Tag Archives: Supreme Court

Compstitutional Law 101: Part 2: Will Sveen signal a move to judicially dismantle the “grand bargain”?

Watch out for what these three could say in Sveen v. Melin

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

WILG is hosting a summit on the constitutional challenges in workers’ compensation on April 18th, I won’t be able to attend, but this post and my last post are my contribution to this ongoing discussion.

Stating that “a seemingly obscure case could have far-reaching implications” is one of the most overused clichés in legal blogging and journalism.  But a case involving a dispute over the proceeds of a life insurance policy might impact the constitutional basis for workers’ compensation and other state laws protecting employees.

In March, the Supreme Court heard oral argument in Sveen v. Melin (paywall). In Sveen, a former spouse was challenging a Minnesota law automatically removing a spouse as beneficiary of an insurance policy upon divorce. The grounds for the challenge is the so-called contracts clause of the United States Constitution which prohibits states from passing laws that impair the obligation of a contract.

Pro-corporate legal commentators have long lamented the demise of the contracts clause at the expense of laws enacted by states under 10th Amendment police powers. When these pundits and academics write about a “contracts clause revival”, they are really writing about diminishing the rights of states to enact laws under their police powers.

One of the most important set of state laws enacted under police powers are workers’ compensation laws. In New York Central Railroad v. White  state workers’ compensation laws were found to be constitutionally enacted under a state’s 10th Amendment police powers.  State laws regulating workplace safety and the ability to injured employees to seek legal redress were one of the primary drivers for the broad recognition of police powers in the late 19th century. A good discussion of the background behind the expansion of state police powers is found in the 1898 Supreme Court case of Holden v. Hardy.  In short, the Supreme Court found that state workplace safety laws were a response to the new industrial economy of the late 19th century and valid exercises of state police powers.

University of Chicago Law Professor Richard Epstein argued that minimum wage laws violated the contracts clause.  It’s not much of an intellectual stretch to argue that mandatory workers’ compensation laws would violate the contracts clause using Epstein’s interpretation of the contracts clause. A gig economy employer like Uber subjected to a state workers’ compensation law might argue that they should not be subjected to such a law under the contracts clause.

On April 2nd the Supreme Court reversed 70 years of precdent in narrowly construing exceptions to the Fair Labor Standards Act in the Navarro case. Navarro will likely have the effect of pushing plaintiffs to file more wage and hour cases under state laws. A revived contracts clause could cut off or curtail opportunities for justice for victims of wage theft in state court.

A potential contracts clause revival should concern advocates for injured workers for other reasons. In recent years, attorneys for injured workers have had a fair amount of success in overturning anti-worker changes to workers’ compensation laws based on state constitutions. That avenue would likely be blocked with a full-blown contracts clause revival.

In the late 19th and early 20th century, state laws regulating workplace conditions were struck down under 14th Amendment substantive due process. But substantive due process also allows claims for a broad variety of civil rights that are disliked by judicial conservatives, so the substantive due process clause is disfavored by courts.  The contracts clause allows courts to strike down worker-friendly state laws without creating a mechanism for expanding rights for suspect classes of individuals like prisoners or victims of police brutality. In New York Central v. White, the Supreme Court considered and rejected arguments overturning workers’ compensation laws on substantive due process grounds and contracts clause grounds.

Finally, a broad interpretation of the contracts clause would allow the Supreme Court to overturn state workers’ compensation laws while still maintaining the narrowed interpretation of interstate commerce the Roberts court appear to be endorsing in NFIB v. Sebelius. As I wrote in a post last week, a narrow construction of the commerce clause could be a high hurdle in enacting worker-friendly chagnes to workers’ compensation laws on a federal level.

