Court Opinion

ID: 8950524
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:49:04.724408+00
Date Added: 2024-06-11T17:09:58.026661
License: Public Domain

STAPLETON, Circuit Judge,
dissenting.
The court concludes that a prior version of the Virgin Islands Workmen’s Compensation Act, as interpreted by this court, became an implied term of an implied employment contract subject to contract clause protection and that the Virgin Islands legislature is barred by the contract clause from amending the Act to retroactively correct what it perceived to be an erroneous interpretation of that statute. I respectfully dissent because the corrective amendment did not impair any contract-based expectation and because, even if that amendment could be said to impair such an expectation, it did not do so in violation of the contract clause.
I.
As correctly noted by the court, the Supreme Court has established a three-step analysis for determining whether retroactive state legislation constitutes an impermissible impairment of contractual rights. Energy Reserve Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 103 S.Ct. 697, 74 L.Ed.2d 569 (1983). The first step requires that two questions be answered: Does the plaintiff have contract-based rights and have those rights been substantially impaired? Id. at 411, 103 S.Ct. at 764. Only if both of these questions are answered in the affirmative does a court proceed in the second step to inquire whether the legislation occasioning the substantial impairment has a “legitimate public purpose.” Id. Finally, the court determines whether the impairment is reasonable and “appropriate to the public purpose” of the legislation. Id. at 412, 103 S.Ct. at 705.
*1254A. The Absence of a Contract Right.
The “purpose of the [Contract] Clause [is] clear: to encourage trade and credit by promoting confidence in the stability of contractual obligations.” United States Trust Co. v. New Jersey, 431 U.S. 1, 15, 97 S.Ct. 1505, 1514, 52 L.Ed.2d 92 (1977). Its “primary focus [is] upon legislation ... designed to repudiate or adjust pre-existing debtor-credit or relationships that obligors [are] unable to satisfy.” Keystone Bituminous Coal Association v. DeBenedictis, — U.S. —, 107 S.Ct. 1232, 1251, 94 L.Ed.2d 472 (1987). Given that focus, it is not surprising that the Supreme Court has stated that the “term ‘contract’ is used in the Constitution in its ordinary sense, as signifying the agreement of two or more minds, for considerations proceeding from one to the other, to do, or not to do certain acts. Mutual assent to its terms is of its very essence.” Louisiana ex rel. Folsom v. Mayor of New Orleans, 109 U.S. 285, 288, 3 S.Ct. 211, 213, 27 L.Ed. 936 (1883); accord Crane v. Hahlo, 258 U.S. 142, 146, 42 S.Ct. 214, 215, 66 L.Ed. 514 (1922); Morley v. Lake Shore Railway Co., 146 U.S. 162, 169, 13 S.Ct. 54, 57, 36 L.Ed. 925 (1892); see Hale, The Supreme Court and the Contract Clause: II, 57 Harv.L.Rev. 621, 621-28 (1944).
Contract clause cases have focused upon laws alleged to impair consensually assumed contractual obligations. See, e.g., Keystone Bituminous Coal Association v. DeBenedictis, — U.S. —, 107 S.Ct. 1232, 94 L.Ed.2d 472 (1987) (law affecting express private contracts); Exxon Corp. v. Eagerton, 462 U.S. 176, 103 S.Ct. 2296, 76 L.Ed.2d 497 (1983) (same); Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 103 S.Ct. 697, 74 L.Ed.2d 569 (1983) (same); Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 98 S.Ct. 2716, 57 L.Ed.2d 727 (1978) (same); United States Trust Co. v. New Jersey, 431 U.S. 1, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977) (law affecting express contract between bondholders and state). In contrast, Hess in this case urges that we employ the contract clause to strike down a law altering a nonconsensual regulation imposed pursuant to the police power of the state. I would decline to do so.
