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May 4, 2018 201700811

Commonwealth of Kentucky 

Workers’ Compensation Board

 

 

 

OPINION ENTERED:  May 4, 2018

 

 

CLAIM NO. 201700811

 

 

JEREMY COCHRAN                                 PETITIONER

 

 

 

VS.          APPEAL FROM HON. R. ROLAND CASE,

                 ADMINISTRATIVE LAW JUDGE

 

 

 

REVELATION ENERGY, LLC

KENTUCKY COAL FUND

and HON. R. ROLAND CASE,

ADMINISTRATIVE LAW JUDGE                      RESPONDENTS

 

 

AND

 

 

REVELATION ENERGY, LLC                         PETITIONER

 

 

VS.

 

 

JEREMY COCHRAN

KENTUCKY CWP FUND

and HON. R. ROLAND CASE,

ADMINISTRATIVE LAW JUDGE                      RESPONDENTS

 

 

OPINION

AFFIRMING

                       * * * * * *

 

 

BEFORE:  ALVEY, Chairman, STIVERS and RECHTER, Members. 

 

STIVERS, Member. Jeremy Cochran (“Cochran”) and Revelation Energy, LLC (“Revelation”) seek review of the December 8, 2017, Opinion, Award, and Order of Hon. R. Roland Case, Administrative Law Judge (“ALJ”) finding Cochran totally disabled pursuant to KRS 342.732(1)(e). The ALJ accepted the opinion of Dr. Sanjay Chavda that Cochran’s suffers from complicated coal workers’ pneumoconiosis (“CWP”) Category 3/2 with massive pulmonary fibrosis. The ALJ awarded permanent total disability (“PTD”) benefits beginning April 10, 2017, the last date of exposure, subject to the limitations contained in KRS 342.730(4) as amended April 4, 1994.

          Revelation filed a petition for reconsideration asserting the award of interest on past due income was erroneous. Revelation requested the “issue of the end point of the award” be bifurcated pending the outcome of the request for review by the U.S. Supreme Court or to see if the Kentucky General Assembly changes the statute. Revelation’s petition for reconsideration was overruled by order dated January 1, 2018.

          Even though Cochran designates his brief as the “Respondent’s brief,” we will first address the grounds raised by Cochran on appeal. Cochran asserts the ALJ erred by applying the tier-down provision in the version of KRS 342.730(4) enacted in 1994 to his PTD benefits. Cochran relies, in part, upon the Kentucky Supreme Court’s recent decision in Cruse v. Henderson County Board of Education, 2015-SC-000506-WC, rendered December 14, 2017, Designated Not To Be Published. Cochran asserts that in Cruse, the Supreme Court directed the award of income benefits should be made without regard to KRS 342.730(4).

          Cochran also contends the current version of KRS 342.730 does not state the remainder of the statute is deemed null and void if one subsection of the statute is deemed unconstitutional. Further, as asserted, the remaining sections of KRS 342.730 “are neither so essentially/inseparably connected with subsection (4), nor are the remaining parts incapable of standing alone/so incomplete that they cannot be executed.” That being the case, Cochran requests the award of PTD benefits subject to the tier-down provision be vacated and the claim remanded to the ALJ with directions to award PTD benefits without the reduction.

          On appeal, Revelation argues the tier-down language of KRS 342.730(4) enacted in 1994 has never been found unconstitutional, is not discriminatory, and applies to all groups. Revelation recognizes the Board is bound by the Supreme Court’s majority opinion in Parker v. Webster County Coal, LLC (Dotiki Mine), 529 S.W.3d 759 (Ky. 2017), but it states “the argument that the dissenting opinion in that case contains the correct analysis of the issue is preserved.” Revelation asserts imposition of the tier-down provision in the present claim should not be found unconstitutional and the argument of the dissent in Parker be adopted.

          Finding the ALJ’s award of PTD benefits is not erroneous, we affirm.

