Court Opinion

ID: 9709915
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:57:16.031855+00
Date Added: 2024-06-11T18:22:52.616109
License: Public Domain

DICKSON, Justice,
dissenting.
I respectfully dissent from the majority opinion's analysis of the plaintiffs' claims under the Fair Labor Standards Act (FLSA) and those asserting violation of the state and federal constitutions.
1. Fair Lobor Standards Act
The majority finds the issue of retroac-tivity determinative in rejecting the plaintiffs' claim that the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., required the State to pay them for their work. Suit on this matter was originally filed in 1974 to secure compensation for labor performed for Indiana mental institutions from May 23, 1970, through December 31, 1974. The trial court entered judgment for the plaintiffs in 1987. At all of these times, the plaintiffs were within the protections of the FLSA by reason of its 1966 amendments extending coverage to employees of state hospitals and institutions for the residential care of the mentally ill. Fair Labor Stan*422dards Amendments of 1966, Pub.L. No. 89-601 §§ 102(a), (b), and (c), 80 Stat. 880, 831 (codified as amended at 29 U.S.C.A. §§ 203(d), (r) and (s)(5)(1978). The application of the FLSA to government hospitals was ruled to be within Congress' power under the Commerce Clause. Maryland v. Wirtz (1968), 392 U.S. 183, 88 S.Ct. 2017, 20 L.Ed.2d 1020. In June of 1976, the United States Supreme Court reversed Wirtz and voided the application of the FLSA to government employees engaged in traditional governmental functions. National League of Cities v. Usery (1976), 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245. However, the Court subsequently reversed itself again, and expressly overruled National League of Cities, thus reinstating Wirtz. Garcia v. San Antonio Metro. Transit Auth. (1985), 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016.
In order to reverse the trial court, the majority opinion gives retroactive application only to National League of Cities but denies Garcia a parallel application. The majority attempts to justify this inconsistency by finding Garcia non-retroactive under the three-factor test enunciated in Chevron Oil Co. v. Huson (1971), 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296. The usual rule is that cases should be decided in accordance with the law existing at the time of decision unless consideration of the three Chevron criteria requires nonretroac-tive application. Goodman v. Lukens Steel Co. (1987), 482 U.S. 656, 107 S.Ct. 2617, 96 L.Ed.2d 572. In the present case, the law existing at the time of the decision was that of Wirtz and Garcia recognizing the constitutional validity of the FLSA provisions which applied minimum wage requirements to protect certain state government employees, including the plaintiffs.
In order for the first Chevron factor to support a claim of nonretroactivity, the Garcia decision must not only overrule clear past precedent, which it did in reversing National League of Cities, but also must such precedent be one "on which litigants may have relied." Chevron, 404 U.S. at 106, 92 S.Ct. at 355, 30 L.Ed.2d at 306. A major weakness of the majority's rationale is its finding that the reliance element was met by the State's failure to seek a declaratory judgment after 1976 when National League of Cities was decided. Despite the majority's conjecture as to the State's possible reliance upon National League of Cities following 1976, the inescapable fact remains that during 1970 to 1974, when the plaintiffs were providing labor without any compensation, the then-existing law entitled them to the minimum wage protections of the FLSA, and the State could not have then relied upon National League of Cities which was not decided until 1976. Absent such reliance, the first Chevron factor cannot support the refusal to give Garcia the customary retroactive application.
The second factor favoring nonretroac-tivity requires an analysis of "the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation." Chevron, 404 U.S. at 107, 92 S.Ct. at 355, 30 L.Ed.2d at 306. Here the "rule in question" is the Gareia holding that the FLSA wage and hour provisions, as applied to state and local governments, are not viola-tive of any constitutional provision. I cannot subscribe to the majority's view that retroactive application, permitting the enacted protections of the FLSA for state workers, would retard the purpose and effect of the minimum wage provision. The contrary is true.
