional and look to any possible legitimate purpose requires us conclude that it
is within the legislature’s perogative to determine that PTD benefits should terminate
upon a claimant receiving or becoming eligible to receive SSRI. Stratemeyer I, 259
Mont. at 152, 855 P.2d at 510. Although the issue raised by Satterlee is legitimate, it not
irrational that the legislature may have decided to allow the most vulnerable claimants,
those who do not qualify for SSRI, to continue to receive PTD benefits even after they
reached the age at which they would otherwise be terminated. That the legislature did not
enunciate this specific purpose does not mean that it should not be considered. As we
have stated “[t]he purpose of the legislation does not have to appear on the face of the
legislation or in the legislative history, but may be any possible purpose of which the
court can conceive.” Stratemeyer I, 259 Mont. at 152, 855 P.2d at 510-11. Our role is
not to second guess the prudence of a legislative decision. As such we cannot strike down
§ 39-71-710, MCA, as a violation of substantive due process simply because we may not
agree with the legislature’s policy decisions. That we have identified at least one
“possible legitimate purpose” is enough in this instance for us to conclude that affirming
the WCC will not result in an absurdity.
19
¶35 Satterlee also argues that § 39-71-710, MCA, terminates PTD benefits based on
age and that our holding in Reesor prohibits such discrimination. As we have already
explained, we find the reasoning in Reesor to be inapplicable to the case at bar. PPD and
PTD benefits and their corresponding purposes are too different to equate them with one
another. As we noted earlier, the legislature’s decision to terminate PTD benefits when a
claimant receives or become eligible to receive SSRI is based on the rational grounds.
¶36 Finally, Satterlee urges that “[b]y terminating [Satterlee’s] PTD benefits because
of [age], § 39-71-710, MCA violates [their] substantive due process rights because there
is no quid pro quo for the PTD benefits . . . lost after age 65.” Satterlee cites Stratemeyer
v. Lincoln Co., 276 Mont. 67, 75, 915 P.2d 175, 179 (1996) (Stratemeyer II) in support of
the proposition that an employee’s rights to file an action in tort “should not be deemed
taken away except where something of value has been put in their place.” Conversely,
Lumberman’s and Montana State Fund argue that the quid pro quo principle of a
bargained for exchange is satisfied because claimants over the age of 65 may still
“receive no-fault medical benefits and temporary total disability benefits as long as they
are due.”
¶37 As this Court has held on several occasions, the enactment of the Workers’
Compensation Act was essentially a compromise between industry and labor so that labor
received guaranteed no-fault recovery, and industry was relieved of the possibility of
large and potentially uncapped recoveries in the tort system. Stratemeyer II, 276 Mont. at
74, 915 P.2d at 179 (citing Lewis & Clark Co. v. Indus. Accident Bd., 52 Mont. 522, 179
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P.499 (1916)). As with all legislative compromises, the WCA is not infallible and the
legislative decisions made in adopting the WCA are subject to honest debate.
Nevertheless, once a statute has been duly approved by the legislative branch, this
Court’s role is not one of second guessing the prudence of the conclusions reached.
Stratemeyer I, 259 Mont. at 147, 855 P.2d at 506. It is from this starting point that we
address Satterlee’s quid pro quo argument.
¶38 Black’s Law Dictionary defines quid pro quo as “[a]n action or thing that is
exchanged for another action or thing of more or less equal value.” Black’s Law
Dictionary 1282 (Bryan A. Garner ed., 8th ed., West 2004). While the legislature has
rationally concluded that PTD benefits should terminate once a claimant has received or
becomes eligible to receive SSRI, the statute still provides for those claimants who are
over 65 when they suffer a work place injury by allowing them to receive temporary total
disability benefits, an impairment award and no-fault medical benefits. Section 39-71-
710, MCA. That this remedy satisfies the quid pro quo by providing the claimant who is
over 65 with a benefit of “more or less equal value” to their forgone rights in tort is
subject to honest debate. However, such a debate involves issues and decisions about
public policy that are clearly of the sort much better suited to the halls of the legislature.
Furthermore, such a claimant is not before us in the case at bar. Here, all three
Appellants suffered work place injuries prior to becoming eligible for SSRI and, in fact,
received PTD benefits for multiple years. Suffice it to say that while the claimant who
suffers a work related injury after becoming eligible for SSRI may not be able to qualify
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for PTD benefits, he or she is still eligible for benefits of sufficient significance to satisfy
the quid pro quo principle.
