Source: https://supreme.justia.com/cases/federal/us/243/188/
Timestamp: 2019-04-19 10:47:15+00:00

Document:
Employment in guarding tools and materials intended for use in the construction of a new railroad station and new tracks which, when finished, will be used in interstate commerce has no such direct relation to interstate transportation as will afford basis for applying the Federal Employers' Liability Act in case of accident and death. Pedersen v. Delaware, Lackawanna & Western R. Co., 229 U. S. 146, 229 U. S. 152.
He who assails a statute as unconstitutional must show that his right is infringed by it; where, however, a statute so regulates the correlative rights of two classes -- as employers and employees -- that, if void as to one it must be void as to the other, complaint of a party belonging to one class may require an examination of the statute in both aspects.
The New York Workmen's Compensation Law, Laws 1913, c. 816; Laws 1914, chaps. 41, 316, provides an exclusive system to govern the liabilities of employers and the rights of employees and their dependents in respect of compensation for disabling injuries and death caused by accident (not due to the willful intent or the intoxication of the employee) in certain employments, classed as hazardous; the duty of employers to compensate is made absolute; the compensation which employers must pay and employees (or their dependents, in death cases) must accept in satisfaction is measured by a prescribed scale, based on loss of earning power, gauged by the previous wage, and the nature and duration of the disability or, in case of death, the dependency of the beneficiaries; the amounts fixed are apparently moderate and reasonable, and the means of collection, through administrative proceedings subject to judicial review of law questions, are apparently economical, expeditious, and fair; employers are required to furnish security against future liabilities, and the act is prospective.
(1) That neither (a) in rendering the employer liable irrespective of the doctrines of negligence, contributory negligence, assumption of risk, and negligence of fellow servants, nor (b) in depriving the employee, or his dependents, of the higher damages which, in some cases, might be recovered under those doctrines, can the act be said to violate due process.
(2) That, viewed from the standpoint of natural justice, the system provided by the act in lieu of former rules is neither arbitrary nor unreasonable.
(3) That the exclusion of farm laborers and domestic servants from the scheme of the act may not be judicially declared an arbitrary classification violating the equal protection of the law.
The common law rules respecting the rights and liabilities of employer and employee in accident cases, viz., negligence, assumption of risk, contributory negligence, fellow servant doctrine, as rules defining legal duty and guiding future conduct, may be altered by state legislation, and even set aside entirely, at least if some reasonably just substitute be provided.
The denial by a trial by jury is not inconsistent with due process of law within the meaning of the Fourteenth Amendment.
The making of a deposit of cash and securities in obedience to the New York Workmen's Compensation Act, accompanied by an express reservation of all contentions respecting the invalidity of the act, does not estop the depositor from questioning its constitutionality.
Under the power to establish a compulsory Workmen's Compensation System, the state may require employers to furnish satisfactory proof of financial ability to pay compensation in future and may require them to deposit reasonable amounts of securities to insure such payments.
Section 50 of the New York Workmen's Compensation Law requires the employer to secure payment of compensation either by state insurance, or by insurance by an authorized corporation or association, or by furnishing satisfactory proof to the state commission of his financial ability to pay, in which case the commission may, in its discretion, require him to deposit securities of a kind prescribed by the state insurance law in an amount to be determined by the commission.
that the method of self-insurance will be open to all employers, on reasonable terms within the power of the state to impose.
(2) That, viewed as optional alternatives, the other modes of insurance are free from constitutional objections as regards employers.
(3) That such an option is not inconsistent with the constitutional rights of employees, there being no ground to presume that any of the methods of security would prove inadequate to safeguard their interests.
169 App.Div. 903, 216 N.Y. 653, affirmed.
Division of the Supreme Court for the Third Judicial Department, whose order was affirmed by the Court of Appeals without opinion. 169 App.Div. 903, 216 N.Y. 653. Federal questions having been saved, the present writ of error was sued out by the New York Central Railroad Company, successor, through a consolidation of corporations, to the rights and liabilities of the employing company. The writ was directed to the appellate division, to which the record and proceedings had been remitted by the Court of Appeals. Sioux Remedy Co. v. Cope, 235 U. S. 197, 235 U. S. 200.
