Opinion ID: 1717400
Heading Depth: 1
Heading Rank: 2

Heading: The Workmen's Compensation Insurance Carrier Immunity

Text: I now address Fireman's Fund's contention for constitutional validity of the employer's workmen's compensation insurance carrier immunity. The carrier summarizes its strongest argument as follows: Under the State's police power, the Legislature may pass reasonable measures incidentally affecting personal rights, in order to eradicate a perceived social evil or attain a perceived social objective. Counsel's brief fairly and accurately analyzes Grantham's holding thusly: In rejecting co-employee immunity from suits by employees, Grantham relies not only on the Legislature's failure to provide an elective substitute remedy for enforcement of rights ... but also on the lack of a social objective invoking the Legislature's exercise of the State's police power. In holding co-employee immunity unconstitutional, Grantham notes: `Enactment of the Workmen's Compensation Act may provide an elective substitute for the remedy of enforcement against the employer in governance of the relationship of employer-employee. It may not deprive the injured employee of rights against the co-employee, the actual wrongdoer for it offers no elective substitute remedy for enforcement of these rights. Nor is there any perceived social evil to be eradicated by legislative exercise of the police power.' (Emphasis added.) From this analysis of Grantham, counsel conclude: Provisions granting workmen's compensation insurance carriers immunity, however, are a valid exercise of the State's police power in eradicating the evil of unsafe working conditions. Citing as precedent Alabama State Federation of Labor v. McAdory, 261 Ala. 1, 18 So.2d 819 (1944), and Pickett v. Matthews, 238 Ala. 542, 192 So.2d 261 (1939), counsel reason: McAdory indicates an exercise of the police power is not rendered invalid by the fact that it affects incidentally the exercise of some right guaranteed by the Constitution, `but the police power may not unreasonably invade private rights guaranteed under the Federal or State Constitution.' Accordingly, `the test is whether the limitation imposed is really by way of regulation only and is one whose purpose and effect go no further than [to] throw reasonable safeguards in the public interest around the exercise of the right.' The obvious example of personal rights of individuals yielding to the police power is the guest statute. Pickett v. Matthews, 238 Ala. 542, 192 So.2d 261 (1939) [reaffirmed in Beasley v. Bozeman, 294 Ala. 288, 315 So.2d 570 (1975)], addresses the problem raised by this restriction of rights and recognizes that in such a context personal rights frequently yield to the general welfare: `The duty to use due care not to harm the person or property of another is of common law origin. It is therefore a right of property or of life and liberty safeguarded by the due process and other features of the Constitution, unless they yield to some power recognized to be superior in respect to the situation. `The police power sometimes is superior to such personal and property rights. They not infrequently yield to the general welfare. Property itself is sometimes forfeited to the state when the legislature finds it necessary to the police protection of the people. `It is said to be well settled that the abolition of old rights recognized by the common law violates no such general feature of a Constitution, when such abolition is to attain a permissible legislative objective.' (Emphasis added.) I find the social objective criterion missing in Grantham is likewise missing in the instant case with respect to the compensation carrier. Indeed, my re-examination of Grantham inclines my thinking, on a relative scale, more favorably to the co-employee position than to the compensation carrier's position with respect to the immunity issue. The social objectives common to the employer-employee relationship, coupled with the identity of fault as between the parties for whom the Act affords immunity, were seriously considered as factors constitutionally justifying the co-employee immunity provision. On balance, however, I conclude that as between co-employees the statutory deprivation of the fundamental rights of redress guaranteed under the due process clause of § 13 outweighs any perceived social evil to be eradicated by legislative exercise of the police power, and that the considerations supporting validity of the carrier's statutory immunity are even less compelling than those favoring co-employee immunity. The immunity's social objective, justifying the legislative exercise of the State's police power, insists the carrier, is to eradicate unsafe working conditions. Implicit in this proposed concept is the notion that the implementing purpose of granting workmen's compensation insurance carrier immunity is to foster industrial safety, and that liability for injury-producing negligent discharge of its voluntarily assumed duty of plant safety inspections materially hampers this benevolent undertaking. A typical statement of this view is found in Kotarski v. Aetna Cas. & Sur. Co., 244 F.Supp. 547 (E.D.Mich.1965): Insurance companies which engage in accident prevention work, the social desirability of which cannot be questioned, should be able to do so without incurring