As to the third Chevron factor, the majority opines that retroactive application of Garcia would produce substantial inequitable results because of the failure of a contemporaneous suit for FLSA benefits. In Brennan v. Indiana (7th Cir.1975), 517 F.2d 1179, rev'd sub nom, Indiana v. Usery (1976), 427 U.S. 909, 96 S.Ct. 3196, 49 L.Ed.2d 1202, the plaintiffs were paid employees of the Indiana Department of Mental Health seeking overtime pay under the FLSA. In finding "substantial inequitable results" between the patients and the staff of the hospitals, the reasoning of the majority is flawed in two respects. First, the plaintiffs in Brennan suffered an untimely dismissal following appellate reversal because the intervening National League of *423Cities, since overruled, was retroactively applied to reverse their favorable judgement. But such an unfortunate and (absent National League of Cities) erroneous result for the hospital employees in Bren-man does not necessarily compel an additional erroneous decision for the present plaintiffs. Two inequities are more substantial than one. Second, the level of harm suffered by the plaintiffs in the present case differs dramatically from that suffered by the plaintiffs in Brennan. In the latter instance, the employees were at least paid basic wages, and were deprived only of their claim for overtime compensation. The present plaintiffs received no wages whatsoever for their labors, and now seek at least the federally mandated minimum wage. Permitting the patient/workers to be denied all compensation for a period during which regular employees were paid basic wages but denied overtime benefits does not constitute the "substantial inequitable results" necessary for the third Chevron factor. Thus, Garcia should not be deprived of its retroactive application.
The majority finds "compelling" the eventual outcome in Garcia. I disagree. The plaintiff in Goreia was seeking application of the FLSA for labor performed after the 1976 decision in National League of Cities, when the San Antonio Metropolitan Transit Authority (SAMTA) notified its employees that it would no longer abide by the FLSA's maximum hours and overtime provisions. In fact, SAMTA obtained a declaratory judgment that its public mass transit system was protected from federal regulation following National League of Cities. Thus in refusing to comply with the FLSA, SAMTA was acting in reliance upon both the Supreme Court's 1976 decision in National League of Cities and the subsequent declaratory judgment. It is little wonder that, following remand from the Supreme Court, it was determined that SAMTA "was relying on the general framework provided by National League of Cities, as it undoubtedly had a right to do." Garcia v. San Antonio Metro. Transit Auth. (5th Cir.1988), 838 F.2d 1411, 1418. Although finding the first prong of Chevron to require nonretroactive application of Garcia, the federal circuit court indicated its agreement with the trial court's finding that the second Chevron factor neither favors nor opposes retroactive application of Garcia. 838 F.2d at 1418-19. In reviewing the third Chevron factor, the court found that the equities favored nonretroactivity, noting that
First, huge back-pay awards may very likely cripple the always closely budgeted municipal funds. There is a great difference between, on the one hand, knowing you are subject to a regulation, planning for it and taxing and charging the public for it all along, and, on the other hand, suddenly finding out that, contrary to precedent of the Supreme Court and the decisions of the district court, you have been subject to a regulation for several years and are required to compensate under that regulation for previous years for which tax monies have already been otherwise allocated and spent. Of course, the municipalities and the taxpayers have in some ways benefitted from their exemption from the FLSA. However, the equities do not justify saddling them with huge back-pay liabilities when they acted in good faith during all those years, believing for substantial precedential reasons that they were exempt from the FLSA,....
Garcia, 838 F.2d at 1420 (emphasis added). The second reason given was that overtime compensation to SAMTA employees was at least presumptively partially received in other forms because SAMTA "must compete for labor in the marketplace against employers who are subject to the FLSA, and so it could not simply subtract the benefits required by the FLSA from its own programs." Id. Neither of these equitable considerations has any application to the present plaintiffs. , Unlike SAMTA, the State of Indiana obtained the plaintiffs' labors before National League of Cities was decided. Because the then-prevailing law would have entitled the patient/workers to FLSA protection, the State cannot be said to have "acted in good faith during all those years, believing for substantial prece-*424dential reasons that they were exempt from the FLSA" as they allocated closely budgeted government resources. The see-ond SAMTA equitable consideration is likewise unavailable in the present case. The State of Indiana was obviously not competing for the patients' labor "in the marketplace against employers who are subject to the FLSA." Rather, the patients literally constituted a captive labor force. For these reasons, while the Chevron analysis permitted SAMTA, in good faith reliance upon National League of Cities, to avoid paying overtime benefits after 1976, it does not justify the refusal of the State of Indiana to pay FLSA minimum wage benefits to the present plaintiffs for work demanded and obtained in the absence of such reliance.