Although courts in some contexts have invoked a legal fiction that contracting parties incorporate certain kinds of statutory law in their contract, to indulge in that fiction in the context of contract clause analysis as my colleagues have done requires extension of contract clause protection far beyond the limits that the Supreme Court has prescribed. In Louisiana ex rel. Folsom v. Mayor of New Orleans, 109 U.S. 285, 3 S.Ct. 211, 27 L.Ed. 936 (1883), that Court refused to sanction the use of a similar legal fiction to extend contract clause protection beyond expectations based on mutual assent:
A judgment for damages, estimated in money, is sometimes called by text writers a specialty or contract of record, because it establishes a legal obligation to pay the amount recovered; and, by a fiction of law, a promise to pay is implied where such legal obligation exists.... But this fiction cannot convert a transaction wanting the assent of the parties into one which necessarily implies it.... The prohibition of the federal Constitution was intended to secure the observance of good faith in the stipulation of parties against any State action. Where a transaction is not based upon any assent of parties, it cannot be said that any faith is pledged with respect to it; and no case arises for the operation of the prohibition.
Id. at 288, 3 S.Ct. at 213.
In light of the purpose of the contract clause, the better-reasoned cases hold that workers’ compensation laws are simply state regulation of the employment relationship. Representative of these cases is McAllister v. Board of Education, 79 N.J.Super. 249, 191 A.2d 212 (1963), aff'd, 42 N.J. 56, 198 A.2d 765 (1964), in which the court reasoned:
Although the rights and liabilities of employer and employee under the Workmen’s Compensation Act have been called “contractual in nature” and “a definite statutory status or relationship which is in essence contractual,” they are *1255not truly contractual. The courts have used the term “contract” in workmen’s compensation cases much as they have used that term when speaking of marriage “contracts.” In employment, like marriage, the parties must agree to enter the relationship, but once they do, the law dictates to them their rights and liabilities....
The net result of all this is that the workmen’s compensation “contract” includes everything that the Legislature and the courts say it shall include, whether added before or after the injury.
Id. 191 A.2d at 217-18 (citations omitted); accord Price v. All American Engineering Co., 320 A.2d 336, 339 (Del.1974); cases cited by the court at 1245 n. 4. Cudahy Packing Co. v. Parramore, 263 U.S. 418, 44 S.Ct. 153, 68 L.Ed. 366 (1923), albeit not a contract clause case, lends support to this view of workmen’s compensation laws. In that case, the Supreme Court recognized:
Workmen’s compensation legislation rests upon the idea of status, not upon that of implied contract.... The liability is based, not upon any act or omission of the employer, but upon the existence of the relationship which the employee bears to the employment....
Id. at 423, 44 S.Ct. at 154.
If a workers’ compensation statute is held to qualify for contract clause protection despite the absence of expectations based on “mutual assent,” Louisiana ex rel. Folsom, 109 U.S. at 288, 3 S.Ct. at 213, the same must be said for state legislation concerning workplace safety, equal employment opportunity, unemployment insurance, maximum working hours, and the like. Yet, I find nothing in 200 years of Supreme Court caselaw that remotely suggests that the contract clause was intended to restrict legislative discretion regarding public policy in these areas. Similarly, I find no warrant for restricting legislative discretion concerning the way in which victims of employment-related torts will be compensated.
Although the court’s opinion initially acknowledged that a successful contract clause challenge must be predicated on contractual rights or obligations altered by the law,” p. 1243, the court ultimately fails to identify any expectation of Hess based on the mutual assent of Hess and its borrowed employees. For this reason, I find the court’s opinion unpersuasive.
The court first relies upon United States Trust Co. v. New Jersey, 431 U.S. 1, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977), and Mississippi ex rel. Robertson v. Miller, 276 U.S. 174, 48 S.Ct. 266, 72 L.Ed. 517 (1928), for the proposition that the contract clause reaches “terms implied in a contract” and “implied contracts as well.” p. 1244. United States Trust Co. held that New Jersey and New York could not repeal a covenant in the bonds of the Port Authority of New York restricting the ability of the Authority to subsidize rail transportation from revenues pledged to secure those bonds. No implied terms were involved. The import of the footnote quoted by my colleagues is that, in the words of the Supreme Court, “statutes governing the interpretation and enforcement of contracts may be regarded as forming part of the obligation of contracts made under their aegis.” 431 U.S. at 17 n. 14, 97 S.Ct. at 1515 n. 14 (emphasis supplied). It is one thing to extend contract clause protection to legislation governing the interpretation and enforcement of contracts in effect at the time the contract is formed. Such laws are undoubtedly relied upon by the parties when they contract. It is very different to extend contract clause protection to rights conferred by social legislation and the Supreme Court has not done so.