unlimited liability for failing to discover a hazard that some jury might think should have been discovered. If an insurance company can escape tort liability altogether by not making any inspections on the premises of the insured, but may incur unlimited tort liability by making some inspections, it more than likely will decline to make any, unless required to do so by statute. The ultimate losers will be workmen and their families. This argument that compensation carriers need immunity to be encouraged to make safety inspections has been answered by a number of courts with the observation that the carrier's undertaking is not entirely motivated by altruistic considerations. The carrier itself benefits from the introduction of improved safety procedures as a result of reducing accident and injuries, thereby also reducing claims. See, e. g., Mays v. Liberty Mut. Ins. Co., 323 F.2d 174 (3d. Cir. 1963). In addition, it can be noted that compensation carriers advertise their safety programs as sales promotions, so it is not at all certain that carriers do not have enough self-interest at stake to continue their safety inspections even without immunity from tort liability. Indeed, there is no claim that the carriers awaited the enactment of the immunity amendment to commence their practice of performing plant safety inspections. Beyond its unsubstantiated premise, the difficulty I have with this public policy argument is in its contradiction to the basic tenets of the common law fault-based tort system. The public policy argument made by compensation carriers, albeit somewhat simplified, is essentially that the public interest in greater safety will be advanced by absolving carriers from tort liability. This is contrary to common experience that accountability for culpable conduct promotes, rather than undermines, the public good. Inherent in our system of reparation for culpably induced injuries is the deterrent factor. While deterrence is more explicit in the punitive damages aspect of willful or wanton conduct, accountability for lack of due care likewise encourages, not discourages, responsibility. Special relationships, to be sure, are viewed under certain circumstances as justifying the modification of the requisite standard of care, but the elimination of liability has yet to be accepted as a substitute for a standard conducive to the exercise of a higher degree of care or for a resultant safer society. The public policy argument is, in fact, two-sided. On the one hand, it is true that public policy would favor promotion of safety through safety inspections by insurance carriers, and would presumptively disfavor anything that would tend to discourage such efforts. On the other hand, public policy recognized the value of holding tortfeasors responsible for the consequences of their wrongs. The issue, then, becomes one of balancing policy considerations, which Professor Larson poses in the following query: Is the public interest in encouraging safety inspections by carriers so great that the public is willing to add to the carrier's own motives for this activity a further incentive in the form of immunity from normal liability for its negligence? 2A Larson's Workmen's Compensation Law, § 72.90, at 14-60. As noted by Larson, the issue is further complicated by examination of the underlying premise of the carrier's public policy argument: that some safety inspection, even one which does not rise to a standard of due care, is better than none at all. Though not without some merit, this contention, if not rejected outright, has already been commented upon by this Court: [N]o inspection at all is preferable to a negligent inspection. Beasley v. MacDonald Engineering Co., 287 Ala. 189, 198, 249 So.2d 844 (1971), citing Fabricus v. Montgomery Elevator Co., 254 Iowa 1319, 121 N.W.2d 361 (1963). As Mr. Justice Holmes commented in the opening paragraph of his famous treatise, The Common Law, The life of the law has not been logic; it has been experience. I adhere to the view, which I believe comports with contemporary societal values, that to hold a person liable for his carelessness is to make him more careful. It is, indeed, a person's paradoxical nature to say to his neighbor, If you will not hold me responsible for my misconduct, I will be more careful; while, on the other hand, it is inherent in his nature to be more careful if he knows he will be held responsible. From this dual capacity for human excesses springs the time-tested fault-based system of reparation for injuryits fountainhead being the imposition of a duty to act prudently not to inflict injury to another, and its result being safer conditions for all of us. It is the wisdom of the law's stability that resists fashionable, yet unsubstantiated, substitutes for the experience of the ages; and § 13 of our State Constitution is the granite stone mandate for such resistance. Unless, and until, evolving societal values repudiate the responsibility for culpability cornerstone of our legal reparation system, I reject any assumed social objective in the carrier immunity provision of the Act; thus, failing to find either the quid pro quo or the perceived social objective requisites, I concur in the holding that § 25-5-11, as it applies to the workmen's compensation insurance carrier immunity, is unconstitutional. III.