Opinion ID: 1439615
Heading Depth: 1
Heading Rank: 3

Heading: rational relation to legislative purpose

Text: Although appellant expends much energy disputing the appropriate standard of review of this contested statute, he asserts that he must prevail, in any event, even upon the application of the deferential reasonableness standard of scrutiny. We disagree. Against his largely conclusory argument in this regard, the history of the Governmental Claims Act and the history of our legislature's response to the much ballyhooed tort/insurance crisis, reveals a clearly reasonable effort to serve the public interest. That particular plaintiffs may occasionally be less well served as a result of these efforts, cannot be denied. However, neither can we deny that, in so doing, the legislature has also attempted to ensure the viability of an insurance system that funds most tort compensation and has attempted to ensure that the State's prospective liability would not jeopardize its ability to provide much needed public services. The history of the legislature's actions in the specific area of governmental immunity is marked by a continual dialogue with the decisions of this court. In Collins v. Memorial Hospital of Sheridan County, 521 P.2d 1339 (Wyo. 1974), we held that such immunity was waived to the extent that a governmental entity used public funds to insure itself against liability. Although we did not speak directly to the general issue of immunity, we noted that its application had fallen into wide and laudable disrepute and commented specifically upon the inequities of Wyoming's rather piecemeal approach to the problem. Id. at 1340-43. At the following legislative session, our holding in Collins was enacted into law by 1975 Wyo. Sess. Laws, ch. 197, § 1, accompanied both by a requirement that the state purchase liability insurance for all law enforcement officers and by a broad authorization for the purchase of liability insurance for health care providers. Id.; 1975 Wyo. Sess. Laws, ch. 16, § 1. Thus, the legislature left the question of immunity largely to the discretion of individual governmental entities, providing for the option of waiver by authorizing the purchase of insurance and selectively waiving state immunity by requiring specific activities to be covered by insurance. Such a treatment of the problem, however, fell under the criticism of Justice Rose's impassioned dicta in Jivelekas v. City of Worland, 546 P.2d 419, 425 (Wyo. 1976), calling for a broad abrogation of immunity for all governmental subdivisions. Admittedly, Collins left much to be desired. In retrospect, it was in fact a mere stopgap based on our trust that governmental entities would continue to insure against liability and on our trust that the legislature would take more comprehensive and satisfactory measures to resolve the problem. This court's disenchantment with the doctrine of governmental immunity, along with the pressures to judicially abrogate the doctrine, had been held in check largely by our deference to the legislature's proper role in determining such issues. Indeed, in Jivelekas Justice Raper clearly noted the legislature's obligation to fund both tort liability and the many services demanded by our citizens and cautioned that the legislature be given time to weigh its difficult economic choices and devise a uniform system for handling tort liability. Id. at 433-34 (Raper, J., concurring in part and dissenting in part). Unfortunately, circumstances arose that would no longer permit such complete deference. That is not to say that the criticisms in Jivelekas went unheeded. In 1977, the Forty-fourth Legislature enacted House Bill 186, which, like the present Governmental Claims Act, provided for a broad yet limited waiver of immunity to tort suits and articulated a policy of balancing the State's responsibility to tort victims against its many other fiscal responsibilities. That act, however, was defeated by gubernatorial veto. 1977 Digest of House Journals 231-33. With the defeat of that act, all governmental entities retained immunity except to the extent, as per Collins, they had insured themselves against liability. We were then called upon to decide Oroz v. Board of County Commissioners of Carbon County, 575 P.2d 1155 (Wyo. 1978) and Worthington v. State, 598 P.2d 796 (Wyo. 1979). In both cases, a victim of alleged governmental negligence squarely challenged the immunity of an uninsured governmental entity. In Oroz, we abrogated the immunity of local governments to tort actions, grounding our authority to do so upon the determination that the immunity of such entities was a court created doctrine that we were freely empowered to amend or overrule. In Worthington, however, we declined to similarly abrogate the immunity of the State. We noted in that case that Article 1, § 8, of the Wyoming Constitution left to the legislature to determine what areas and under what conditions it would consent to suit for damages suffered by an individual and under which a recovery might be had by an individual for the wrongs of the State. Worthington, 598 P.2d at 803. Noting also the legislature's recent attempts to provide an orderly cure