Sunday, July 15, 2018
Many readers of this blog will be familiar with the name of Phineas Gage, the victim of one of the most remarkable work accidents in history. Gage, who suffered a brain injury, is reliably mentioned in just about every neurology and neuroscience book for the lay public that one can pick up.
In September 1848, Gage was supervising workers blasting rock in preparation of a roadbed for an early Vermont railway. “Setting a blast” involved a skilled worker boring a hole deep into an outcrop of rock, adding blasting powder and a fuse, and then using a “tamping iron” to tamp sand into the hole above the powder, in effect to make a plug.
Gage became distracted during the process. According to an accurate Wikipedia summary, “As Gage was [undertaking the process] … his attention was attracted by his men working behind him. Looking over his right shoulder, and inadvertently bringing his head into line with the blast hole, Gage opened his mouth to speak; in that same instant the tamping iron sparked against the rock and (possibly because the sand had been omitted) the powder exploded. Rocketed from the hole, the tamping iron – 11⁄4 inches … in diameter, three feet seven inches … long, and weighing 131⁄4 pounds … – entered the left side of Gage's face in an upward direction, just forward of the angle of the lower jaw. Continuing upward outside the upper jaw and possibly fracturing the cheekbone, it passed behind the left eye, through the left side of the brain, and out the top of the skull through the frontal bone.”
The amazing aspect of the story of the story is that Gage not only lived, but was able to recover and live a fairly normal life for another twelve years. The loss of significant frontal lobe brain tissue altered his personality severely but did not, as many physicians at the time expected, necessarily result in his death. See https://en.wikipedia.org/wiki/Phineas_Gage. Gage did ultimately die of brain seizures caused by his injury.
Although much has been written about Gage, a modernist poem has now been published which is perhaps in its own category – it gives the point of view of the tamping iron which both caused the injury -- and which Gage so famously clung to, after the accident and for the rest of his life. The poem, The Tamping Iron Speaks, authored by Zoe Hitzig, appeared in the June 7, 2018 issue of the London Review of Books. The poem is presumably inspired by her contemplation of the iron, as it is on display, along with Gage’s skull, at a museum at Harvard Medical School (the poet is also an economics Ph.D. candidate at Harvard.)
For this brief reverie, see https://www.lrb.co.uk/v40/n11/zoe-hitzig/the-tamping-iron-speaks
Tuesday, July 10, 2018
Oxford University's Jeremias Prassl has just published what seems to be the first book by a law professor analyzing the gig economy and its relationship to international precepts of modern employment law. Jeremias Prassl, Humans as a Service: The Promise and Perils of Work in the Gig Economy (Oxford University Press 2018).
I'm on my second read-through, and one won't want to miss this item. It's beautifully written and edited, with revelations on most every page.
After describing the current landscape of the gig economy, Prassl asks, "Can we protect consumers and workers without stifling innovation?" To this query he replies, "As courts and governments around the world begin to grapple with the gig economy, Humans as a Service explores the challenges of on-demand work, and explains how we can ensure decent working conditions, protect consumers, and foster innovation. Employment law plays a central role in leveling the playing field: gigs, tasks, and rides are work -- and should be regulated as such."
Just a couple months before Prassl's book came out, I completed my own view of the situation as I see it from Pennsylvania. I have posted my two papers, presented last month at my agency's educational seminar in Hershey, at www.davetorrey.info. I have appended to each paper a bibliography for those who wish to do further reading. These papers were largely inspired by the excellent January 2018 seminar on the topic convened by the National Academy of Social Insurance, “Nonstandard Work and Social Insurance: Designing Risk Protections for a Changing Workforce.” Videos of that conference, and all the presentations, are available at https://www.nasi.org/civicrm/event/info?reset=1&id=228.
Sunday, July 1, 2018
The New York Workers’ Compensation Board has proposed a rule that would permit “law school graduates and senior law students” to represent any party in interest before the workers’ compensation board “only in those type of matters that have been authorized by the Board and set forth in the approved program . . .”
“Such law interns may, under the general supervision of an attorney, file forms, [and] make applications as required, fully participate in informal adjudicatory proceedings, prepare and enter stipulations other than waiver agreements, [and] appear at hearings before Workers' Compensation Law judges in noncontroverted claims or at such hearings, other than trial hearings, in controverted claims, and prepare and file applications for administrative review and full board review, and rebuttals, as necessary. Such law interns may, under the immediate supervision of an attorney, appear before Workers' Compensation Law judges at trial hearings in controverted claims and at all hearings before board panels, and prepare and enter waiver agreements.”
