DA 19-0523

IN THE SUPREME COURT OF THE STATE OF MONTANA

2020 MT 317

SUSAN HENSLEY,

 Petitioner and Appellant,

 v.

MONTANA STATE FUND,

 Respondent and Appellee.

APPEAL FROM: Montana Workers’ Compensation Court, WCC No. 2013-3235

Honorable David M. Sandler, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

E. Kiel Duckworth (argued), Duckworth Law Office, P.C., Ronan, Montana

Matthew J. Murphy (argued), Murphy Law Firm, Great Falls, Montana

Ben A. Snipes, Ross T. Johnson, Kovacich Snipes Johnson, P.C., Great Falls, 

Montana

For Appellee:

Bradley J. Luck (argued), Tessa A. Keller, Garlington, Lohn & Robinson,

PLLP, Missoula, Montana

Thomas E. Martello, Montana State Fund, Helena, Montana

For Amicus Workers’ Injury Law and Advocacy Group:

Kathleen G. Sumner, Law Offices of Kathleen G. Sumner, Hampstead, 

North Carolina

Paul Odegaard, Odegaard Miller Law, PLLC, Billings, Montana

Argued and Submitted: July 8, 2020

 Decided: December 16, 2020

Filed:

__________________________________________

Clerk

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12/16/2020

Case Number: DA 19-0523
2

Justice Beth Baker delivered the Opinion of the Court.

¶1 Susan Hensley appeals the Workers’ Compensation Court’s (“WCC”) ruling that 

§ 39-71-703(2), MCA, does not violate her right to equal protection of the law by denying 

an impairment award to a worker with a Class 1 impairment who has suffered no wage 

loss. We affirm. 

FACTUAL AND PROCEDURAL BACKGROUND

¶2 In January 2012, Hensley suffered a shoulder injury while working as a paramedic 

for Polson Ambulance. Her duties at the time included heavy-labor reaching and heavy 

weight-bearing activities. Hensley filed a workers’ compensation claim that month and 

Montana State Fund (“MSF”), the company’s insurer, accepted liability. Hensley’s injury 

left her unable to work from mid-February 2012 through late-May 2013. During that time, 

Hensley was diagnosed with a glenoid labral tear of her left shoulder, for which she 

received surgery in March 2012. Hensley received $33,156.81 in medical benefits and 

$34,169.70 in disability benefits from MSF during this time. 

¶3 In mid-May 2013, Hensley’s doctor released her to return to work on “full shifts” 

with “no restrictions on lifting” but with requested back-up for some activities. She 

returned at the same hourly rate as before the accident. A few weeks later, Hensley was 

declared at maximum medical improvement (“MMI”), though she continued to report 

ongoing pain and loss of sensation when engaged in overhead activity. She last saw her 

treating physician in October 2013 and reported “mild tingling and numbness into the arm, 

but overall . . . feeling good.” Hensley since has completed her nursing degree and works 

full-time as a registered nurse while also continuing to work part-time at 
3

Polson Ambulance. Both employers pay her a rate of pay higher than the rate she received 

when she returned to work in 2013. 

¶4 After Hensley reached MMI, her treating physician also assigned her a four percent 

whole person impairment rating, pursuant to the Sixth Edition of the AMA Guides to the 

Evaluation of Permanent Impairment (“Guides”). Hensley’s whole person impairment 

percentage, when considered together with the nature of her injuries, is a Class 1 

impairment under the Guides. This classification made Hensley ineligible for an 

impairment award under § 39-71-703(2), MCA. That statute allows impairment awards 

for claimants without actual wage loss only if they have a Class 2 or higher impairment 

rating. 

¶5 Hensley petitioned for trial before the WCC in October 2013. She asserted that 

§ 39-71-703(2), MCA, violates the Equal Protection and Due Process Clauses of the 

Montana Constitution and that the MSF should pay an impairment award for her 

four percent whole person impairment rating. On the basis of stipulated facts, both parties 

moved for summary judgment. In an order issued August 22, 2019, the WCC granted 

MSF’s motion for summary judgment and denied Hensley’s, ruling that 

§ 39-71-703(2), MCA, does not violate equal protection, and declined to rule on Hensley’s 

due process claim. Hensley appeals, arguing the WCC erred in its determination that 

§ 39-71-703(2), MCA, does not violate the Equal Protection Clause of the 

Montana Constitution. She does not appeal on the due process claim.1

 

1 Hensley notes that generally, “due process in the workers’ compensation context examines 

whether a claimant is afforded enough benefits to sustain the quid pro quo for the exclusive 
4

STANDARD OF REVIEW

¶6 We review a court’s grant of summary judgment de novo. Goble v. Mont. State

Fund, 2014 MT 99, ¶ 14, 374 Mont. 453, 325 P.3d 1211. Where there are no genuine 

issues of material fact, we determine whether the moving party is entitled to judgment as a 

matter of law. Satterlee v. Lumberman’s Mut. Cas. Co., 2009 MT 368, ¶ 9, 353 Mont. 265, 

222 P.3d 566. 

¶7 We review for correctness a court’s conclusions of law on the constitutionality of a 

statute. Goble, ¶ 14. “The constitutionality of a legislative enactment is prima facie 

presumed.” Satterlee, ¶ 10 (citing Powell v. State Comp. 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 statute unconstitutional beyond a reasonable doubt. Goble, ¶ 15 

(citing Henry v. State Comp. Ins. Fund, 1999 MT 126, ¶ 11, 294 Mont. 449, 982 P.2d 456). 

We ask not “whether it is possible to condemn, but whether it is possible to uphold” the 

challenged statute. Satterlee, ¶ 10 (quoting Powell, ¶ 13). If any doubt exists, it must be 

resolved in favor of the statute. Powell, ¶ 13. See also Robinson v. State Comp. Mut. Ins. 

Fund, 2018 MT 259, ¶ 13, 393 Mont. 178, 430 P.3d 69.

DISCUSSION

¶8 Because the parties stipulated to the facts, the issue is whether the WCC correctly 

entered judgment as a matter of law that § 39-71-703(2), MCA, is constitutional. We apply 

the statute in effect in 2012, when Hensley was injured. Goble, ¶ 16. 

 

remedy. Here, Hensley is not arguing § 703(2) undermines the quid pro quo.” Hensley thus is not 

making a discrete claim that the statute undermines the quid pro quo.
5

Section 39-71-703, MCA (2011), provides compensation to workers for permanent partial 

disability. Permanent Partial Disability (“PPD”) is defined as: 

a physical condition in which a worker, after reaching maximum 

medical healing:

(a) has a permanent impairment, as determined by the sixth edition of 

the American medical association’s Guides to the Evaluation of Permanent 

Impairment, that is established by objective medical findings for the ratable 

condition. The ratable condition must be a direct result of the compensable 

injury or occupational disease and may not be based exclusively on 

complaints of pain.

(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(27), MCA (2011). A worker has actual wage loss when “the wages that 

a worker earns or is qualified to earn after the worker reaches maximum healing are less 

than the actual wages the worker received at the time of the injury.” 

Section 39-71-116(1), MCA (2011).

¶9 Subsection (2) of § 39-71-703, MCA, allows a worker—though ineligible for 

PPD benefits—to nonetheless receive payment of an impairment award when the worker 

has no actual wage loss from the injury, but only if the worker receives a Class 2 or greater 

class of impairment. Subsection (2), which remains unchanged from the 2011 version of 

the statute, reads in full: 

When a worker receives a Class 2 or greater class of impairment as converted 

to the whole person, as determined by the sixth edition of the American 

medical association Guides to the Evaluation of Permanent Impairment for 

the ratable condition, and has no actual wage loss as a result of the 

compensable injury or occupational disease, the worker is eligible to receive 

payment for an impairment award only.
6

Section 39-71-703(2), MCA. 

¶10 Section 39-71-703, MCA, is part of Montana’s comprehensive workers’ 

compensation system, which—with few exceptions not applicable here—is the sole 

method of recovery for workers injured on the job. Section 39-71-411, MCA. The 

2011 Legislature enacted a series of changes to the workers’ compensation system through 

House Bill 334, 62nd Leg., Reg. Sess. (Mont. 2011) (“HB 334”). HB 334 updated to the 

Sixth Edition the version of the Guides referenced throughout the workers’ compensation 

statutes and amended § 39-71-703(2), MCA, to limit impairment-only awards to claimants 

with no actual wage loss and a Class 2 or greater class of impairment. Before then, any 

claimant with no actual wage loss and an impairment rating was eligible for an impairment 

award. Section 39-71-703(2), MCA (2009).2 

¶11 The Legislature has used the Guides for more than thirty years to establish a 

worker’s impairment rating. See § 39-71-711(1)(b), MCA (1989). Similar to the 

Fifth Edition of the Guides, the Sixth Edition defines “impairment” as “[a] significant 

 

2 Hensley points out that Montana is the only state to use the Class rating as the basis for an 

impairment-only award in workers’ compensation matters. Many state statutes, however, simply 

adopt the most recent version of the Guides without legislative review upon the publication of a 

new version. See, e.g. Alaska Stat. § 23.30.190(d); Wyo. Stat. Ann. § 27-14-405(g); 820 Ill. Comp.

Stat. Ann. 305/8.1B(a). Others do not have comparable statutes providing for an impairment 

award for injury without wage loss. Amicus Workers’ Injury Law and Advocacy Group points to 

one state—North Dakota—that restricts impairment-only awards to those who suffer a 14% or 

greater whole-body impairment as determined in accordance with the Sixth Edition of the Guides. 

N.D. Cent. Code § 65-05-12.2.8, 12.2.10. Outside the workers’ compensation context, Class is

used as a cutoff for silicosis litigation in several states. See, e.g. Tex. Civ. Prac. & Rem. Code 

Ann. § 90.004; Tenn. Code Ann. § 29-34-304; Ohio Rev. Code Ann. § 2307.85 (all requiring a 

Class 2 or higher impairment in order to assert a tort claim for silicosis). Regardless of a state-bystate comparison, Montana’s treatment of the Guides is subject to rational-basis review.
7

deviation, loss, or loss of use of any body structure or function in an individual with a 

health condition, disorder, or disease.” An “impairment rating” is a “consensus-derived 

estimate of loss of activity” reflecting the “severity of impairment for a given health 

condition, and the degre[]e of associated limitations in terms of Activities of Daily Living.” 

A “whole person impairment” is a percentage that “estimate[s] the impact of the 

impairment on the individual’s overall ability to perform Activities of Daily Living, 

excluding work.” The whole person impairment rating ranges from normal (0%) to totally 

dependent on others for care (90+%) to approaching death (100%).

¶12 The Sixth Edition of the Guides introduced the use of standardized Impairment 

Classes in the determination of a patient’s impairment rating. The Guides use these 

Classes, from zero to four, as part of an injury- or organ-specific impairment grid. The 

Classes are defined to represent loss of functionality. They “range from level 0 

(no functional problem) to level 4 (complete problem with total functional loss).” Class 1 

is used for persons with a “MILD problem,” described as “[s]ymptoms with strenuous 

activity; no symptoms with normal activity (independent).” Class 2 is used for persons 

with a “MODERATE problem,” described as “[s]ymptoms with normal activity 

(independent).” Classes 3 and 4, described as “SEVERE” and “COMPLETE,” 

respectively, are reserved for persons who are either “partially dependent” or 

“totally dependent” and have progressively more severe symptoms. 

¶13 The range of whole person impairment percentages assigned to each Class depends 

on the nature of the injury or condition; the Guides indicate that the ranges represent the 

effect of the particular injury on the person’s overall functionality. Though the percentages 
8

of impairment may vary depending on the disorder or condition, the generic template is 

consistent across all impairment classification grids. An impairment grid is a table a 

medical provider uses to calculate a patient’s impairment rating. The grids are flexible and 

vary somewhat between different injuries or organ systems but follow a standardized 

template. Class 0 is always a 0% impairment percentage. In the Shoulder Regional Grid 

for Upper Extremity Impairments, a Class 1 impairment is associated with a possible whole 

person impairment from 1%-13%; Class 2 from 14%-25%; Class 3 from 26%-49%; and 

Class 4 from 50%-100%. The grids for other musculoskeletal systems use similar 

impairment percentages. But the grids for other organ systems may place a whole person 

impairment percentage in different groupings; for Metabolic Bone Disease, for example, 

Class 1 ranges from 1% to only 3% and Class 2 from 4% to 5%. The impairment grid 

includes a Severity Grade for each Class and a list of Impairment Criteria to be considered 

depending on the specific injury: History of Clinical Presentation, Physical Examination 

or Physical Findings, Clinical Studies or Objective Test Results, and sometimes Functional 

History and Burden of Treatment Compliance (BOTC).3 The Impairment Criteria describe 

symptoms or clinical findings for each possible Impairment Class column. For each 

impairment grid, the Guides designate one Impairment Criterion as the “key factor”; that 

factor determines the Class within which the final impairment will fall. For most 

 

3

“The BOTC refers to the impairment that results from adhering to a complex regimen of 

medications, testing, and/or procedures to achieve an objective, measurable, clinical improvement 

that would not occur, or could potentially be reversed, in the absence of compliance.” In the 

musculoskeletal assessments, the BOTC is not separately added because it “is already considered 

as part of the History of Clinical Presentation[.]”
9

conditions, including “musculoskeletal organ systems,” the key factor is History of Clinical 

Presentation—the “pertinent history and case summary data at MMI that identify an 

anatomic region or diagnosis being considered, confirm history of illness or injury, and 

support the selection of the particular disease specific impairment grid[, including] 

[h]istorical indicators of severity and chronicity of the condition[.]” This is used as the 

key factor because “it captures considerable information regarding an individual’s prior 

clinical course that is relevant to the rating but which may not be apparent on the day of 

the examination.” 

¶14 The Generic Template for Impairment Classification Grids, which is the format the 

Guides adopt for a uniform process of assigning impairment, defines each impairment 

criterion to describe the patient’s condition. For Class 1, the descriptions are:

History of Clinical Presentation: Symptoms controlled with continuous 

treatment or intermittent, mild symptoms despite continuous treatment

Physical Examination Or Physical Findings: Physical findings not present 

with continuous treatment or intermittent, mild physical findings

Clinical Studies Or Objective Test Results: Consistently normal with 

continuous treatment or intermittent mild abnormalities

Functional History [which “is used as a grade modifier in the musculoskeletal 

chapters”]: Pain/symptoms with strenuous/vigorous activity; Able to 

perform self-care activities independently

¶15 A medical provider uses the impairment grid to determine an impairment percentage 

as follows. First, the provider notes which Impairment Criterion is the key factor in 

whichever injury-specific impairment grid the provider is using. She will then determine 

the claimant’s overall Impairment Class by determining the description of symptoms or 
10

findings in the key factor criterion with which the claimant presents. Next, the provider 

adjusts for other non-key Impairment Criteria that may be present. If these criteria fall into 

the same Class as the key factor, the overall impairment percentage is assigned the middle 

Severity Grade for that Class. If the other criteria fall into a higher or lower Class, however,

the Severity Grade will be modified accordingly.4 The resulting percentage is the patient’s 

impairment rating.5 

¶16 The result of this system is that a claimant with an overall whole person impairment 

percentage may, depending on her specific injury and individual medical factors, fall into 

Class 1, while another claimant with the same whole person percentage, yet a different 

injury, may fall into Class 2 or higher. Hensley thus claims that § 39-71-703(2), MCA, 

violates equal protection because a claimant with the same four percent whole person 

impairment percentage may fall into Class 2 and therefore receive an impairment award, 

while she is denied one despite suffering the identical whole person impairment percentage. 