for the unfairness inherent in the immunity doctrine, we found it appropriate to defer to those efforts and refrain from interfering with the legislative prerogative. Id. at 803-04. Those efforts, during the interim between Oroz and Worthington, culminated in the passage of a comprehensive Governmental Claims Act. The concerns which the legislature attempted to balance through that act are best expressed in W.S. 1-39-102, which states in part: The Wyoming legislature recognizes the inherently unfair and inequitable results which occur in the strict application of the doctrine of governmental immunity and is cognizant of the Wyoming Supreme Court decision of Oroz v. Board of County Commissioners 575 P.2d 1155 (1978). It is further recognized that the state and its political subdivisions as trustees of public revenues are constituted to serve the inhabitants of the state of Wyoming and furnish certain services not available through private parties and, in the case of the state, state revenues may only be expended upon legislative appropriation. This act is adopted by the legislature to balance the respective equities between persons injured by governmental actions and the taxpayers of the state of Wyoming whose revenues are utilized by governmental entities on behalf of those taxpayers. In the service of this purpose, the act set out the limits of governmental liability and established claim procedures. However, it also required the State to purchase insurance to cover its liability, provided for periodic review of the State's claim history under that coverage, and required the State to conduct actuarial and risk management studies. 1979 Wyo. Sess. Laws, ch. 157, §§ 1, 7. Additionally, as a safeguard against unwarranted claims, the act from its inception has sharply restricted the ability of governmental entities to settle claims without an investigation and a determination that the claimant was entitled to relief. See W.S. 1-39-115 and its attendant history. Thus the act, in its waiver of immunity, has relied heavily on the maintenance of insurance and has sought to control the costs of that insurance both through the prevention of risks and the litigation of baseless claims. These management techniques, however, gradually became inadequate to the task of providing affordable insurance funding for the State's potential tort liabilities. By the time the Forty-eighth Legislative Session convened in 1986, the State had been impacted by the so-called tort/insurance crisis, then sweeping this nation. Governor Herschler, in his address to both houses of the legislature, noted the inability of both government and the private sector to maintain affordable insurance coverage against potential tort liability. The governor urged the legislature to consider permanent measures which might make the extent of such liability more predictable and specifically called for a variety of interim actions which would address problems created by the Governmental Claims Act. Among such suggestions were the elimination of liability related to the construction and maintenance of highways and the creation of governmental self-insurance funds. 1986 Digest of House Journals 7-10. The legislature answered this call on a variety of fronts. In addition to measures directed specifically towards governmental tort liability, the Forty-eighth Legislature enacted a number of tort reforms designed to expedite litigation and, by either limiting liability exposure or making it more predictable, make certain risks more insurable. Among the reforms enacted into the 1986 Wyoming Session Laws are the following: ch. 4 (providing for sanctions against the submittal of baseless pleadings); ch. 5 (providing for the dismissal of actions on the basis of a defendant's affidavit of non-involvement, providing that such an affidavit may be filed in lieu of an answer, and permitting a plaintiff limited discovery for the purpose of rebutting that affidavit); ch. 24 (repealing joint and several liability); ch. 45 (clarifying the burden of proof and standard of care to be established in medical malpractice cases); ch. 48 (limiting liability for amateur rodeos sponsored by public schools and non-profit organizations); ch. 92 (requiring the screening of medical malpractice claims prior to filing suit); and ch. 100 (eliminating liability for the executive decisions of governmental agencies and non-profit corporations). More specifically directed at the problem of governmental liability, 1986 Wyoming Session Laws, chs. 74 and 81, established a program of self-insurance for the State and made participation in that program available to local governmental entities. The intent of the legislature with respect to that program is articulated in W.S. 1-41-101, which provides: The legislature recognizes that certain liability insurance policies of the state of Wyoming have been cancelled, that no responsive bids have been received and that there exists a need to develop a method to handle claims brought under the Wyoming Governmental Claims Act and arising under federal law. The legislature declares that the appropriate remedy is to create an account for self-insurance of the state and to provide