Court Opinion

ID: 9665575
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:51:51.140518+00
Date Added: 2024-06-11T18:15:16.887557
License: Public Domain

T. M, Kavanagh, J.
Plaintiff, in 1955, suffered an injury to his right knee arising out of. and in the *585course of Ms employment. In June of that year plaintiff was awarded $34 a week for 500 weeks under the workmen’s compensation statute for permanent and partial disability. Since 1955 plaintiff has developed new skills and found employment with other employers at wages higher than he was receiving at the time of the injury. However, when unemployed he collected the $34 per week allowed him as workmen’s compensation benefits.
In May of 1964 plaintiff was laid off work by Ms then employer Pioneer Engineering & Manufacturing Company and was awarded $37 per week for 19-1/2 weeks in unemployment compensation benefits. Under section 27n of the employment security act,1 the employment security commission deducted from its award of $37 per week the benefits of $34 per week plaintiff was receiving under the workmen’s compensation act. His final unemployment compensation benefits, therefore, were reduced to $3 per week. This determination was upheld by the referee, the appeal board of the Michigan employment security commission, and the circuit court for the county of "Wayne.
Leave to appeal prior to decision of the Court of Appeals, pursuant to GrCR 1963, 852, was granted by this Court on April 27, 1966.
Plaintiff contends that he is denied equal protection of the laws because of unreasonable classification of persons applying for benefits under section 27n of the employment security act. He contends that the classifications are unreasonable:
(1) As between claimants under the employment' security act who at that time are receiving work*586men’s compensation benefits and those seeking only unemployment compensation benefits;
(2) As between those seeking benefits under the employment security act who have received weekly workmen’s compensation benefits other than death benefits or scheduled benefits for a specific loss and those seeking unemployment compensation benefits who are receiving other benefits under the workmen’s compensation act; and
(3) As between those seeking benefits under the employment security act who had entered into a lump sum settlement of their benefits under the workmen’s compensation act prior to seeking unemployment compensation benefits and those seeking unemployment compensation benefits who are receiving weekly benefits under the workmen’s compensation act.
Plaintiff further contends that his right to workmen’s compensation benefits vested as of the date of injury in 1955, and that therefore (a) he is deprived of property without due process of law, and (b) there is an impairment of the obligations of contract when the legislature attempts to affect this vested right by providing that he must give up that same amount of unemployment compensation benefits to which he otherwise would be entitled.
Plaintiff’s final contention is that the circuit court applied section 27n of the employment security act retroactively absent an express mandate in the statute compelling that application.
Defendants, after accepting the facts set forth by plaintiff, contend that there is no need to look to the purposes of the employment security act to determine the meaning of section 27n, as the section is clear, unambiguous, and needs neither interpretation nor clarification.
It is further contended by defendants that there are neither contractual nor vested rights to unem*587ployment compensation benefits, as section 57 of the employment security act2 subjects all the rights; privileges, or immunities conferred by that act to repeal or amendment by the legislature.
In answer to plaintiff’s contention that section 27n of the employment security act is applied retroactively, defendants state that it has not been so applied, but rather is effective to all claimants who receive workmen’s compensation benefit's after September 6, 1963 (the date section 27n became effee-' tive), irrespective of the date of the award.
Defendants’ final contention is that section 27n of the employment security act does not, as applied to plaintiff, deny equal protection of the laws under the. United States or the Michigan Constitution, as''the classes adopted present reasonable classifications among applicants for employment security benefits.
We have concluded it is necessary in disposing of. this case to consider the constitutional question dealing with the classification of parties under the equal protection clauses of the State and Federal Constitutions. This question will be discussed first.
Section 27n of the employment security act, as added by PA 1963, No 188, reads in pertinent part as follows:
“(a) If an individual claims and is otherwise eligible for weekly benefits under this act for a week with respect to which he has received weekly benefits, other than death benefits or scheduled benefits for a specific loss, under the workmen’s compensation act of this State or under any similar law of another State or of the United States, the; individual's weekly benefits otherwise payable under this act for such week shall be reduced to the amount, if any, by which the individual’s workmen’s compensation weekly benefit for such week was less than *588his benefits otherwise payable under this act for such week. If the individual’s workmen’s compensation weekly benefit for such week equaled or exceeded his weekly benefits otherwise payable under this act for such week, no weekly benefits shall be payable under this act for such week.” (Emphasis supplied.)