¶17 Hensley brings a facial challenge against the statute. She maintains that as applied 

to her, the “facial challenge encompasses her claim. If the Court agrees § 703(2) is facially 

unconstitutional for all similarly situated claimants, it would include Hensley.” Hensley 

thus bears the heavy burden to show “that ‘no set of circumstances exists’ under which the 

 

4

If the Severity Grade adjustment results in the impairment rating moving into a higher or lower 

Class than originally assigned under the key factor, the Guides instruct the provider to stop at the 

highest or lowest Severity Grade in the Class as determined by the key factor. The Guides caution

that should non-key Impairment Criteria be several Impairment Classes higher than the key factor, 

the examiner “might want to be certain that the non-key factors were, indeed, correct.” 

5 Some impairment grids automatically provide a whole person impairment rating rather than just 

an impairment rating; the Guides additionally contains charts allowing a provider to combine 

impairment ratings for multiple injuries into a final whole person impairment rating. 
11

statute would be valid or that the statute lacks any ‘plainly legitimate sweep.’”

In re S.M., 2017 MT 244, ¶ 10, 389 Mont. 28, 403 P.3d 324 (quoting Wash. State Grange 

v. Wash. State Republican Party, 552 U.S. 442, 449, 128 S. Ct. 1184, 1190 (2008));see also 

Robinson v. State Comp. Mut. Ins. Fund, 2018 MT 259, ¶ 17 n.1, 393 Mont. 178, 430 P.3d 

69 (observing that the challenger “must show . . . that the law is unconstitutional in all of 

its applications”) (quoting Mont. Cannabis Indus. Ass’n. v. State, 2016 MT 44, ¶ 14, 382 

Mont. 256, 368 P.3d 1131 (“MCIA II”)); In re Marriage of K.E.V., 267 Mont. 323, 336, 

883 P.2d 1246, 1255 (1994) (Trieweiler, J., concurring and dissenting) (noting that “a facial 

challenge to a legislative Act is, of course, the most difficult challenge to mount 

successfully, since the challenger must establish that no set of circumstances exists under 

which the Act would be valid.”) (citation and internal quotation marks omitted). 

Equal Protection Analysis

¶18 The Fourteenth Amendment to the United States Constitution and Article II, 

Section 4 of the Montana Constitution guarantee equal protection of the law to every 

person. Powell, ¶ 16. The principal purpose of the Equal Protection Clause is “to ensure 

that Montana’s citizens are not subject to arbitrary and discriminatory state action.” 

MCIA II, ¶ 15 (citing Powell, ¶ 16). Equal protection thus guarantees that persons similarly 

situated with respect to a legitimate government purpose of a law receive like treatment. 

Rausch v. State Comp. Ins. Fund, 2005 MT 140, ¶ 18, 327 Mont. 272, 114 P.3d 192 

(“Rausch II”). “However, the equal protection clause does not preclude different treatment 

of different groups so long as all individuals within the group are treated the same.” 

Rausch II, ¶ 18 (citing Powell, ¶ 22). This Court evaluates potential equal protection 
12

violations under a three-step process. Satterlee, ¶ 15. First, the Court identifies the classes 

involved and determines if they are similarly situated. Satterlee, ¶ 15. Second, the Court 

determines the appropriate level of scrutiny to apply to the challenged statute. 

Satterlee, ¶ 17. Finally, the Court applies the appropriate level of scrutiny to the statute. 

Satterlee, ¶ 18. 

Defining the Classes

¶19 We identify similarly situated classes by isolating the factor allegedly subject to 

impermissible discrimination; if two groups are identical in all other respects, they are 

similarly situated. Goble, ¶ 29 (citing Snetsinger v. Mont. Univ. Sys., 2004 MT 390, ¶ 27, 

325 Mont. 148, 104 P.3d 445; Oberson v. U.S. Dept. of Agric., 2007 MT 293, ¶¶ 19-20, 

339 Mont. 519, 171 P.3d 715). Hensley has a four percent whole person Class 1 

impairment and, because she returned to work at the same pay-rate as before her injury, 

has no actual wage loss and is not eligible for an impairment award. Claimants with a 

Class 2 (or 3 or 4) impairment and no wage loss, however, are eligible for an impairment 

award regardless of their whole person impairment percentage. Hensley contends that a 

claimant’s Class 1 impairment is the sole factor differentiating her from otherwise similarly 

situated claimants. MSF argues that Hensley has mischaracterized the classes at issue—

that the heart of Hensley’s argument is that injured workers should receive PPD benefits 

in all circumstances, and therefore the classes are properly stated as Class 1 claimants 

without wage loss and Class 1 claimants with wage loss. 

¶20 We do not agree with MSF’s characterization of the classes. A worker with actual 

wage loss and a whole person impairment rating greater than zero percent, be it designated 
13

Class 1 or Class 2, is entitled to full PPD benefits pursuant to § 39-71-703(1), MCA. 

Relying on Wilkes v. Mont. State Fund, 2008 MT 29, ¶ 6, 341 Mont. 292, 177 P.3d 483, 

MSF’s characterization of the classes focuses on a worker’s status as having or not having 

a PPD. Hensley does not contest that she does not have a PPD or how PPD claimants stand 

in respect to her own position; rather, she asserts that other claimants without a PPD, but 

with a whole person impairment, will receive an impairment award so long as their 

impairments are Class 2 or higher under the Guides. Hensley thus alleges discrimination 

on the basis of a non-wage-impacted claimant’s Impairment Class rating. This 

distinguishes Wilkes, which involved denial of PPD benefits to certain claimants without 

wage loss. We agree with the WCC that the two classes here are best described as 

(1) claimants with a Class 1 impairment, without wage loss; and (2) claimants with a Class 

2, 3, or 4 impairment, without wage loss.6 

Similarly Situated

¶21 Next, the Court must determine if the two classes are similarly situated by isolating 

the factor subject to the allegedly impermissible discrimination (here a claimant’s Class 1 

rating as opposed to a higher Impairment Class rating). If the two groups are equivalent in 

all respects other than the isolated factor, then they are similarly situated. See Goble, ¶ 29; 

Rausch II, ¶ 18. The WCC concluded that, “based upon [the Guides], claimants with 

Class 1 impairments are not similarly situated to claimants with Class 2, 3, and 4 

 

6 We recognize that it is unlikely a Class 3 or 4 claimant will suffer no actual wage loss, but for 

purposes of equal protection classification, the three Classes (2 and higher) belong together.
14

impairments.” We disagree. “[W]hether [a] challenged statute creates a discriminatory 

classification is informed by the statute’s purpose.” MCIA II, ¶ 17 (citing Caldwell v. 

MACo Workers’ Comp. Tr., 2011 MT 162, ¶ 19, 361 Mont. 140, 256 P.3d 923). When the 

single distinguishing factor between the two classes constitutes a “fundamental distinction” 

relative to the underlying purpose of the statute, the classes are not similarly situated. 

See MCIA II, ¶¶ 17-18 (concluding that distinctions in the regulation of different narcotics, 

specifically the use of federally prohibited marijuana, results in a fundamental distinction 

plainly relating to the underlying justification of the statute sufficient to render the two 

classes dissimilar for equal protection purposes); Wilkes, ¶¶ 19-20 (holding that for the 

purposes of PPD benefits, whether a claimant has actual wage loss is a fundamental 

distinction plainly relating to the underlying justifications of § 39-71-703(1)(a), MCA, that 

“wage-loss benefit[s] should bear a reasonable relationship to actual wages lost as a result 

of work-related injury or disease”). Evident from its plain language, the purpose of 

§ 39-71-703(2), MCA, is to provide an impairment award to a claimant with no actual wage 

loss who nevertheless suffers “the loss of physical function of his or her body.” 

Rausch v. State Comp. Ins. Fund, 2002 MT 203, ¶ 21, 311 Mont. 210, 54 P.3d 25 

(“Rausch I”). 

¶22 Unlike the actual wage loss distinction in Wilkes, there is no fundamental distinction 

between Class 1 and Class 2 claimants relative to the purpose of § 39-71-703(2), MCA. 

Isolating the allegedly discriminatory factor here, a claimant’s Impairment Class, leaves 

all potential claimants without wage loss similarly situated under § 39-71-703(2), MCA. 

Both classes of claimants have a whole person impairment percentage greater than zero—
15

and possibly even the same percentage—representing at least a nominal degree of loss of 

physical function. Both classes of claimants have suffered some measurable loss of 

functionality, and neither has endured a loss of wages as defined by the statute. It is only 

when the isolated factor, Impairment Class, is added that the classes receive dissimilar 

treatment—claimants with a Class 2 or greater impairment may recover an impairment 

award, but claimants with a Class 1 impairment may not. Claimants with a Class 1 

impairment and no wage loss and claimants with a Class 2 or higher impairment with no 

wage loss thus are similarly situated for equal protection purposes. 

Rational Basis Scrutiny

¶23 Having defined the relevant classes and determined that they are similarly situated, 

we turn to a facial examination of the statute under the appropriate level of scrutiny. This 

Court has long held that rational basis review applies to workers’ compensation statutes, 

and no party suggests otherwise. See Goble, ¶ 35; Satterlee, ¶ 17; Rausch II, ¶ 18; 

Powell, ¶ 21. “The rational basis test requires that (1) the statute’s objective was legitimate, 

and (2) [] the statute’s objective bears a rational relationship to the classification used by 

the legislature.” Satterlee, ¶ 18. We defer to the Legislature’s policy choices; in doing so, 

we recognize that cost control may be considered in conjunction with other legitimate 

interests but cannot alone justify disparate treatment of similar classes. See Satterlee, ¶ 29 

(“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”); see also 

Powell, ¶ 30; Caldwell, ¶ 34. Because the rational basis test requires that a statute rationally 
16

relate to a legitimate government interest, we take into account the public policy 

considerations underlying Montana’s workers’ compensation system in coming to a 

conclusion. Goble, ¶ 36; see also Reesor v. Mont. State Fund, 2004 MT 370, ¶ 16, 325 

Mont. 1, 103 P.3d 1019; Henry, ¶¶ 34-35. 

Legitimate Statutory Objective

¶24 Hensley argues that § 39-71-703(2), MCA, fails rational basis review because the 

Legislature’s sole objective in amending the statute in 2011 was cost containment. She 

argues that there is no legitimate objective to be served in “tak[ing] benefits from less 

injured people and giv[ing] them to more injured people.”

¶25 MSF counters that the Legislature sought to strengthen the workers’ compensation 

system as a whole and to increase certain benefits—including those found in 

§ 39-71-703(2), MCA—pursuant to the system’s goals. MSF argues that the Legislature’s 

decision to strengthen benefits to workers who suffer PPD demonstrates that its objective 

in amending § 39-71-703, MCA, was not solely cost containment.

¶26 The statutory amendment that limited eligibility for an impairment award to those

with a Class 2 or greater impairment was included in a bill containing many other 

substantive changes to the workers’ compensation system. The fiscal note attached to HB 

334 contemplated overall cost savings but revealed numerous changes that would increase 

costs and benefits within the system. Among those changes, the bill added twenty-five 

weeks to the PPD award computation found in § 39-71-703(3)-(5), MCA, estimated to cost 

$3,500,000. This computation is used not only in computing the benefits to which PPD 
17

claimants are entitled under § 39-71-703(1), MCA, but also in computing the impairment 

award claimants receive under § 39-71-703(2), MCA.7 

¶27 The change reflects the Legislature’s prerogative to determine how best to fulfill the 

public policy objectives behind the workers’ compensation system. Those objectives are 

set forth in § 39-71-105, MCA (2011). One is to provide no-fault “wage-loss and medical 

benefits to a worker suffering from a work-related injury or disease.” 

Section 39-71-105(1), MCA (2011).8 Another “is to return a worker to work as soon as 

possible after the worker has suffered a work-related injury or disease.” 

Section 39-71-105(3), MCA (2011). Adding an additional twenty-five weeks to the 

calculation used in determining PPD awards accomplishes both goals. 

¶28 “‘[T]he power of the legislature to fix the amounts, time and manner of payment of 

workers’ compensation benefits is not doubted.’” Walters v. Flathead Concrete Prods., 

2011 MT 45, ¶ 29, 359 Mont. 346, 249 P.3d 913 (quoting Satterlee, ¶ 34). “To a certain 

extent, nearly all legislation sets forth classifications regarding applicability, benefits and 

recipients; the fact that some of these classifications are imperfect does not necessarily 

mandate a conclusion that they violate the equal protection clause.” Gulbrandson v. Carey, 

272 Mont. 494, 503, 901 P.2d 573, 579 (1995) (citation omitted). We summarized in 

Walters the numerous legitimate governmental concerns underlying the WCA. Among 

 

7 Consistent with the amendment, Hensley used the 400-week figure, rather than the 

pre-amendment 375-week figure, in computing her theoretical impairment award. 

8 Hensley received all such benefits from the time of her injury until she was released to return to 

work at full pay.
18

those, “[w]e have identified improving the financial viability of the system, controlling 

costs of the system, and providing benefits as ‘legitimate governmental objective[s].’” 

Walters, ¶ 28 (quoting Stratemeyer v. Lincoln Co., 259 Mont. 147, 155, 855 P.2d 506, 511 

(1993) (“Stratemeyer I”)). We noted “that the quid pro quo itself serves legitimate 

purposes, providing ‘no fault recovery’ for workers and ‘predictability of consistent 

workers[’] compensation payments’ for the employer.” Walters, ¶ 28 (quoting Satterlee, 

¶ 39).

¶29 The Workers’ Compensation Act contains no explicit public policy to provide 

impairment awards to claimants without wage loss. But MSF does not disagree that 

§ 39-71-703(2), MCA, advances a legitimate objective in compensating workers who 

experience a loss of physical function of some part of their body, whether or not they have 

sustained any actual wage loss. See generally Rausch I, ¶ 21 (“An impairment award is 

paid to compensate the worker for the loss of physical function of his or her body, which 

may have ramifications beyond just the worker’s ability to return to work.”). We agree 

that providing impairment-only awards to those workers functionally impacted by an 

injury, despite their ability to continue working at the same or higher pay, serves a 

legitimate objective. Having chosen to provide such awards, the Legislature may not 

condition them on arbitrary classifications. But the Legislature legitimately may choose a 

classification system that provides consistency and uniformity in functional assessment, 

ensuring that people with similar functional limitations are given like classifications. And 

by the Guides’ definition—unaltered from the previous edition—“impairment” is a 

“significant” deviation or loss; the purpose of the impairment assessment is to determine 
19

whether a particular claimant has sustained such a loss and should be compensated. In 

Satterlee, ¶ 30, we found a legitimate government interest in providing Permanent Total 

Disability benefits that bear a reasonable relationship to actual wages lost. In the context 

of impairment-only awards, the government has a legitimate interest in providing benefits 

that bear a reasonable relationship to the actual functional loss a worker sustains. 

Considering the purpose of an impairment award within the overall scheme of the workers’ 

compensation system, the objective is legitimate.

Rational Relationship to the Statute’s Objective

¶30 That leads to the final inquiry: whether a legitimate governmental objective bears 

some identifiable rational relationship to the statutory classification. Satterlee, ¶ 18; 

Powell, ¶ 21. Hensley does not dispute the Guides’ use of Impairment Class in determining 

an injured worker’s impairment rating but argues that the Legislature “misappropriated” 

the Impairment Class as a means to differentiate between claimants in 

§ 39-71-703(2), MCA. Hensley argues that, because the purpose of an impairment award 

is to compensate a claimant for permanent loss of functionality and not for wage loss, 

precluding such compensation based only on Impairment Class does not account for the 

whole-person impairment rating and therefore is arbitrary and irrational.

¶31 Agreeing with this premise, Justice Gustafson’s Dissent relies on Caldwell for the 

proposition that the Legislature cannot eliminate benefits from one class of workers to 

increase benefits for another class. Dissent, ¶ 85. But there are two problems with this 

characterization. First, it is too simplistic. As both Hensley and the Dissent acknowledge, 

the Equal Protection Clause allows the Legislature to treat similarly situated individuals 
20

differently, provided it has a rational, as opposed to an arbitrary, reason for doing so. 

