Court Opinion

ID: 8910611
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:50:16.63146+00
Date Added: 2024-06-11T17:08:29.847298
License: Public Domain

KENNEDY, Circuit Judge:
This appeal presents us with a challenge to certain Nevada workers’ compensation statutes and raises equal protection and right of travel issues. Nevada maintains a workers’ compensation program for persons who sustain industrial injuries during their employment in Nevada. Compensation benefits are payable to injured employees and their survivors regardless of where they reside after the injury. In 1973 and in 1975, the Nevada Legislature granted cost-of-living increases to workers’ compensation beneficiaries who continued to reside in Nevada, but it denied the increased benefits to the beneficiaries who were not Nevada residents. The district court rejected plaintiffs’ constitutional challenge to these statutes, and we affirm.
Before addressing the background of the plaintiffs’ case, we summarize the controlling statutes. Under the Nevada Industrial Insurance Act (Nev.Rev.Stat. § 616.010 et seq. (1977)), Nevada employers must insure workers against the risk of industrial injuries. The Nevada Industrial Commission (“NIC”) administers a state insurance fund, financed by employer premiums, which is used to pay workers’ compensation benefits to injured workers. Employees injured in accidents “arising out of and in the course of employment” with a covered employer are entitled to certain benefits under the program.
To be eligible for benefits, the injured employee must have been working in Nevada for a covered employer at the time of the injury. Workers hired or regularly employed in Nevada are also eligible for benefits if they are injured while working for their employer temporarily outside the state. (Nev.Rev.Stat. § 616.520).1 Workers hired outside Nevada are eligible for benefits unless they are only temporarily working in the state and are covered by another state’s workers’ compensation program. (Nev.Rev.Stat. § 616.260). Compensation benefits are payable to injured employees and their survivors wherever they may reside after the injury.2
The level of benefits available to the injured worker or to his survivors depends on the nature of the injury and the average wage of the worker at the time of the injury. Permanently and totally disabled workers are entitled to monthly payments of two-thirds of their average wage at the time of their injury, until their death. (Nev.Rev.Stat. § 616.580). The surviving spouse of an employee whose death was caused by a job-related accident is entitled to monthly payments of two-thirds of the employee’s average wage at the time of the injury. Death benefits are paid until the surviving spouse dies or remarries. (Nev.Rev.Stat. § 616.615).
Because the benefits received are based on a percentage of wages earned by the covered worker at the date of the injury, compensation recipients have been particularly hurt by inflation. In 1973, the Legislature responded to the beneficiaries’ plight by granting flat percentage increases in permanent total disability and death benefits, but the Legislature limited these cost-of-living increases to those beneficiaries who were living in Nevada. Death benefits based upon industrial injuries occurring before July 1, 1973, and permanent total disability benefits from injuries occurring before April 9, 1971, were increased by 10 percent. (Nev.Rev.Stat. §§ 616.628, 616.626). In 1975, the same benefit adjustment was increased to 20 percent, and the in*632crease was likewise limited to Nevada residents only.3 Limitation of the increases to residents only gives rise to the constitutional questions presented here.
The NIC was reimbursed from general state funds for the cost of the initial 10 percent cost-of-living increase in disability and death benefit pensions. When the cost-of-living supplement was increased to 20 percent in 1975, the Legislature directed that the increase be paid from a newly-created silicosis and disabled pension fund. The latter fund was established by an appropriation from general revenues when the Legislature extended workers’ compensation to persons injured by exposure to silicon dioxide dust. (Nev.Rev.Stat. §§ 617.323, 617.460). The fund is used to reimburse NIC for payment of silicosis claims and for the cost-of-living supplements in disability and death benefit cases.
Although eligibility for disability and death benefits is based upon industrial injury in Nevada, without regard to the residence of the injured employee or his survivors, the cost-of-living increases to the beneficiaries are provided only to those recipients who remain residents of Nevada. As of February 1, 1977, the NIC was administering 583 pensions that qualified for the 20 percent cost-of-living increases. Recipients of 363 of those pensions were receiving the 20 percent supplement because they were still residing in Nevada. The recipients of 220 pensions were not receiving the same income supplements solely because they resided outside Nevada.
Gladys Fisher is a recipient of one of the 220 pensions that were not supplemented. She is an 80 year-old widow who lives in Applegate, California. She and her deceased husband, Charles, formerly lived in Las Vegas, Nevada, where he was employed in the city metal shop. On September 25, 1962, he suffered severe brain damage in a work-related accident that left him totally disabled. Mr. Fisher qualified for the receipt of permanent total disability benefits under the Nevada compensation scheme. He began receiving disability benefits effective from the date of his injury.