The errors specified are based upon these contentions: (1) that the liability, if any, of the railroad company for the death of Jacob White is defined and limited exclusively by the provisions of the Federal Employers' Liability Act of April 22, 1908, c. 149, 35 Stat. 65, and (2) that to award compensation to defendant in error under the provisions of the Workmen's Compensation Law would deprive plaintiff in error of its property without due process of law, and deny to it the equal protection of the laws, in contravention of the Fourteenth Amendment.
The first point assumes that the deceased was employed in interstate commerce at the time he received the fatal injuries. According to the record, he was a night watchman, charged with the duty of guarding tools and materials intended to be used in the construction of a new station and new tracks upon a line of interstate railroad. The Commission found, upon evidence fully warranting the finding, that he was on duty at the time, and at a place not outside of the limits prescribed for the performance of his duties; that he was not engaged in interstate commerce, and that the injury received by him and resulting in his death was an accidental injury arising out of and in the course of his employment.
designed for use, when finished, in interstate commerce does not bring the case within the federal act. The test is "[w]as the employee at the time of the injury engaged in interstate transportation, or in work so closely related to it as to be practically a part of it?" Shanks v. Delaware, Lackawanna & Western R. Co., 239 U. S. 556, 239 U. S. 558. Decedent's work bore no direct relation to interstate transportation, and had to do solely with construction work, which is clearly distinguishable, as was pointed out in Pedersen v. Delaware, Lackawanna & Western R. Co., 229 U. S. 146, 229 U. S. 152. And see Chicago, Burlington & Quincy R. Co. v. Harrington, 241 U. S. 177, 241 U. S. 180; Raymond v. Chicago, Minneapolis & St. Paul Ry. Co., ante, 243 U. S. 43. The first point therefore is without basis in fact.
from the intoxication of the injured employee while on duty, in which cases neither the injured employee nor any dependent shall receive compensation. By § 11, the prescribed liability is made exclusive, except that, if an employer fail to secure the payment of compensation as provided in § 50, an injured employee, or his legal representative, in case death results from the injury, may at his option, elect to claim compensation under the act, or to maintain an action in the courts for damages, and in such an action it shall not be necessary to plead or prove freedom from contributory negligence, nor may the defendant plead as a defense that the injury was caused by the negligence of a fellow servant, that the employee assumed the risk of his employment, or that the injury was due to contributory negligence. Compensation under the act is not regulated by the measure of damages applied in negligence suits, but, in addition to providing surgical or other like treatment, it is based solely on loss of earning power, being graduated according to the average weekly wages of the injured employee and the character and duration of the disability, whether partial or total, temporary or permanent, while in case the injury causes death, the compensation is known as a death benefit, and includes funeral expenses, not exceeding $100, payments to the surviving wife (or dependent husband) during widowhood (or dependent widowerhood) of a percentage of the average wages of the deceased, and, if there be a surviving child or children under the age of eighteen years, an additional percentage of such wages for each child until that age is reached. There are provisions invalidating agreements by employees to waive the right to compensation, prohibiting any assignment, release, or commutation of claims for compensation or benefits except as provided by the act, exempting them from the claims of creditors, and requiring that the compensation and benefits shall be paid only to employees or their dependents.
liability to pay the compensation provided in this chapter."
If an employer fails to comply with this section, he is made liable to a penalty in an amount equal to the pro rata premium that would have been payable for insurance in the state fund during the period of noncompliance, besides which, his injured employees or their dependents are at liberty to maintain an action for damages in the courts, as prescribed by § 11.
other rights and remedies for injuries to employees or for death resulting from such injuries, or to provide that the amount of such compensation for death shall not exceed a fixed or determinable sum, provided that all moneys paid by an employer to his employees or their legal representatives by reason of the enactment of any of the laws herein authorized shall be held to be a proper charge in the cost of operating the business of the employer."