The better reasoning, which finds that the Chevron test requires retroactive application of Gareia to reinstate FLSA protections for the plaintiffs, is additionally bolstered by the principle that the party seeking to avoid retroactive application of a decision bears the burden of persuasion. Ackinclose v. Palm Beach County (11th Cir.1988), 845 F.2d 931, 933. The State has wholly failed in its burden of persuasion as to any of the three Chevron criteria. For these reasons, I respectfully dissent from part II(C) of the majority opinion.
2. Involuntary Servitude
I am likewise unable to join the majority's analysis of the plaintiffs' claim for damages resulting from their involuntary servitude in violation of the Thirteenth Amendment to the Constitution of the United States and Article 1, Section 87 of the Constitution of Indiana. Noting that the plaintiffs' claim here attacks a system of compulsory labor, the majority recognizes that suit may be brought directly under the Thirteenth Amendment, but finds that the nature of the plaintiffs' compulsory service falls within a "civic duty" exception permitting governments to compel citizens to perform certain civic duties such as jury service, military service, and road work.
In contrast, several other jurisdictions have found otherwise. Weidenfeller v. Kidulis (E.D.Wis.1974), 380 F.Supp. 445 (forced labor of certain individuals, including the mentally disabled, amounts to involuntary servitude and therefore is violative of Thirteenth Amendment); Stone v. City of Paducah (1905), 120 Ky. 322, 86 S.W. 531 (compelling labor from persons confined as "idiots, insane persons, and inebriates" would be involuntary servitude in violation of the Thirteenth Amendment); Downs v. Dept. of Public Welfare (E.D.Pa.1973), 368 F.Supp. 454 (forced labor at state mental hospitals may be violation of Thirteenth Amendment); Johnston v. Ciccone (W.D.Mo.1966), 260 F.Supp. 553 (forced work by confined mental patient without compensation would violate Thirteenth Amendment); and Jobson v. Henne (2d Cir.1966), 355 F.2d 129 (inmate of state mental institution entitled to trial on claim that compulsory work allegedly constituted involuntary servitude).
Therefore, I do not share the majority's conviction that the facts of the present case "fit squarely" within the civic duty exception. The requirement of extended full-time work was not imposed upon all citizens equally. Rather, I find it more reasonable to conclude that the nature and extent of labor compelled from the plaintiffs was far beyond "civic duties" and amounted to an actionable violation of the constitutional proscriptions against involuntary servitude.
3. Right to Just Compensation for Demanded Services
I further dissent from the majority opinion's analysis of the plaintiffs' claim under Article I, Section 21 of the Constitution of Indiana, which provides, in part:
No person's particular services shall be demanded, without just compensation.
The majority correctly recognizes that the evidence at trial was adequate to establish that the plaintiffs' uncompensated labor was demanded by the State, but finds that the plaintiffs' work did not constitute "particular services" and that the plaintiffs were not denied "just compensation."
The majority recognizes that the plaintiffs were required to work full-time jobs *425as kitchen workers, groundskeepers, barbers, maintenance workers, secretaries, launderers, mechanics, hospital workers, and janitors, but finds that such work did not constitute "particular services" under the constitutional provision. Critical to the majority's resolution of this issue is its belief that in choosing the phrase "particular services" rather than "personal service-es," the 1850-51 Indiana Constitutional Convention necessarily intended to create no new rights to compensation which had gone historically uncompensated.