See Goble, ¶ 37 (finding rational basis for termination of PPD benefits to incarcerated 

claimants); see also Henry, ¶ 40 (noting that “offering services to some while excluding 

others for any arbitrary reason” is impermissible though it “will always result in lower 

costs”) (quoting Heisler v. Hines Motor Co., 282 Mont. 270, 283, 937 P.2d 45, 52 (1997))

(first emphasis added); Stratemeyer I, 259 Mont. at 154, 855 P.2d at 511 (holding that 

excluding workers’ compensation for mental or stress claims occurring without a physical 

component rationally relates to the legitimate governmental objective of controlling the 

costs of the workers’ compensation program in order to continue providing benefits). 

¶32 In Caldwell, we held the challenged dissimilar treatment unlawful where 

termination of rehabilitation benefits had no relationship to a worker’s injury or prospects 

for returning to work but was based exclusively on age—an arbitrary classification because 

age had nothing to do with a worker’s actual ability to return to work. Here, in contrast, 

the dissimilar treatment is based on the difference in a worker’s functional limitation. A

worker’s functional limitation—the very basis of determining whether she is “impaired” 

and thus entitled to an award—is based on the medical evidence, as interpreted by a medical 

provider, once a claimant reaches MMI, not by the mere passage of time as in Caldwell. 

Rather than an arbitrary choice unmoored from the purpose of the benefit, the Class 

designation represents a method by which the Guides seek to quantify a person’s functional 

assessment, grouping persons with similar overall limitations—or lack thereof—into 

similar Classes. 
21

¶33 The second problem with Hensley’s and the Dissent’s characterization is that the 

Guides’ adoption of a uniform system of Classes, and the Legislature’s reliance on that 

classification system, does not “take benefits” from a class of workers to give them to 

another. The Sixth Edition emphasizes the need for consistency, noting that previous 

versions of the Guides had considerable variation in the number of impairment classes 

depending on a person’s specific disorder or injury.9 The authors explained that that 

“[c]riticism of previous editions of the Guides includes lack of validity due, in part, to 

inadequate attention to functional assessment.”

¶34 The Sixth Edition of the Guides thus categorizes whole person impairments into one 

of five classes based on the severity of the person’s loss of function for the condition at 

issue. The Guides’ stated goal for the classification system is to “yield maximal internal 

consistency of impairment ratings across organ systems.” To determine a claimant’s whole 

person impairment, the claimant’s medical provider applies the Guides’ criteria 

“to translate human pathology resulting from a trauma or disease process into a percentage 

of the whole person.” The findings and symptoms found within each impairment grid vary 

based on the injury the provider is assessing, and the classification takes into account its 

impact on the patient. 

 

9 The Sixth Edition authors observed that prior versions had “a wider range and variation in 

impairment percentages within organ systems.” The Sixth Edition’s design was to improve 

consistency in the classification range for different disorders or “organ systems.” 
22

¶35 The Guides contain demonstrative examples of examination results and 

corresponding impairment ratings for various body parts, organ systems, and types of 

diseases. Impairment Class is referenced in these examples as an expression of the final 

impairment percentage rating. For example, a hypothetical hyperparathydroidism analysis 

concludes with: “Impairment Rating: Class 1, 2% [whole person impairment]”; likewise, a 

healed compound bone fracture analysis ends with: “Impairment Rating: 8% impairment 

of the whole person. This individual is in [C]lass 2 . . . .” Clearly, rather than being merely 

an organizational system as Hensley argues, the Guides designed the Impairment Class to 

provide a more uniform process for assigning impairment based on the claimant’s specific 

condition. 

¶36 Neither an impairment percentage nor a classification of different percentages into 

groupings provides a perfect system of assessing functional disability. The Guides

acknowledge these imperfections, pointing out that assessment of impairment is an inexact 

science: 

The relationship between impairment and disability remains both complex 

and difficult, if not impossible, to predict. In some conditions there is a 

strong association between level of injury and the degree of functional loss 

expected in one’s personal sphere of activity (mobility and ADLs). The same 

level of injury is in no way predictive of an affected individual’s ability to 

participate in major life functions (including work) when appropriate 

motivation, technology, and sufficient accommodations are available. 

Disability may be influenced by physical, psychological, and psychosocial 

factors that can change over time.

The Guides recognize that impairment and disability “are complex concepts that are not 

yet amenable to evidence-based definition.” Although they note that the diagnosis should 

be evidence-based, “the impact of injury or illness is dependent on factors beyond physical 
23

and psychological aspects, including psychosocial, behavioral and contextual issues. 

Therefore, it is more challenging to obtain data needed to define an evidence-based 

approach to impairment assessment.” The Sixth Edition set out to improve the consistency 

of the Guides’ functional assessment methodology in an attempt, albeit still less than 

precise, to explain the level of a person’s disability. 

¶37 In sum, both the impairment percentage and Class designation are based on 

objective medical findings, as the WCA requires, but neither provides an air-tight formula 

for expressing a person’s level of functional impact from an injury or condition. The right 

to an impairment award not being fundamental, the Legislature may define its contours, 

provided the distinction is not arbitrary. See Powell, ¶ 21; Satterlee, ¶¶ 27-28. The 

Dissents mistakenly equate medical impairment classification with classification under the 

law for equal protection purposes. To qualify a worker to receive compensation for 

permanent partial disability, the Legislature chose to use—along with wage loss—the 

Guides’ permanent impairment rating, which reflects the whole person impairment 

percentage. See §§ 39-71-703(1)(b), (requiring permanent impairment rating more than 

zero), 39-71-711(1)(c), MCA (requiring that an “impairment rating . . . be expressed as a 

percentage of the whole person”). But where a worker does not have a permanent partial 

disability, the Legislature has adopted the Guides’ Class designation to determine 

eligibility for an impairment award. It needed only a rational basis for doing so. And it 

had one, determining to allow such an award only when a worker’s injury—as determined 

by the Guides—affects her ability to engage in “normal activity” without symptoms.
24

¶38 “Impairment” being tied to some “significant” loss or deviation, the Legislature 

reasonably could choose the Guides’ new template format for categorizing that level of 

severity. “[I]t may be ‘easy to opine that the Legislature could have done better’” in setting 

parameters for functional impairment determinations; “the law, however, ‘requires us to 

recognize that 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.’” MCIA II, ¶ 27 

(quoting Walters, ¶ 33). In constitutional analysis, particularly under rational basis 

scrutiny, “[o]ur role is not to second guess the prudence of a legislative decision.” 

Satterlee, ¶ 34. 

¶39 For the statute to fail on a facial challenge, we would have to conclude that the 

Legislature must award an impairment benefit to any worker with the slightest impact from 

a work-related injury. But as the Guides acknowledge, disability “may be influenced by 

physical, psychological, and psychosocial factors” not measured by clinical evaluation 

alone, and an impairment rating is not a scientifically precise measure of a person’s 

functional assessment. Applying appropriate deference to the legislative choice of policy 

alternatives, we conclude that the distinction between Class 1 claimants without wage loss 

and Class 2 or higher claimants without wage loss bears a rational relationship to the 

objectives of § 39-71-703(2), MCA. The WCC properly recognized that it is not arbitrary 

to limit impairment awards to those whose symptoms and functional limitations impact 

normal activities; such a distinction is consistent with the definition of “impairment.” That 

the precise impairment percentages falling under Class 1 may vary between different 

workers and different injuries is simply a function of the Sixth Edition’s design to focus on 
25

uniformity of functional assessment. Some conditions yield more functionality than others; 

both the whole person impairment percentage and the Class designation account for this 

variability. “[R]ational distinctions may be made with substantially less than mathematical 

exactitude.” Ward v. Johnson, 2012 MT 96, ¶ 23, 365 Mont. 19, 277 P.3d 1216 (citation 

omitted). Hensley cannot demonstrate that the statute is unconstitutional in all of its 

applications.10

¶40 In adopting a standardized Impairment Class system, the Guides’ authors sought to 

maximize the “internal consistency of impairment ratings across organ systems.” The 

Legislature rationally could decide that claimants with a Class 2 or higher impairment 

rating are more likely to have sustained the loss of functionality that impairment awards 

are meant to compensate. That is a decision within its discretion. 

CONCLUSION

¶41 We indulge “every possible presumption . . . in favor of the constitutionality of a 

challenged statute.” Gulbrandson, 272 Mont. at 503, 901 P.2d at 579. We agree with the 

WCC that § 39-71-703(2), MCA, passes rational-basis muster under the Equal Protection 

Clause of the Montana Constitution. Though the classes at issue are similarly situated, we 

conclude that Hensley has not met her burden of demonstrating that the statutory 

differentiation between them violates the constitution. For the purposes of eligibility for 

the impairment award found in § 39-71-703(2), MCA, the Legislature had a rational basis 

 

10 A worker whose injury and whole person impairment percentage result in a Class 1 impairment 

could bring an as-applied challenge if the worker claims to have suffered a significant functional 

impact or injuries to multiple organ systems not accounted for in the Class designation, but Hensley 

makes no such claim in this case.
26

for distinguishing between Class 1 and Class 2 or higher claimants without actual wage 

loss. The WCC’s judgment is therefore affirmed. 

/S/ BETH BAKER

We Concur: 

/S/ MIKE McGRATH

/S/ JIM RICE

Justice James Jeremiah Shea, specially concurring.

¶42 In his dissent, Justice Sandefur provides a compelling analysis of the facial 

constitutionality of § 39-71-703(2), MCA, when considered within the framework of the 

quid pro quo structure that provides the bedrock of our workers’ compensation system. 

However, this argument was not presented to either the Workers’ Compensation Court or 

to this Court on appeal. The Court’s Opinion correctly notes that Hensley does not make 

a discrete claim that § 39-71-703(2), MCA, undermines the quid pro quo. Opinion, ¶ 5, n 1. 

More to the point in my consideration, though, Hensley does not argue the implications of 

the quid pro quo in her equal protection challenge. The only one to make that argument in 

this case is Justice Sandefur. Compelling as the argument may be, it would be 

fundamentally unfair to both the parties and the Workers’ Compensation Court to decide 

the constitutionality of a statute based on an argument that was never made. It is well 

established that we do not consider new arguments or legal theories for the first time on 

appeal because it is fundamentally unfair to the parties. Pilgeram v. GreenPoint Mortg. 
27

Funding, Inc., 2013 MT 354, ¶¶ 20-21, 373 Mont. 1, 313 P.3d 839. It also is unfair to fault 

the trial court on an issue that it was never given an opportunity to consider. 

State v. Montgomery, 2010 MT 193, ¶ 11, 357 Mont. 348, 239 P.3d 929.

¶43 Considering only the arguments as they were presented to the Workers 

Compensation Court and to this Court, I agree with the Court’s ultimate conclusion that, 

in this particular case, Hensley has not met her burden of demonstrating that 

§ 39-71-703(2), MCA, violates equal protection. I therefore concur in the result affirming 

the WCC.

/S/ JAMES JEREMIAH SHEA

Justice Ingrid Gustafson, dissenting. 

¶44 Susan Hensley (Hensley) appeals from the Workers’ Compensation Court’s Order 

Granting Respondent’s Motion for Summary Judgment and Denying Petitioner’s Motion 

for Summary Judgment in which the WCC ruled that Hensley had failed to prove that 

§ 39-71-703(2), MCA (2011), violated her constitutional right to equal protection. I agree 

with the Plurality that the WCC correctly identified the classes but erred in concluding the 

identified classes were not similarly situated. I disagree with the Plurality’s determination 

that § 39-71-703(2), MCA, survives this equal protection challenge because I would hold 

that no legitimate governmental objective to deny impairment awards to the identified class 

has been identified. While the Plurality identifies reallocation as a legitimate governmental 

objective, it does not explain how this objective is legitimate in this instance when this 

Court flatly rejected this approach in Caldwell v. MACo Workers’ Comp. Trust, 2011 MT 
28

162, ¶¶ 38-47, 361 Mont. 140, 256 P.3d 923, and it conflates the identification of a 

legitimate governmental objective with the analysis of whether the identified legitimate 

governmental objective bears a rational relationship to the classification used by the 

Legislature. Because I conclude § 39-71-703(2), MCA, does not fulfill a legitimate 

governmental objective and violates Hensley’s constitutional right to equal protection, I 

would also conclude it is unnecessary to consider whether the classification used by the 

Legislature bears a rational relationship to the statute’s objective and I address this issue 

only in response to the Plurality’s faulty conclusion in this regard. I would reverse and 

remand. 

FACTUAL AND PROCEDURAL BACKGROUND

¶45 The facts underlying Hensley’s claim are undisputed. In January 2012, Hensley 

suffered an industrial injury to her shoulder while in the course and scope of her 

employment as a paramedic. Because the industrial injury occurred while the 2011 version 

of the Workers’ Compensation Act (WCA) was in effect, the 2011 statutes govern this 

matter. Buckman v. Mont. Deaconess Hosp., 224 Mont. 318, 322, 730 P.2d 380, 382 

(1986). 

¶46 Montana State Fund (MSF) insured Hensley’s employer at the time of her injury. 

MSF accepted liability after Hensley made a workers’ compensation claim. 

¶47 Hensley underwent surgery to repair her shoulder. However, she continued to 

experience symptoms post-surgery, including tingling and numbness in her arm. In spite 

of ongoing symptoms, Hensley was able to return to her time-of-injury job as a paramedic 
29

without any formal restrictions in May 2013—about sixteen months after her industrial 

injury. 

¶48 A month after Hensley returned to work, her treating physician opined that she had 

reached maximum medical improvement (MMI), also referred to as medical stability, for 

her industrial injury. Pursuant to § 39-71-703(1)(b), MCA (2011), Hensley’s doctor used 

the American Medical Association, Guides to the Evaluation of Permanent Impairment

(6th ed. 2008) (the “Guides”), to calculate Hensley’s permanent impairment. He assigned 

Hensley a 4% whole person impairment rating. In addition to providing evaluators with a 

formula for calculating a person’s impairment rating, the 6th edition of the Guides

universally incorporated a categorization system, called “Class,” that range from Class 0 

to 4 from least to most severe. Under this system, a Class 0 designation means a person 

has no ratable impairment; designations of Class 1 to Class 4 are intended to indicate 

increasing levels of impairment. Hensley’s injury was categorized as Class 1. 

¶49 Because Hensley returned to her time-of-injury employer and suffered no wage loss, 

and because her permanent impairment was categorized as a Class 1 impairment, MSF did 

not pay Hensley an impairment award; § 39-71-703(2), MCA (2011), excludes injured 

workers with Class 1 impairments and no actual wage loss from entitlement to an 

impairment award. The value of Hensley’s impairment rating, if her impairment award 

was payable, is $5,192. 

¶50 Hensley challenged MSF’s denial of her impairment award in the WCC, arguing in 

part that § 39-71-703(2), MCA (2011), denies equal protection to injured workers with 

Class 1 impairments and no actual wage loss. Both Hensley and MSF moved for summary 
30

judgment. The WCC ruled in MSF’s favor, concluding that Hensley’s equal protection 

challenge failed because the classes were not similarly situated. This appeal followed. 

DISCUSSION

¶51 Does § 39-71-703(2), MCA (2011), violate the constitutional right to equal 

protection by denying impairment awards to injured workers who do not experience 

a wage loss as a result of their injury and who are assigned a Class 1 impairment 

rating? 

I. History of Impairment Awards in Montana Workers’ Compensation Law

¶52 Payment of impairment awards to all injured workers left with a permanent loss of 

physical function after reaching MMI, and usage of the Guides to determine impairment 

ratings, developed over time in Montana’s workers’ compensation scheme. Montana was 

among the first states to adopt laws providing for workers’ compensation, and the 

Legislature adopted the “essential framework” for the WCA in 1915. Wight v. Hughes 

Livestock Co., 204 Mont. 98, 106, 664 P.2d 303, 307-08 (1983). The workers’ 

compensation system began as an outgrowth of tort law: Workers forfeited their right to 

sue their employers in exchange for a no-fault, speedy system of guaranteed compensation. 