          In Pickett v. Ford Motor Co., Claim No. 2015-01910, rendered February 16, 2018, we set forth our rationale as to why income benefits, in light of the Supreme Court of Kentucky’s decision in Parker, are to be calculated pursuant to the tier-down formula, when applicable, as set forth in the 1994 version of KRS 342.730(4):

The version of KRS 342.730(4) the Parker Court deemed unconstitutional, enacted in 1996, states in pertinent part:

All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee qualifies for normal old-age Social Security retirement benefits under the United States Social Security Act, 42 U.S.C. secs. 301 to 1397f, or two (2) years after the employee's injury or last exposure, whichever last occurs.

 

     In Parker, supra, the Kentucky Supreme Court concluded the manner in which income benefits were limited in the 1996 version of KRS 342.730(4) is unconstitutional. In so ruling, the Supreme Court stated, in part, as follows:

[T]he equal protection problem with KRS 342.730(4) is that it treats injured older workers who qualify for normal old-age Social Security retirement benefits differently than it treats injured older workers who do not qualify. As Justice Graves noted in his dissent in McDowell, “Kentucky teachers ... have a retirement program and do not participate in social security.” 84 S.W.3d at 79. Thus, a teacher who has not had any outside employment and who suffers a work-related injury will not be subject to the limitation in KRS 342.730(4) because that teacher will never qualify for Social Security retirement benefits. There is no rational basis for treating all other workers in the Commonwealth differently than teachers. Both sets of workers will qualify for retirement benefits and both have contributed, in part, to their “retirement plans.” However, while teachers will receive all of the workers' compensation income benefits to which they are entitled, nearly every other worker in the Commonwealth will not. This disparate treatment does not accomplish the goals posited as the rational bases for KRS 342.730(4). The statute does prevent duplication of benefits, but only for non-teachers because, while nearly every other worker is foreclosed from receiving “duplicate benefits,” teachers are not.

Id. at 768 (emphasis added).

     The Supreme Court determined the 1996 version of KRS 342.730(4) does not pass constitutional muster because it treats injured older workers in the Commonwealth who do not qualify for old-age Social Security benefits, such as teachers, differently from all other injured older workers in the Commonwealth who qualify for old-age Social Security benefits. That said, the Supreme Court’s pronouncement in Parker lacks guidance as to how income benefits should now be calculated for injured older workers. In other words, should income benefit calculations for injured older workers be devoid of any age-related restrictions or should income benefit calculations revert back to the previous version of KRS 342.730(4) immediately preceding the 1996 version? Having had another opportunity to offer guidance in Cruse v. Henderson, Not To Be Published, 2015-SC-00506-WC (December 14, 2017), the Supreme Court declined. Thus, this Board must turn to other sources in order to address this inquiry.

     The previous version of KRS 342.730(4) reads as follows:

If the injury or last exposure occurs prior to the employee’s sixty-fifth birthday, any income benefits awarded under KRS 342.750, 342.316, 342.732, or this section shall be reduced by ten percent (10%) beginning at age sixty-five (65) and by ten percent (10%) each year thereafter until and including age seventy (70). Income benefits shall not be reduced beyond the employee’s seventieth birthday.

     The above-cited language does not induce the same constitutional quandary identified by the Parker Court, as the tier-down directed in the previous version of KRS 342.730(4) does not differentiate between injured older workers eligible for old-age Social Security benefits and those who are not. All workers injured before the age of sixty-five are subject to the tier-down provisions regardless of their eligibility for Social Security benefits. The previous version of KRS 342.730(4) does, however, differentiate between injured younger workers and injured older workers, because those injured above the age of sixty-five are not subjected to the tier-down. The Parker Court has already addressed the rational basis of providing for such a distinction:

The rational bases for treating younger and older workers differently is: (1) it prevents duplication of benefits; and (2) it results in savings for the workers' compensation system. Undoubtedly, both of these are rational bases for treating those who, based on their age, have qualified for normal Social Security retirement benefits differently from those who, based on their age, have yet to do so.

Id. at 768.

     However, there must be a determination of whether the Supreme Court’s pronouncement in Parker revives the previous iteration of KRS 342.730(4).  