¶39 Furthermore, Satterlee’s claims that substantive due process has been violated by
the lack of a quid pro quo mistakenly ignores the fundamental compromise that was
reached by legislature’s enactment of the WCA. Namely, in exchange for no fault
recovery, employers gained the predictability of consistent workers compensation
payments that would be capped in a way that personal injury tort claims were not. As
such, it is sufficiently rational that the legislature enacted § 39-71-710, MCA. Without
such a limitation on the duration of PTD benefits, the cap and predictability of payments
that employers bargained for in the WCA would be lost thus denying the employers, the
benefit of the quid pro quo. Although we may empathize with Satterlee’s economic loss,
we have long held that “a worker’s right to compensation benefits is not fundamental.”
Ingraham, 243 Mont. at 48, 793 P.2d at 773 (citing Cottrill, 229 Mont. at 44-43, 744 P.2d
at 897 (1987)). Thus, with respect to Satterlee’s quid pro quo assertions, we hold that §
39-71-710, MCA, does not violate their substantive due process rights.
¶40 We conclude that § 39-71-710, MCA, is constitutional under the Substantive Due
Process and Equal Protection Clauses of the Montana Constitution. For this and for the
reasons discussed above, we hold that the WCC properly granted Montana State Fund’s
motion for summary judgment.
¶41 Affirmed.
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/S/ W. WILLIAM LEAPHART
We concur:
/S/ MIKE McGRATH
/S/ JOHN WARNER
/S/ PATRICIA O. COTTER
/S/ JIM RICE
Justice Brian Morris dissents.
¶42 I reluctantly dissent. The Utah Supreme Court recently struck down a similar
offset provision on equal protection grounds. Merrill v. Utah Labor Comm’n, ___ P.3d
___ (Utah 2009). The Utah offset kicked in once an injured worker had received 312
weeks of workers’ compensation. Merrill, ¶ 1. Montana’s offset law contains no similar
delayed trigger. It applies as soon as the injured worker becomes eligible for SSRI
benefits. Section 39-71-710, MCA. The Utah offset reduced by fifty percent the amount
of workers’ compensation benefit that the injured worker may receive. Merrill, ¶ 1.
Montana’s offset eliminates entirely any PTD benefits for the injured worker. Section
39-71-710, MCA. The Utah court determined nevertheless that this offset provision
could not withstand rational basis scrutiny in that it unfairly singled out workers’
compensation benefits of injured workers over the age of 65 who qualified for social
security benefits. Merrill, ¶ 1. I agree with the analysis of the Utah Supreme Court in
Merrill and would strike down the offset provision of § 39-71-710, MCA, for similar
reasons.
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¶43 This Court recently struck down without hesitation under rational basis review a
maximum hiring age for new firefighters in § 7-33-4107, MCA, on the ground that the
cut-off age of 34 was “wholly arbitrary.” Jaksha v. Butte-Silver Bow County, 2009 MT
263, ¶ 24, 352 Mont. 46, 214 P.3d 1248. The Court rejected out of hand the county’s
argument that the maximum hiring age prolonged the productive life of a firefighter and
enabled him to work more safely and efficiently as his physical capabilities declined with
age. Jaksha, ¶ 21. The Court concluded that as long as the applicant had mastered the
written and physical tests and successfully had completed the interview process the
maximum hiring age bore no rational relationship to the statute’s objective of protecting
the safety of other firefighters and the public. Jaksha, ¶ 24.
¶44 The same “rational scrutiny with bite” approach used in Jaksha surely would
invalidate the legislature’s similar effort to use SSRI eligibility as a proxy for retirement.
See G. Gunther, Cases and Materials on Constitutional Law, 12th Ed. at 462 (Foundation
Press 1992). The Court instead employs a toothless analysis that permits the legislature
to advance the perfectly legitimate task of protecting the economic viability of the
workers’ compensation system through the illegitimate means of penalizing injured
workers who have qualified for SSRI. The Court applies its toothless approach through
its depiction of workers’ compensation and SSRI solely as wage loss replacement
systems.
