Court Opinion

ID: 9701856
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:40:47.935679+00
Date Added: 2024-06-11T18:21:30.201091
License: Public Domain

*604
Eldridge, J.,

dissenting:

By Chapter 832 of the Acts of 1973, the Workmen’s Compensation Law, Maryland Code (1957, 1964 Repl. Yol., 1976 Cum. Supp.), Art. 101, was amended to add § 36 (10). The amendment provided that any employee receiving benefits for a permanent total disability caused by an injury occurring after July 1, 1965, but before July 1, 1973, the effective date of the Act, be paid a supplemental allowance. The amount of this allowance is calculated under a formula provided in the Act. The total compensation to be paid, however, including the supplemental allowance, is not to exceed the maximum weekly benefits provided for in Art. 101, § 36 (2). The supplemental allowance applies only to weekly benefit payments to be made after the effective date of the amendment and continues only for the period of the original award.
The supplemental allowance is to be paid to the claimant in the first instance by the insurance carrier or the self-insured employer. However, under Art. 101, § 66, the party paying the supplemental allowance is to be reimbursed by the Subsequent Injury Fund, a State agency. The Fund is maintained by payments from employers or insurance carriers based on a 5% assessment on all awards rendered against the employer for permanent disability and death, including settlement agreements approved by the Workmen’s Compensation Commission. Art. 101, § 66 (2). These payments are required only where the monies in the Subsequent Injury Fund are reduced to an amount below $500,000.00. Art. 101, § 66 (4).
The effect of the supplemental allowance is to allow those who are receiving benefits for a permanent total disability to receive the maximum award permissible under current provisions of the Workmen’s Compensation statute. The purpose of the amendment is clear: to alleviate the effects of inflation which may have rendered future payments under prior awards totally inadequate. Thus, although the supplemental allowance is applicable to a retrospective class of claimants, namely those receiving benefits for a *605permanent total disability caused by an injury occurring before July 1, 1973, it is prospective in that it affects only payments to be made after the effective date of the amendment. And because the insurer or employer is to be reimbursed for payments by the Subsequent Injury Fund, the liability of the insurer or employer is not increased over that which was fixed by the original award and determined by the law in effect at the time of the injury.
Because of these features, I do not believe that Art. 101, § 36 (10), unconstitutionally impairs contractual obligations in violation of Art. 1, § 10 of the United States Constitution or deprives the employer of vested property rights without due process of law in violation of the Fourteenth Amendment to the United States Constitution, as the appellees contend.
Even accepting arguendo the fiction that the obligation of the employer to compensate his employee for injuries, under the circumstances like those here, is contractual in nature, compare Crowner v. Balto. Butchers Ass’n, 226 Md. 606, 175 A. 2d 7 (1961), with McAllister v. Board of Education, Kearny, 79 N.J. Super. 249, 191 A. 2d 212, 217-218 (1963), the contract clause does not prohibit the Legislature from enacting laws which may affect the rights of contracting individuals. If the “legislation is addressed to a legitimate end and the measures taken are reasonable and appropriate to that end,” it will not be rendered unconstitutional despite an incidental effect on contractual obligations. Home Building & Loan Ass’n v. Blaisdell, 290 U. S. 398, 438, 54 S. Ct. 231, 240, 78 L. Ed. 413 (1934). Assuming that there is some impairment of the contract between the employer and employee here, I believe that it is permissible given the State’s legitimate interest in insuring that injured workers receive adequate compensation. Moreover, the extent of any impairment would be almost negligible in view of the reimbursement provision of the amendment.
Additionally, the appellees contend that Art. 101, § 36 (10), results in the deprivation of a vested right without due process of law. Appellees argue that an employer has a vested right in having his obligation to an employee deter*606mined by the law in effect at the time of the injury, and that payment of the supplemental allowance would increase this obligation, thus depriving the employer of a vested right. If the effect of § 36 (10) were to increase the liability of the employer or to impose a new obligation on the employer for an injury occurring prior to the enactment of § 36 (10), there might arguably be merit to this contention. But see National Independent Coal Operator’s Ass’n v. Brennan, 372 F. Supp. 16 (D. D.C.), aff'd, 419 U. S. 955, 95 S. Ct. 216, 42 L.Ed.2d 172 (1974) (requiring payment of benefits under Black Lung Benefits Act for disability or death occurring prior to the effective date of the Act held not to be violative of the Due Process Clause of the Fifth Amendment); Schmidt v. Wolf Contracting Co., 269 App. Div. 201, 55 N.Y.S.2d 162 (1945), aff'd per curiam, 295 N. Y. 748, 65 N.E.2d 568 (1946) (statute increasing maximum weekly compensation payments, for injuries occurring prior to effective date of statute, held to be constitutional where increased compensation was to be paid only for periods after the effective date); Price v. All American Engineering Company, 320 A. 2d 336 (Del. 1974) (a supplemental plan, quite similar to the Maryland law involved in the present case, was held not to violate the Due Process Clause); Lahti v. Fosterling, 357 Mich. 578, 99 N.W.2d 490 (1959) (an amendment to the Workmen’s Compensation Law, requiring the employer to pay additional medical benefits on account of an injury occurring prior to the amendment, was held to be constitutional); Clark v. Chrysler Corporation, 377 Mich. 140, 139 N.W.2d 714 (1966) (reclassification of injuries which occurred prior to the effective date of the statute, resulting in an increase of benefits payable after the effective date, held to be constitutional).