for a loss prevention program. It is the intent of the legislature that the self-insurance account shall be operated on an actuarially sound basis. The legislature further declares that its intent is that the availability of commercial liability insurance coverage shall be explored considering the possibility that the insurance industry can provide coverage in the future that is less expensive than the costs of providing a loss prevention program and paying for claims out of the self-insurance account. Consistent with the expressed intent that this fund function merely as an interim alternative to the purchase of commercial insurance, the legislature provided for the automatic repeal of the self-insurance program, effective June 30, 1988. However, the continued unavailability of insurance required the extension of the program until June 30, 1990. 1988 Wyo. Sess. Laws, chs. 19, 63. Finally, and most pertinent to the present case, the legislature also responded to Governor Herschler's address by eliminating governmental liability for defects in the design, construction and maintenance of streets and highways. 1986 Wyo. Sess. Laws, ch. 89. We note in this regard the governor's opinion in that address that such a reinstatement of immunity would not preclude the legislature from later waiving immunity for specific claimants whose injuries were allegedly caused by the negligent maintenance of highways. It is not certain that this opinion played any part in the legislature's final decision. It certainly is not relevant to any issue raised or to our decision in this case. We do observe, however, that the contents of the governor's address, when read in conjunction with the contents of this appellate record and considering the specific areas of tort law which the legislature considered ripe for reform, amply reveal the reasonableness in the legislature's reinstatement of immunity with respect to highway maintenance. The record reveals, concerning the period between the passage of the Governmental Claims Act and the 1986 legislative session, the following noteworthy items: 1. The majority of claims filed against the State (75%-90%) related to the design, construction and maintenance of the State's highway system. 2. In addition to purchasing insurance, the legislature appropriated $750,000 to the Attorney General's office to pay claims under the Claims Act, one-third of which was set aside to cover litigation fees and expenses. 3. During that period, and as of July 21, 1988, the Highway Department defended eighty-six lawsuits, claiming a total of $100,333,158.22 in damages. Seventy of those suits resulted in awards or settlements totalling $1,654,485.22. Sixteen of the suits were still pending, exposing the State to a potential liability of $9,398,203.67. 4. During that same period, the Highway Department handled an additional thirty-five claims for a total of $7,864,051.80 that did not result in a lawsuit. Two were pending, in a total amount of $23,210.92. The other claims resulted in a total payment of $10,000. 5. Of the one hundred three claims that had been finalized, fifty-eight claimants received nothing. While the sheer expanse of our state's highway system might to some extent account for the disproportionate amount of claims relating to this one area of governmental activity, the fact that the State has avoided liability on so many of those claims suggests a different conclusion. When one considers that joint and several liability still existed during this period and that under this doctrine the State, though one percent negligent, might be required to pay a total judgment, we think it not unreasonable for the legislature to assume that, in many of these cases, the State had merely become a convenient deep pocket. We are all too aware that a highway accident may cause damages costing far in excess of what the injured and their insurance policies are capable of paying. Under the original provisions of the Governmental Claims Act, however, an often faultless Highway Department was hauled into court and held answerable for all of the claimed loss. While the record shows that the State was able to avoid liability in a great number of instances, the costs to the taxpayer of such vulnerability cannot be tallied merely by reference to the cases successfully defended by the State. The monetary costs of litigation and the related costs of diverting the human resources of government from otherwise beneficial endeavors must also be calculated. It is not unreasonable for the legislature to determine that these costs outweigh the benefits of continued liability for highway maintenance. We cannot say it is unreasonable for the legislature to decide that the most efficient use of public monies requires assertion of immunity in these circumstances. We hold, therefore, that the passage of W.S. 1-39-120, providing immunity from suit for design, construction and maintenance of highways, bears a reasonable relation to the legitimate legislative objectives of conserving public funds and preserving a fair and viable system of compensating persons injured by governmental actions. There is no constitutional infirmity in that statute. Affirmed.