¶45 The Court reaches this result without regard for whether the amount of SSRI for
which an injured worker might be eligible even remotely approaches the benefits that the
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workers’ compensation system provided. I could accept some coordination of benefits to
offset the receipt of SSRI, similar to what Montana law does with respect to social
security disability benefits. Sections 39-71-701(5), and 39-71-702(4), MCA. Section 39-
71-701(5), MCA, reduces, but does not eliminate, workers’ compensation benefits for
temporary total disability by an amount roughly equal to one-half of the federal benefits.
Section 39-71-702(4), MCA, imposes the same reduction on permanent total disability
benefits. The offset contained in § 39-71-710, MCA, however, eliminates completely an
injured worker’s entitlement to any benefits.
¶46 The court in Merrill recognized that SSRI serves an entirely different purpose
from the workers’ compensation scheme. Merrill, ¶ 26. The court noted that “[n]either
social security retirement benefits nor workers’ compensation are solely wage
replacement measures.” Merrill, ¶ 29. A mere five years ago this Court declared without
equivocation that “social security retirement benefits are not wage loss benefits.” Reesor
v. Mont. State Fund, 2004 MT 370, ¶ 24, 325 Mont. 1, 103 P.3d 1019. The Court
nevertheless determines today that SSRI eligibility constitutes a reasonable proxy for
retirement and analyzes the offset in § 39-71-710, MCA, under the premise that SSRI
benefits replace the wage loss benefits provided under the workers’ compensation
system.
¶47 The court in Merrill cited at least four distinctions between the workers’
compensation system and SSRI. Merrill, ¶¶ 30-33. First, the programs compute benefits
“on entirely different bases and compensate for entirely different eventualities.” Merrill,
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¶ 30, quoting West Virginia v. Richardson, 482 S.E.2d 162, 168 (W.Va. 1996). This
Court in Reesor also previously defined workers’ compensation and SSRI as “two
distinct programs” and rejected the notion that they could “offset one another due to the
fact that both programs are based on completely different concepts.” Reesor, ¶ 23.
¶48 The Merrill court explained that Utah had adopted workers’ compensation as a tort
liability reform measure. Merrill, ¶ 24. Workers’ compensation benefits represent a
substitute for access to the courts for redress for torts “and are not a welfare benefit for
wage loss.” Golden v. Westark Community College, 969 S.W.2d 154, 158 (Ark. 1998).
Employers pay premiums for insurance from which injured workers receive benefits “in
exchange for the employee’s forbearance from suing the employer in tort.” Golden, 969
S.W.2d at 158.
¶49 Injured workers in Montana receive compensation for damages incurred by a work
related injury in the form of lost wages, medical services, nursing services, hospital
services, and medicines. Section 39-71-704, MCA. Montana’s workers’ compensation
system provides no means for a worker to “opt out” of the system unless the employer
fails to pay to the workers’ compensation fund, in which case the injured worker may
bring a civil action. Section 39-71-515, MCA. Workers’ compensation provides the sole
remedy for injured workers. Reesor, ¶ 22; § 39-71-411, MCA. It cannot be described
fairly as a “wage loss” system.
¶50 Second, the Merrill court determined that unlike workers’ compensation, SSRI
benefits are not paid in connection with any injury or disability. Merrill, ¶ 31. The
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federal government pays SSRI benefits only after a person has contributed to the fund.
Merrill, ¶ 31. The Arkansas Supreme Court likewise noted that “‘[s]ocial security
retirement benefits are provided to persons over age sixty-five regardless of injury . . . .
These benefits are not disability benefits, but are old-age entitlements serving the same
function as pension payments.’” Golden, 969 S.W.2d at 158 (quoting Industrial Claim
Appeals Office v. Romero, 912 P.2d 62, 67-68 (Colo. 1996)); see also Wal-Mart Stores,
Inc. v. Keel, 817 So. 2d 1, 10 (La. 2002). Social security retirement benefits allow
participants to receive income after age 65 only if they have contributed adequately to the
fund.
¶51 As this Court explained in Reesor, social security benefits “provide the recipient
with supplemental income after he contributes to the program throughout his working
life.” Reesor, ¶ 22 (emphasis in original). The West Virginia Supreme Court likewise
recognized that SSRI benefits represent “additional compensation paid by insurance as a
result of having worked some period of time at some average taxable salary, except as the
payments reflect a return of the recipient's wage contributions to the system.”
