Opinion ID: 2411092
Heading Depth: 1
Heading Rank: 2

Heading: special legislation issue

Text: Appellants rationalize that the compensation statute (KRS 342.732[1][d]) is violative of special legislation by arbitrarily excluding from the classification numerous others who stand in the same relationship. The parties recite Kentucky Constitution, Section 59, Item 24, which provides that the General Assembly shall not pass local or special acts concerning any of the following subjects, or for any of the following purposes, namely: To regulate labor, trade, mining or manufacturing. While appellants offer Tabler v. Wallace, Ky., 704 S.W.2d 179 (1985), as being determinative that the compensation statute is unconstitutional, we markedly disagree. Tabler is highly and historically instructive of Kentucky Constitution, Section 59, and it (in that case) determined there was no natural, real or substantial distinction to justify the classes created by the statute in controversy. The court therein recited that while evidence of reasons that might have supported a perceived need for classification was presented, there was no evidence that those reasons actually existed. In this case there are supportive and perceived reasons amply punctuated by the evidence. In Tabler , there was ample lobbying for the enactment of the statute under review. There was absolutely no evidence of committee meetings or legislative debate discussing its purposes. Tabler, supra, at p. 187. The record supporting the passage of KRS 342.732(1)(d) is replete with reasons, evidence of committee meetings, and debate discussing its purposes. We restate that the Commonwealth's power to legislate public policy in the area of employer/employee relations derives from its police power, and the fact that there is a community interest in regulating the safety of the workplace and in requiring employers to provide for injured workers and their dependents so that they do not become a burden on the community. Workmen's Compensation Board of Kentucky v. Abbott, 212 Ky. 123, 278 S.W. 533 (1925). The primary purpose of Kentucky Constitution, Section 59 is to prevent special privileges, favoritism, and discrimination, and to insure equality under the law. A special law is legislation which arbitrarily or beyond reasonable justification discriminates against some persons or objects and favors others. Bd. of Educ. of Jefferson County v. Bd. of Educ. of Louisville, Ky., 472 S.W.2d 496, 498 (1971). While appellants assert the Act as special legislation, the appellees insist otherwise. As we have generally established in this jurisdiction, in order for a law to be general in its constitutional sense it must meet the following requirements: (1) it must apply equally to all in a class, and (2) there must be distinctive and natural reasons inducing and supporting the classification. The second requirement is as essential as the first. The legislature may not arbitrarily designate the severed factions of the original unit as two classes and thereupon enact different rules for the government of each. It is equally established that the classification, as made, must be based upon some reasonable and substantial difference in kind, situation or circumstance which bears a proper relation to the purpose of the statute. It is also necessary to determine that the legislative classification, when based on police power, must further objectives relevant to that power. Schoo v. Rose, Ky., 270 S.W.2d 940 (1954). Collaterally, it has been held that legislative classifications may be used to regulate employer/employee relations where the classification is consistent with correcting an abuse or problem which the legislation seeks to cure. Where the statute sought to correct an abuse that was present only in the mining industry and only in larger mining companies, there was no need to include other industries or smaller companies in order to correct the abuse. The class created was reasonable, natural, and consistent with the legitimate purpose of government. Commonwealth v. Hillside Coal Co., 109 Ky. 47, 58 S.W. 441 (1900). Where the classification enacted by the legislature in the statute has a reasonable basis, such law does not constitute special or local legislation within the prohibition of Section 59 of the Kentucky Constitution nor does it deny the equal protection guaranteed by the United States Constitution. When the purpose of the enactment is to correct a prior legislative inequity, then the classification which accomplishes that purpose will be permitted. Hyde v. Haunost, Ky., 530 S.W.2d 374 (1975). Contrary to appellants' arguments, the fact that the Workers' Compensation Act applied only to certain employers and employees and not to all employers and employees did not render it special legislation. Greene v. Caldwell, 170 Ky. 571, 186 S.W. 648 (1916). This court, in recent decisions, recognized the historical significance behind the enactment of the Teachers' Retirement Act and satisfactorily explained the legitimate purpose behind exempting contributions to the teachers' retirement system from being classified as marital property upon divorce, and not exempting contributions to other retirement plans. Under such circumstance, the classification was upheld. KRS 161.700(2); Waggoner v. Waggoner, Ky., 846 S.W.2d 704 (1993). A classification based on population would be considered special legislation where the question of population had no appreciable relevancy to accomplishing the purpose of the legislation. City of Louisville v. Klusmeyer, Ky., 324 S.W.2d 831 (1959). However, the court held where the sheer population of a class creates special needs or problems in accomplishing the legislative purpose that are not