This Court has held numerous times that the Michigan Const 1908, art 2, § 1, secures the same right of equal protection as does its counterpart in the Constitution of the United States. Gauthier v. Campbell, Wyant & Cannon Foundry Company, 360 Mich 510, 514, and cases therein cited. The same provisions in Const 1963, art 1, §§ 1 and 2, must likewise be held to afford the same rights as the Federal equal protection clause.
There is no doubt that State legislatures have a broad range of discretion in establishing classifications in the exercise of their powers of regulation. However, the constitutional guarantees of equal protection are interposed against discriminations that are entirely arbitrary. In determining what is within legislative discretion and what is arbitrary, regard must be had for the particular subject of the State legislation. There must be a relation between the classification and the purposes of the act in which it is found. Smith v. Cahoon, Sheriff, 283 US 553, 566 (51 S Ct 582, 587, 75 L ed 1264, 1274); Morey v. Doud, 354 US 457, 465 (77 S Ct 1344, 1350, 1 L ed 2d 1485, 1491); Beauty Built Construction Corporation v. City of Warren, 375 Mich 229; Palmer Park Theatre Company v. City of Highland Park, 362 Mich 326.
In the case of People v. Chapman, 301 Mich 584, a statute of this State was challenged as unconstitutionally denying the defendant therein equal protection of the laws. Justice Starr, writing for the Court, stated (pp 597, 598):
*589“It is well recognized that the legislature may make classifications of persons, provided such classifications are based on substantial distinctions and are in accord with the aims sought to be achieved. (Citing cases.) However, such classification must be neither arbitrary nor capricious, but must rest on reasonable and justifiable foundations. In Haynes v. Lapeer Circuit Judge, supra,3 p 141, the rule is stated:
“ ‘Legislation which, in carrying out a public purpose for the common good, is limited by reasonable and justifiable differentiation to a distinct type or class of persons is not for that reason unconstitutional because class legislation, if germane to the object of the enactment and made uniform in its operation upon all persons of the class to which it naturally applies; but if it fails to include and affect alike all persons of the same class, and extends immunities or privileges to one portion and denies them to others of like kind, by unreasonable or arbitrary subclassification, it comes within the constitutional prohibition against class legislation.’ ”
See, also, Davidow v. Wadsworth Manfg. Co., 211 Mich 90, 97-102; Peninsular Stove Co. v. Burton, 220 Mich 284, 286; Smith v. Wayne Probate Judge, 231 Mich 409.
The obvious intention of the legislature in enacting section 27n of the employment security act was to prevent duplication of benefits to the unemployed who receive workmen’s compensation benefits. In doing so, the legislature made certain classifications of persons.
It permitted those not receiving workmen’s compensation benefits to receive full unemployment compensation benefits, while preventing those receiving total permanent, partial permanent, or temporary disability payments under the workmen’s *590compensation act from receiving full unemployment compensation benefits.
It permitted those who were recipients of death benefits under the workmen’s compensation act to receive unemployment compensation benefits, while preventing those receiving total permanent, partial permanent, or temporary disability payments under the workmen’s compensation act from receiving the same 'benefits.
It permitted those receiving workmen’s compensation benefits for a specific loss to receive unemployment compensation benefits, and prevented those receiving total permanent, partial permanent, or temporary disability payments from receiving unemployment compensation benefits.
It permitted those who had received lump sum settlements of total permanent, partial permanent, or temporary disability payments under the workmen’s compensation act to receive unemployment compensation benefits immediately after the “lump sum” settlement, while preventing those who received weekly total permanent, partial permanent, or temporary disability payments under the workmen’s compensation act from receiving unemployment compensation benefits.
Counsel for the defendants at oral argument admitted that the Michigan employment security commission so administers the law.
We direct our attention to the above classifications in reverse order of their enumeration, and consider their rationality, reasonableness, and relevance to the purposes of the employment security act attempted to be accomplished by this legislation, to determine whether the distinctions are based on substantial differences and justifiable foundations which operate uniformly on all.of the persons naturally in the various classes. ■ -
*591"We ask ourselves this question: Is there a justifiable, reasonable and substantial difference between these participants in workmen’s compensation benefits who did not qualify for unemployment compensation benefits because they were drawing weekly benefits under the workmen’s compensation act and those with the same disability, suffering injury at the same time, who received their workmen’s compensation benefits in one lump sum, as is provided by section 22 of part 2 of the workmen’s compensation act?4
