O Connor v. Labor Commission ( 2020 )

2020 UT App 49THE UTAH COURT OF APPEALS
PATRICK J. O’CONNOR,
Petitioner,
v.
LABOR COMMISSION AND
EMPLOYERS’ REINSURANCE FUND,
Respondents.
Opinion
No. 20190145-CA
Filed March 26, 2020
Original Proceeding in this Court
Phillip B. Shell, Attorney for Petitioner
Edwin C. Barnes and Robert D. Andreasen,
Attorneys for Respondents
JUDGE DIANA HAGEN authored this Opinion, in which
JUDGES DAVID N. MORTENSEN and RYAN M. HARRIS concurred.
HAGEN, Judge:
¶1 Following a workplace-related injury in May 1983, Patrick
J. O’Connor applied for disability benefits. O’Connor was
preliminarily found to be permanently and totally disabled, and
the Labor Commission (the Commission) ordered the
Employers’ Reinsurance Fund (ERF) to pay him $241 each week
for the remainder of his life. In 1988, the legislature amended the
law to provide that the minimum payment rate for permanent
and total disability benefits would be equal to 36% of Utah’s
average weekly wage. Because the average weekly wage grew
over time, there came a point—in 2008—when O’Connor’s static
weekly payment of $241 fell below the new percentage-based
statutory minimum amount. Thereafter, O’Connor petitioned the
Commission to increase his disability award from a static $241
per week to a variable 36% of Utah’s current average weekly
O'Connor v. Labor Commission
wage. The Commission denied the petition, and O’Connor now
seeks judicial review of that decision. We conclude that the law
in effect at the time of O’Connor’s injury—and not the 1988
amendment—governs the amount of compensation to which
O’Connor is entitled. Accordingly, we decline to disturb the
Commission’s decision.
BACKGROUND 1
¶2 O’Connor suffered a workplace-related injury on May 3,
1983. In March 1987, the Commission ordered ERF to pay
O’Connor permanent total disability benefits in the amount of
$241 per week. ERF has made weekly payments of $241 to
O’Connor ever since. Those facts are not in dispute.
¶3 Also relevant to our review, however, is the statutory
history concerning the minimum amount of weekly benefits to
which permanently and totally disabled workers are entitled.
Under the statutory framework at the time of O’Connor’s injury,
injured workers were entitled to receive 66⅔% of their wage
from their employers or their employers’ insurers for 312 weeks.
Utah Code Ann. § 35-1-67 (Allen Smith Co. Supp. 1981). After
the initial 312-week period following the injury, responsibility
for the payments would shift to ERF, triggering a separate
minimum and maximum benefit provision. Id. Between 1971 and
1985, the legislature periodically amended this provision to
increase the minimum weekly benefit to which permanently and
totally disabled workers were entitled. See, e.g., id. § 35-1-67
(Supp. 1983) (increasing the minimum weekly benefit from $100
to $110). Each time the legislature amended the statute, it
1. In reviewing an order from the Commission, we view the facts
in the light most favorable to the Commission’s findings and
recite them accordingly. See Utah Paiute Tribal Housing Auth. Inc.
v. Department of Workforce Services, 2019 UT App 191, n.1, 454
P.3d 865.
20190145-CA 2 2020 UT App 49O'Connor v. Labor Commission
included a retroactivity clause specifying that the newly
increased minimum applied to “[a]ll persons who are
permanently and totally disabled” and entitled them to benefits,
regardless of when their injury occurred. See, e.g., id.¶4 The legislature amended the statute again in 1988. But
instead of merely increasing the minimum weekly benefit for
permanently and totally disabled workers, it adopted a formula
from which a new minimum could be calculated each year
without the need to continually revise the statute. The new
formula provided that “during the initial 312-week entitlement,
compensation shall be 66⅔% of the employee’s average weekly
wage at the time of the injury.” Id. § 35-1-67(2) (Michie 1988).
Then, “[a]fter the initial 312 weeks, the minimum weekly
compensation rate . . . shall be 36% of the current state average
weekly wage, rounded to the nearest dollar.” Id. § 35-1-67(2)(c). 2
Notably, unlike previous iterations of the statute, neither the
1988 amendment nor subsequent versions of the statute
contained a retroactivity clause.
¶5 Due to a combination of inflation and rising wages, the
minimum weekly benefit under the new calculation increased
significantly in the decades following 1988. In July 2008, Utah’s
average weekly wage had increased such that the minimum
weekly benefit under the new calculation method was greater
than the $241 that O’Connor received each week under the
Commission’s 1987 award.
¶6 O’Connor filed an application for hearing with the
Commission, asserting that he was entitled to increased benefits
because his current weekly payments from ERF were less than
36% of Utah’s average weekly wage. Both O’Connor and ERF
filed cross-motions for summary judgment. O’Connor argued
2. This remains the formula by which the minimum weekly
benefit is calculated today. Utah Code Ann. § 34A-2-413(2)
(LexisNexis 2019).