present or are present to a lesser degree in a less populous class, different treatment based on population can be justified. Shannon v. Wheeler, 268 Ky. 25, 103 S.W.2d 718 (1937). We find that KRS 342.732 (enacted in 1987), which created a classification including coal workers who have contracted occupational pneumoconiosis, was a part of a comprehensive revamping of the entire Kentucky Workers' Compensation Act. This was a clearly demonstrated response to the widely recognized need to deal with the ominous burden placed on all of Kentucky industry, through Special Fund assessments, by the cost of workers' compensation claims relating to the coal industry. It was a founded fear that because of the burgeoning cost of workers' compensation, particularly due to the pay-as-you-go method of Special Fund financing, industries would leave the state or fail to locate in Kentucky, thereby increasing unemployment. Approximately 78% of the Special Fund's overall liability and over 95% of its liability for occupational disease was attributable to the coal industry. Legislative recommendations were derived from the 15 months' study of a 16-member task force, representing both industry and labor. A Special Session of the General Assembly was called solely to consider the proposed legislation. Some of the major concerns of the legislature were expressed in KRS 342.1201. We discern that the legislation approached the problems by: 1) providing for sufficient Special Fund assessments on workers' compensation insurance premiums of all industries to allow for funding to meet present obligations and prefunding and investment to meet future obligations in order to put the Special Fund on a more sound financial footing (KRS 342.122; KRS 342.1223, et seq.); 2) placing an additional Special Fund assessment on the coal industry in order to more nearly equate payments by that industry to liabilities resulting from that industry (KRS 342.122); and 3) incorporating medical realities into both the standards for the admissibility of evidence for claims involving coal workers' pneumoconiosis (KRS 342.316), the standards of proof for the various levels of benefits set forth in the newly-enacted KRS 342.732. Clearly, KRS 342.732 applies equally to all coal workers who have contracted pneumoconiosis and the legislative history provides distinctive and natural reasons for classifying them separately from workers in other industries who have also contracted pneumoconiosis. The problem was caused, not by pneumoconiosis, but by coal workers' pneumoconiosis. Therefore, there was no necessity to include workers with other occupational pneumoconioses in order to remedy the problems which the legislation sought to correct. Coal workers' pneumoconiosis accounted for 95% of the Special Fund's liability for occupational disease, and over 90% of awards for the disease were for total disability. Other pneumoconioses comprised only part of the remaining 5% of occupational disease claims, and there was no indication that over 90% of awards for other pneumoconioses were for total, occupational disability. The sheer number of coal workers' pneumoconiosis claims involving the Special Fund and the economic impact of those particular claims on the entire system is further justification for a more standardized treatment of those claims. It appears the subclassifications within the statute are based on pulmonary impairment and/or on the degree to which the disease has progressed (from few, small opacities; to many, small opacities; to large opacities). These constitute substantial differences in the degree to which the disease affects the workers' health and the necessity to their health of leaving the mining industry. The mere fact that the legislative treatment of coal workers' pneumoconiosis is different from that of other occupational pneumoconioses does not make it arbitrary or unfair to either group. Workers with coal workers' pneumoconiosis are entitled to a presumption of occupational disability based on the medical criteria of the various subsections of KRS 342.732, but their standards for admissible medical evidence are more stringent and they are required to meet a minimum exposure requirement before they may receive benefits. Based on the projections before the legislature, the relative proportion of total occupational disability awards under KRS 342.732 would decrease to approximately 24% from the over 90% that had been awarded under KRS 342.730. This proportion was expected to be more consistent with the medical realities of the disease. Quite clearly, the legislature did not establish an easier standard for workers than that in KRS 342.730 as the employer here suggests. Workers with other occupational pneumoconioses are not subject to the stringent medical proof requirements or minimum exposure requirements, but are required to prove the degree to which their disease has caused them to be occupationally disabled. There are no standards for the type of proof necessary to prove occupational disability other than that there must be some evidence of substance to support the ALJ's decision. There is often nothing more than a physician's statement that the worker must avoid a dusty environment and testimony that the worker has never worked in any occupation but his present one. It was projected that KRS 342.732 would decrease the number of total, occupational disability awards for coal workers' pneumoconiosis. The anti-discrimination provision contained in KRS 342.197(2), which applies only to coal workers' pneumoconiosis, works together with the presumptions of disability contained in KRS 342.732 to help assure that workers will, in fact, be no more occupationally disabled than the statute presumes.