In answering this question, it is necessary to bear in mind that the express preferred administration of the workmen’s compensation act is (1) that recipients receive weekly payments as opposed to lump sum payments; and (2) that duplication of benefits is the obvious evil — if it is an evil — which the legislature has attempted to eliminate.
We find that section 27n does not accomplish either the purpose of this amendment or the preferred purposes of the workmen’s compensation act. It is obvious that weekly payments will be discouraged by the fact that if the weekly benefit is taken, the recipient will be precluded from obtaining unemployment compensation benefits when otherwise qualified. Further, the acceptance of the lump sum settlement under the workmen’s compensation act so as to qualify for unemployment compensation benefits would not in any way reduce the number of instances in which duplication of payments under the two acts would take place, and therefore, would not remedy the situation that the legislature seeks to avoid.
There is no substantial, rational, or justifiable difference between the classes established by this amendment pertaining to the lump sum payment *592exception. The injury is the same; the disability is the same; the length of the incapacity is the same; and even the benefits to which the two classes are entitled are the same. Plaintiff, who falls into the classification of one receiving weekly benefits rather than having taken a lump sum settlement prior to filing for unemployment compensation benefits, is deprived of the constitutional right of equal protection of the laws since all, including this plaintiff, have not been treated alike in determining their eligibility under section 27n of the employment security act.
The classifications made in section 27n of the employment security act between those partially permanently disabled and those under the specific loss provisions of the workmen’s compensation act fail to treat all within the class equally, as section 27n allows benefits under both the employment security act and the workmen’s compensation act for one suffering a specific loss and yet denies the same to one permanently and partially disabled.
Section 10(a) of part 2 of the workmen’s compensation act5 provides for certain benefits where the incapacity for work resulting from an injury is partial and matters not pertinent here. It continues as follows:
“Compensation shall be paid for the duration of the disability. In cases included by the following schedule, the disability in each such case shall be deemed to continue for the period specified, and the compensation so paid for such injury shall be as specified therein: * * * .”
Continuing, the section enumerates 16 specific loss provisions and the number of weeks the partial disability will be deemed to continue.
*593Subd (b) of section 10 defines what is meant by “total and permanent disability.”
Clearly, then, specific loss is a species of the genus “partial permanent” disability. The only characteristic differentiating partial permanent disability from specific loss is that specific loss is “deemed to continue for the period specified,” whereas “partial permanent” disability continues for the duration of the incapacity.
Does the fact that some partial permanent disabilities are “deemed to continue for the period specified” justify a difference with respect to receipt of unemployment compensation benefits? We think not.
Two employees are permanently injured. Both have given up their common-law remedies against their employer. The working capacity of each is reduced, yet the employee with the specific loss is given the additional privilege of dual benefits, while the other is denied that privilege. This certainly does not provide the “equal protection to all upon which justice under law rests.” It is an arbitrary classification of those persons injured who qualify for both workmen’s compensation and unemployment compensation benefits.
We conclude, therefore, that section 27n of the employment security act — re-enacted as subd (m) of section 27 of the same act — was from the beginning constitutionally invalid and is now invalid in that it constitutes a denial to this plaintiff and others like him of equal protection of the laws under the Michigan and United States Constitutions.
For obvious reasons it is not necessary to discuss the other questions raised by the parties.
The judgment of the circuit court is reversed and the case remanded for entry of judgment in accordance with this opinion. Plaintiff shall have costs, .
*594Black, Souris, and Brennan, JJ., concurred with T. M. Kavanagh, J.

 PA 1936 (Ex Sess), No 1, § 27n (CL 1948, § 421.27a), as added by PA 1963, No 188 (Stat Ann 1963 Cum Supp § 17.529[1]). Section 27n was repealed by PA 1965, No 281, but the same act reenacted substantially the same language as subd (m) of section 27 of the employment security act (CL 1948, § 421.27 [Stat Ann 1965 Cum Supp § 17.529] ).

 CL 1948, §421.57 (Stat Ann 1960 Rev §17.561).

 201 Mich 138.

 CL 1948, §412.22 (Stat Ann 1960 Rev §17.172). This section was amended by PA 1965, No 44 — see Stat Ann 1965 Cum Supp § 17-.172.

 CL 1948, § 412.10, as amended by PA 1965, No 44 (Stat Ann 1965 Cum Supp § 17.160).