It should also be noted that the “incorporation rationale” in United States Trust Co. would not support the theory advanced by Hess and adopted by the court even if it were not limited to laws governing the interpretation and enforcement of contracts. The incorporation rationale, being grounded in the expectations of contracting parties, applies only to laws in effect when the contract is made. See United States Trust Co., 431 U.S. at 19 n. 17, 97 S.Ct. at 1516 n. 17. As I understand it, Hess concedes that a state legislature may make a new workers’ compensation law or an *1256amendment to an existing one applicable to employment contracts entered into before its enactment so long as the amendment comes before an employee is injured. Hess could not successfully argue otherwise. As the Supreme Court observed in Exxon Corp. v. Eagerton, 462 U.S. 176, 103 S.Ct. 2296, 76 L.Ed.2d 497 (1983):
The Contract Clause does not deprive the States of their “broad power to adopt general regulatory measures without being concerned that private contracts will be impaired, or even destroyed, as a result.” United States Trust Co. v. New Jersey, [431 U.S. 1, 22, 97 S.Ct. 1505, 1517, 52 L.Ed.2d 92 (1977) ]. As Justice Holmes put it: “One whose rights, such as they are, are subject to state restriction, cannot remove them from the power of the State by making a contract about them. The contract will carry with it the infirmity of the subject matter.” Hudson Co. v. McCarter, 209 U.S. 349, 357 [28 S.Ct. 529, 531, 52 L.Ed. 828] (1908). Thus, ... a workmen’s compensation law may be applied to employers and employees operating under pre-existing contracts of employment that made no provision for work-related injuries, New York Central R. Co. v. White, 243 U.S. 188 [37 S.Ct. 247, 61 L.Ed. 667] (1917).
Id. at 190, 103 S.Ct. at 2305 (footnotes omitted). Hess’s argument is not that it had the right to expect tort immunity based on the workers’ compensation law in effect at the time of contracting, but rather that the workers’ compensation law became immutable, and Hess’s immunity thereunder vested, at the time of injury. This highlights the fact that Hess’s expectation was not contract-based. Rather, its theory is that its statute-based right of tort immunity somehow became vested at the time of injury.
Although Mississippi ex rel. Robertson uses the phrase “implied contract,” the Court did not there extend contract clause protection to a situation lacking expectations based on mutual assent. This is apparent from that portion of the opinion immediately following the portion quoted by the court:
The selection of plaintiff to be the Revenue Agent amounted to a request or direction by the State that he exert the authority and discharge all the duties of that office. In the performance of services so required of him plaintiff made the investigations and brought the suits to discover and collect the delinquent taxes. Under the statutes then in force as construed by the highest court of the State, he thereupon became entitled to the specified percentages of the amounts subsequently collected on account of the taxes sued for. The retroactive application of c. 170 would take from him a part of the amount that he had theretofore earned. That would impair the obligation of the implied contract under which he became entitled to the commissions.
276 U.S. at 179, 48 S.Ct. at 268. Accordingly, the holding of Mississippi ex rel. Robertson is that the contract clause protects a unilateral contract once it has been consummated through performance by the promisee.
The court’s decision does not rest on these venerable precedents, however. Rather, in making its "determination as to whether waiver of tort remedies [by the borrowed employees] is a term of the contract,” the court looks “to the expectations of the parties to the contract rather than to any formalistic classification.” P. 1245. This puts the cart before the horse. Although it makes sense to look to the contract-based expectations of the parties to determine whether there has been a substantial impairment of a contractual relationship, expectations do not necessarily evidence a contractual relationship. Life engenders many expectations; the contract clause protects only expectations arising from mutual assent.
The court’s failure to focus on the necessity of mutual assent causes it to virtually ignore the implied contract between Hess and the borrowed employees. Its discussion of the expectations of the parties focuses almost solely on the agreement be*1257tween Hess and Litwin.1 Because the borrowed employees did not give their assent to that contract, Hess’s expectations in entering it are irrelevant to the question of whether the contract clause applies in this situation.