Sveen v. Melin will likely be decided this spring. If the Supreme Court strikes down the Minnesota law based on the contracts clause, I will be interested to read the language of the opinion. I will also be interested in reading any concurring opinions from hard core conservatives like Gorsuch, Thomas and Alito as those opinions could be a clue as to where the court could be going on contracts clause jurisprudence. It is unlikely that Sveen v. Melin will be grounds to invalidate state workers’ compensation laws. Supreme Court decisions are limited to actual cases and controversies that are presentd to them. But Sveen could be another step in undercutting New Deal and Progressive Era refroms.  The Supreme Court has been chipping away at New Deal era laws in cases like Navarro and the Tackett decision in 2015. A bad decision in Sveen might accelerate the rollback of pro-worker laws.

Will The Supreme Court’s Attack On State Courts Affect Workers’ Compensation?

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

One of the biggest and least understood developments of the current session of the Supreme Court session is how the Supreme Court has undercut the power of state courts to decide cases. This development may also impact the traditionally state law centered world of workers’ compensation.

In Bristol Meyer-Squibb v. Superior Court the Supreme Court held that non-California residents could not join a class action against Bristol Meyer-Squibb in California state court. In Tyrell v. BNSF the Supreme Court held that North Dakota residents could not sue the BNSF in Montana state court in an FELA case.

Despite Bristol-Meyer and the BNSF having a substantial number of employees and doing a substantial amount of business in California and Montana respectively, the Supreme Court held that it would violate due process to subject defendants to litigation in those states. State court litigation should be limited to states where a defendant is incorporated, where they are headquartered or where the events in the case took place..

Bristol-Meyer and Tyrell both rely on the Daimler v. Bauman case that was decided in 2014. In her dissent in Daimler, Justice Sonia Sotomayor wrote that the effect of Daimler was “to shift the risk of loss from multinational corporations to the individuals harmed by their actions.” Essentially Sotomayor believes that the rule that a corporation can be sued in any state court where they have substantial contacts has been repealed. Sotomayor was the lone dissenter in both the Tyrell and Bristol Meyers case.

The constitutional basis for limiting state court jurisdiction is the due process clause of the 14th Amendment. The use of the due process clause to weaken the ability of states to regulate corporate conduct has echoes of the so-called Lochner era where state laws that impeded on contracts were overturned unless they were based on general police powers.

So-called forum shopping gets a bad rap from tort reformers. Terms like “judicial hellhole” have coined by pro-corporate legal advocacy groups. But the ability to pick a forum to  bring a legal case is inherent in a federal system like we have in the United States. Lawyers have a duty to bring cases in a forum where they think it is most favorable to their client. Corporate and management interests also engage in forum shopping. In November business interests persuaded a business-friendly federal judge in Texas to block enforcement of the so-called blacklist rule that would have prevented employers who violated workplace safety and fairness laws from receiving federal contracts.

Workers’ compensation laws were enacted during the Lochner era and were held to be constitutional because they were enacted under state police powers under the 10th Amendment. But the mere fact that workers’ compensation laws were enacted under 10th Amendment authority of the states does not mean corporate friendly federal courts can not find a way to strip states of jurisdiction over certain workers’ compensation claims. This is particularly true for workers who may be able to claim workers’ compensation benefits in multiple states.

In Magnolia Petroleum v. Hunt, the Supreme Court ruled that an employee who was injured in Texas but lived in Louisiana could not claim workers’ compensation in his home state of Louisiana because he had already accepted benefits in Texas. The court held that the Hunt could not collect benefits in Texas because of the full faith and credit clause of the U.S. Constitution.

Justice Hugo Black’s dissent in the case that pointed out that the only reason that Hunt received workers compensation benefits in Texas was signing a form in the hospital after the accident. Black also forcibly denounced the idea that Hunt was double- collecting benefits in Texas and Louisiana for two reasons. First, Louisiana offset the benefits that Hunt received in Texas. Secondly, Black stated “the aggregate of the awards from both states, if added together, would be far less than the total loss suffered by respondent. The Texas allowance scarcely amounts to a “recovery” in the sense of giving full compensation for loss, and has been described by a Texas court to be “more in the nature of a pension than a liability for breach of contract, or damages intact.”

Black’s description of the benefits available to injured workers who could claim benefits in two states is as true as it is now as it was 73 years ago when Magnolia came out.

