S. Hensley v. State Fund ( 2020 )

12/16/2020
SYNOPSIS OF THE CASE Case Number: DA 19-0523
2020 MT 317, DA 19-0523: SUSAN HENSLEY, Petitioner v. MONTANA STATE
FUND, Respondent.1
In a divided opinion, the Montana Supreme Court upheld a workers’ compensation
statute that denies impairment benefits to workers whose injury results in no permanent
wage loss and places them in a “Class 1” impairment as determined by a new edition of
guidelines issued by the American Medical Association. The law, passed in 2011, changed
the rule that previously allowed all workers with any functional impact from the injury to
receive an “impairment-only” award.
Susan Hensley, who injured her shoulder at work in 2012 and received medical and
wage-loss benefits while she was recovering, later returned to work at a higher rate of pay
with an overall 4% whole-person impairment rating designated as Class 1 under the AMA
Guides. She challenged the statute that denied her an impairment award, claiming that it
violated her constitutional right to equal protection of the law because other workers with
different injuries but the same whole-person impairment percentage would receive such an
award. The Workers’ Compensation Court denied her challenge.
The Supreme Court affirmed that ruling. Three members concluded that the purpose
of the law was to compensate workers based on functional loss from their injury. Neither
the previously used whole-person impairment percentage nor the new Class designation
provides an air-tight formula for expressing a person’s level of functional impact from an
injury. The Legislature has the constitutional authority to define the rules for an
impairment award as long as the distinction is not arbitrary. It was rational for the
Legislature to allow such an award only when a worker’s injury—as determined by the
AMA Guides—affects her ability to engage in “normal activity” without symptoms. This
was a decision about public policy clearly of the sort better suited to the halls of the
legislature than to the courts.
In a dissent joined by Justice Gustafson and Judge Jessica Fehr (sitting for
Justice McKinnon, who recused herself from the case), Justice Sandefur noted that the
Workers’ Compensation Act is fundamentally a quid pro quo that deprives workers of the
right to sue employers for full compensation for work-related injuries in return for some
degree of lesser but guaranteed no-fault compensation, capped at reasonable and
predictable cost to employers as determined by the Legislature. Based on our prior
holdings that categorical exclusions of work-comp benefits solely for cost-control without
1
This synopsis has been prepared for the convenience of the reader. It constitutes no part of the
Opinion of the Court and may not be cited as precedent.
balanced consideration of the other pertinent purposes of the Act violated equal protection,
Justice Sandefur asserted that the Legislature’s use of the AMA Guides to categorically
deny one class of injured workers any compensation for work-related injury solely for cost-
control, while continuing to compensate others similarly situated, denies equal protection
of law to the former in the context of the quid pro quo required to maintain the
constitutionality of the Act in conformance with the Montana constitutional right to full
legal redress for work-related injury.
In a special concurring opinion, Justice Shea agreed that Justice Sandefur had
provided a compelling analysis of the statute under the quid pro quo framework of the
Workers’ Compensation Act but declined to adopt his position in this case because Hensley
had not made a quid pro quo argument, and the Court should not consider it for the first
time on appeal when the parties had not made, and the Workers’ Compensation Court had
not addressed, the argument. Considering the issues presented, he agreed that Hensley had
not demonstrated the statute denied her right to equal protection.
In a separate dissent, Justice Gustafson expressed the opinion that the change in the
statute had no legitimate objective because it was based purely on containing costs, which
the Court has long held cannot supply a constitutionally sound basis for discriminating
between similarly situated workers. Further, the Legislature’s distinction between Class 1
and Class 2 impairments as the threshold for impairment awards was arbitrary because
some workers who suffer a permanent functional loss are denied compensation while
others with quantifiably identical loss are compensated. Justice Sandefur and Judge Fehr
also joined Justice Gustafson’s dissent.
2