Henry v. State Comp. Ins. Fund, 1999 MT 126, ¶ 12, 294 Mont. 449, 982 P.2d 456. This 

“grand bargain” bars injured workers from seeking the possibility of larger awards 

potentially available through the tort system in exchange for more certainty of an award. 

Satterlee v. Lumberman’s Mut. Cas. Co., 2009 MT 368, ¶ 56, 353 Mont. 265, 222 P.3d 566
31

(Morris, J., dissenting) (citing Sitzman v. Shumaker, 221 Mont. 304, 307-08, 718 P.2d 657, 

659 (1986)).1 

¶53 The WCA has gone through many legislative reforms. A significant reform in 1987 

provided for injured workers to obtain an impairment award, among other substantial 

revisions. Section 39-71-703, MCA (1987) (“The benefits available for permanent partial 

disability are impairment awards and wage supplements.”). Prior to that time, injured 

workers who suffered permanent partial disability (PPD) received benefits only for actual 

wage loss, for up to 500 weeks. The creation of a separate impairment award, unrelated to 

wage loss, was further supported by § 39-71-116(14), MCA (1987), which in relevant part 

defined PPD as a condition, after a worker reached MMI, in which the worker has a 

medically determined physical restriction as a result of an injury and is able to return to 

work but suffers “impairment or partial wage loss, or both.” (Emphasis added.) 

¶54 Concomitant with the creation of the impairment award, the Legislature repealed 

§§ 39-71-705, -706, and -707, MCA, which had provided “disfigurement awards” for 

specific losses or partial losses, such as loss of a hand, hearing, or vision. These losses 

would instead be compensated, along with other permanent losses of function, under the 

new impairment award scheme. In order to determine the value of the newly created 

 

1 Henry, ¶ 12, states: “Historically, the workers’ compensation system was an outgrowth of tort 

law. It was premised on a compromise whereby workers gave up their right to sue employers in 

tort for work-related injuries in exchange for a guaranteed compensation system. The injured 

worker gave up his right to receive full compensation for his injury in exchange for receiving a 

speedy and certain award; compensation did not depend upon the fault of the employer, nor was it 

denied based upon the fault of the employee. Based upon the legal environment existing at the 

time that workers’ compensation laws were first enacted, this bargain was perceived as fair.” 
32

impairment awards, the Legislature enacted § 39-71-711, MCA (1987), which provided in 

part: 

(1) An impairment rating: 

(a) is a purely medical determination and must be determined by an 

impairment evaluator after a claimant has reached maximum healing; 

(b) must be based on the current edition of the Guides to Evaluation of 

Permanent Impairment published by the American Medical Association; and 

(c) must be expressed as a percentage of the whole person. 

Since its enactment, every version of § 39-71-711(1), MCA, has required that impairment 

ratings be expressed as a percentage of the whole person. The whole person percentage is 

a crucial determination, as this is the numerical value used for calculating impairment 

awards. Once the impairment rating provides the percentage, the award is determined by 

inputting the whole person percentage into the award calculation formula found in 

§ 39-71-703, MCA. 

¶55 Through its various revisions, the WCA has implicitly recognized the existence of 

impairment awards as a distinct benefit. As this Court stated in Rausch v. State Comp. Ins. 

Fund, 2002 MT 203, ¶ 20, 311 Mont. 210, 54 P.3d 25 (Rausch I), “No section of the 

Workers’ Compensation Act explicitly authorizes impairment awards per se. However, 

impairment awards are impliedly authorized to any injured worker classified in one of the 

four distinct classes of disability benefits by two sections of the Act, § 39-71-710, MCA, 

and § 39-71-737, MCA.” Section 39-71-710(2), MCA (1987-2019), provides in part, “If 

a claimant who is eligible . . . to receive retirement benefits . . . suffers a work-related 

injury, the insurer retains liability for . . . any impairment award[.]” Section 39-71-737, 
33

MCA (1987-2019), provides, compensation must run consecutively and not concurrently, 

and payment may not be made for two classes of disability over the same period, “except 

that impairment awards and auxiliary rehabilitation benefits may be paid concurrently with 

other classes of benefits.” (Emphasis added.) 

¶56 From 1987 forward, it was a rare Legislature that left § 39-71-703, MCA, 

untouched.

2

 While the 1987 and 1989 versions of the WCA expressly classified 

impairment awards as a partial disability benefit, the 1991 and subsequent versions no 

longer provided authority for limiting impairment awards only to partially disabled 

claimants. Rausch v. State Comp. Ins. Fund, 2005 MT 140, ¶ 12, 327 Mont. 272, 114 P.3d 

192 (Rausch II). Among other revisions, the 1991 amendments reduced the benefit 

calculation from 500 weeks to 350 weeks. Section 39-71-703(2), MCA (1991). Beginning 

in 1995, the statute explicitly provided that a worker with no actual wage loss as a result 

of the injury was eligible for an impairment award only. 

¶57 Case law has further explained the nature of the impairment award and its role in 

compensating an injured worker. The impairment award does not replace lost wages. 

Caldwell, ¶ 38. In Rausch I, ¶¶ 39, 41, MSF3argued that an impairment award is neither 

 

2 The history of § 39-71-703, MCA, through the current (2019) version, provides as follows: En. 

92-703.1 by Sec. 1, Ch. 155, L. 1973; amd. Sec. 1, Ch. 241, L. 1975; amd. Sec. 1, Ch. 278, L. 

1975; R.C.M. 1947, 92-703.1; amd. Sec. 23, Ch. 464, L. 1987; amd. Sec. 64, Ch. 613, L. 1989; 

amd. Sec. 6, Ch. 9, Sp. L. June 1989; amd. Sec. 4, Ch. 574, L. 1991; amd. Sec. 13, Ch. 243, L. 

1995; amd. Sec. 182, Ch. 42, L. 1997; amd. Sec. 12, Ch. 276, L. 1997; amd. Sec. 4, Ch. 464, L. 

2003; amd. Sec. 8, Ch. 103, L. 2005; amd. Sec. 1, Ch. 36, L. 2011; amd. Sec. 9, Ch. 167, L. 2011; 

amd. Sec. 17, Ch. 55, L. 2015. 

3 Under its then-moniker State Compensation Insurance Fund. 
34

a permanent partial nor permanent total disability benefit, but rather is a unique, distinct 

benefit intended only to compensate claimants for the medical component of their 

disability. As this Court stated in Rausch I, ¶ 21: 

Impairment awards are based on a worker’s impairment rating, which is a 

purely medical determination of the loss of physical function of the body 

caused by the injury. § 39-71-711, MCA [ ]. The impairment rating is the 

physical component on which the disability is based. Disability benefits 

compensate the worker for losses related to their inability to work. An 

impairment award is paid to compensate the worker for the loss of physical 

function of his or her body, which may have ramifications beyond just the 

worker’s ability to return to work. The difference is subtle, yet important. 

The inclusion of continued impairment award liability in § 39-71-710, MCA 

[ ], indicates the distinct nature of the impairment award from other types of 

disability benefits. 

¶58 This Court has held that, while impairment awards are provided for in § 39-71-703, 

MCA, which is the statute that also provides for PPD benefits, an impairment award is not 

“linked to” partial disability as workers who do not incur an actual wage loss as a result of 

their work-related injuries do not fall within the definition of PPD but are nonetheless 

entitled to an impairment award. Rausch I, ¶¶ 26-27. An impairment award compensates 

an injured worker for the permanent loss of physical function and is designed to 

compensate an injured worker who is able to return to work. Rausch II, ¶ 23. Paying an 

impairment award to injured workers who are able to return to work is consistent with the 

WCA’s stated purpose of returning injured workers to the workforce. Rausch II, ¶ 23. 

Thus, not only does an impairment award not replace lost wages, but it also bears no 

relationship to whether an injured worker incurs wage loss. 

¶59 The present equal protection challenge focuses on the exclusion of certain workers 

from receiving an impairment award in spite of a physician’s determination that each of 
35

these workers has a ratable permanent impairment. Under § 39-71-703(2), MCA 

(2011-2019), some workers with a permanent loss of physical function receive their full 

impairment award, while other workers with the same impairment rating—the same 

percentage of permanent loss of physical function—receive nothing. This exclusion arose 

as part of H.B. 334, a package of WCA revisions passed by the 2011 Legislature. 

¶60 Pertinent to the present case, the revisions included amending § 39-71-711(1)(b), 

MCA, to provide that impairment ratings must be based on the 6th edition of the Guides. 

Prior to 2011, the statute provided that impairment ratings be based upon the “current” 

edition and thus the Guides in use would automatically change whenever a new edition 

was published. 

¶61 H.B. 334 also amended § 39-71-703, MCA, incorporating the use of impairment 

rating “Class,” universally incorporated in the 6th edition of the Guides, and excluding 

injured workers who suffered no wage loss as a result of their work-related injuries and 

who were assigned impairment ratings the Guides categorized as Class 1 from obtaining 

impairment awards. Prior to the publication of the 6th edition of the Guides, “Class” did 

not exist in the same manner, and from the enactment of the 1987 WCA until the enactment 

of the 2011 WCA, all injured workers who were assigned impairment ratings received 

corresponding impairment awards as calculated by the formula within § 39-71-703, MCA. 

¶62 The Plurality correctly notes that Montana is the only state to use the Class rating 

as the basis for an impairment-only award in workers’ compensation matters, but it also 

asserts some other states have adopted the most recent version of the Guides without 

legislative review and that Class is used as a cutoff for silicosis litigation in some states 
36

outside the workers’ compensation context. Plurality, n2. Footnote 2, however, is 

misleading. First, although it is true that some states’ comparable statutes adopt the most 

recent version of the Guides without legislative review, a Pennsylvania case found this 

practice to be an unconstitutional delegation of legislative authority. Protz v. Workers’ 

Comp. Appeal Bd., 161 A.3d 827 (Pa. 2017). One could anticipate a similar result if this 

provision was challenged in other states. Second, while it may be true that class is used as 

a cutoff for silicosis litigation outside of the workers’ compensation arena, silicosis is a 

progressive occupational disease not unlike asbestosis; a claimant who is a Class 1 today 

will progress to a Class 2 in the future and their claim thus becomes ripe for litigation. 

Thus, this is incomparable to the present situation where the Class designation will not 

change over time, but rather serves as a permanent preclusion to benefits. 

II. Equal Protection Challenge

¶63 Both in the WCC and in this Court on appeal, Hensley argues that by denying 

impairment awards to injured workers such as herself—workers who were found to have a 

permanent impairment at MMI but who did not suffer a wage loss as a result of their 

work-related injuries—merely because the Guides designated the impairment as a Class 1

impairment, § 39-71-703(2), MCA, violates the right to equal protection guaranteed by 

Article II, Section 4, of the Montana Constitution. 

¶64 When analyzing an equal protection claim, Montana’s courts follow a three-step 

process: (1) identify the classes involved and determine if they are similarly situated; 

(2) determine the appropriate level of scrutiny to apply to the challenged legislation; and 

(3) apply the appropriate level of scrutiny to the challenged statute. Goble v. Mont. State 
37

Fund, 2014 MT 99, ¶ 28, 374 Mont. 453, 325 P.3d 1211. In this case, the WCC concluded 

Hensley’s equal protection challenge failed because the classes were not similarly situated, 

but further advised that it would also conclude a rational basis supports the statute. 

1(A). How are the classes identified? 

¶65 Hensley asserts that the two similarly situated classes are: permanently physically 

impaired claimants with no wage loss and an impairment categorized as Class 1; and 

permanently physically impaired claimants with no wage loss and an impairment 

categorized as Class 2. MSF argues that Hensley mis-identifies the classes and that the 

classes to be compared are permanently physically impaired claimants with a wage loss 

and an impairment categorized as Class 1; and permanently physically impaired claimants 

with no wage loss and an impairment categorized as Class 1. MSF points to Wilkes v. 

Mont. State Fund, 2008 MT 29, 341 Mont. 292, 177 P.3d 483, which raised an equal 

protection challenge to § 39-71-703, MCA (2001), because the statute required that 

permanently partially disabled workers demonstrate they suffered an actual wage loss as a 

result of their injury. However, as we explained in Goble, ¶ 32, in identifying the classes, 

we must isolate the “sole distinguishing factor” between the classes. In Wilkes, the 

presence or absence of wage loss was the sole distinguishing factor between those who 

received permanent partial disability benefits and those who did not; here, the Class 

category is the sole distinguishing factor between those who receive an impairment award 

and those who do not. Therefore, in agreement with the WCC, I reject MSF’s invitation to

define the classes by the absence or presence of wage loss. Wage loss is irrelevant in this 

case and has no relationship to impairment rating: whether or not an injured worker has 
38

wage loss does not depend upon the severity of the worker’s permanent loss of function 

but rather on the worker’s job duties and the employer’s ability to accommodate the 

worker’s needs. 

¶66 However, MSF argued that if the WCC, and now this Court, rejects MSF’s 

suggestion to define the classes by wage loss, the Court should define the classes as 

permanently physically impaired claimants with no wage loss and an impairment 

categorized as Class 1; and permanently physically impaired claimants with no wage loss 

and an impairment categorized as Class 2, 3, or 4. MSF argued, and the WCC agreed, that 

this was a more suitable definition of the classes, as this would encompass all claimants 

with a ratable permanent impairment and no actual wage loss. 

¶67 I accept the WCC’s class definition. This identification of classes is consistent with 

our identification of classes in comparable equal protection challenges. For example, in 

Henry, which raised an equal protection challenge to the statutory provisions which 

mandated that workers suffering from industrial injuries could receive vocational 

rehabilitation benefits while workers suffering from occupational diseases could not, this 

Court identified the classes as (1) workers who suffered a work-related injury on one work 

shift and (2) workers who suffered a work-related injury on more than one work shift. 

Henry, ¶ 27. 

1(B). Are the identified classes similarly situated? 

¶68 An equal protection violation cannot occur if the classes are not similarly situated; 

such discrimination can only be found in the unequal treatment of people in similar 

circumstances. The goal of identifying a similarly situated class is to isolate the factor 
39

allegedly subject to impermissible discrimination. Thus, two groups are similarly situated 

if they are equivalent in all relevant respects except the factor constituting the alleged 

discrimination. Goble, ¶ 29 (citations omitted). 

¶69 While I agree with the WCC’s class descriptions, I conclude that the WCC 

incorrectly determined that the classes were not similarly situated because it fell into the 

same trap as it did in Goble. In Goble, ¶ 34, which raised an equal protection challenge to 

the statute that denied certain workers’ compensation benefits to incarcerated people, this 

Court rejected the WCC’s analysis of whether the classes presented were similarly situated, 

explaining: 

The WCC essentially came to the conclusion that the classes presented by 

Goble/Gerber were not similarly situated because a rational basis exists for 

treating incarcerated claimants differently from unincarcerated claimants. 

By doing so, the WCC subsumed the factor—incarceration—that we are 

trying to isolate and test against a rational basis. Defining the classes for 

equal protection analysis can be difficult and tedious, and if not done with 

clarity of vision, may result in the class definition swallowing up the factor 

we are attempting to examine. 

¶70 In its Order in Hensley’s case, the WCC found that Class 1 impairments were not 

similar to Class 2 or greater impairments because it found a “clear demarcation of the 

severity of the claimant’s symptoms and functional limitations.” In other words, it 

subsumed the factor—Class—that needs to be isolated and tested against a rational basis, 

coming to the conclusion that the classes Hensley presented were not similarly situated 

because a rational basis exists for treating permanently physically impaired claimants with 

no wage loss and an impairment categorized as Class 1 differently from permanently 
40

physically impaired claimants with no wage loss and an impairment categorized as Class 2. 

In the words of Goble, ¶ 34, the WCC subsumed the factor it was attempting to examine. 