More importantly, however, any relevant expectations of Hess were based neither on its contract with Litwin nor on its implied contract with the borrowed employees. To the extent Hess had any expectations of immunity from tort liability to its borrowed employees when it initiated its arrangement with Litwin and borrowed the plaintiff employees, that expectation could only have arisen from a hope that it would be able to persuade the courts to adopt an interpretation of the Virgin Islands Act that they had given no indication they were prepared to embrace. This is simply not the kind of expectation the contract clause was intended to protect.
In the final analysis, the court’s conclusion is based on the assertion that “the concept that borrowed employees consent to a waiver of employer tort liability as a term of the implied contract of employment was the basis of the Vanterpool opinion, and is binding on us here.” P. 1246. There is no little irony in this conclusion. In Vanterpool, we reversed the district court’s holding that a borrowed employee could not be stripped of his common law rights against his borrowing employer without a showing that he had given knowing assent to a waiver of those rights. Although we noted that there was an “implied contract” of employment between a borrowed employee and a borrowing employer for purposes of applying the Virgin Islands Act, we expressly held that the waiver of tort liability came about by operation of the statute and not as a result of the borrowed employee’s assent to its inclusion in the implied contract of employment:
Because the foundation of workers’ compensation rests on the contract for hire, the threshold inquiry must be whether the employee made such a contract with the borrowing employer.... This inquiry, however, is different from whether the employee consented to accept the compensation scheme as well. As previously noted, where the scheme is mandatory, it conditions all employment. The borrowed employee may or may not make an express or implied contract for hire with a borrowing employer, but once such a contract is made, there is no secondary inquiry as to whether the employee consents to the application of the compensation scheme itself.
766 F.2d at 126.
Workers’ compensation is wholly a creature of statute, not contract. For this reason, neither Hess nor the court is able to identify a contract right that is impaired by the challenged amendment. Accordingly, Hess should not prevail.
B. The Absence of Substantial Impairment
Assuming nonetheless that the pre-1984 version of the Virgin Islands Act was a protected implied term of the implied employment contract between Hess and its borrowed employees, application of the amended Act to all claims pending on or filed after the effective date of the chal*1258lenged amendment does not violate the contract clause. Hess bears the burden of demonstrating that the amendment “substantially impaired” its contractual rights or obligations. Cf. National Railroad Passenger Corp. v. Atchison, Topeka & Santa Fe Railway Co., 470 U.S. 451, 472, 105 S.Ct. 1441, 1455, 84 L.Ed.2d 432 (1985). “Minimal alteration of contractual obligations may end the inquiry at its first stage.” Allied Structural Steel Co., 438 U.S. at 245, 98 S.Ct. at 2723. The severity of impairment is measured by the law’s effect on the legitimate expectations and reliance interests of the contracting parties. Id.; Energy Reserves Group, 459 U.S. at 411, 103 S.Ct. at 704; United States Trust Co., 431 U.S. at 20 n. 17, 97 S.Ct. at 1516 n. 17. “In determining the extent of the impairment, we are to consider whether the industry the complaining party has entered has been regulated in the past.” Energy Reserves Group, 459 U.S. at 411, 103 S.Ct. at 704.
When we focus upon Hess’s legitimate expectations, it is important to remember that the Virgin Islands Act, even if conceived as being incorporated into every employment contract, nevertheless exists solely by virtue of legislation adopted by the Virgin Islands legislature. I believe Hess can have had no legitimate expectation that the statutory scheme at any given point in time would remain unchanged, and, accordingly, would hold, in the alternative, that there has been no substantial impairment of a legitimate expectation.
The court candidly acknowledges that Hess could not reasonably expect the Act to remain unchanged. It asserts, however, that “Hess had no reason to anticipate that the legislature would make such a drastic change as retroactive elimination of [its] coverage under the Act as the employer of borrowed employees.” P. 1248. I do not agree that Hess had a legitimate expectation of being free from retroactive change.