In Magnolia, Black also drew parallels between how the due process and full faith and credit clauses could be used to protect corporate interests.

“For more than half a century the power of the states to regulate their domestic economic affairs has been narrowly restricted by judicial interpretation of the federal Constitution. The chief weapon in the arsenal of restriction, only recently falling into disrepute because of overuse, is the due process clause. The full faith and credit clause, used today to serve the same purposes, is no better suited to control the freedom of the states.”

Three years later Magnolia was distinguished by the McCartin decision. In McCartin the Supreme Court allowed an employee to collect benefits in Wisconsin who had first collected benefits in Illinois to collect benefits in both states because unlike Texas, Illinois had no laws stating accepting workers’ compensation benefits in Illinois ruled out a claimant from receiving benefits in another state.

In 1980, the Supreme Court applied McCartin in Thomas v. Washington Gas and Light to rule that an injured employee could collect benefits in Washington D.C. and Virginia.

But the decision in Thomas was far from the enthusiastic endorsement of multi-jurisdiction workers’ compensation claims voiced by Justice Black in his dissent in Magnolia. Three concurring Justices criticized McCartin but upheld the award of benefits to Thomas based on the legal doctrine of stare decisis. Two justices, including William Rehnquist, dissented ruling that Magnolia should still govern multi-jurisdictional claims. Current Chief Justice John Roberts clerked for Rehnquist and holds a great deal of respect and affection for his former boss.

Considering how eager the majority of the Supreme Court is to limit the jurisdiction of state courts, I would be very concerned if the constitutional of multi-jurisdictional workers compensation claims were reviewed by the Roberts’ court.

Alabama Court Strikes Down Anti-Worker Provisions Of State Workers’ Compensation Law

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

An Alabama trial-court level judge ruled the Alabama Workers Compensation Act was unconstitutional in a recent decision. Though the decision isn’t binding on a state level and it was recently stayed or delayed indefinitely, it is an important and interesting decision for many reasons.

The Alabama workers’ compensation statute was found to be unconstitutional because it capped benefits at $220 per week for permanent injuries and it limited attorney fees for plaintiff attorneys to 15 percent. Jefferson County Circuit Court Judge Pat Ballard found that Alabama’s cap on permanent damages violated equal protection of the laws because it created two classes of workers without any rational basis because some workers were fairly compensated for permanent disability while others were not. Ballard also found that the attorney fee cap violated constitutional due process rights.

Ballard’s reasoning about equal protection and due process mirror recent state supreme court decisions in Oklahoma and Florida striking down anti-worker reforms to the workers’ compensation laws in those states. Florida struck down attorney fee caps for plaintiff’s attorney because they impaired the ability of injured workers to find counsel. Oklahoma struck down the so-called Oklahoma option because it impermissibly created two separate systems for workers’ compensation, one of which could make it almost impossible for workers to collect benefits.

While it is encouraging that courts are protecting the rights of injured workers, the decisions in Oklahoma, Florida and Alabama have all been driven by anti-worker legislation in those states. Unfortunately, that trend is continuing in 2017.  Possible Democratic presidential candidate and New York Governor Andrew Cuomo pushed through anti-worker reforms to New York’s workers’ compensation act.

The recent attack on workers’ compensation has been bi-partisan. A newly- elected Republican legislature in Iowa passed anti-worker workers’ compensation reforms which were signed into law by that state’s Republican governor. The Iowa reforms include a cruel measure that caps benefits for senior citizens who are injured on the job. That provision may be ripe for an equal protection challenge.

Relying on appellate courts to protect the rights of injured workers’ is a risky strategy. Workers compensation laws were passed by state legislatures in response to pressure from unions and other workers advocates during the early 20th century when appellate courts were generally hostile to employees. While it seems that trend may have reversed in the early 21st century, appellate judges certainly can’t be accused of pro-worker bias.