¶71 Instead, in determining if the classes are similarly situated, this Court must ask, as 

it did in Goble, ¶ 29, if these two groups are “equivalent in all relevant respects other than 

the factor constituting the alleged discrimination.” Simply put, they are: the factor 

constituting the alleged discrimination—Class categorization—is the only relevant 

difference between these classes. Therefore, all permanently partially disabled workers 

with wage loss are similarly situated once this sole distinguishing factor is isolated per 

Goble. 

¶72 This is consistent as well with the way this Court determined whether classes were 

similarly situated in other workers’ compensation cases. In Satterlee, ¶ 16, the Court found 

classes similarly situated where “the only identifiable differentiating factor between the 

two classes” was age—the precise factor constituting the alleged discrimination. In Schmill 

v. Liberty Nw. Ins. Corp., 2003 MT 80, ¶ 18, 315 Mont. 51, 67 P.3d 290, the Court found 

classes similarly situated because the workers in both classes were physically impaired 

“[r]egardless of the time frame over which their affliction was contracted or the name 

assigned to the affliction.” In Stavenjord v. Mont. State Fund, 2003 MT 67, ¶ 46, 314 

Mont. 466, 67 P.3d 229, the Court again found that workers who were treated differently 

due to their status as having either an industrial injury or an occupational disease were 

similarly situated classes because they were “distinguished merely by the number of work 

shifts over which their work-related affliction is sustained.” In each of these instances, 
41

these were groups “equivalent in all relevant respects other than the factor constituting the 

alleged discrimination,” as later described by Goble, ¶ 29. 

¶73 Most analogous to the present case, in Reesor v. Mont. State Fund, 2004 MT 370, 

¶ 12, 325 Mont. 1, 103 P.3d 1019, we found the classes proposed by Appellant Dale 

Reesor—(1) claimants eligible for PPD benefits who also received or were eligible to 

receive social security retirement benefits; and (2) claimants eligible for PPD benefits who 

did not receive and were not eligible to receive social security retirement benefits—to be 

similarly situated because both classes had suffered work-related injuries, were unable to 

return to their time-of-injury jobs, had impairment ratings, and had to rely on § 39-71-703, 

MCA, as their exclusive remedy under Montana law. Here, both proposed classes have 

suffered work-related injuries, are able to return to their time-of-injury jobs, have 

impairment ratings, and have to rely on § 39-71-703, MCA, as their exclusive remedy 

under Montana law. While Reesor’s classes were distinguished by eligibility for social 

security retirement benefits, the classes in this case are distinguished by the Guides’ Class 

categorization. 

¶74 The WCC’s examination of the Classes also fails in substance. Relying on the 

Guides’ explanations, the WCC found that a person with a Class 1 impairment would have, 

at most, intermittent, mild physical findings with continuous treatment while a person with 

a Class 2 impairment would have “mild symptoms on a ‘constant’ basis or intermittent 

symptoms that are ‘moderate’ despite continuous treatment.” Although the WCC saw a 

bright line between these descriptions, I find no definite line of when a “mild” symptom 

becomes a “moderate” symptom, or at what point “constant” becomes “intermittent.” 
42

¶75 Moreover, the WCC further supported its conclusion by observing, “It is not until a 

claimant obtains a Class 2 or greater whole person impairment rating that her symptoms 

and functional limitations impact normal activities and could reasonably be expected to 

impact her ability to work and possibly cause an actual wage loss in the future.” Hensley 

argues that the WCC has manufactured a speculative, and non-existent, correlation between 

Class and likelihood of future impairment. She points out that the Guides specifically 

disclaim the WCC’s speculation, as the Guides assert that no ready correlation between 

“impairment” and “disability” exists. As this Court has held, the impairment award’s 

purpose is not to compensate for speculative future loss but for present loss of function 

regardless of wage loss. Section 39-71-703(2), MCA; Rausch I, ¶ 21; Rausch II, ¶ 23. 

Therefore, even if the WCC’s conclusion that the classes are not similarly situated had not 

subsumed the factor to test as Goble warns, we would still conclude that the classes are 

similarly situated under the applicable case law. We therefore employ the rational basis 

test to determine if § 39-71-703(2), MCA, violates equal protection. 

2. Level of scrutiny 

¶76 For the second step of an equal protection analysis, we determine the appropriate 

level of scrutiny. It is well-settled that the rational basis test applies when considering 

equal protection challenges to the WCA. Goble, ¶ 35 (citations omitted). 

3. Rational basis test 

¶77 That brings us to the third step of an equal protection analysis: applying the 

appropriate level of scrutiny to evaluate the constitutional challenge. The rational basis 

test requires the government to show two things: (1) the statute’s objective is legitimate; 
43

and (2) the statute’s objective bears a rational relationship to the classification used by the 

Legislature. Henry, ¶ 33. In other words, the statute must bear a rational relationship to a 

legitimate governmental interest. Henry, ¶ 33; Goble, ¶ 36. Rational basis review requires 

this Court to give the greatest amount of deference to the Legislature, such deference 

requiring this Court to allow legislation to stand if the Court can even conceive of a reason 

to justify the statute. Reesor, ¶¶ 29-30 (Rice, J., dissenting). Here, the question is whether 

a rational basis exists for treating injured workers who do not suffer a wage loss as a result 

of their industrial injury differently because of the Class in which their impairment rating 

is categorized. 

3(A). Is the objective of § 39-71-703(2), MCA, legitimate? 

¶78 Hensley argues that § 39-71-703(2), MCA, does not have a constitutionally 

permissible objective because the Legislature eliminated impairment awards for herself 

and other permanently physically impaired claimants with no wage loss and an impairment 

categorized as Class 1 solely for cost savings. While a goal of the WCA is assistance to 

the worker at a reasonable cost, § 39-71-105(1), MCA, Hensley points out that here, she 

and other injured workers with a permanent loss of physical function like her are not 

assisted. This Court has previously determined that the purpose of § 39-71-711, MCA, 

which created the criteria for impairment rating, was “to compensate workers for valid 

impairments resulting from injuries on the job.” S.L.H. v. State Comp. Mut. Ins. Fund, 

2000 MT 362, ¶ 33, 303 Mont. 364, 15 P.3d 948. Here, Hensley argues this objective is 

thwarted as she is not compensated for her valid impairment under § 39-71-703(2), MCA 
44

(2011). Rather, because her impairment is categorized as Class 1, she is wholly denied a 

benefit to which she would otherwise be entitled. 

¶79 In Henry, ¶ 42, this Court distinguished instances in which similarly situated groups 

received a different “degree of benefits” from instances of “the provision of certain benefits 

to one group of workers and the wholesale denial of the same benefits to another similarly 

situated group.” The Court suggested that a wholesale denial was more likely a violation 

of equal protection because the legitimate objective was suspect. After Henry, this Court 

offered additional guidance into how to examine such circumstance. In Caldwell, we 

determined that categorical denial of benefits based solely on age violated equal protection. 

In reaching this determination, we noted that Reesor concluded that a particular categorical 

denial of benefits violated equal protection while Satterlee concluded a different 

categorical denial did not. Caldwell observed that the dispositions “turned on the 

differences between the purposes and entitlement schemes of the varying kinds of 

benefits.” Caldwell, ¶ 28. 

¶80 Here, as the Court stated in Rausch I, ¶ 21, the purpose of an impairment award is 

to “compensate the worker for the loss of physical function of his or her body.” It is 

unquestionable that a person with a ratable impairment has in fact suffered a “loss of 

physical function” irrespective of wage loss and irrespective of Class designation. As for 

the entitlement scheme, under the Guides, the whole person impairment percentage, not 

Class designation, quantifies that loss. Section 39-71-703, MCA, then provides a formula 

for compensating for that quantifiable loss. As Caldwell, ¶ 32, explains, identification of 
45

the purpose and entitlement scheme must guide this Court’s analysis in determining 

whether the categorical elimination of specific benefits violates equal protection. 

¶81 In this instance, the Court must ask if the categorical denial of these benefits 

undermines the purposes and entitlement scheme of impairment awards.4 In considering 

whether the disparate treatment under § 39-71-703(2), MCA (2011), fulfills a legitimate 

objective, I examine Hensley’s assertion that the Legislature eliminated impairment awards 

for certain injured workers with a permanent loss of physical function solely for cost 

savings. In Henry, ¶ 45, this Court held that a statutory scheme that provided rehabilitation 

benefits to workers who had suffered an industrial injury but denied rehabilitation benefits 

to workers who suffered from an occupational disease was not rationally related to the 

legitimate governmental interest of returning workers to work as soon as possible. In 

reaching this conclusion, this Court rejected cost savings as a permissible rational basis. 

Relying on established precedent, it explained, “Any argument that economic reasons 

justify treating the two classes differently must be rejected.” Henry, ¶ 40. 

¶82 However, while cost savings may not be the sole basis, this Court has consistently 

held that cost containment is a legitimate governmental interest that the Legislature may 

pursue in revisions to the WCA; however, in so doing, the Legislature must follow rational 

means, and cost savings may not be the sole reason for disparate treatment. Caldwell, ¶ 34 

(citing Satterlee, ¶ 29). “We must scrutinize attempts to disguise violations of equal 

 

4

In his Dissent in this case, Justice Sandefur fully explains how such wholesale denial violates 

equal protection by bearing no rational relationship to the WCA’s quid pro quo purpose. 
46

protection as legislative attempts to ‘contain the costs’ or ‘improve the viability’ of the

workers’ compensation system.” Caldwell, ¶ 35 (citing Satterlee, ¶ 29). The Legislature’s 

goal of cost savings in the present case is unquestionably legitimate; however, by itself it 

provides insufficient basis to support disparate treatment under the statute. 

¶83 I agree with the Plurality that providing impairment-only awards to those 

functionally impacted by an injury, despite lack of wage loss, serves a legitimate objective 

and having chosen to provide such awards, the Legislature may choose a classification 

system that provides consistency and uniformity in functional assessment, ensuring that 

people with similar functional limitations are given like classifications. Here, however, 

they are not, because a person with a 12% impairment rating, who is unquestionably similar 

to a person with a 12% impairment rating, may be designated Class 1, 2, 3, or 4, which are 

by definition not “like classifications.” I further agree that “[i]n the context of 

impairment-only awards, the government has a legitimate interest in providing benefits that 

bear a reasonable relationship to the actual functional loss a worker sustains.” Plurality, ¶ 

29. Here, however, that relationship is lost where certain workers who suffer a permanent 

functional loss are denied compensation while others with quantifiably identical loss are 

compensated. 

¶84 MSF argues that cost savings was not the sole objective because the Legislature 

realized cost savings while reallocating the money available in the workers’ compensation 

system. MSF asserts that we must look at H.B. 334 as a whole: some provisions sought to 

increase benefits, while other sections decreased costs, with the intention to “strengthen 

and reinforce the viability of the system.” MSF does not deny that the purpose for the 
47

revision to § 39-71-703(2), MCA, viewed alone, was cost savings. Rather, MSF argues 

that this Court should consider that elsewhere in the Bill, benefits were increased to injured 

workers MSF asserts are “those most entitled.” Essentially, MSF argues that the 

Legislature engaged in a Robin-Hood-esque endeavor, taking benefits from some injured 

workers and giving a portion of those eliminated benefits to others, all the while enjoying 

“cost savings” in the difference between the amount taken from some and the amount given 

to others. 

¶85 This Court soundly rejected this same allocation rationale in Caldwell, where MSF 

argued that the rational basis of a statute which denied rehabilitation benefits to older 

workers was “tailoring benefit entitlement to need.” Caldwell, ¶ 44. In so doing, this Court 

stated, “We know of no authority to support the argument that the legislature can eliminate 

benefits from one class of people in order to continue providing benefits to another class 

of similarly situated people.” Caldwell, ¶ 43 (emphasis in original). Here, MSF argues 

that the Legislature eliminated impairment awards for permanently physically impaired

workers with a Class 1 impairment and no actual wage loss in order to increase benefits to 

permanently partially disabled workers with an actual wage loss in the form of additional 

weeks of PPD benefits—the class identification MSF urged and which the WCC and this 

Court rejected. However, MSF does not provide the authority for reallocation that 

Caldwell found lacking. Caldwell, ¶ 44, further states, “We reject the suggestion that the 

legislature constitutionally can eliminate rehabilitation benefits for older workers so as to 

‘tailor’ or provide benefits to those in ‘need,’ which presumably means younger workers.” 

The Caldwell Majority rejected the Caldwell Dissent’s assertion that the Legislature could 
48

categorically eliminate benefits for some workers in order to “channel resources” toward a 

different group of workers that the Legislature believed could better use those benefits. 

Caldwell, ¶ 45 (citing Caldwell, ¶ 71 (Baker, J., dissenting, and Rice, J., joining)). The 

allocation rationale rejected in Caldwell is indistinguishable from the present rationale 

offered by MSF, which maintains that the Legislature may take Hensley’s entitlement to 

an impairment award in order to increase the biweekly benefits awarded to a permanently 

partially disabled worker who suffered wage loss. 

¶86 While MSF asserts a noble intent in the Legislature’s purported attempt to 

“strengthen the viability” of the WCA, this Court has previously recognized that claims to 

improve the “viability” of the workers’ compensation system is merely a euphemism for 

cost savings. Caldwell, ¶ 35. Hensley points out that H.B. 334’s fiscal note predicted that 

eliminating impairment awards for these injured workers would create a cost savings of $8 

million annually. Under MSF’s argument, so long as the Legislature, within the same bill, 

minimally increases benefits to some workers, it can arbitrarily eliminate benefits for other 

workers without running afoul of equal protection. Although the Plurality points out that 

adding 25 weeks to PPD benefits not only adds this amount to those workers who receive 

biweekly PPD benefits, but also affects the multiplier used for calculating impairment 

awards, this reallocation in no way benefits Hensley and other workers who are designated 

Class 1 and who do not suffer wage loss. Prior to 2019, Hensley and those similarly 

situated would have been entitled to 375 times something; now, they are entitled to 400 

times nothing. Further, as Justice Sandefur more fully explains in his Dissent, this 
49

discriminatory categorical exclusion also does not further the quid pro quo purposes of the 

WCA. 

¶87 Workers’ compensation benefits are the property of the individual claimant. 

Lockhart v. New Hampshire Ins. Co., 1999 MT 205, ¶ 24, 295 Mont. 467, 984 P.2d 744. 

As such, these benefits cannot be given away to someone else “more deserving.” At issue 

in the present case is whether permanently physically impaired workers with Class I 

designations and no wage loss are denied equal protection of the law as compared to 

similarly situated individuals—not whether some other, non-similarly situated individuals 

received increased benefits courtesy of H.B. 334. 

¶88 The Plurality contends this argument is too simplistic because the Legislature may 

treat similarly situated individuals differently so long as its reason for doing so is not 

arbitrary. However, the Plurality has truncated the equal protection analysis; the question 

of arbitrariness goes to the next step—whether the statute’s objective bears a rational 

relationship to the classification used by the Legislature. Before we reach that step, we 

must first determine if that objective is a legitimate governmental objective. Under 

Caldwell, reallocation is not. 

¶89 Other justifications MSF offers are also unpersuasive. MSF alleges that a rational 

basis for the elimination of an impairment award for permanently partially impaired 

individuals who have no actual wage loss and who are designated as a Class 1 impairment 

pursuant to § 39-71-703(2), MCA, is the WCA’s purpose of compensating workers who 

suffer an actual wage loss due to their work-related injury or condition. However, 

§ 39-71-703(2), MCA, does not categorically eliminate impairment awards for workers 
50

who do not experience actual wage loss and this purported basis does not account for the 

disparate treatment among the classes identified in this case: workers with no actual wage 

loss. MSF similarly points out that § 39-71-105(1), MCA, provides that wage-loss benefits 

should bear a reasonable relationship to actual wages lost as a result of a work-related 

injury or disease. In the case of workers with no actual wage loss, there is no question that 

the impairment award is not a “wage-loss” benefit; moreover, this public policy does not 

provide a basis for disparate treatment of workers without actual wage loss because their 

impairments, regardless of Class, have an identical relationship to their actual wage loss of 

zero. 