Some claimants’ attorneys are pretty upset about the proposal. But the Board argues that “such amendments are necessary to decrease the total number of unrepresented claimants appearing in Board proceedings, particularly where no indemnity benefits are sought and the only issue is entitlement to medical treatment. Upon review of current internal records, the Board finds that, in 2016, there were 247 unrepresented claimants with cases pending before the Board, in which the claimant did not seek indemnity benefits. This number is largely consistent with past years; in 2014 there were 229 such claimants and in 2015 there were 302. It is the Board’s position that the legal assistance provided by a law school or legal intern will help many of these unrepresented claimants navigate the workers’ compensation law and the adversarial hearing process."
Claimants’ counsel very rightly argue that a law student (or law school graduate -which I assume to mean a recently graduated law student who is not yet gainfully employed or is working pro bono) could not possibly represent an injured worker as ably as experienced counsel. Claimants’ counsel also argue that the real solution is to provide adequate attorneys’ fees for all classes of workers’ compensation cases, and I agree.
As a law professor who practiced law for 11 years (workers’ compensation in Maine and labor law with the federal government), interned with the Massachusetts Department of Industrial Accidents during the second and third years of law school, and handled five SSDI cases before Federal ALJs during the third year of law school, I have a unique perspective on the issue.
Law students face an incredibly difficult job market and law schools are doing everything in their power to gain in-school experiential opportunities for their students. As a workers’ compensation law professor, I would be thrilled for my students to have in-school workers’ compensation experiential opportunities. Students would benefit from the experience generally, and might become attracted longer-term to the practice of workers’ compensation law, an interest I unashamedly try to instill in them.
It is true that law students will not be prepared to take on the most complex cases, and I would suggest that the New York Board be very explicit about defining the types of cases to which law students should not be assigned. Without even thinking too hard about it, one could come up with excludable categories involving multiple carriers on the risk, and cases involving significantly conflicting medical evidence in arcane medical areas. (Obviously, very simple cases do not go to hearing in the first place). But all of this could be managed with reasonably skilled supervision and teaching. I would strongly suggest that the Board stay in close contact with law school clinical instructors, who perform equally delicate balancing acts in areas of law that are (I say respectfully) just as complex as (or more complex than) workers’ compensation. In my law school, for example, we have clinics and practicums in Estate Planning, Trial Practice, Energy Law, International Human Rights/Immigration, Family and Child Legal Advocacy, Criminal Defense and Prosecution Assistance, and Civil Legal Services. Virtually all the students in these law school clinics and practicums have live-client contact or appear before courts and administrative agencies (many have argued before our state supreme court). And I will note in passing that most folks know that third year medical school students engage in live-patient intern practice.
Of course, I think attorneys’ fees should be available to practicing attorneys for many, if not all, the kinds of cases that would likely be assigned to students under the rule. And there is no doubt a real risk that state legislators might become too comfortable with the idea of unpaid legal labor once they saw it. But there is a relatively simple partial solution to that problem – the Board should establish with law schools externship (not internship) programs that would both pay students a competitive hourly wage (in comparison with other types of law school work) and simultaneously earn them law school credit. That could create some real goodwill between law students and practicing lawyers. The American Bar Association approved these kinds of paid externships in August 2016 and many law schools have adopted these programs.
As a former nine-year administrative agency lawyer (with the NLRB), I also understand that administrative officials frequently have very little control over what legislators do. At the end of the day, the official is faced with the stark reality that (apparently) hundreds of claimants go without representation. Is it any wonder that administrators would attempt to fix the problem with whatever resources they possess? I would not want to deny an injured worker some representation in what all agree can be a tangled mess of a system. One must be guided here by a higher moral compass.
One caveat – I do not like the application of the program to “law school graduates” (which appears to be part of the rule). I am not sure what the phrase means. One hopes the “graduates” will have passed the Bar exam since, unlike the case with students, there is no cap on the duration of such a hire. But in any event, opening such a program to that class of participant really does hint at a shadowy unbounded servitude inappropriately (in my view) sponsored by the state. I would have to know a lot more before I could agree it was a good idea.