In March, 1963, Mr. and Mrs. Fisher moved to California, where their children could help Mrs. Fisher care for Mr. Fisher. After they settled in California, the Fishers continued to receive monthly disability benefit payments from the NIC. On May 10, 1972, Mr. Fisher died. Although the disability benefits terminated on Mr. Fisher’s death, Mrs. Fisher became eligible for death benefits under the Nevada compensation program because her husband’s death resulted from the injuries he sustained in a covered accident. (Nev.Rev.Stat. § 616.615). She began receiving monthly benefits of $167.50, one-half of her husband’s average wage at the time of his injury.4
Apart from her monthly benefits from the NIC, Mrs. Fisher’s only other source of income has been a Social Security payment of $178.30 per month. She has had great difficulty living on her meager income. When she learned that Nevada had approved cost-of-living increases in compensation benefits, she wrote to the NIC and explained her circumstances. Although the Commission expressed sympathy for Mrs. *633Fisher, the Commission informed her that the 20 percent cost-of-living supplements were paid only to persons residing in Nevada. She was told that if she moved back to Nevada, her monthly benefits would be increased by 20 percent, but, so long as she resided outside Nevada, she could never receive more than her $167.50 monthly benefit.
When a program of free legal services for the elderly was initiated in her community, Mrs. Fisher saw a lawyer about her problem. Thereafter, a class action was filed on her behalf and on behalf of those similarly situated against the Commissioners of the NIC and the Nevada State Treasurer. Invoking federal jurisdiction under 42 U.S.C. § 1983, the action sought declaratory and injunctive relief to redress alleged deprivations of equal protection and the right to travel based upon Nevada’s denial of cost-of-living increases to those beneficiaries who were residing outside Nevada.
The district court certified a class consisting of all recipients of permanent total disability and death benefit pensions under the Nevada program who did not receive cost-of-living increases solely because they resided outside Nevada. The case was tried on stipulated facts, and judgment was entered for the defendants. The district court refused to apply strict scrutiny to the Nevada program because it did not perceive any infringement of the constitutional right to travel. The district court held that the Nevada scheme involved a simple residency requirement that, unlike durational residency requirements, fell outside the purview of the right to travel. The Nevada program survived the equal protection challenge because the district court held that the eligibility limitation was rationally related to Nevada’s legitimate interests in protecting the health and welfare of its own citizens while limiting the state’s general revenue expenditures. We turn now to the legal issues in the case.
The appellants’ constitutional premise is that the Nevada statutory classification must be subject to strict scrutiny because it penalizes their right to travel, as did the classifications in Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969); Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); and Memorial Hospital v. Maricopa County, 415 U.S. 250, 94 S.Ct. 1076, 39 L.Ed.2d 306 (1974). We do not agree. We conclude the appellants’ right to travel was not penalized, and thus strict scrutiny of Nevada’s statutory classification is not required. The cases cited by appellants do not support the proposition that a classification based upon residence is subject to strict scrutiny when attacked by one who has migrated from the state which denies the benefit in question.
In Shapiro, Dunn, and Maricopa County, the issue involved the obligation and responsibility of the claimant’s new state of residence; here the claimants seek to enforce an obligation against the state of former residence. The distinction is critical. Any primary obligation to ascertain a citizen’s economic status or condition and to make provision for his or her well-being falls upon the state of current residence, not the state where the citizen formerly resided. It is a fact of our federal system that a state is limited, both in its competence and its responsibility, to exercising its welfare powers for those persons who are its residents, and, perhaps in some cases, those temporarily within its borders. We find no authority for the broad proposition that Nevada must pass prospective legislation with reference to the subsistence or economic well-being of persons formerly residing in it but who are now resident elsewhere, or include former residents in statutes passed to aid current residents.5 In Shapiro, Dunn, and Maricopa County, on the other hand, the state with whom the claimant had a new and existing political *634relation refused to recognize that status without the imposition of a durational waiting period. That period discriminated against those who had recently exercised their right of interstate migration. As stated in the Maricopa County case:
[T]he right of interstate travel must be seen as insuring new residents the same right to vital government benefits and privileges in the States to which they migrate as are enjoyed by other residents.
415 U.S. at 261, 94 S.Ct. at 1084, 39 L.Ed. 2d 306.
Califano v. Torres, 435 U.S. 1, 98 S.Ct. 906, 55 L.Ed.2d 65 (1978), makes it abundantly clear that the obligation imposed on the states under Shapiro and Maricopa County, the obligation to grant immediate or reasonably prompt recognition to a newly arrived citizen, cannot be the basis for automatically imposing a reverse obligation on the former state to continue to care for the former resident. In Torres, various old age and disability benefits under the Supplemental Security Income Act were payable only while the claimant resided in one of the fifty states. The claimant moved to Puerto Rico. The Court acknowledged that the denial of benefits resulted from the claimant’s exercise of a constitutionally protected right of travel and that the claimant was prejudiced, since benefits under equivalent programs for which she might qualify were significantly less. The Court upheld as lawful the benefit termination. After referring to Shapiro and Maricopa County the Court stated:
In the present cases the District Court altogether transposed that proposition. It held that the Constitution requires that a person who travels to Puerto Rico must be given benefits superior to those enjoyed by other residents of Puerto Rico if the newcomer enjoyed those benefits in the State from which he came. This Court has never held that the constitutional right to travel embraces any such doctrine, and we decline to do so now. Such a doctrine would apply with equal force to any benefits a State might provide for its residents, and would require a State to continue to pay those benefits indefinitely to any persons who had once resided there. And the broader implications of such a doctrine in other areas of substantive law would bid fair to destroy the independent power of each State under our Constitution to enact laws uniformly applicable to all of its residents.
435 U.S. at 4-5, 98 S.Ct. at 908.6
While we are not prepared to, say that a state may never be held to have some continuing duties to a former resident, we do not think such obligations can be measured automatically by the standards set forth in Shapiro and Maricopa County, even assuming the claims asserted here were in all respects comparable.7 To do so would be inconsistent with state jurisdictional limitations based on territorial boundaries and the concept of residence, jurisdictional limitations that are a principal feature of our federal system. We are reluctant to impose upon states fiscal burdens that are not coterminous either with their taxing power or their general jurisdiction.
*635It is true that given the pattern of existing state legislation, a welfare recipient who migrates to a new state is more likely to receive welfare benefits in the new state than is a recipient of Nevada workers’ compensation residing in California likely to receive a cost-of-living increase from the California legislature (or the legislatures of any other states). This fact seems to us of no significance for right to travel analysis. As we understand the Court’s precedents, whether a residency or other requirement employed by a state infringes the right to travel does not depend on what benefits other states choose to provide. For some kinds of monetary benefit programs for which a residency requirement would be constitutional, a state is not required to, and may not in fact, provide any program at all. Losing such benefits upon migration from a state which does provide them does not thereby mean the right to travel has been infringed.
Other distinctions between this case and the three authorities principally relied upon by the appellant have a significant bearing upon our decision. In Shapiro, Dunn, and Maricopa County, the challenged classification was a one-year durational residency requirement, not a simple residency requirement. The Court in Dunn was careful to note that it was the durational aspect which implicated right to travel concerns.8 In a later case, the Court sustained a continuing residency requirement as a condition for municipal employment. McCarthy v. Philadelphia Civil Service Commission, 424 U.S. 645, 96 S.Ct. 1154, 47 L.Ed.2d 366 (1976). The Court emphasized the distinction between durational residency requirements and a bare residency requirement such as the one facing us here:
We have previously differentiated between a requirement of continuing residency and a requirement of prior residency of a given duration. Thus in Shapiro, supra, [394 U.S.] at 636 [, 89 S.Ct. 1322], we stated: “The residence requirement and the one-year waiting-period requirement are distinct and independent prerequisites.” And in Memorial Hospital, supra, [415 U.S.] at 255 [, 94 S.Ct. at 1081, 39 L.Ed.2d at 313,] quoting Dunn, supra [405 U.S.] at 342 n. 13 [, 92 S.Ct. 995], the Court explained that Shapiro and Dunn did not question “ ‘the validity of appropriately defined and uniformly applied bona fide residence requirements.’ ”
Id. at 647, 96 S.Ct. at 1155.
A further distinction between the cases invalidating durational residency classifications and the facts of the instant case is in the nature of the benefit denied. In Shapiro the claim was for subsistence welfare; in Dunn the denial was of the fundamental right to vote; and in Maricopa County the injury was the loss of the right to free nonemergency medical treatment. The Court in Maricopa County emphasized that the fundamental character of the claims asserted in the three cases was a factor in finding that the right to travel had been penalized:
In Dunn v. Blumstein, supra, the Court found that the denial of the franchise, “a fundamental political right,” Reynolds v. Sims, 377 U.S. 533, 562 [, 84 S.Ct. 1362, 12 L.Ed.2d 506] (1964), was a penalty requiring application of the compelling-state-interest test. In Shapiro, the Court found denial of the basic “necessities of life” to be a penalty. Nonetheless, the Court has declined to strike down state statutes requiring one year of residence as a condition to lower tuition at state institutions of higher education.
Whatever the ultimate parameters of the Shapiro penalty analysis, it is at least clear that medical care is as much “a basic necessity of life” to an indigent as welfare assistance. And, governmental privileges or benefits necessary to basic *636sustenance have often been viewed as being of greater constitutional significance than less essential forms of governmental entitlements. See, e. g., Shapiro, supra; Goldberg v. Kelly, 397 U.S. 254, 264 [90 S.Ct. 1011, 25 L.Ed.2d 287] (1970); Sniadach v. Family Finance Corp., 395 U.S. 337 [, 89 S.Ct. 1820, 23 L.Ed.2d 349] 340-342 (1969).