20190145-CA 3 2020 UT App 49O'Connor v. Labor Commission
that he was entitled to increased benefits because the 1988
amendment applied retroactively to his claim; ERF took
the opposite position. An administrative law judge (the ALJ)
agreed with O’Connor and granted his motion for summary
judgment.
¶7 ERF filed a motion for review with the Commission,
challenging the ALJ’s ruling. The Commission issued an order
reversing the ALJ’s decision and concluding that “the 1988
statutory change regarding the minimum weekly benefit for
permanent and total disability compensation” was not
retroactive and so did not apply to O’Connor’s claim.
¶8 O’Connor now seeks judicial review of the Commission’s
order.
ISSUE AND STANDARD OF REVIEW
¶9 O’Connor argues that the Commission erred in
concluding that the current statutory minimum weekly benefit
for permanent and total disability compensation is not
retroactive and that the law in effect at the time of his injury
governed the calculation of benefits. “Whether a statute operates
retroactively is a question of law, which we review for
correctness,” affording no deference to the Commission. See State
ex rel. Kirby v. Jacoby, 1999 UT App 52, ¶ 7, 975 P.2d 939 (cleaned
up). 3
3. O’Connor also raises a constitutional claim, arguing that
applying “the statute only to those injured after the effective
date of the 1988 amendment would treat similarly situated
disabled workers differently” in violation of the equal protection
guarantees of the Fourteenth Amendment to the United States
Constitution and article I, section 24 of the Utah Constitution.
However, apart from identifying the alleged classification of
(continued…)
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ANALYSIS
¶10 The sole issue on appeal is whether the current or past
version of the disability benefits statute applies to O’Connor’s
claim. Generally, unless a statute is expressly declared to be
retroactive, a statutory bar prevents retroactive application of
newly enacted laws. See Utah Code Ann. § 68-3-3 (LexisNexis
2016) (“A provision of the Utah Code is not retroactive, unless
the provision is expressly declared to be retroactive.”). Here, the
parties agree that the statute does not contain an express
declaration of retroactivity. See id. § 34A-2-413 (2019).
¶11 However, O’Connor argues that this case falls under an
exception to the general bar on retroactivity because the
amendment is a “procedural” change as opposed to a
“substantive” change. It is true that prior Utah cases made that
distinction, occasionally characterizing the “rule governing the
applicability of changes in procedural rules as an exception to
the bar against the retroactive application of statutes.” State v.
Clark, 2011 UT 23, ¶ 13, 251 P.3d 829. But our supreme court has
since clarified that that characterization is “imprecise.” Id.Rather, older retroactivity cases distinguishing between
(…continued)
injured workers, O’Connor fails to flesh out his constitutional
argument by identifying “what level of scrutiny should apply, or
why, assuming rational basis review, there is no rational basis
for treating” the purported classes differently. See Rose v. Office of
Prof’l Conduct, 2017 UT 50, ¶ 81, 424 P.3d 134. And it goes
“without saying that merely identifying classes is not enough to
demonstrate an equal protection violation.” Id. Because
O’Connor has not carried his burden of persuasion on judicial
review, we decline to disturb the Commission’s decision on this
basis. See Snyder v. Labor Comm’n, 2017 UT App 187, ¶ 23, 405
P.3d 984 (declining to disturb the Commission’s decision where
a petitioner’s “inadequate briefing resulted in a failure to meet
his burden of persuasion”).
20190145-CA 5 2020 UT App 49O'Connor v. Labor Commission
procedural and substantive amendments should be understood
to stand for “the simpler proposition that we apply the law as it
exists at the time of the event regulated by the law in question.”
Id.Thus, if a law regulates a breach of contract or a
tort, we apply the law as it exists when the alleged
breach or tort occurs—i.e., the law that exists at the
time of the event giving rise to a cause of action.
Subsequent changes to contract or tort law are
irrelevant. Similarly, if the law regulates a motion
to intervene, we apply the law as it exists at the
time the motion is filed. A change in the
procedural rule would not apply retroactively to
prior motions to intervene. We would not expel a
party for failure to conform to a newly amended
intervention rule in her prior motions.
The difference is in the nature of the underlying
occurrence at issue. On matters of substance the
parties’ primary rights and duties are dictated by
the law in effect at the time of their underlying
primary conduct (e.g., the conduct giving rise to a
criminal charge or civil claim). When it comes to
the parties’ procedural rights and responsibilities,
however, the relevant underlying conduct is
different: the relevant occurrence for such purposes
is the underlying procedural act (e.g., filing a
motion or seeking an appeal). The law governing
this procedural occurrence is thus the law in effect
at the time of the procedural act, not the law in
place at the time of the occurrence giving rise to the
parties’ substantive claims.
Id. ¶¶ 13–14. Accordingly, the more precise question at issue is
not whether the 1988 amendment was “substantive” or
“procedural” but, rather, what “event” is being regulated by the
law in question and, further, when that event occurred.
20190145-CA 6 2020 UT App 49O'Connor v. Labor Commission
¶12 O’Connor contends that the event being regulated is the
moment that his disability payments fell below the statutory
minimum, an event that occurred for the first time in 2008.