In December, 1913, the legislature enacted the law now under consideration (Laws 1913, c. 816), and in 1914 reenacted it (Laws 1914, c. 41) to take effect as to payment of compensation on July 1 in that year. The act was sustained by the Court of Appeals as not inconsistent with the Fourteenth Amendment in Jensen v. Southern Pacific Co., 215 N.Y. 514, and that decision was followed in the case at bar.
agreement as they choose respecting the terms of the employment.
In support of the legislation, it is said that the whole common law doctrine of employer's liability for negligence, with its defenses of contributory negligence, fellow servant's negligence, and assumption of risk, is based upon fictions, and is inapplicable to modern conditions of employment; that, in the highly organized and hazardous industries of the present day, the causes of accident are often so obscure and complex that in a material proportion of cases it is impossible by any method correctly to ascertain the facts necessary to form an accurate judgment, and in a still larger proportion, the expense and delay required for such ascertainment amount in effect to a defeat of justice; that, under the present system, the injured workman is left to bear the greater part of industrial accident loss, which, because of his limited income, he is unable to sustain, so that he and those dependent upon him are overcome by poverty and frequently become a burden upon public or private charity, and that litigation is unduly costly and tedious, encouraging corrupt practices and arousing antagonisms between employers and employees.
In considering the constitutional question, it is necessary to view the matter from the standpoint of the employee as well as from that of the employer. For, while plaintiff in error is an employer, and cannot succeed without showing that its rights as such are infringed (Plymouth Coal Co. v. Pennsylvania, 232 U. S. 571, 232 U. S. 576; Jeffrey Mfg. Co. v. Blagg, 235 U. S. 571, 235 U. S. 576), yet, as pointed out by the Court of Appeals in the Jensen case, 215 N.Y. 526, the exemption from further liability is an essential part of the scheme, so that the statute, if invalid as against the employee, is invalid as against the employer.
of liberty and property is, of course, recognized. But those rules, as guides of conduct, are not beyond alteration by legislation in the public interest. No person has a vested interest in any rule of law, entitling him to insist that it shall remain unchanged for his benefit. Munn v. Illinois, 94 U. S. 113, 94 U. S. 134; Hurtado v. California, 110 U. S. 516, 110 U. S. 532; Martin v. Pittsburg & Lake Erie R. Co., 203 U. S. 284, 203 U. S. 294; Second Employers' Liability Cases, 223 U. S. 1, 223 U. S. 50; Chicago & Alton R. Co. v. Tranbarger, 238 U. S. 67, 238 U. S. 76. The common law bases the employer's liability for in juries to the employee upon the ground of negligence, but negligence is merely the disregard of some duty imposed by law, and the nature and extent of the duty may be modified by legislation, with corresponding change in the test of negligence. Indeed, liability may be imposed for the consequences of a failure to comply with a statutory duty, irrespective of negligence in the ordinary sense, safety appliance acts being a familiar instance. St. Louis, Iron Mountain & Southern Ry. Co. v. Taylor, 210 U. S. 281, 210 U. S. 295; Texas & Pacific Ry. Co. v. Rigsby, 241 U. S. 33, 241 U. S. 39, 241 U. S. 43.
The fault may be that of the employer himself, or most frequently that of another for whose conduct he is made responsible according to the maxim respondeat superior. In the latter case, the employer may be entirely blameless, may have exercised the utmost human foresight to safeguard the employee, yet, if the alter ego, while acting within the scope of his duties, be negligent -- in disobedience, it may be, of the employer's positive and specific command -- the employer is answerable for the consequences. It cannot be that the rule embodied in the maxim is unalterable by legislation.