415 U.S. at 259, 94 S.Ct. at 1082-1083 (citations omitted). The benefit in question here is a supplemental payment for spousal disability. Eligibility for the benefit is not based upon financial need. We cannot say that such benefits have a necessity or urgency as great as the benefits in Shapiro or Maricopa County. The Supreme Court has specifically held that where eligibility for benefits is not based upon financial need, termination of the benefit does not implicate the same constitutional concerns that denial of the benefit for basic subsistence does. Mathews v. Eldridge, 424 U.S. 319, 340—43, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).
In summary, when we contrast the claim presented here with that of the three principal Supreme Court cases discussing withholding of rights or benefits as a result of interstate migration, we find that the absence of a political or residential relation between the claimant and the state, the absence of a durational residency requirement, and the fact that eligibility is not based upon need are all factors which detract from the strength of the claim to such an extent that the statutory classification does not burden the right of travel in a manner requiring strict scrutiny.
We turn next to the claim that the statutory classification between residents and nonresidents for determining eligibility to receive the supplemental benefit violates the equal protection clause, even if no right to travel concerns are implicated. We are mindful that the provision in question is the kind which requires a high degree of judicial deference. See, e. g., Mathews v. De Castro, 429 U.S. 181, 185, 97 S.Ct. 431, 50 L.Ed.2d 389 (1976); Dandridge v. Williams, 397 U.S. 471, 487, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970). As the Court said in Califano v. Torres:
[A] law providing for governmental payments of monetary benefits . . “is entitled to a strong presumption of constitutionality.” Mathews v. De Castro, 429 U.S. 181, 185 [, 97 S.Ct. 431, 50 L.Ed.2d 389] (1976). “So long as its judgments are rational, and not invidious, the legislature’s efforts to tackle the problems of the poor and the needy are not subject to a constitutional straitjacket.” Jefferson v. Hackney, 406 U.S. 535, 546 [, 92 S.Ct. 1724, 32 L.Ed.2d 285] (1972). See also Califano v. Jobst, 434 U.S. 47, 53-54 [, 98 S.Ct. 95, 54 L.Ed.2d 228]; Califano v. Goldfarb, 430 U.S. 199, 210 [, 97 S.Ct. 1021, 51 L.Ed.2d 270] (1977); Helvering v. Davis, 301 U.S. 619, 640 [, 57 S.Ct. 904, 81 L.Ed. 1307] (1937).
435 U.S. at 5, 98 S.Ct. at 908. The Court elaborated in Califano v. Aznavorian, 439 U.S. 170, 174, 99 S.Ct. 471, 474, 58 L.Ed.2d 435 (1978):
“Social welfare legislation, by its very nature, involves drawing lines among categories of people, lines that necessarily are sometimes arbitrary. This Court has consistently upheld the constitutionality of such classifications in federal welfare legislation where a rational basis existed for Congress’s choice.”
We recognize that the supplemental benefits sought by Mrs. Fisher are important to her and others similarly situated. We assume that for her, payment or nonpayment of the claim will result in a different standard of living. We find, however, that the challenged classification meets the constitutional test of rationality.
From the group of workers’ compensation beneficiaries, the statute identified a subclass consisting of Nevada residents. The inflationary supplement was limited to the subclass. That this group was treated as a discrete entity is apparent from the funding provisions made for the supplemental benefits. The basic industrial insurance benefits, available to residents and nonresidents alike, were paid from an insurance fund established and maintained by Nevada employers, with a fixed schedule of benefits. *637See page 631, supra. The subsequent, distinct Nevada legislative grant of a cost-of-living increase to the subclass of residents was payable not from this insurance fund but from general funds of the State of Nevada. Nev.Rev.Stat. §§ 616.626, 616.628.
Nevada has a legitimate interest in confining payments to those most likely to spend them within the territorial limits of the state. Califano v. Aznavorian, 439 U.S. 170, 178, 99 S.Ct. 471, 58 L.Ed.2d 435 (1978). Similarly, the legislature rationally may have concluded that it was more familiar with the needs of in-state recipients of workers compensation. See id. There may be additional factors supporting the decision, including the costs of administering the payments for, and ascertaining eligibility of, out-of-state residents. The challenged classification rationally furthers all these legitimate state interests.
No doubt one object of the Nevada legislation was to provide increased assistance to workers’ compensation beneficiaries, and, we must concede, by adopting a residency classification the legislature did not fully implement this purpose. As is true in many such programs, see, e. g., Califano v. Jobst, 434 U.S. 47, 50-53, 98 S.Ct. 95, 54 L.Ed.2d 228 (1977), the legislature has not pursued this goal with single-minded consistency. See also Sims v. Harris, 607 F.2d 1253 (9th Cir. 1979). The legislature need not, however, be guided only by the objective of the original workers’ compensation program. The cost-of-living statute is a separate enactment which may be informed both by the purpose of the first compensation program and also by other legitimate legislative policies. Those policies suffice to sustain the Act as rational and within the constitutional powers of the State of Nevada.
For the foregoing reasons, the judgment is AFFIRMED.