According to O’Connor, this must be the case because ERF’s
liability for the minimum payment could not have arisen until
36% of the average state wage exceeded his weekly award, and
the “event” being regulated is that which “giv[es] rise to a cause
of action.” Id. ¶ 13. In contrast, ERF contends that the event
being regulated is O’Connor’s injury, which occurred in 1983; it
asserts that this must be the case because O’Connor’s entitlement
to benefits, including the statutory minimum benefit, arose at the
time of the injury.
¶13 ERF’s position is more consistent with Utah Supreme
Court caselaw on workers’ compensation. Our supreme court
has long held that the law governing the amount of
compensation to which an injured worker is entitled is the law in
effect at the time of injury. See, e.g., Petersen v. Utah Labor
Comm’n, 2017 UT 87, ¶ 1 n.1, 416 P.3d 583 (“This court applies
the law as it existed at the time of the injury.”); Utah State Road
Comm’n v. Industrial Comm’n, 168 P.2d 319, 320 (Utah 1946)
(“[T]he law governing this case is that which was in effect when
the injury occurred.”). For example, in Brown & Root Industrial
Service v. Industrial Commission of Utah, 947 P.2d 671 (Utah 1997),
the court analyzed whether an amendment affecting workers’
compensation applied retroactively to bar an injured worker’s
claim. The court held that the amendment did not apply
retroactively and that the law existing at the time of injury
governed because the amendment did not regulate a “mode or
form of procedure.” Id. at 676 (cleaned up). Rather, the
amendment regulated the “substantive rights” of the injured
worker at the time that he was injured and so did not apply
retroactively. Id.
¶14 As O’Connor points out, our supreme court has applied
some amendments affecting workers’ compensation benefits
retroactively. In Marshall v. Industrial Commission, 704 P.2d 581(Utah 1985), the court held that a statute providing for interest
20190145-CA 7 2020 UT App 49O'Connor v. Labor Commission
payments on past-due workers’ compensation benefits applied
to an action seeking benefits for an injury sustained before
passage of the statute. Id. at 583. However, as the Marshall court
explained, “[i]nterest on a compensation award is incident to a
right and a remedy that already exists.” Id. Injured workers do
not have a claim for interest until disability benefits to which
they are entitled become overdue. In contrast, injured workers
become entitled to receive a minimum benefit on the date that
they are injured. Cf. Utah State Road Comm’n, 168 P.2d at 320
(declining to apply a statutory maximum that limited an injured
worker’s total benefits because it was not “in effect when the
injury occurred”). Despite holding that the interest payment
statute applied retroactively, the Marshall court was clear that
“the benefits to be awarded to an injured worker are to be
determined on the basis of the law as it existed at the time of the
injury.” 704 P.2d at 582.
¶15 In this case, similar to Brown & Root, the statute at
issue directly regulates the benefits to which an injured
worker is entitled at the time of injury. See 947 P.2d at 676.
Specifically, because O’Connor was injured in 1983, he was
initially entitled to receive at least 66⅔% of his average weekly
wages, so long as it did not exceed 85% of the state average
weekly wage at the time of injury. See Utah Code Ann. § 35-1-67(Allen Smith Co. Supp. 1981). After the initial 312 weeks
following his injury, when responsibility for the payments
shifted to ERF, O’Connor was guaranteed to receive no less
than $100 per week. See id. His entitlement to the $100-per-week
statutory minimum arose at the time of his injury, even
though the minimum would not apply, if at all, until 312 weeks
passed. 4
4. Although an amendment increasing the statutory minimum
benefit to $110 passed in 1983, it did not go into effect until six
days after O’Connor’s injury. See Utah Code Ann. § 35-1-67(Allen Smith Co. Supp. 1983).
20190145-CA 8 2020 UT App 49O'Connor v. Labor Commission
¶16 If, as O’Connor contends, subsequent amendments to the
statutory minimum applied to workers injured before the
amendment’s effective date, an amendment reducing—or even
eliminating—the statutory minimum would reduce the benefit
to which workers were otherwise entitled based on the law in
effect at the time of their injuries. Such a result would be in
tension with Brown & Root because it would reach back and alter
the substantive right to benefits guaranteed to injured workers at
the time of their injuries. See 947 P.2d at 676. When O’Connor
was injured in 1983, he was entitled to the minimum benefits
guaranteed under existing law. Absent express direction from
the legislature to apply subsequent amendments to the class of
workers injured before the effective date, the statute in effect at
the time of the injury continues to control the calculation of
benefits.
¶17 Accordingly, O’Connor is not entitled to have his $241
weekly award increased to match the current statutory
minimum benefit. The law as it existed at the time of O’Connor’s
injury in 1983 governs the amount of benefits to which he is
entitled.
CONCLUSION
¶18 The statute regulates benefits to which injured workers
are entitled at the time that they are injured, so the law as it
existed at the time of O’Connor’s injury governs the amount of
minimum benefits to which he is entitled. Accordingly, we
decline to disturb the Commission’s decision that O’Connor was
not entitled to an increase in his weekly benefits.
20190145-CA 9 2020 UT App 49