¶90 The only legitimate basis for the Legislature’s action in eliminating benefits to this 

category of workers is cost savings, an insufficient basis to fulfill a legitimate governmental 

objective by itself and thus I would conclude § 39-71-703(2), MCA, unconstitutionally 

violates Hensley’s right to equal protection. Since I would conclude § 39-71-703(2), MCA, 

meets no legitimate governmental objective, it would not be necessary to consider whether 

its objective bears a rational relationship to the classification used by the Legislature. 

However, I address this issue in response to the Plurality’s faulty conclusion that overall 

cost savings in the scheme of the entire WCA is a legitimate governmental objective. 

3(B). Does the objective of § 39-71-703(2), MCA, bear a rational relationship to the 

classification used by the Legislature? 

¶91 The rational basis test has two parts: whether there is a legitimate objective, and 

whether that objective bears a rational relationship to the classification used by the 

Legislature. Henry, ¶ 33. I do not believe a legitimate governmental objective exists. 
51

However, I have further considered whether, assuming a legitimate governmental objective 

exists, the Legislature’s denial of impairment awards based on Class designation would 

constitute an arbitrary denial of benefits. 

¶92 It is unquestionably within the purview of the Legislature to reduce benefits in a 

non-arbitrary way, as Hensley acknowledges. However, she contends that if the 

Legislature chooses to reduce impairment benefits, it must do so via a rational method. 

Hensley argues that even if this Court finds a rational objective for § 39-71-703(2), MCA, 

the statute would still fail to pass constitutional muster because there is no relationship 

between Class designation and severity of impairment; thus it denies benefits to an arbitrary 

group of impaired workers. Hensley points to S.L.H., ¶ 33, in which this Court observed 

that while the legislative history on the development of criteria for impairment ratings 

“provides little insight, clearly the requirements for establishing impairments are intended 

to ensure that the level of impairment is determined by a scientifically sound method, using 

objective medical findings.” 

¶93 As noted above, the 6th edition of the Guides introduced a universal grid of “Class” 

categorizations for permanent impairments, and the 2011 Legislature used the Class 

designation to determine which injured workers with permanent impairments would or 

would not qualify for an impairment award. Hensley asserts that Class is not a reliable 

measuring instrument. She argues the Guides themselves recognize it is premature to find 

significance in Class in comparing permanently impaired individuals to determine relative 

degree of impairment because the Class designation has not been validated. Hensley notes 

that Montana is the only state to place any significance on Class in its statutory 
52

compensation scheme and argues that tying entitlement to Class is improper because Class 

does not measure overall impairment severity and does not directly correlate to whole 

person impairment—the very measure that § 39-71-711(1)(c), MCA, requires us to employ 

to determine impairment rating. Once the impairment rating is expressed as a whole person 

percentage under § 39-71-711(1)(c), MCA, the impairment award is calculated using that 

rating by employing the formula prescribed by § 39-71-703, MCA. 

¶94 Hensley’s equal protection challenge rests upon the fact that using Class to eliminate 

certain permanently impaired workers’ entitlements to impairment awards means some 

permanently impaired individuals without wage loss receive their impairment awards while 

others with the same whole person impairment rating receive nothing. In fact, if 

impairment award entitlement is categorically denied to all permanently impaired workers 

with Class 1 designations who do not have wage loss, these individuals will receive nothing 

while other permanently impaired workers who do not have actual wage loss and who have 

lower whole person impairment percentages will receive impairment awards. This Court 

has previously rejected such outcome, holding in Rausch I, ¶ 29, that to conclude 

permanently partially disabled workers were entitled to an impairment award while 

permanently totally disabled workers were not would be an absurd result because 

more-disabled claimants would receive fewer benefits than less-disabled claimants. 

Upholding Class as the means of determining impairment award eligibility dictates that 

rejected result here if Hensley is correct in her assertion that Class does not correlate with 

severity of impairment, extent of disability, or likelihood of future wage loss. 
53

¶95 Hensley urges this Court to take a closer look at the Guides to determine if the use 

of Class to deny benefits violates equal protection because § 39-71-711(1)(b), MCA, 

dictates that impairment ratings be based on the 6th edition of the Guides. In order for us 

to determine if Class is an arbitrary method for determining whether an otherwise eligible 

permanently injured worker is entitled to an impaired award, we must understand how 

Class is determined and what the Class designation means. 

3(B)(1). A Guide to the Guides

¶96 The Guides provide “operational definitions” of “impairment,” “disability,” and 

“impairment rating.” “Impairment” is “a significant deviation, loss, or loss of use of any 

body structure or body function in an individual with a health condition, disorder, or 

disease.” “Disability” is “activity limitations and/or participation restrictions in an 

individual with a health condition, disorder, or disease.” An “impairment rating” is a 

“consensus-derived percentage estimate of loss of activity reflecting severity for a given 

health condition, and the degree of associated limitations in terms of [activities of daily 

living].” Guides at 5. 

¶97 The Guides characterize the relationship between impairment and disability as 

“complex and difficult, if not impossible, to predict.” Guides at 5. In other words, the 

evidence available to the expert authors of the Guides does not support the theory that the 

most-impaired people are likely to be the most-disabled, and vice versa, no matter how 

commonsense such notion might appear. The Guides also recognize the principle that there 

is no direct correlation between an injury’s severity and the impact it has on the life, or 

working ability, of the injured person: 
54

In some conditions there is a strong association between level of injury and 

the degree of functional loss expected in one’s personal sphere of activity 

(mobility and ADLs). The same level of injury is in no way predictive of an 

affected individual’s ability to participate in major life functions (including 

work) when appropriate motivation, technology, and sufficient 

accommodations are available. Disability may be influenced by physical, 

psychological, and psychosocial factors that can change over time. 

Guides at 5-6. As the Guides offer for example, “[A] given physical impairment can be 

highly disabling in one vocational context and virtually non-disabling in another. For 

example, amputation of one’s great toe might preclude the vocation of a ballerina who must 

dance ‘on point,’ whereas the same amputation might be of no functional consequence to 

a construction worker equipped with an appropriately fitted work boot.” Guides at 6. In 

her opening brief, Hensley posits that an attorney with the same permanent impairment as 

her would be able to return to and successfully perform their time-of-injury employment, 

while a carpenter or painter may not. For this reason, the impairment award compensates 

for the purely medical determination of whole person impairment rating without regard to 

actual wage loss. Simply put, there is no ready correlation between impairment award and 

wage loss, or even likelihood of wage loss. 

¶98 The Plurality overlooks the crucial distinction the Guides make between 

“impairment” and “disability,” and the fact that the impairment rating calculates only the 

former. In discussing the impact of work-related injuries, the Plurality relies on the Guides’

definition of “disability” to argue in favor of limiting impairment awards, Plurality, ¶ 39, 

when the impairment rating does not purport to measure, or take into account, “disability.” 

This Court cannot examine whether the objective of § 39-71-703(2), MCA, bears a rational 
55

relationship to the classification used by the Legislature without understanding the injury 

for which the statute is intended to compensate. 

¶99 The 6th edition of the Guides implemented a uniform system across all impairments 

that would, in addition to the percentage-based impairment rating, categorize each 

impairment in what the Guides describe as a “5-Scale Taxonomy.” Guides at 11-16. The 

five Scales are the five Classes, ranging in severity from Class 0 (“no functional problem”) 

to Class 4 (“complete problem with total functional loss”). While the Guides anticipated 

that in the future, these classes could lead to a functionally based percentage of loss, the 

process is “as yet unverified” and must await formal validation studies. Guides at 11. 

¶100 This “5-Scale Taxonomy” is incorporated into a grid that is customized for each 

body part or type of disorder, such as “lower extremity peripheral vascular disease,” 

“pulmonary dysfunction,” and “voice and speech impairment.” Each grid consists of six 

components. These components are class, impairment percentage range, and four 

“impairment criteria:” history of clinical presentation; physical findings; clinical studies or 

objective test results; and functional history or assessment. The grid dictates the 

impairment evaluator’s approach to determining impairment: First, the evaluator must 

determine which of the four “impairment criteria” the Guides designate as the “key factor” 

for the body part or type of disorder at issue. Based on the description of severity for that 

key factor, the evaluator will then assign the individual a Class designation. In other words, 

key factor, and key factor alone, determines the Class. Each Class designation corresponds 

to a range of impairment percentages available to those individuals assigned that Class. 

Consideration of the three remaining criteria—those which are not the “key factor”—
56

determines where the evaluator places the permanently impaired worker in the range of 

available impairment percentages within the designated Class. Notably, the range of 

available impairment percentages within each Class varies significantly from grid to grid—

or from body part to body part. 

¶101 To use Hensley’s case as an example, the key factor for her shoulder injury is the 

history of physical presentation—in other words, her initial diagnosis. Guides at 385. 

Using Hensley’s diagnosis, and only her diagnosis, her impairment evaluator categorized 

her permanent impairment in Class 1. Therefore, regardless of the evaluator’s physical 

findings, the results of any clinical studies or tests, or any functional history or assessment 

performed—in other words regardless of all the other evidence an evaluator must consider 

prior to determining an impairment rating—Hensley’s permanent impairment would 

remain within the Class I categorization on the impairment rating grid. The key factor in 

Hensley’s case is the criteria that the Guides frequently, but not universally, designate as 

the key factor: The Guides advise that history of physical presentation, or diagnosis, is the 

key factor for “most organ systems or disease processes.” Guides at 12. The Guides do 

not suggest that this key factor, or any of the four key factors, is somehow more important 

than the remaining factors in determining whole person impairment percentage. 

3(B)(2). Is Class an arbitrary distinction? 

¶102 Hensley argues that the method by which Class is designated forms an arbitrary and 

unscientific basis to deny impairment awards because the Class designation—which the 

Guides cautions is an “as yet” unverified process—is determined by only a fraction of the 

information which is used to determine impairment rating, and because the whole person 
57

impairment rating percentages do not correlate to Class designations universally. As 

appellate counsel explained during oral argument, for Class 1 designations, a worker is 

denied their impairment award before their doctor finishes the examination and calculates 

whole person impairment because only the “key factor” determines Class even though the

remaining factors contribute to the whole person impairment percentage. Hensley 

contends that under Montana law and under the Guides, the same whole person impairment 

rating is the same whole person impairment rating, regardless of whether it is an arm injury, 

a back injury, or some other injury. However, a 12% impairment rating could be designated 

as a Class 1, 2, 3, or 4, depending on which impairment grid applies and which key factor 

is used for that grid. Thus, for these permanently impaired workers without an actual wage 

loss, those whose 12% impairment rating is designated as a Class 2, 3, or 4 receive their 

full impairment award, while the permanently injured workers without an actual wage loss 

whose 12% impairment rating is designated as a Class 1 receive nothing.5 

¶103 In other words, under § 39-71-703(2), MCA (2011), two similarly situated 

individuals who have not only suffered a measurable loss of functionality, but have 

suffered the same amount of loss of functionality, obtain significantly different benefits 

based only on the non-validated Class designation. Hensley thus argues that to deny an 

impairment award on the basis of Class alone is irrational; it gives Class more legal 

 

5 At oral argument, Hensley’s counsel provided the Court with a handout, as allowed by M. R. 

App. P. 17(6)(a), in which they provide the following whole person impairment percentage ranges 

by Class designation: Class 1 ranges from 1% to 15%; Class 2 ranges from 2% to 32%; Class 3 

ranges from 4% to 65%; and Class 4 ranges from 10% to 100% whole person impairment 

percentage. 
58

meaning than impairment percentage when it has less medical meaning than impairment 

percentage in spite of the fact that an impairment rating is a purely medical determination. 

Section 39-71-711(1)(a), MCA. 

¶104 The Plurality attempts to distinguish Caldwell from this case on the basis that age is 

an arbitrary classification while “difference in a worker’s functional limitation” is not. 

Plurality, ¶ 32. It maintains that the reason for this distinction is because age, the 

distinguishing factor in Caldwell, has nothing to do with a worker’s ability to return to 

work. However, neither does functional limitation: the Guides explain that while in some 

conditions there may be “a strong association between level of injury and the degree of 

functional loss expected in one’s personal sphere of activity,” it is not “predictive of an

affected individual’s ability” to return to work. If age was an arbitrary classification 

because of its lack of relationship to ability to return to work, then functional limitation is 

also an arbitrary classification for the exact same reason. 

¶105 Use of Class to determine entitlement to an impairment award also fails because a 

worker’s functional limitation is expressed as the whole person impairment percentage, so 

we have not established that there is a difference in a worker’s functional limitation 

between a 12% impairment award that’s been designated a Class 1 and a 12% impairment 

award that’s been designated Class 2. The Plurality asserts, “Hensley’s and the Dissent’s 

characterization is that the Guides’ adoption of a uniform system of Classes, and the 

Legislature’s reliance on that classification system, does not ‘take benefits’ from a class of 

workers to give them to another.” Plurality, ¶ 33. Neither Hensley nor the Dissent allege 

this; rather MSF argued that a legitimate objective of § 39-71-703(2), MCA, eliminating 
59

impairment-only awards for Class 1 workers without wage loss is that the Legislature took 

some of the money saved from eliminating those benefits to give more weeks of biweekly 

payments to workers who are entitled to PPD benefits. 

¶106 MSF does not deny that workers without wage loss and with identical whole person 

impairment ratings are treated differently under § 39-71-703(2), MCA, on the basis of 

which Class their impairment falls into. However, MSF argues that this disparate treatment

does not violate equal protection because the Legislature had a rational basis in making 

this distinction in workers’ entitlement to an impairment award. MSF acknowledges that 

the use of the Class designation may be “imperfect,” but points out that this Court has held 

that classifications may be imperfect and yet not violate equal protection. Gulbrandson v. 

Carey, 272 Mont. 494, 503, 901 P.2d 573, 579 (1995) (citation omitted). However, while 

they may be imperfect and yet survive an equal protection challenge, they may not be 

arbitrary such that there is no rational basis to support disparate treatment of otherwise 

similarly situated classes. 

¶107 The Plurality asserts, “For the statute to fail on a facial challenge, we would have to 

conclude that the Legislature must award an impairment benefit to any worker with the 

slightest impact from a work-related injury.” Plurality, ¶ 39. That is inaccurate; rather we 

would conclude that the Legislature cannot treat similarly situated workers disparately. A 

worker with a 2% impairment award and no wage loss has suffered the same “slight[] 

impact” as a worker with a 2% impairment award and no wage loss. To give one worker 

with a 2% whole person impairment their full impairment award and deny the other any 

impairment award on the basis of Class is disparate treatment. In Caldwell, ¶ 50, this Court 
60

determined that § 39-71-710, MCA, which denied rehabilitation benefits to workers who 

were eligible for social security retirement benefits, bore no rational relationship to any 

legitimate governmental interest because “[e]ligibility for social security benefits bears no 

rational relationship to a worker’s ability or willingness to return to work.” In Reesor, ¶ 23, 

this Court determined that there was no rational relationship to any legitimate 

governmental interest in denying PPD benefits to a worker on the basis of age because 

social security retirement benefits bear no relationship to disability benefits. Here, as 

demonstrated by Hensley, and by the language of the Guides, Montana’s impairment award 

is determined by applying a formula to the permanently impaired worker’s whole person 

impairment rating, and there is no correlation between the whole person impairment rating 

and Class, an “as yet” unverified categorization system. For the reasons set forth above, 

denial of impairment award on the basis of Class designation is arbitrary and therefore does 

not demonstrate a rational relationship between the statute’s objective and the classification 

used by the Legislature. As such, it violates equal protection. 