negligence is one of the natural and ordinary risks of the occupation, assumed by the employee and presumably taken into account in the fixing of his wages. The earliest reported cases are Murray v. South Carolina R. Co. (1841), 1 McMull. 385, 398; Farwell v. Boston & Worcester R. Corp. (1842), 4 Met. 49, 57; Hutchinson v. York, New Castle & Berwick Ry. Co. (1850), L.R. 5 Exch. 343, 351; Wigmore v. Jay (1850), 5 Exch. 354; Bartonshill Coal Co. v. Reid, (1858), 3 Macq. H.L. Cas. 266, 284, 295. And see Randall v. Baltimore & Ohio R. Co., 109 U. S. 478, 109 U. S. 483; Northern Pacific R. Co. v. Herbert, 116 U. S. 642, 116 U. S. 647. The doctrine has prevailed generally throughout the United States, but with material differences in different jurisdictions respecting who should be deemed a fellow servant and who a vice principal or alter ego of the master, turning sometimes upon refined distinctions as to grades and departments in the employment. See Knutter v. New York & N.J. Telephone Co., 67 N.J.L. 646, 650-653. It needs no argument to show that such a rule is subject to modification or abrogation by a state upon proper occasion.
U.S. 492, 233 U. S. 504; 239 U. S. 239 U.S. 595, 239 U. S. 599. Plainly, these rules, as guides of conduct and tests of liability, are subject to change in the exercise of the sovereign authority of the state.
So also with respect to contributory negligence. Aside from injuries intentionally self-inflicted, for which the statute under consideration affords no compensation, it is plain that the rules of law upon the subject, in their bearing upon the employer's responsibility, are subject to legislative change, for contributory negligence, again, involves a default in some duty resting on the employee, and his duties are subject to modification.
It may be added by way of reminder that the entire matter of liability for death caused by wrongful act, both within and without the relation of employer and employee, is a modern statutory innovation, in which the states differ as to who may sue, for whose benefit, and the measure of damages.
But it is not necessary to extend the discussion. This Court repeatedly has upheld the authority of the states to establish by legislation departures from the fellow servant rule and other common law rules affecting the employer's liability for personal injuries to the employee. Missouri Pacific Ry. Co. v. Mackey, 127 U. S. 205, 127 U. S. 208; Minneapolis & St. Louis Ry. Co. v. Herrick, 127 U. S. 210; Minnesota Iron Co. v. Kline, 199 U. S. 593, 199 U. S. 598; Tullis v. Lake Erie & Western R. Co., 175 U. S. 348; Louisville & Nashville R. Co. v. Melton, 218 U. S. 36, 218 U. S. 53; Chicago, Indianapolis & Louisville Ry. Co. v. Hackett, 228 U. S. 559; Wilmington Star Mining Co. v. Fulton, 205 U. S. 60, 205 U. S. 73; Missouri Pacific Ry. Co. v. Castle, 224 U. S. 541, 224 U. S. 544. A corresponding power on the part of Congress, when legislating within its appropriate sphere, was sustained in Second Employers' Liability Cases, 223 U. S. 1. And see El Paso & Northeastern Ry. Co. v. Gutierrez, 215 U. S. 87, 215 U. S. 97; Baltimore & Ohio R. Co. v. Interstate Commerce Commission, 221 U. S. 612, 221 U. S. 619.
the rate of wages, so the fixed responsibility of the employer, and the modified assumption of risk by the employee under the new system, presumably will be reflected in the wage scale. The act evidently is intended as a just settlement of a difficult problem, affecting one of the most important of social relations, and it is to be judged in its entirety. We have said enough to demonstrate that, in such an adjustment, the particular rules of the common law affecting the subject matter are not placed by the Fourteenth Amendment beyond the reach of the lawmaking power of the state, and thus we are brought to the question whether the method of compensation that is established as a substitute transcends the limits of permissible state action.