However, § 36 (10) does not increase the employer’s obligation above the original award. Rather it merely requires that the insurer or employer pay the supplemental allowance with the regular weekly payments, and it then provides that a State agency, the Subsequent Injury Fund, shall reimburse the employer for these payments on an annual basis. Thus, the only possible injuries to the *607employer are (1) the loss of the use of the payments advanced prior to reimbursement and (2) the mere possibility that the funds so reimbursed would deplete the Subsequent Injury Fund to the extent that additional payments from employers or insurers generally would be required.
This mere possibility that additional payments to the Subsequent Injury Fund might be required is not, in my view, sufficient to show any injury to the employer caused by the payment of the supplemental allowance. The law creating the Subsequent Injury Fund provides for a mandatory compensation plan administered by the State and supported by an assessment on all insurers or employers based upon prior awards against them. If the Fund, for whatever reason, were impaired so as to require additional payments, all insurers or self-insured employers, and not only those advancing supplemental allowances, would be required to make the additional payments. Payments to the Fund are more in the nature of a general tax assessed to cover expenses of administering a government program. Certainly the fact that the State may choose to increase the benefits of the program, possibly increasing the contributions due from all insurers or employers, does not constitute a deprivation of any right of the employer in violation of the Fourteenth Amendment’s Due Process Clause. See Allied American Co. v. Comm’r, 219 Md. 607, 150 A. 2d 421 (1959). A similar legislative program, involving supplemental payments to those already receiving disability benefits and providing for reimbursement from a Second Injury and Contingency Fund with funds generated by an additional tax on employers and insurance carriers, was held by the Supreme Court of Delaware not to violate either the Contract Clause or the Due Process Clause in Price v. All American Engineering Company, supra.
In my view, there would be no violation of constitutional rights of the employer even if some indirect additional costs were to result from the payment of the supplement allowance. Consequently, I do not see any purpose in remanding this case to the circuit court for additional *608findings of fact.1 Additionally, Gange Lumber Co. v. Rowley, 326 U. S. 295, 66 S. Ct. 125, 90 L. Ed. 85 (1945), relied upon by the majority in remanding this case, does not support the majority’s position. In Gange, a statute was enacted extending the period of time during which an employee could apply for additional payments from a_ publicly administered compensation fund. The effect of the statute was to allow an employee to file a claim for additional compensation even though the claim would have been barred under the limitations provision in effect at the time of the injury. The employer there, as here, contended that the statute, in permitting additional payments which could not have been allowed under the law in effect at the time of the injury, would result in an increase of payments due the fund and thus deprive it of property without due process of law. The Supreme Court noted that these allegations of a possible increase in premiums payable to a publicly administered compensation fund were too speculative and remote to even present a question of injury to any legally protected interest. The Court emphasized that a statute would have to produce some more immediate and substantial injury than a mere increase in premiums to be beyond the state’s regulatory power and in violation of the Due Process Clause of the Fourteenth Amendment, stating (326 U. S. at 303, 305):
“A mere increase in premium, under a compulsory and publicly administered accident insurance plan, designed to operate at cost based upon general and individual experience rather than at an arbitrary figure, and surrounded with adequate procedural safeguards against arbitrary action, would not seem to be so obviously harsh or arbitrary in its *609effect upon employers generally that it could be said without question to be beyond the scope of the state’s regulatory power or in violation of the due process prohibition of the federal Constitution.
“The Fourteenth Amendment, through the due process clause, does not assure protection from the states’ regulatory powers against injuries so remote, contingent and speculative. Some substantial and more immediate harm must be shown to present a justiciable question concerning the state’s power. The injury, as it appears from this record, is neither so certain nor so substantial as to justify a finding, upon that showing, that appellant’s substantial rights have been or will be invaded by allowance and payment of the award.”
Accordingly, the appeal was dismissed and not remanded to the state court for additional proceedings.
For these reasons, I believe that Ch. 832 of the Acts of 1973 is constitutional and that the judgment of the circuit court should be reversed.
Judge Levine has authorized me to state that he joins in the views expressed in this dissent.

. Apparently, one issue of law is to be decided by the circuit court on remand. The majority states that “if the challenged law read with other pertinent parts of the Workmen’s Compensation Law requires the insurer to pay the annual assessment on the monies they temporarily pay out under Ch. 832, the appellees would appear to have suffered substantial harm,” Whether under Art. 101, § 66 (2), the awards upon which the 5% assessment to the Subsequent Injury Fund is básed includes supplemental allowances is a matter of statutory construction. This is clearly a question of law which should be decided by this Court.