Good legislation also prevents the need for worker advocates to look to the judiciary to protect the rights of workers. Part of the reason, Judge Ballard ruled against the Alabama Workers Compensation Act was because the maximum benefit rate had not increased in 30 years. In Nebraska, our maximum benefit rate increases automatically under a formula determined by the Department of Labor. Nebraska’s current maximum rate is $817 per week for temporary and permanent disability.

What Does Supreme Court’s Warehouse Workers’ Ruling Mean?

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Last Monday, the U.S. Supreme Court ruled 9-0 that contracted warehouse workers for Amazon did not have to be paid for time spent waiting to clear through an anti-theft security screening after their shifts. Justice Clarence Thomas ruled that time spent in an after-work security screening was not integral and indispensable to the primary activity of a warehouse worker, therefore not covered under the federal Fair Labor Standards Act. So what does that mean for you?

First of all, this should mean that any worker who has to go through a security check after work will not have to be paid by their employer for the time that process takes. However other pre- and post- workday activities should still be covered under the Fair Labor Standards Act. Donning and doffing safety equipment is still compensable because such safety equipment helps an employee work safely. Call-center workers still should be paid for time spent booting up and logging into a computer and phone because a call-center employee is unable to do their job if they are not logged into their phones and computers. Employees should also consult with a lawyer about state wage and hour law as state law may be friendlier to employees.

Your Social Security Benefits After The Defense Of Marriage Act (DOMA) Decision

Today’s post comes from guest author Barbara Tilker, from Pasternack Tilker Ziegler Walsh Stanton & Romano.

Nearly two months after the Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA), the Social Security Administration has announced that it will start to pay benefits to some individuals in same-sex marriages. In order to be eligible for benefits, these individuals must meet the same criteria as individuals in opposite-sex marriages, in addition to several other requirements.

Only applications for spousal benefits are being approved right now. Spousal benefits are payable to a spouse who either 1) did not work enough to be entitled to Social Security benefits or 2) worked enough to be entitled to Social Security benefits but would be entitled to a larger benefit on their spouse’s earnings record.  This is generally the case when one spouse earned significantly more than the other spouse over the course of their working lives. The individual on whose earnings record the claim is made (the number holder, in SSA’s terms) must also be entitled to old-age or disability benefits from Social Security. In order to receive spousal benefits, you must be at least age 62 and have been married to the number holder for at least one year.

The individual applying for benefits (the claimant, in SSA’s terms) must show that he or she was married to the number holder in a state that permits same-sex marriage and that the number holder is living in a state that recognizes same-sex marriage either 1) when the application for benefits is filed or 2) while the application is pending a final determination. It does not matter what state the claimant lives in. What matters for SSA’s purposes is the state the number holder lives in. This only matters when spouses live in different states.

Below is a chart from SSA that shows which states recognize same-sex marriages performed in other states, and when those states permitted same-sex marriages.  If a state is not listed, it does not recognize same-sex marriages performed in other states or permit same-sex marriages to be performed.

Before filing a claim for benefits or moving to a different state, you should consult with an experienced attorney or with the Social Security Administration to determine your eligibility for benefits.  As SSA continues to pay benefits to more individuals in connection with the Supreme Court’s decision, we will provide updated information regarding who may be eligible for these benefits.

State

Date Same-Sex Marriages from Any Other State Was Recognized

Date Same-Sex Marriages Were Permitted in the State

California June 17, 2008 – November 4, 2008

June 26, 2013 – present

June 17, 2008 – November 4, 2008

June 26, 2013 – present

Connecticut November 12, 2008 November 12, 2008
Delaware July 1, 2013 July 1, 2013
Iowa April 30, 2009 April 20, 2009
Maine December 29, 2012 December 29, 2012
Maryland February 23, 2010 January 1, 2013
Massachusetts May 17, 2004 May 17, 2004
Minnesota August 1, 2013 August 1, 2013
New Hampshire January 1, 2010 January 1, 2010
New York February 1, 2008 July 24, 2011
Rhode Island May 14, 2012 August 1, 2013
Vermont September 1, 2009 September 1, 2009
Washington December 6, 2012 December 6, 2012
Washington, DC July 7, 2009 March 9, 2010