Briefly, the statute imposes liability upon the employer to make compensation for disability or death of the employee resulting from accidental personal injury arising out of and in the course of the employment, without regard to fault as a cause except where the injury or death is occasioned by the employee's willful intention to produce it, or where the injury results solely from his intoxication while on duty; it graduates the compensation for disability according to a prescribed scale based upon the loss of earning power, having regard to the previous wage and the character and duration of the disability, and measures the death benefits according to the dependency of the surviving wife, husband, or infant children. Perhaps we should add that it has no retrospective effect, and applies only to cases arising some months after its passage.
by way of compensation for the loss of earning power incurred in the common enterprise, irrespective of the question of negligence, instead of leaving the entire loss to rest where it may chance to fall -- that is, upon the injured employee or his dependents. Nor can it be deemed arbitrary and unreasonable, from the standpoint of the employee's interest, to supplant a system under which he assumed the entire risk of injury in ordinary cases, and in others had a right to recover an amount more or less speculative upon proving facts of negligence that often were difficult to prove, and substitute a system under which, in all ordinary cases of accidental injury, he is sure of a definite and easily ascertained compensation, not being obliged to assume the entire loss in any case, but in all cases assuming any loss beyond the prescribed scale.
Much emphasis is laid upon the criticism that the act creates liability without fault. This is sufficiently answered by what has been said, but we may add that liability without fault is not a novelty in the law. The common law liability of the carrier, of the innkeeper, or him who employed fire or other dangerous agency or harbored a mischievous animal, was not dependent altogether upon questions of fault or negligence. Statutes imposing liability without fault have been sustained. St. Louis & San Francisco Ry. Co. v. Mathews, 165 U. S. 1, 165 U. S. 22; Chicago, Rock Island & Pacific Ry. Co. v. Zernecke, 183 U. S. 582, 183 U. S. 586.
"bottomed on this principle, that he who expects to derive advantage from an act which is done by another for him, must answer for any injury which a third person may sustain from it."
cannot be deemed to be an arbitrary and unreasonable application of the principle so as to amount to a deprivation of the employer's property without due process of law. The pecuniary loss resulting from the employee's death or disablement must fall somewhere. It results from something done in the course of an operation from which the employer expects to derive a profit. In excluding the question of fault as a cause of the injury, the act in effect disregards the proximate cause and looks to one more remote -- the primary cause, as it may be deemed -- and that is the employment itself. For this both parties are responsible, since they voluntarily engage in it as coadventurers, with personal injury to the employee as a probable and foreseen result. In ignoring any possible negligence of the employee producing or contributing to the injury, the lawmaker reasonably may have been influenced by the belief that, in modern industry, the utmost diligence in the employer's service is in some degree inconsistent with adequate care on the part of the employee for his own safety; that the more intently he devotes himself to the work, the less he can take precautions for his own security. And it is evident that the consequences of a disabling or fatal injury are precisely the same to the parties immediately affected and to the community whether the proximate cause be culpable or innocent. Viewing the entire matter, it cannot be pronounced arbitrary and unreasonable for the state to impose upon the employer the absolute duty of making a moderate and definite compensation in money to every disabled employee, or, in case of his death, to those who were entitled to look to him for support, in lieu of the common law liability confined to cases of negligence.
by the statute in question is unreasonable in amount, either in general or in the particular case. Any question of that kind may be met when it arises.
"Included in the right of personal liberty and the right of private property -- partaking of the nature of each -- is the right to make contracts for the acquisition of property. Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property. If this right be struck down or arbitrarily interfered with, there is a substantial impairment of liberty in the long established constitutional sense."
Truax v. Raich, 239 U. S. 33, 239 U. S. 41.
It is not our purpose to qualify or weaken either of these declarations in the least. And we recognize that the legislation under review does measurably limit the freedom of employer and employee to agree respecting the terms of employment, and that it cannot be supported except on the ground that it is a reasonable exercise of the police power of the state. In our opinion, it is fairly supportable upon that ground. And for this reason: the subject matter in respect of which freedom of contract is restricted is the matter of compensation for human life or limb lost or disability incurred in the course of hazardous employment, and the public has a direct interest in this as affecting the common welfare.