KRS 446.160 states as follows:

If any provision of the Kentucky Revised Statutes, derived from an act that amended or repealed a pre-existing statute, is held unconstitutional, the general repeal of all former statutes by the act enacting the Kentucky Revised Statutes shall not prevent the pre-existing statute from being law if that appears to have been the intent of the General Assembly.

(emphasis added).

     In making an educated assessment of the legislative intent at the time the current version of KRS 342.730(4) was enacted in 1996, we turn to a contemporaneous provision, contained in the 1996 legislation, in which the legislature addressed the dire need to preserve the long-term solvency of the Special Fund, now the Division of Workers’ Compensation Funds, which reads as follows:

Section 90. The General Assembly finds and declares that workers who incur injuries covered by KRS Chapter 342 are not assured that prescribed benefits will be promptly delivered, mechanisms designed to establish the long-term solvency of the special fund have failed to reduce its unfunded competitive disadvantage due to the cost of securing worker’s vitality of the Commonwealth’s economy and the jobs and well-being of its workforce. Whereas it is in the interest of all citizens that the provisions of this Act shall be implemented as soon as possible, an emergency is declared to exist, and this Act takes effect upon its passage and approval by the Governor or upon its otherwise becoming a law.     

     The language of Section 90 indicates the legislature, at the time the 1996 version of KRS 342.730(4) was enacted, intended to preserve the solvency of the Special Fund. Indeed, the language used in Section 90 speaks to this intent as being “an emergency.” This legislative intent cannot be ignored in the wake of the Supreme Court’s determination the 1996 version of KRS 342.730(4) is unconstitutional. This expressed concern certainly bolsters the conclusion the legislature contemplated a revival of the tier-down provisions in the previous version of KRS 342.730(4).

     Accordingly, we hold that income benefits are to be calculated pursuant to the tier-down formula as set forth in the pre-existing version of KRS 342.730(4) in place when the statute in question was enacted in 1996. As the record indicates Pickett was sixty at the time of the July 13, 2015, injury to his left shoulder, and the ALJ awarded PPD benefits commencing on July 13, 2015, we vacate the ALJ’s award of PPD benefits which are “subject to the limitations set forth in KRS 342.730(4)” and remand for a revised calculation of PPD benefits and an amended award consistent with the views set forth herein.

          Cochran’s reliance upon Cruse is misplaced. Cruse was seventy-one years old at the time of her injury, thus, the tier-down provision in the 1994 version of KRS 342.730(4) was not implicated. Since Cochran was 40 years old on April 10, 2017, his last date of exposure, the tier-down provision of KRS 342.730(4) enacted in 1994 is applicable. Also, noticeably absent in Cruse is any language from the Supreme Court indicating since KRS 342.730(4) is unconstitutional, the claimant is entitled to an unaltered award of income benefits. The Supreme Court’s refusal to make such a statement led to our decision in Pickett, and we will consistently adhere to our decision until informed otherwise.

          Accordingly, the December 8, 2017, Opinion, Award, and Order and the January 19, 2018, Order of the ALJ overruling Revelation’s petition for reconsideration are AFFIRMED.

          ALL CONCUR.

COUNSEL FOR PETITIONER:

HON JEFFREY DAMRON

P O BOX 351

PIKEVILLE KY 41502

COUNSEL FOR RESPONDENT:

HON KENNETH BUCKLE

P O BOX 1890

HYDEN KY 41749

 

COUNSEL FOR RESPONDENT:

 

HON MARGY DE MOVELLAN

DIRECTOR OF COAL FUND

C/O KEMI

250 W MAIN ST STE 900

LEXINGTON KY 40507

KENTUCKY ATTORNEY GENERAL:

HON ANDY BESHEAR

700 CAPITAL AVE STE 118

FRANKFORT KY 40601

ADMINISTRATIVE LAW JUDGE:

HON R ROLAND CASE

657 CHAMBERLIN AVE

FRANKFORT KY 40601