Hess negotiated its contract with Litwin in 1977. That contract was last amended in 1980. The latest accident which is the subject of these suits occurred on May 31, 1984. As of that date, there was some reason to believe that the borrowed employee doctrine did not apply in the Virgin Islands.2 There was no case adopting that doctrine for the Virgin Islands and no case providing a basis for predicting that it would be adopted. The most that can be said is that the issue was an open one when these accidents occurred. Accordingly, whichever assumption Hess made about this issue when it planned its affairs during the period before the district court decision in Vanterpool on June 7, 1984, it had to expect that a court might decide the other way and, in the normal course, apply its ruling to accidents which had previously occurred.
In addition, Hess knew that it faced the possibility of retroactive legislative action. Whichever way the court decision went, Hess knew that the Virgin Islands legislature could have the last word. Not only did Hess know that the legislature had periodically amended the Act in the past, it had specific reason to know that the legislature had not hesitated to revise the Act retroactively to cure a judicial interpretation of the Act with which it disagreed. In response to a Third Circuit interpretation of the Act’s provision governing liability of third party tortfeasors that shortened the generally applicable two-year statute of limitations, see Berkeley v. West Indies Enterprises, Inc., 480 F.2d 1088 (3d Cir.1973), the Virgin Islands legislature amended the provision to retroactively apply a two-year standard. In Galvan v. Hess Oil Virgin Island Corp., 549 F.2d 281 (3d Cir.1977), this court upheld the retroactivity of that change without discussion. Id. at 286.
Because the concept of giving contract clause protection to statutory rights unrelated to the interpretation and enforcement of contracts is a novel one, there are few cases that address the issue of wheth*1259er legitimate expectations m contract clause analysis must include the possibility of statutory amendments. This court recently addressed that issue, however, after suggesting that legislatively created rights are not protected by the contract clause. In terms of the absence of both substantial impairment and contract-based expectations, I find Hess’s present position comparable to, but less sympathetic than, the landlord in Troy Ltd. v. Renna, 727 F.2d 287 (3d Cir.1984). In that case, New Jersey’s Anti-Eviction Act, enacted in 1974, created a grace period which in effect extended the term of a tenant’s lease when the landlord failed to renew because of plans to convert to condominiums. In 1981, the New Jersey legislature enacted the Tenancy Act to enhance the protection of certain senior citizens and disabled persons against evictions resulting from condominium conversions. The effect of qualifying for a “protected tenancy” under the Act was to obtain the right to remain as a tenant in a converted unit for up to 40 years beyond any period already authorized by the Anti-Eviction Act. The Tenancy Act also limited the magnitude of rent increases during the “protected tenancy.” The Act conferred discretion on New Jersey courts to apply its provisions to buildings that were converted before the effective date of the Act.
Even though the Act authorized retroactive modification of the rights of parties to lease contracts, this court sustained its validity. In doing so, we noted the absence of contract-based expectations as well as the lack of substantial impairment to legitimate expectations:
[I]t is doubtful that any impairment of a contractual relationship has occurred. The Tenancy Act only enlarged, for senior citizens and the disabled, a preexisting statutory tenancy which came into operation as a matter of law. Prior to the enactment of the Tenancy Act, New Jersey had already placed significant limitations upon the rights of owners of multiple dwellings to define the landlord-tenant relationship solely in terms of contract. ... Thus, beginning in 1974 the terms of the landlord-tenant relationship were specified to a large extent by statute. The Tenancy Act only operates to protect those statutory tenants whose relationship with their landlord has already become non-consensual by virtue of the Anti-Eviction Act. That is, the Tenancy Act simply enlarges the terms of a statutory tenancy already created by the Anti-Eviction Act. All of the plaintiffs acquired their interests in the Springfield complex after the Anti-Eviction Act went into effect. Such an enlargement of an already-regulated statutory tenancy is probably not an impairment at all. As the Supreme Court held in Veix v. Sixth Ward Building & Loan Ass'n., 310 U.S. 32, 38 [60 S.Ct. 792, 794, 84 L.Ed. 1061], ... (1940), “[w]hen he purchased into an enterprise already regulated in the particular to which he now objects, he purchased subject to further legislation upon the same topic.”