CONCLUSION

¶108 The Plurality has not distinguished our holding in Caldwell that squarely rejected 

the same objective as a legitimate governmental objective as it accepts here. I would hold 

the WCC erred when it denied Hensley’s motion for summary judgment and granted 

summary judgment to MSF. I would further hold that § 39-71-703(2), MCA (2011), 

violates Article II, Section 4, of the Montana Constitution by denying an impairment-only 

award to Hensley and all similarly situated injured workers who did not suffer a wage loss 
61

as a result of their work-related injury and who received an impairment rating that was 

categorized as a Class I impairment under the Guides. 

/S/ INGRID GUSTAFSON

Justice Dirk Sandefur and Judge Jessica Fehr join in the dissenting Opinion of Justice 

Gustafson. 

/S/ DIRK M. SANDEFUR

/S/ JESSICA FEHR

District Court Judge Jessica Fehr 

sitting in place of Justice McKinnon

Justice Dirk Sandefur, dissenting. 

¶109 I dissent from the Court’s holding that § 39-71-703(2), MCA (2011), does not 

violate Montana’s constitutional equal protection guarantee. Section 39-71-703(2), MCA 

(2011), is not rationally related to the pertinent quid pro quo purpose of the Workers’ 

Compensation Act (the Act) as a whole—to provide at least some substantial form of 

proportional compensation for permanent partial impairments without actual wage loss at 

reasonable cost to employers. 

¶110 The version of the Act in effect at the time of a work-related injury governs a claim 

of right under the Act. Buckman v. Montana Deaconess Hosp., 224 Mont. 318, 321, 730 

P.2d 380, 382 (1986). The injury at issue occurred in January 2012, and is thus governed 

by the 2011 version of the Act. In a substantial change from the 1995-2009 versions of the 

Act, the 2011 Legislature revised the Act to categorically eliminate compensation for 

permanent partial impairments with no actual wage loss for one class of injured workers, 
62

while continuing to provide it to others based on a new scale of relative severity of injury 

applied to otherwise similar whole-body impairment ratings. Section 39-71-703(2), MCA

(2011). Before subjecting this patently discriminatory change to appropriate equal 

protection scrutiny, a summary review of the recent history of compensation for permanent 

partial impairment with no wage loss is necessary for context. 

1. Modern History of Compensation under the Act for Permanent Partial

Impairment Without Actual Wage Loss.

¶111 The pre-1985 Act provided two forms of wage-related compensation for 

work-related permanent partial impairments—a disability award based on an actual wage 

loss or, alternatively as applicable, an indemnity award regardless of actual wage loss for 

certain types of injuries (i.e. specified dismemberments). Sections 39-71-703, -705, and 

709(1), MCA (1981); McDanold v. B.N. Transp., Inc. (McDanold II), 208 Mont. 470, 477, 

679 P.2d 1188, 1191-92 (1984) (citing Walker v. H.F. Johnson, Inc. (Walker I), 180 Mont. 

405, 591 P.2d 181 (1978)); Jones v. Claridge, 145 Mont. 326, 330, 400 P.2d 888, 890 

(1965) (characterizing the indemnity award as compensation for “possible loss of future 

earning capacity” and the disability award as “compensation in lieu of wages”). The 

specified compensation for both types of awards was “proportional to the degree of 

disability resulting from the injury.” McDanold II, 208 Mont. at 476-77, 679 P.2d at 1191. 

The disability award was thus a function of a worker’s proportional whole-body permanent 

partial disability and actual wage loss, applied to a specified formula for permanent partial 

disability awards. See § 39-71-703, MCA (1981); § 92-703 R.C.M. 1947 (1971); 

McDanold II, 208 Mont. at 477-79, 679 P.2d at 1191-93); McDanold v. B.N. Transp. Inc.
63

(McDanold I), 194 Mont. 300, 308, 634 P.2d 175, 180 (1981). The alternative indemnity 

award was a function of a worker’s whole-body disability rating and projected loss of 

future earning capacity, applied to a specified compensation formula. See Walker v. H.F. 

Johnson, Inc. (Walker II), __ Mont. __, 639 P.2d 1138, 1139-40 (Mont. 1979) (modifying 

Walker I on rehearing); Ramsey v. Duncan, 174 Mont. 438, 440-41, 571 P.2d 384, 385 

(1977); Shaffer v. Midland Empire Packing Co., 127 Mont. 211, 213-14, 259 P.2d 340, 342 

(1951), superseded by § 39-71-703, MCA (1995) as recognized in Wilkes v. Mont. State 

Fund, 2008 MT 29, ¶ 24, 341 Mont. 292, 177 P.3d 483.

1

 

¶112 In 1981, the Legislature revised the Act to expressly clarify an “impairment” as a 

“purely medical condition,” defined as an “anatomic or functional abnormality or loss of 

bodily function,” proportionally measured by a whole-body impairment rating. Section 

39-71-122, MCA (1981). The 1981 amendment also introduced the now familiar classes 

of temporary/permanent and partial/total disabilities (TPD, TTD, PPD, or PTD) 

compensable under the Act and defined the general term “disability” as the extent to which 

a worker’s:

ability to engage in gainful employment is diminished as a result of an 

impairment . . . combined with such factors as . . . physical condition, age, 

education, work history, and other factors affecting the worker’s ability to 

engage in gainful employment. 

 

1 Though not expressly referenced by the pre-1981 Act, medical impairment ratings were the 

common evidentiary means by which treating physicians rendered expert opinions regarding a 

worker’s whole-body permanent impairment as relevant to the worker’s resulting proportional 

disability rating for purposes of determining the amount of wage-loss disability awards under 

alternative indemnity awards. See Grimshaw v. L. Peter Larson Co., 213 Mont. 291, 296, 691 

P.2d 805, 807 (1984); Cleveland v. Cyprus Indus. Minerals, 196 Mont. 15, 18-19, 636 P.2d 1386, 

1388-89 (1981); Robins v. Anaconda Aluminum Co., 175 Mont. 514, 520, 575 P.2d 67, 71 (1978); 

Ramsey v. Duncan, 174 Mont. 438, 440-41, 571 P.2d 384, 385 (1977).
64

Section 39-71-121, MCA (1981).

2

 

¶113 The pre-1987 formulas for permanent partial disability and indemnity awards 

effectively included elements of compensation for permanent loss of physical function and 

wage/earning capacity loss. See Grimshaw, 213 Mont. at 295-96, 691 P.2d at 807 

(distinguishing and applying limited holding of Holton v. F.H. Stoltze Land & Lumber Co., 

195 Mont. 263, 268-69, 637 P.2d 10, 13-14 (1981) (holding that PPD claimants were 

entitled to immediate payment of PPD disability benefits calculated on an undisputed 

impairment rating alone prior to the ultimate determination of resulting disability award)). 

See also Monroy v. Cenex, 246 Mont. 365, 371-72, 805 P.2d 1343, 1347 (1990) (noting 

incorporation and application of Holton holding and thus requiring immediate payment of 

new “impairment award” upon determination of undisputed impairment rating under 1987 

Act); Phelan v. Lee Blaine Enterprises, 220 Mont. 296, 300, 716 P.2d 601, 603 (1986) 

(similarly manifesting limited application of Holton). Thus, the pre-1987 Act did not 

provide for separate impairment awards to compensate for a permanent partial loss of 

physical function with no actual wage loss. 

¶114 In 1987, the Legislature substantially revised the Act regarding permanent partial 

impairments by eliminating the dismemberment-based indemnity awards previously 

 

2 The 1981 amendment further clarified that the whole-body “impairment rating [was] the medical 

component” of the ultimate “medical-legal” disability rating upon which the Act based 

compensation under the various disability classes. Grimshaw, 213 Mont. at 296, 691 P.2d at 807. 

See also § 39-71-121, MCA (1981); Sciuchetti v. Hurt Const., 238 Mont. 170, 174, 777 P.2d 308, 

311 (1989).
65

provided under § 39-71-705, et seq., MCA, and splitting PPD disability awards into two 

separate benefits—PPD “impairment awards” and PPD “wage supplement benefits.” 

Section 39-71-703(1), MCA (1987 Mont. Laws ch. 464, §§ 23 and 68). Similar to the 

actual wage-loss component of the prior PPD disability awards, the purpose of the new 

“wage supplement benefits” was to restore the injured worker to his or her “pre-accident 

wage level . . . upon return to work” in a different capacity than prior to injury. Rausch v. 

State Comp. Ins. Fund (Rausch II), 2005 MT 140, ¶ 23, 327 Mont. 272, 114 P.3d 192. See 

also § 39-71-703(1)(b), MCA (1987). In contrast, the new “impairment award” distinctly 

provided a degree of proportional compensation regardless of actual wage loss. Sections 

39-71-116(14) and -703(1)(a), MCA (1987); Rausch II, ¶¶ 12-15 and 23.

3

 Consistent with 

prior practice, the 1987 Act expressly required permanent impairment ratings in 

accordance with “the current edition of the Guides to Evaluation of Permanent Impairment 

published by the American Medical Association.” (AMA Guides.) Section 39-71-711, 

MCA (1987 Mont. Laws ch. 464, § 24). 

¶115 In 1991, the Legislature again substantially revised § 39-71-703, MCA, this time to 

eliminate separate PPD impairment awards and wage supplement benefits in favor of a 

single PPD “disability benefit award.” Section 39-71-703(1)-(2), MCA (1991). The new 

“disability benefit award” was a function of a total percentage (i.e. the sum of a worker’s 

whole-body impairment rating determined by the “latest edition of the [AMA] Guides” and 

 

3 See also Goble v. Montana State Fund, 2014 MT 99, ¶ 30 n.4, 374 Mont. 453, 325 P.3d 1211 

(noting similar purpose of impairment awards over ongoing statutory evolution). 
66

various other applicant-specific percentages) and the worker’s pre-injury wages under a 

specified compensation formula. Section 39-71-703(1)-(4), MCA (1991). See also

§ 39-71-711(1)(b), MCA (1991) (“impairment ratings” based on “current edition” of the 

AMA Guides). Despite elimination of separate impairment awards, the 1991 Act 

continued to effectively provide compensation for permanent partial impairments without 

wage loss via distinctions in the “disability benefit award” formula. See § 39-71-703(3), 

MCA (1991). 

¶116 In 1995, the Legislature revised the Act to make PPD disability benefits narrowly 

available only to workers with permanent partial impairments and actual wage loss. 

Sections 39-71-116(22) and -703(1)(a), MCA (1995). The 1995 amendment thus 

categorically excluded workers with permanent partial impairments and no actual wage 

loss from eligibility for PPD disability awards, but then made them eligible for a separate 

proportional “impairment award only.” See §§ 39-71-116(22) and -703(1)-(2), MCA 

(1995). The post-1995 Act continued to require permanent impairment ratings in 

accordance with the “latest edition” of AMA Guides. Section 39-71-703(1)(a)(ii), MCA 

(1995). See also § 39-71-711(1)(b), MCA (1995) (referencing “current edition” of the 

Guides). Eligibility for no-wage-loss, impairment-only awards thereafter remained 

constant for sixteen years until 2011. 

¶117 In 2011, however, the Legislature limited the availability of no-wage-loss, 

impairment-only awards. Rather than the “latest” or “current” edition, the 2011 

amendment revised the Act to more specifically require impairment ratings in accordance 

with the “sixth edition” of the AMA Guides. Sections 39-71-116(27), -703(1)-(2), 
67

and -711(1)(b), MCA (2011). The change was significant because, unlike prior editions 

which merely determined a single whole-body permanent impairment rating percentage, 

the sixth edition of the Guides further subdivided impairment ratings into four subclasses 

of relative severity, from one (lowest) to four (highest). Based on the new relative severity 

subclasses, the 2011 amendment further revised the Act to limit compensation for 

permanent partial impairments and no wage loss only to workers with a relative severity 

rating of “Class 2 or greater,” thereby categorically eliminating any form of compensation 

for Class 1 permanent partial impairments. Section 39-71-703(2), MCA (2011). 

2. Essential Quid Pro Quo Structure and Purpose of the Act. 

¶118 From original enactment in 1915, the Act has been a delicate public policy 

compromise, with the essential quid pro quo purposes and effects of (1) depriving workers 

of otherwise available tort remedies (which previously afforded them opportunity for full 

compensation), in return for some lesser form of guaranteed no-fault compensation for 

work-related injury, and (2) depriving employers of advantageous common law defenses 

in tort, in return for limited and predictable liability for employee injuries. See §§ 39-71-

105(1), -124, and -411, MCA (2011); Royal Ins. Co. v. Roadarmel, 2000 MT 259, ¶ 29, 

301 Mont. 508, 11 P.3d 105; Henry v. State Comp. Ins. Fund, 1999 MT 126, ¶ 12, 294 

Mont. 449, 982 P.2d 456; Sitzman v. Shumaker, 221 Mont. 304, 307, 718 P.2d 657, 659 

(1986); Madison v. Pierce, 156 Mont. 209, 213-14, 478 P.2d 860, 863 (1970); Mahlum v. 

Broeder, 147 Mont. 386, 392-95, 412 P.2d 572, 575-77 (1966); State ex rel. Morgan v. 

Indus. Accident Bd. of Mont., 130 Mont. 272, 278-79, 300 P.2d 954, 958 (1956); Chisholm 

v. Vocational Sch. for Girls, 103 Mont. 503, 512-13, 64 P.2d 838, 844 (1936); Shea v. 
68

North-Butte Mining Co., 55 Mont. 522, 528-29, 179 P. 499, 501 (1919); Lewis & Clark

County v. Industrial Accident Bd., 52 Mont. 6, 9-13, 155 P. 268, 270-71 (1916). Within 

the framework of this essential quid pro quo, the Legislature retains broad discretion under 

Article III, Section 1, of the Montana Constitution to determine the level, type, and manner 

of compensation and benefits available to injured workers under the Act, except as limited 

by Article II, Sections 4 and 16-17 (individual rights to full legal redress, equal protection, 

and due process of law). See Henry, ¶¶ 38-40 and 44-45 (invalidating discriminatory denial 

of rehabilitation benefits among similarly situated classes of injured workers); Stratemeyer 

v. Lincoln Cty. (Stratemeyer I), 259 Mont. 147, 153-55, 855 P.2d 506, 510-511 (1993) 

(upholding across-the-board denial of compensation for mental stress injury not resulting 

from physical injury); Ingraham v. Champion Int’l, 243 Mont. 42, 48, 793 P.2d 769, 772 

(1990) (“power of the legislature to fix the amounts, time and manner of payment of 

workers’ compensation benefits is not doubted”). 

3. Equal Protection and Section 39-71-703(2), MCA (2011). 

¶119 “No person shall be denied equal protection of the laws.” Mont. Const. art. II, § 4. 

Depending upon the nature of the legally cognizable right or interest affected, legislative 

enactments are subject to one of three recognized standards of constitutional scrutiny for 

purposes of equal protection—strict scrutiny, middle-tier scrutiny, or rational basis 

scrutiny. See Bustell v. AIG Claims Serv., Inc., 2004 MT 362, ¶¶ 19-20, 324 Mont. 478, 

105 P.3d 286; Powell v. State Comp. Ins. Fund, 2000 MT 321, ¶ 21, 302 Mont. 518, 15 

P.3d 877; Henry, ¶ 29. The right to equal protection of law prohibits the government, 

whether through legislative enactment or otherwise, from treating similarly situated classes 
69

of individuals differently, except as permissible under the appropriate level of 

constitutional scrutiny. 

(A) Applicable Level of Constitutional Scrutiny. 

¶120 For purposes of equal protection, rational basis scrutiny generally applies to 

discriminatory laws that neither affect the exercise of other fundamental constitutional 

rights, nor discriminate on a constitutionally suspect basis. Bustell, ¶ 19; Henry, ¶ 29; 

Powell, ¶ 21. Provisions of the Act are generally subject to equal protection challenge only 

under rational basis scrutiny because the discriminatory manner and provision of 

compensation for work-related injury under the Act generally does not affect other 

fundamental constitutional rights or discriminate on a constitutionally suspect basis. 