Such was not the view of this Court just three years after the convention debates upon which the majority relies. In Webb v. Baird (1854), 6 Ind. 13, there was no apparent hesitation in declaring that a pre-con-vention (1843) statute authorizing courts to assign counsel to gratuitously defend paupers would fall to § 21 should a conflict be presented. In addressing whether the 11-year-old statute could require an attorney's services to defend a pauper without any reward in the face of the newly re-adopted § 21 of the Constitution of Indiana, the Court declared: "the inferior law must yield to the superior," and found the constitutional provision would not allow courts to assign attorneys to defend poor persons for free, an obligation existing prior to the 1850-51 Convention. Thus, contrary to the majority's assertion, prevailing Indiana jurisprudence at the time of adoption of § 21 included a willingness to "create new rights to compensation for services provided to the state that had gone historically uncompensated."
Furthermore, the majority's treatment of "particular services" fails to sufficiently recognize that such phrase was utilized to identify services not equally required of all citizens. In 1856, this Court rejected an argument that witness fees constituted "particular services" which may not be constitutionally demanded without just compensation for the reason that such services were equally required of every citizen.
[Blut we are prepared to say, that the services of witnesses in criminal cases are not particular, but are of the class of general services which every man in community is bound to render for the general, as well as his own individual good. It is as much the duty and interest of every citizen to aid in prosecuting crime, as it is to aid in subduing any domestic or foreign enemy; and it is equally the interest and duty of every citizen to aid in furnishing to all, high and low, rich and poor, every facility for a fair and impartial trial when accused; for none is exempt from liability to accusation and trial. These are matters of general interest and public concern,-are vital, indeed, to the very existence of free government, and render the services of witnesses on such occasions matters of general public interest, and not particular, in the sense of the constitution.
Israel v. State (1856), 8 Ind. 467, 468. The plaintiffs call our attention to the comments of Mr. Clark, which included:
I take it that the word particular, in the old Constitution means, not that general service which every citizen is bound to render, but something specific-something that is required of him as an individual, in contra-distinetion to what is required, generally, of all citizens.
1 Debates In Indiana Convention of 1850, at 359 (1985) (emphasis in original). Others expressed similar views during the convention. For example, Mr. Niles stated:
I prefer the old word particular to the word personal used by the committee, as it will distinguish between such services and those general services which all good citizens owe to the State in protecting the interests and preserving the good order of society.
Id. at 368 (emphasis in original). Likewise, Mr. Clark added:
There are duties which all citizens are occasionally called on to perform; services which the necessities of the State demand alike from all; obligations which all citizens owe to their government, the common defense of all.
Id. at 371-2 (emphasis added).
Working at the state's mental institutions was not required of all citizens. The labor of patient/workers was not demanded for merely a few days each year. Rath*426er the state required, without compensation, plaintiffs' full-time work during much of their confinement at a mental institution. Such demand should be viewed as falling within the "particular service" which our Constitution prohibits without just compensation.
I find particularly unfortunate the majority's rationale for finding that the plaintiffs' right to just compensation is precluded by inferred extrinsic benefits.
From its review of the convention debates resulting in the inclusion of § 21 in the 1851 Indiana Constitution, the majority concludes that extrinsic benefits are constitutionally permitted when assessing damages for the taking of a person's property without just compensation, and that parallel application requires that extrinsic benefits also be considered in determining damages for a person's particular services demanded without just compensation. But application of this conclusion to the present facts does not compel the result reached by the majority.
In the instance of claims seeking just compensation for property taken by law, extrinsic benefits are considered to the extent that the pecuniary value of a person's remaining property is enhanced. Such a claim for just compensation is not reduced because of general, non-pecuniary enhancements in "improved environment." Parallel application to claims seeking just compensation for particular services demanded by law would require that the extrinsic benefits to be considered are restricted to the pecuniary benefits to the person's remaining services, and not improved environment. Thus if the manner of using the demanded labor resulted in increased marketable skills or experience thereby conferring an enhanced value upon the patient/worker's particular services, or labor skills, such extrinsic benefits could be considered in determining damages for just compensation. But there should be no reduction for general, non-pecuniary enhancements in improved environment. The State does not argue that the evidence demonstrates a pecuniary enhancement of the value of plaintiffs residual labor skills. Therefore there is no proper basis to conclude that plaintiffs have already received "just compensation."