727 F.2d at 297.
In Troy, we distinguished Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 98 S.Ct. 2716, 57 L.Ed.2d 727 (1978), relied upon here by the court, based on a similar analysis:
Spannaus deals with the modification of an existing contractual relationship voluntarily arrived at by negotiation between employer and employee. The Tenancy Act, in contrast, involves the modification of the terms of a non-contractual statutory tenancy previously imposed by state law. In Spannaus, the Minnesota legislature entered a field it had never before sought to regulate; New Jersey, to the contrary, regulated statutory tenancies following the expiration of a contractual lease beginning in 1974, and the plaintiffs purchased subject to those limitations ....
727 F.2d at 299.
Here, similarly, any tort immunity Hess had was solely a matter of statute and the challenged amendment to that statute did not frustrate any legitimate expectation of Hess that it could count on such immunity remaining unaltered by the legislature.
*1260C. Public Purpose and Reasonableness.
The official explanation attached to the challenged amendment states in substantial part:
This bill is needed to assist person [sic] who are injured while on the job and to assist the Department of Labor Workmen’s Compensation Division, in recouping monies it has expended on injured workmen from the wrongdoer.
This need arises because the courts have been interpreting Section 284 of Title 24 of the Workmen’s Compensation Act to grant immunity not only to a worker’s immediate employer, but also to secondary employers although the Legislature never intended immunity for these secondary wrongdoers.
Other courts have made this bad interpretation, but it was quickly cured by other legislatures. Last June in Washington Metro Area Transit v. Johnson, 467 U.S. 925, 104 S.Ct. 2827, 81 L.Ed.2d 768 (1984) the United States Supreme Court interpreted the Federal Workmen’s Compensation Act (LSHW) [sic] in such a manner as to grant immunity not only to an employee’s immediate employer but to a remote secondary employer. The Congress became aware immediately of this wrong interpretation of its Act and within ninety days Congress amended the Federal Workmen’s Compensation Act to avoid this interpretation.
This bill uses the same language Congress used when amending its Act....
By this proposed bill this defect can be cured.
Take a situation where a Litwin employee is injured at Hess. Under the present law, the Courts say our Legislature intended not only to grant immunity to the injured worker’s employer Litwin, but also to Hess. The Bill would avoid that.
This is important not only to the injured workers, but to the Department of Labor because under the bill, for example, if the Litwin employee is badly hurt as a result of the negligence of Hess, and the employee has collected $25,000.00 in workmen’s compensation benefits, if he can sue Hess for his injury, the first $25,000.00 of his recovery is paid back to Workmen’s Compensation. This has enabled the Department of Labor in the past to maintain its ability to pay claims without undue assistance from the General Fund. The present existing interpretation would cut off that needed supply of revenue.
Bill No. 498, 16th Legislature (1986) (attached explanation), Nieves App. at 151-52.
The Virgin Islands legislature here articulates three public purposes that support retroactive application of the amendment; to cure VanterpooV s adoption of the borrowed employee doctrine so as not to exclude any of the intended beneficiaries of the right to sue borrowing employers; to assist injured workers; and to assist the Commissioner of Labor in recouping sums paid to workers injured by third party tort-feasors. Although I believe each of these public purposes would suffice as a basis for sustaining the amendment, I need address only one.
The court expressly concedes that there is a public purpose to prospective abrogation of borrowing employer immunity. As it correctly notes, the theory of the Act is that an employee surrenders his or her common law right to sue his or her employer in tort in exchange for the more certain, though more limited, remedy provided by the Act. As indicated in the above-quoted explanation, the original intent of the Virgin Islands legislature was to effect this exchange between the employee and his or her immediate employer, but not to require the employee to surrender his or her common law right against a second employer when he or she would receive no additional consideration from anyone for that surrender. Although one can make arguments for a contrary policy, it is clearly rational to conclude that the public interest of the Virgin Islands population is better served by denying immunity to the borrowing employer. Having reached this conclusion, I fail to see how the court can find that there is no public purpose sup*1261porting the retroactive application provision.
All victims of negligence on the part of Virgin Islands borrowing employers were intended to be beneficiaries of the limits that the legislature thought it had placed on the exclusive remedy provision of the Act. The courts, albeit unintentionally, frustrated the legislature’s intent and deprived some intended beneficiaries, like Mr. Vanterpool, of the benefits they were intended to have. Not surprisingly, when the legislature attempted to set the courts straight, it tried to save the rights of as many of the intended class of beneficiaries as it reasonably could. Given that there is a conceded public interest in employees having the intended benefits, this effort cannot be said to be unsupported by a public purpose.