Bustell, ¶ 19; Powell, ¶ 21; Henry, ¶ 29; Ingraham, 243 Mont. at 48, 793 P.2d at 773. 

(B) Discriminatory Classification/Treatment. 

¶121 For purposes of equal protection, classes of individuals are similarly situated if they 

are similar but for the disputed basis of discrimination at issue. Goble, ¶ 29 (internal 

citations omitted). Even facially neutral legislation may be discriminatory if it has a 

discriminatory purpose and effect on otherwise similarly situated classes. State v. Spina, 

1999 MT 113, ¶ 85, 294 Mont. 367, 982 P.2d 421; Fitzpatrick v. State, 194 Mont. 310, 

323, 638 P.2d 1002, 1010 (1981); Pers. Adm’r of Mass. v. Feeney, 442 U.S. 256, 272 and 

278-79, 99 S. Ct. 2282, 2292 and 2296 (1979). 

¶122 Here, § 39-71-703(2), MCA (2011), effects two classes of injured workers with 

permanent partial impairments—those with no actual wage loss and a Class 1 impairment 

rating, and those with a similar whole-body impairment rating, no actual wage loss, and a 
70

Class 2 or greater relative severity rating. Because those classes differ only as to relative

severity rating, § 39-71-703(2), MCA (2011), facially discriminates, based on relative 

severity of impairment, in the provision of compensation between otherwise similarly 

situated classes of injured workers with permanent partial impairment ratings. 

(C) Application of Rational Basis Scrutiny. 

¶123 A discriminatory legislative classification survives rational basis scrutiny only if it 

rationally relates to, i.e. furthers, a legitimate government purpose. Kottel v. State, 2002 

MT 278, ¶ 34, 312 Mont. 387, 60 P.3d 403; Nordlinger v. Hahn, 505 U.S. 1, 11, 112 S. Ct. 

2326, 2332 (1992). Accord Bustell, ¶ 19; Powell, ¶ 21; Henry, ¶ 29. Legislative 

classifications are presumed constitutional under rational basis scrutiny and the challenging 

party bears the burden of demonstrating that the disputed classification does not rationally 

further a legitimate government purpose. Henry, ¶ 11 (internal citations omitted). Within 

the framework of the essential quid pro quo of the Act, a discriminatory provision of the 

Act survives rational basis scrutiny only if it rationally furthers the pertinent quid pro quo 

purpose of the Act as a whole. See Caldwell v. MACO Workers’ Comp. Trust, 2011 MT 

162, ¶¶ 23-48, 361 Mont. 140, 256 P.3d 923; Henry, ¶¶ 33-44; Stratemeyer I, 259 Mont. at 

152-55, 855 P.2d at 509-11. In other words, a discriminatory classification in the Act 

survives rational basis scrutiny only if it furthers the pertinent dual purpose of the quid pro 

quo. 

¶124 In Stratemeyer I, we considered whether the Act’s categorial exclusion of 

compensation for work-related mental stress injury not resulting from physical injury (i.e.

mental-mental injury) violated equal protection by compensating one form of work-related 
71

injury but not another. Stratemeyer I, 259 Mont. at 149-52, 855 P.2d at 507-09. Within 

the framework of the quid pro quo of the Act, we held that the exclusion of compensation 

for mental-mental injuries rationally furthered the legitimate government interest of 

maintaining the continued viability of the compensation system for workers, at reasonable 

cost to employers. Stratemeyer I, 259 Mont. at 153-55, 855 P.2d at 510-11. 

¶125 In Henry, we considered whether the exclusion of vocational rehabilitation benefits 

to injured workers under the Occupational Disease Act (ODA), while providing them to 

workers with a similar injury under the Act, based on whether the injury occurred acutely 

in a single work shift or cumulatively over multiple shifts, violated equal protection. 

Henry, ¶ 2. The dispute involved an acute herniated disc injury that occurred on a single 

shift but which “was treated and accepted” as a compensable occupational disease under 

the ODA, rather than a compensable injury under the Act. Henry, ¶¶ 4 and 21. Under the 

governing versions of both Acts, the same injury was compensable under either, but related 

vocational rehabilitation benefits for that injury were only available under the Act, not the 

ODA. Henry, ¶¶ 6 and 21. 

¶126 Regardless of the different histories and purposes of the Act and the ODA, 

we recognized that the Acts discriminated between two classes of similarly situated 

workers—those who suffered an acute injury on one work shift and those who suffered a 

similar injury cumulatively caused over multiple work shifts. Henry, ¶¶ 27-28. We first 

noted for purposes of rational basis scrutiny that the pertinent legitimate government 

purpose of both Acts was to help injured workers return to work, and that “[r]ehabilitation 

services [were] the only mechanism provided” under either to further that purpose. Henry, 
72

¶¶ 35 and 38-39. We thus held that the ODA violated equal protection because providing 

rehabilitation benefits for an injury under the Act, and categorically denying them under 

the ODA for an injury that was similar but for cumulative or acute causation, was not 

rationally related to the pertinent common purposes of the Acts to help injured workers 

return to work. See Henry, ¶¶ 39-45 (distinguishing Eastman v. Atl. Richfield Co., 237 

Mont. 332, 339, 777 P.2d 862, 866 (1989)). 

¶127 In Caldwell, we considered whether the Act’s categorical denial of vocational 

rehabilitation benefits, based on social security eligibility, to workers who were able and 

willing to return to work in an alternative capacity violated equal protection. Caldwell, 

¶¶ 5-6 and 50-51. The dispute involved a 74-year-old injured worker who desired to return 

to work in some other capacity, but was denied vocational rehabilitation benefits because 

he was eligible for social security. Caldwell, ¶¶ 5-6. Except for those eligible for social 

security, the Act provided vocational rehabilitation benefits to injured workers with 

permanent partial disabilities upon demonstration that they were willing, able, and had the 

opportunity to return to work in some alternative capacity. Caldwell, ¶¶ 12-13. We 

concluded that the Act thus discriminated between two otherwise similar classes of injured 

workers but for age-based social security eligibility. Caldwell, ¶¶ 16, 18, and 25. 

¶128 After dismissing as illegitimate various other government interests asserted as 

justification for the discriminatory classification, we noted that the pertinent combined 

purpose of the Act was to provide rehabilitation benefits to aid willing and able workers’

return to work, at reasonable cost to employers. See Caldwell, ¶¶ 31 and 34-48. However, 

noting that “cost alone is insufficient to justify the disparate treatment of similar classes,” 
73

we focused on whether the “categorical elimination” of rehabilitation benefits to one class 

of injured workers based on social security eligibility was also rationally related to the 

Act’s pertinent purpose of providing rehabilitation benefits to aid willing and able workers’

return to work. See Caldwell, ¶¶ 36-48 (quoting Satterlee v. Lumberman’s Mut. Cas. Co., 

2009 MT 368, ¶ 29, 353 Mont. 265, 222 P.3d 566). We ultimately held that the 

discriminatory classification violated equal protection because it was not rationally related 

to both aspects of the pertinent purpose of the Act—to aid willing and able workers’ return 

to work, at reasonable cost to employers. See Caldwell, ¶¶ 48 and 50. 

¶129 Despite the ongoing evolution of the Act since 1915, its constant over-arching quid 

pro quo purpose and provision has been, and continues to be, to provide at least some 

substantial form of guaranteed no-fault compensation and benefits for work-related injuries 

at reasonable cost to employers. See Stratemeyer v. Lincoln Cty. (Stratemeyer II), 276 

Mont. 67, 74-79, 915 P.2d 175, 179-82 (1996); Stratemeyer I, 259 Mont. at 153-55, 855 

P.2d at 510-11. Though we did not expressly reference the quid pro quo, the essential 

gravamen of Stratemeyer I, Henry, and Caldwell is that cost control is just one aspect of 

the pertinent quid pro quo purpose of the Act to which a discriminatory categorical 

exclusion or denial of compensation or benefits must rationally relate for purposes of equal 

protection. See Caldwell, ¶¶ 33-51; Henry, ¶¶ 25-45. Compare Stratemeyer I, 259 Mont. 

at 153-55, 855 P.2d at 510-11 (essentially holding that the categorical exclusion of a type 
74

of compensation to all injured workers furthered both aspects of the quid pro quo).4 In 

other words, a discriminatory categorical exclusion of compensation or benefits under the 

Act satisfies equal protection only if it rationally furthers the pertinent quid pro quo purpose 

of the Act in some, though not necessarily equal, degree of balance, as determined by the 

Legislature in its discretion. Thus, unlike in Stratemeyer I, the discriminatory 

classifications at issue in Henry and Caldwell could not survive rational basis scrutiny 

because, though they served the legitimate government interest in cost-control, they were 

contrary to the other inseparable aspect of the pertinent quid pro quo purpose of the Act, 

as applied to the disaffected classes. 

¶130 While Stratemeyer I manifests that the Legislature can categorically exclude or 

cut-out compensation for a particular type of work-related loss without violating equal

protection, Stratemeyer II illustrates the over-arching consequence of the quid pro quo. 

Montana workers have a fundamental constitutional right to “full legal redress” for 

employment-related injury, “except as to . . . [employment-related injuries] cover[ed] under 

the [Act].” Mont. Const. art. II, § 16. The right to full legal redress and its express workers’

compensation exception constitutionally require preservation of the essential quid pro quo 

of the Act as a condition of depriving workers of otherwise available tort remedies for 

work-related injuries, and immunizing employers therefrom. See Walters v. Flathead 

Concrete Prod., Inc., 2011 MT 45, ¶¶ 11-16, 359 Mont. 346, 249 P.3d 913 (citing Adsem 

 

4 See also Satterlee v. Lumberman’s Mut. Cas. Co., 2009 MT 368, ¶ 29, 353 Mont. 265, 222 P.3d 

566 (Legislature may discriminate in provision work-comp benefits between similar classes based 

on cost only if cost is not the sole reason for the discrimination). 
75

v. Roske, 224 Mont. 269, 270-71, 728 P.2d 1352, 1353 (1986) and Stratemeyer II, 276 

Mont. at 74-79, 915 P.2d at 179-82). As implemented by the exclusivity provision of the 

Act, the essential quid pro quo requires that the Legislature provide “some form” of 

substantial compensation for work-related injuries in return for depriving workers of 

otherwise generally applicable tort remedies. Stratemeyer II, 276 Mont. at 74-79, 915 P.2d 

at 179-82 (emphasis added). Thus, the categorical denial of at least some form of 

substantial compensation for a work-related injury otherwise compensable in tort 

eliminates the quid pro quo and subjects the employer to liability in tort. Stratemeyer II, 

276 Mont. at 74-79, 915 P.2d at 179-82 (holding that categorical exclusion of 

compensation for mental-mental injury destroyed quid pro quo and rejecting assertion that 

work-comp exclusivity applies to non-compensable injuries as long the employment is 

“covered” under the Act). Accord Kleinhesselink v. Chevron, U.S.A., 277 Mont. 158, 163, 

920 P.2d 108, 111 (1996) (exclusion of compensation for mental-mental injury and 

physical injury caused by mental stress subjected employers to liability in tort for those 

injuries). Compare Walters, ¶¶ 6 and 12-16 (work-comp exclusivity barred third-party 

wrongful death/survivorship claims against employer because Act provided some degree 

of substantial compensation for the employee’s death in the form of medical and burial 

expenses and survivor death benefits). 

¶131 Here, regardless of relative severity or actual wage loss, a work-related permanent

partial impairment of physical function would unquestionably be compensable in tort 

against an employer, but for application of the Act. See §§ 27-1-201 and -202, MCA. In 

accordance with its essential quid pro quo, the Act has thus historically provided some 
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form of proportional compensation for work-related permanent partial impairments 

regardless of actual wage loss, whether as a function of the permanent partial disability 

award formula or by separate impairment award. See Monroy, Grimshaw, and Holton, 

supra, and post-1987 versions of §§ 39-71-703 and -711, MCA. Here, except for Class 1 

impairments, the 2011 version of the Act continues to provide proportional compensation 

for permanent partial impairments without actual wage loss. Sections 39-71-703(2) 

and -711(1), MCA (2011). Thus, providing some degree of proportional compensation for 

permanent partial impairments regardless of actual wage loss, but at reasonable cost to 

employers, is the pertinent legitimate government purpose within the framework of the quid 

pro quo here. To survive rational basis scrutiny for purposes of equal protection, 

§ 39-71-703(2), MCA (2011), must rationally further both aspects of this relevant quid pro 

quo purpose. See Caldwell, Satterlee, and Henry, supra. 

¶132 However, § 39-71-703(2), MCA (2011), categorically excludes and denies any 

form or level of compensation for one class of permanent partial impairments without wage 

loss, while continuing to compensate another class of permanent partial impairments 

without wage loss that is similarly situated but for a different relative severity subclass 

rating. Regardless of its acknowledged imprecision and experimental nature, I agree that 

neither Hensley, nor the Amicus, have shown that the medical methodology employed by 

the sixth edition of the AMA Guides is arbitrary. However, the constitutional problem is 

not with the validity of the methodology chosen to rate relative severity of injury. The 

problem is how the Legislature has, within the framework of the quid pro quo, chosen to 

use it to categorically deprive one class of otherwise similarly situated workers of any
77

compensation for a type of work-related loss previously compensable under the Act, and 

otherwise compensable in tort but for the new provision of the Act. 

¶133 To that end, as in Henry and Caldwell, § 39-71-703(2), MCA (2011), is rationally 

related to only one aspect of the pertinent quid pro quo purpose of the Act—cost control. 

However, the categorical exclusion of compensation for Class 1 permanent partial 

impairments is not rationally related to the other aspect of the pertinent quid pro quo 

purpose of the Act—providing at least some substantial form of proportional compensation 

for permanent partial loss of physical function in return for depriving those workers of their 

remedy to obtain full compensation for that type of loss in tort. Had the 2011 Legislature 

simply further discriminately reduced the level of compensation for workers with similar 

whole-body impairment ratings in some reasonable proportion to the new relative severity 

subclass scale, this would be a different case for equal protection purposes, provided that 

the Act continued to at least provide some substantial form of compensation for all 

permanent partial impairments without wage loss. But that is not this case. 

¶134 Here, like the discriminatory classifications in Caldwell and Henry, the 

discriminatory classification effected by § 39-71-703(2), MCA (2011), is contrary to and 

defeats one of the tandem aspects of the pertinent quid pro quo purpose of the Act by 

categorically excluding and denying any compensation for a class of work-related 

permanent partial impairments. To hold otherwise would be to presume that, in revising 

§ 39-71-703(2), MCA (2011), the Legislature intended to resubject employers to tort 

liability for non-economic damages, and potentially even punitive damages, for Class 1 

permanent impairments without actual wage loss, as in Stratemeyer II. However, nothing 
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in the language or legislative history of § 39-71-703(2), MCA (2011), indicates such a 

drastic intent. We must therefore presume that, in addition to controlling cost, the 2011 

Legislature nevertheless intended to preserve the essential quid pro quo, thereby continuing 

to protect employers from tort liability, and subjecting § 39-71-703(2) to rational basis 

scrutiny within the framework of the quid pro quo of the Act. Thus, I would hold that, like 

the discriminatory classifications in Henry and Caldwell, § 39-71-703(2), MCA (2011), 

facially violates the equal protection guarantee of the Montana Constitution because it is 

not rationally related to the pertinent quid pro quo purpose of the Act as a whole. 

¶135 I dissent. 

/S/ DIRK M. SANDEFUR

Justice Ingrid Gustafson and Judge Jessica Fehr join in the Dissenting Opinion of Justice 

Sandefur. 

/S/ INGRID GUSTAFSON

/S/ JESSICA FEHR

District Court Judge Jessica Fehr 

sitting in place of Justice McKinnon