Richardson, 482 S.E.2d at 166. SSRI benefits do not compensate for a workplace injury
or replace elements of damage “that might be recovered in a common law action for such
an injury.” Richardson, 482 S.E.2d at 166.
¶52 Third, the Merrill court cited Congress’s repudiation of the notion that SSRI
constitutes a wage replacement program through its enactment of the Senior Citizen’s
Freedom to Work Act, 42 U.S.C. § 402 (2000). Merrill, ¶ 32. Not surprisingly, this
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Court in Reesor reached the same conclusion. It too noted Congress’s decision to
eliminate the earnings limit for workers over age 65 and thereby eliminate the reduction
in social security benefits due to wages regardless of the amount of wages earned by
persons 65 and older. Reesor, ¶ 24. The court in Golden explained that SSRI benefits
have evolved into a benefit more associated with advanced years than a replacement for
wage loss in light of the fact that a worker over age 65 can supplement his social security
retirement benefits by income from gainful employment. Golden, 969 S.W.2d at 158.
¶53 The offset contained in § 39-71-710, MCA, prevents an injured worker in
Montana from supplementing his SSRI benefits. The injury prevents the worker from
continuing to earn a wage and the offset deprives the injured worker of the wage
replacement benefit to which he otherwise would be entitled. This Court noted the
irrationality of allowing a forty-year-old injured worker to receive permanent partial
disability benefits while a similarly situated sixty-five-year-old worker with an identical
injury would receive only an impairment award “due to the fact that he ha[d] reached
social security retirement age.” Reesor, ¶ 23. The complete offset in § 39-71-710, MCA,
for PTD benefits heightens the irrationality. A worker injured after he has reached
eligibility for SSRI receives no wage replacement benefits at all. The worker cannot sue
in tort to recover for these losses, however, as workers’ compensation provides the sole
remedy. Section 39-71-411, MCA.
¶54 Fourth, the Merrill court determined that the public policy in the Age
Discrimination in Employment Act, 29 U.S.C. § 623(a)(1) (2006) (ADEA), further
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supports the notion that social security retirement benefits represent something different
from wage loss benefits “and are not duplicative of workers’ compensation benefits.”
Merrill, ¶ 33. The ADEA, among other matters, prohibits an employer from
discriminating against any employee “with respect to his compensation, terms,
conditions, or privileges of employment, because of such individual’s age.” Merrill,
¶ 33. This provision makes it improper for an employer “to compel its older employees
to substitute retirement benefits for disability benefits.” Merrill, ¶ 33. Section 39-71-
710, MCA, of course, forces an older employee to substitute entirely SSRI benefits for
PTD benefits.
¶55 This forced substitution raises the specter of whether the workers’ compensation
scheme provides an adequate substitute remedy “for that which might be available in the
tort system for such an injury.” Richardson, 482 S.E.2d at 168. The offset provision of
Section 39-71-710, MCA, singles out injured workers who have contributed to the
economy by working the required number of years to qualify for SSRI benefits and
punishes these injured workers by eliminating their workers’ compensation benefits.
Though the economic viability of the workers’ compensation scheme represents a worthy
and legitimate state interest, I fail to see how “workers’ compensation benefits paid for
loss of the ability to earn the same wages and a retirement benefit under social security
are duplicative in any respect.” Golden, 969 S.W.2d at 159.
¶56 The workers’ compensation system in Montana constitutes a grand bargain in
which injured workers forego the possibility of larger awards potentially available
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through the tort system (the quid) in exchange for a no fault system that provides more
certainty of an award (the quo). Sitzman v. Shumaker, 221 Mont. 304, 307-08, 718 P.2d
657, 659 (1986). The offset provision of § 39-71-710, MCA, eviscerates the quid without
returning the quo. The Court concedes that this point “is subject to honest debate.”
Opinion, ¶ 38. I would resolve this honest debate in favor of the injured workers who
have foregone their right to seek damages through the tort system and now receive
nothing in the form of workers’ compensation benefits upon their eligibility for SSRI.
/S/ BRIAN MORRIS
Justice James C. Nelson joins in the foregoing dissent.
/S/ JAMES C. NELSON
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