Contrary to the assertion of the court, this is not special interest legislation whether looked at from the viewpoint of those burdened or those benefitted. The Virgin Islands legislature acted broadly to abrogate the borrowed employee doctrine for all employees and all employers for all time, the past, the present, and the future. Nor is there any reason to credit Hess’s assertion that only a handful of plaintiffs are benefitted and only one employer burdened by the retroactive aspects of the statute. It was impossible at the time the records in these cases were developed to determine how many would be benefitted and how many burdened. The amendment applies to “(1) claims filed after the effective date of this Act; and (2) claims pending as of the effective date of this Act; regardless of when the accident which gave rise to the claim occurred.” Bill No. 498, § 2(b), 16th Legislature (1986), Nieves App. at 151. The size of the first group was not ascertainable. Those affected by the retroactive provision of the statute may not be numerous. Given the applicable two-year statute of limitations, it is unlikely that many viable claims were saved by the 1986 amendment that were not already saved by the 1984 amendment. But the important thing for present purposes is that neither Hess nor the plaintiffs were singled out for special treatment.
Hess cannot plead that it is the target of legislation solely because it is the biggest private employer in the Virgin Islands and thus the most heavily affected. In Energy Reserves Group, the Court noted that, “[g]iven the nature of the industry — sales to public utilities — it is impossible for any regulation not to have a major effect on a small number of participants.” 459 U.S. at 418 n. 25, 103 S.Ct. at 708 n. 25. Declining to find the legislation in that case to be for the benefit of special interests, the Court noted that there was no “indication that the Kansas political process had broken down.” Id. There is no indication in this record that the Virgin Islands political process had broken down or that employers in general and Hess in particular were denied a hearing in that process; indeed, the Governor’s veto of the retroactive application amendment suggests that Hess’s concerns were not ignored.
The Virgin Islands Act is a creation of the Virgin Islands legislature. When a legislature declares its belief that a court has misunderstood its creation, and the assertion of that belief is plausible, the courts have consistently recognized the legislature’s right to cure the court’s erroneous interpretation retroactively to the date of that interpretation (a fortiori, to pending cases). E.g., Board of Education of East Windsor Regional School District v. Diamond, 808 F.2d 987, 995-96 (3d Cir.1986) (upholding Congress’ retroactive cure of Supreme Court’s interpretation of Education of the Handicapped Act); Temple University v. United States, 769 F.2d 126, 134-35 (3d Cir.1985) (upholding Congress’ retroactive cure of Supreme Court’s interpretation of “wages” for purposes of the Federal Insurance Contributions Act against due process challenge), cert. denied, — U.S. —, 106 S.Ct. 2914, 91 L.Ed.2d 544 (1986); Canisius College v. United States, 799 F.2d 18, 27 (2d Cir.1986) (same), cert. denied, — U.S. —, 107 S.Ct. 1887, 95 L.Ed.2d 495, 8 Employee Benefits Cas. (BNA) 1488 (1987); Louviere v. Marathon Oil Co., 755 F.2d 428, 430 (5th Cir.1985) (upholding Congress’ retroactive cure of Supreme Court’s interpretation of *1262Longshoreman’s and Harbor Workers’ Compensation Act against due process challenge); Long v. United States Internal Revenue Service, 742 F.2d 1173, 1183-84 (9th Cir.1984) (upholding Congress’ retroactive cure of Ninth Circuit’s interpretation of statutory exemption to Freedom of Information Act against due process challenge); Thomas v. Carnegie-Illinois Steel Corp., 174 F.2d 711, 713 (3d Cir.1949) (agreeing with Battaglia v. General Motors Corp., 169 F.2d 254, 259-61 (2d Cir.), cert. denied, 335 U.S. 887, 69 S.Ct. 236, 93 L.Ed. 425 (1948), that Congress’ retroactive cure of Supreme Court’s interpretation of Fair Labor Standards Act did not violate due process); Abshire v. Potter, 179 Cal.App.3d 73, 224 Cal.Rptr. 312 (1986) (upholding against due process and contract clause challenge California legislature’s retroactive cure of U.S. Supreme Court’s interpretation of federal law that was cured prospectively by Congress), cert. denied, — U.S. —, 107 S.Ct. 1262, 94 L.Ed.2d 124 (1987); Sanelli v. Glenview State Bank, 108 Ill.2d 1, 90 Ill.Dec. 908, 483 N.E.2d 226 (1985) (upholding against due process and contract clause challenge an Illinois legislature’s retroactive cure of Illinois Supreme Court decision); see also J. Nowak, R. Rotunda & J. Young, Constitutional Law 473 (2d Ed.1983) (“[t]he category of cases where the constitutionality of curative statutes is an issue presents another area where the Court will almost always sustain retroactive legislation.”).