. Only workers injured within six months after leaving Nevada are covered by section 616.520 of the Nevada Industrial Insurance Act, unless their Nevada employer notifies the NIC prior to expiration of the six-month period that he has elected to extend coverage for a greater period of time.

. The Legislature also increased the level of benefits to which workers subsequently injured would become entitled. This increase was financed by increasing employer premiums paid into the state insurance fund.

. Section 616.626 of the Nevada Industrial Insurance Act provides in pertinent part: “Any claimant or his dependents, residing in this state, who receive compensation for permanent total disability on account of an industrial injury or disablement due to occupational disease occurring prior to April 9, 1971, is entitled to a 20 percent increase in such compensation, without regard to any wage limitation imposed by this chapter on the amount of such compensation.” (emphasis supplied). Section 616.628 of the Nevada Industrial Insurance Act provides in pertinent part: “Any widow, widower, surviving children or surviving dependent parent or parents, residing in this state, who receive death benefits on account of an industrial injury or disablement due to occupational disease occurring prior to July 1, 1973, is entitled to a 20 percent increase in such benefits without regard to any wage limitation imposed by this chapter on the amount of such benefits.” (emphasis supplied).

. Mrs. Fisher receives death benefits equal to only one-half of her husband’s average wage because her husband was injured prior to the date when death benefit levels were increased to two-thirds of the deceased employee’s average wage. (Nev.Rev.Stat. § 616.615).

. Califano v. Torres, 435 U.S. 1, 98 S.Ct. 906, 55 L.Ed.2d 65 (1978), discussed in the text, appears to be the authority most closely on point. In Ruiz v. Morton, 462 F.2d 818 (9th Cir. 1972), aff’d and remanded on other grounds, 415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974), the court did not reach a somewhat similar constitutional question. Judge Merrill in dissent, however, indicated agreement with the principles we state today. See id. at 825-26.

. Torres is factually distinguishable in that in addition to the residency requirement for receipt of SSI funds there was no requirement that a recipient have become blind or disabled in the United States instead of Puerto Rico. For purposes of evaluating the residency requirement in this case, however, the distinction is irrelevant. Assuming, moreover, that the requirement described above rationally furthered a legitimate government interest, we think the right-to-travel holding of Torres would have been the same had the challenged SSI provisions contained both requirements.

. United States v. Guest, 383 U.S. 745, 757-60, 86 S.Ct. 1170, 1178, 16 L.Ed.2d 239 (1966), which reaffirmed the “constitutional right to travel from one State to another” and “to use the highways and other instrumentalities of interstate commerce in doing so,” and Crandall v. Nevada, (73 U.S.) 6 Wall. 35, 18 L.Ed. 744 (1867), which invalidated a Nevada tax on every person leaving the state by common carrier, provide no support for the proposition that statutes withdrawing benefits upon migration from a state must be judged under the same standards as statutes denying benefits to those who are new residents in a state.

. The Court has left open the possibility that some simple residency requirements, as well as durational residency requirements, might im-permissibly burden the right to travel. See, e. g., Shapiro v. Thompson, supra 394 U.S. at 638 n. 21, 89 S.Ct. 1322. The Court has emphasized, however, that simple residency requirements stand on a different footing than dura-tional residency requirements. Dunn v. Blum-stein, supra, 405 U.S. at-342-44, 92 S.Ct. 995; McCarthy v. Philadelphia Civil Service Commission, supra.