The proper use of benefits in determining "just compensation" was thoroughly reviewed and, to the extent possible, resolved in State v. Reid (1933), 204 Ind. 631, 185 N.E. 449. Following a review of existing precedent, speeches of the various delegates at the constitutional convention, and the action of the General Assembly the following year when it passed an act preventing the consideration of extrinsic benefits, the Reid court concluded:
We consider the just compensation clause to be primarily a restriction on the power of the legislature for the protection of private property. It is not a specific rule to measure the amount of damages, and we believe there is a margin of discretion for courts and legislatures in determining what specific rules should be adopted to insure just compensation. In view of the obvious margin of uncertainty inherent in any effort to estimate money value of benefits we cannot say, as a matter of law, that the requirement of "just compensation" will not be attained more often by a rule excluding benefits than by a rule requiring benefits to be considered. On the other hand we could not say, as a matter of law, that the legislative rule requiring benefits to be considered would violate the "just compensation" clause.
204 Ind. at 638, 185 N.E. at 451-52. We need not revisit history and alter this considered analysis. Whether extrinsic benefits are to be included in determining "just compensation" under § 21 is thus a matter for legislation. When the plaintiffs' particular services were demanded in 1970-1974, just such a legislative policy determination existed in the Patient Remuneration Act, which the majority declines to enforce in part II(B) of its opinion. Absent legislative determination, extrinsic benefits are not a necessary constitutional component of "just compensation."
Furthermore, the majority opinion inappropriately presumes from a silent record that the State proved extrinsic benefits *427which exceeded the value of the compelled particular services rendered by the plaintiffs, apparently relying upon evidence "offered to show existing amounts due for the cost of care and maintenance of a substantial number of the individual plaintiffs." Brief of Appellants to the Court of Appeals at 87. This evidence was excluded by the trial court. On appeal, the defendants complained of its exclusion only with respect to the plaintiffs' claims under the Patient Remuneration Act, not as to any other of plaintiffs' claims. Brief of Appellants to the Court of Appeals at p. 4. I cannot agree with the majority's declaration that said evidence was erroneously excluded or its belief that such provides a basis to reverse the trial court and enter judgment for the State.
This is not to suggest that I oppose consideration of proper claims which the State may have in the event of unpaid accounts resulting from services rendered for the State's provision of food, shelter and care for members of the class. Our legal system provides an appropriate mechanism for such claims to be asserted and proven at trial. However, in this appeal the State does not contend that trial court error prevented it from the legitimate presentation of such claims except as to claims under the Patient Remuneration Act. The State filed a counterclaim (Record at 156) but withdrew it before trial (Record at 406-7). The contents of counterclaim are not disclosed in the record.
For most of four years, the plaintiffs' coerced labor was provided for our state mental institutions without wages or other demonstrated compensation. In what we proudly call the Bill of Rights in the Indiana Constitution, § 21 unequivocally declares that a person's particular services shall not be demanded without just compensation. And § 12 of the Bill of Rights assures that every person shall have remedy by due course of law. The plaintiffs have asked the courts to recognize their constitutional right to just compensation and to afford a remedy. With today's decision this Court, with dubious regard for due course of law, relies upon unadmitted evidence and implements an unasserted affirmative defense to deprive the plaintiffs of the just compensation to which they were found entitled by both the trial court and the Court of Appeals. I share my colleagues' apparent regard for the magnitude of the award and its fiscal impact upon the state treasury. However, such award also reflects the magnitude of the aggregate loss resulting from the compelled labor extracted from the plaintiffs. Concern for the former cannot justify disregard of the latter.