I am cognizant of the fact that most of the above-cited cases deal with federal legislation and thus involve only due process, rather than contract clause, analysis. I am also aware of Justice Brennan’s admonition that the Supreme Court has “never held ... that the principles embodied in the Fifth Amendment’s Due Process Clause are coextensive with prohibitions existing against state impairments of pre-existing contracts.” Pension Benefit Guarantee Corp. v. R.A. Gray & Co., 467 U.S. 717, 733, 104 S.Ct. 2709, 2719, 81 L.Ed.2d 601 (1984). Nevertheless, I do not believe the Supreme Court’s contract clause analysis would lead it to conclude that retroactive curative amendments in circumstances of this kind are either unsupported by a public purpose or effect an unreasonable accommodation between the public interest and contractual expectations. The Supreme Court knows only too well that statutory interpretation is an inexact science and that legislative intent is not difficult to misconstrue. For this reason, I think it unlikely that the Supreme Court will deny to state and territorial legislatures the curative power it has consistently accorded Congress.
If contract clause analysis were applicable in situations of this kind, I would hold that where a state or territorial legislature has acted to retroactively cure a judicial misinterpretation of one of its statutes, it need not show a public purpose and reasonable accommodation of interests independent of the legislature’s desire to cure the court’s misinterpretation without excluding some of the intended beneficiaries of the statute. All that need be shown is that there is a public purpose supporting the substantive rule embodied in the statute as corrected, as there clearly is here, and that it is plausible for the legislature to claim that that rule has been its intent all along, which it clearly is here. Accordingly, I would conclude in this case that the retroactive application of the amendment does not violate the contract clause.
III.
Because I find the borrowed employee doctrine inapplicable in these cases, I have no occasion to address the issues discussed in Section III of the court’s opinion.

. Although it is irrelevant whether Hess pays for the borrowed employees' workers’ compensation insurance, Hess pays only in the sense that Litwin undoubtedly uses revenues received from Hess to pay the insurance premiums, just as it undoubtedly uses revenues from Hess to pay the salaries of the employees, unemployment compensation premiums, and the like. The Weinman affidavit evidences no more than that Litwin had a "cost plus profit” contract with Hess. As we noted in the Vanterpool case,
Borrowed employees, such as Vanterpool, who was borrowed by [Hess] from Litwin, remained on the Litwin payroll and Litwin made insurance premium payments to the statutory workers’ compensation fund. See app. at 31. [Hess] in turn, reimbursed Litwin for all payroll expenses incurred for borrowed employees, including workers’ compensation premiums. See app. at 104 (affidavit of Edward L. Weinman, Controller of [Hess]). This reimbursement was made by including the cost of procuring workers’ compensation insurance as a factor in the scheduled time and materials rate paid to Litwin for borrowed employees. Id.
Vanterpool v. Hess Oil Virgin Islands Corp., 766 F.2d 117, 120 (3d Cir.1985), cert. denied, — U.S. —, 106 S.Ct. 801, 88 L.Ed.2d 111 (1986).

. The Virgin Islands Act was based on Puerto Rico’s workers’ compensation law, which had been interpreted by the First Circuit in Colon Nunez v. Horn-Linie, 423 F.2d 952 (1st Cir.1970), to permit suits by borrowed employees against their borrowing employers. See Vanterpool, 766 F.2d at 124 & n. 10.