Holden v. Hardy, 169 U. S. 366, 169 U. S. 397. It cannot be doubted that the state may prohibit and punish self-maiming and attempts at suicide; it may prohibit a man from bartering away his life or his personal security; indeed, the right to these is often declared, in bills of rights, to be "natural and inalienable;" and the authority to prohibit contracts made in derogation of a lawfully established policy of the state respecting compensation for accidental death or disabling personal injury is equally clear. Chicago, Burlington & Quincy R. Co. v. McGuire, 219 U. S. 549, 219 U. S. 571; Second Employers' Liability Cases, 223 U. S. 1, 223 U. S. 52.
We have not overlooked the criticism that the act imposes no rule of conduct upon the employer with respect to the conditions of labor in the various industries embraced within its terms, prescribes no duty with regard to where the workmen shall work, the character of the machinery, tools, or appliances, the rules or regulations to be established, or the safety devices to be maintained. This statute does not concern itself with measures of prevention, which presumably are embraced in other laws. But the interest of the public is not confined to these. One of the grounds of its concern with the continued life and earning power of the individual is its interest in the prevention of pauperism, with its concomitants of vice and crime. And, in our opinion, laws regulating the responsibility of employers for the injury or death of employees, arising out of the employment, bear so close a relation to the protection of the lives and safety of those concerned that they properly may be regarded as coming within the category of police regulations. Sherlock v. Alling, 93 U. S. 99, 93 U. S. 103; Missouri Pacific Ry. Co. v. Castle, 224 U. S. 541, 224 U. S. 545.
Amendment. The denial of a trial by jury is not inconsistent with "due process." Walker v. Sauvinet, 92 U. S. 90; Frank v. Mangum, 237 U. S. 309, 237 U. S. 340.
The objection under the "equal protection" clause is not pressed. The only apparent basis for it is in the exclusion of farm laborers and domestic servants from the scheme. But manifestly this cannot be judicially declared to be an arbitrary classification, since it reasonably may be considered that the risks inherent in these occupations are exceptionally patent, simple, and familiar. Missouri, Kansas & Texas Ry. Co. v. Cade, 233 U. S. 642, 233 U. S. 650, and cases there cited.
We conclude that the prescribed scheme of compulsory compensation is not repugnant to the provisions of the Fourteenth Amendment, and are brought to consider next the manner in which the employer is required to secure payment of the compensation. By § 50, this may be done in one of three ways: (a) state insurance; (b) insurance with an authorized insurance corporation or association; or (c) by a deposit of securities. The record shows that the predecessor of plaintiff in error chose the third method, and, with the sanction of the Commission, deposited securities to the amount of $300,000, under § 50, and $30,000 in cash as a deposit to secure prompt and convenient payment, under § 25, with an agreement to make a further deposit if required. This was accompanied with a reservation of all contentions as to the invalidity of the act, and had not the effect of preventing plaintiff in error from raising the questions we have discussed.
not be, construed so as to give an unbridled discretion to the Commission; nor is it to be presumed that solvent employers will be prevented from becoming self-insurers on reasonable terms. No question is made but that the terms imposed upon this railroad company were reasonable in view of the magnitude of its operations, the number of its employees, and the amount of its payroll (about $50,000,000 annually); hence, no criticism of the practical effect of the third clause is suggested.
This being so, it is obvious that this case presents no question as to whether the state might, consistently with the Fourteenth Amendment, compel employers to effect insurance according to either of the plans mentioned in the first and second clauses. There is no such compulsion, since self-insurance under the third clause presumably is open to all employers on reasonable terms that it is within the power of the state to impose. Regarded as optional arrangements, for acceptance or rejection by employers unwilling to comply with that clause, the plans of insurance are unexceptionable from the constitutional standpoint. Manifestly, the employee is not injuriously affected in a constitutional sense by the provisions giving to the employer an option to secure payment of the compensation in either of the modes prescribed, for there is no presumption that either will prove inadequate to safeguard the employee's interests.
Chap. 816, Laws 1913, as reenacted and amended by c. 41, Laws 1914, and amended by c. 316, Laws 1914.
By c. 674, Laws 1915, §§ 2 and 8, this Commission was abolished and its functions were conferred upon the newly created Industrial Commission.

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