Michael C. Duff
Thursday, June 28, 2018
All the issues we have seen emerging from employee classification—or misclassification—were likely to come to a head in the context of a large multistate employer. And Amazon is the perfect catalyst. When Amazon “entrepreneurs” hit someone in an Amazon van—that we will be told really isn’t an Amazon van—and it will assuredly happen, the driver will be hurt, or worse, and so, somewhere (many such somewheres) will a third-party. This is not speculative, it is reasonably foreseeable. So, the question that I pose to every first-year law student at the University of Wyoming College of Law springs to the fore: who is going to pay? Because somebody is going to pay (even if we return de facto to the 19th century and that somebody is the victim). Much of what will play out is excruciatingly predictable.
Amazon had already “Uberized” its “last mile” delivery services through a “platform” structure known as “Amazon Flex.” Now Amazon has announced a new “Delivery Service Partners” program, described as the company’s attempt to build its own delivery alternative to USPS, FedEx, the U.S. Postal Service and other traditional shipping companies.
“The new program lets anyone run their own package delivery fleet of up to 40 vehicles with up to 100 employees. Amazon works with the entrepreneurs — referred to as ‘Delivery Service Partners’ — and pays them to deliver packages while providing discounts on vehicles, uniforms, fuel, insurance, and more. They operate their own businesses and hire their own employees, though Amazon requires them to offer healthcare, paid time off, and competitive wages. Amazon said entrepreneurs can get started with as low as $10,000 and earn up to $300,000 annually in profit.”
According to reports, Amazon “now has 7,000 truck trailers and 40 jumbo jets that shuttle packages to and from 125 fulfillment centers across the world.”
To me, all of Amazon’s recent initiatives bespeak a single overriding goal: control. The soft underbelly of the Uber-world is the tension between giving up control, so as not to incur legal liability through use of employees, and the need for control to maintain standards and quality. Amazon’s decision is logical and structural: our “entrepreneurs” and/or their employees will wear Amazon uniforms and drive Amazon trucks (and even fly Amazon jumbo jets); hence we will have more control.
Here comes the excruciating part: Amazon will argue that the scheme is somehow not under their control for purposes of liability. When the onslaught of frenetic activity results in predictable collisions, of one sort or another, it is the “entrepreneur”-employer who will be in control (though Amazon will dictate design of vehicles, provide packages, and set baseline working conditions for employees of those “entrepreneurs.”) If you buy that canard, the next argument will be that the entrepreneur is not an employer because it is dispatching its drivers through a “marketplace.” Politicians will bemoan that the dilution of responsibility is all the result of a “new” economy (‘cuz no one has ever delivered packages before) and propose an insurance system of some type providing pennies on the dollar for what was formerly a tort or workers’ compensation remedy). In the end, all risk is projected into the community as a classic economic “externality.” All the world is a “marketplace,” with no one in control. Ask not, dear reader, on whom the risk falls; it falls on thee!
Michael C. Duff
Monday, June 25, 2018
I would be the first to admit that I can be a hard-head. For years, some very sophisticated people have been trying to convince me that a citizen’s right to be free from invasions of property is hierarchically more important than a citizen’s right to be free from invasions of personal security. Because of that difference in status, the argument continues, the decision by a legislature to whittle away at workers’ compensation benefits (and by inference tort, and by further inference a right to a remedy to protect against invasions of personal security) need only have a “rational basis.” Obviously, very few decisions by a legislature will lack some rational basis, whatever the legislation’s essential or true motivations. But what if Blackstone is right? What if the right to personal security is “absolute”? I told you I was a hard-head. And maybe that is because I come from a place where invasions of personal security (or fear thereof) are real and omnipresent. For some people, the fear of invasions of personal security is at least as important as guarantees of remedies for property deprivation.
I’m currently working on an article on foundational (early 20th century) understandings of “adequate benefits.” My research has me revisiting and reanalyzing New York Cent. R. Co. v. White, 243 U.S. 188 (1917). White was a case that said it might be doubted that the state could abolish all rights of action, or all defenses without setting up something adequate in their stead. But, said the Court, that situation wasn’t presented in the case at bar, the general quid pro quo made sense given the risks all parties faced in litigation, nothing about the scheme offended the 14th Amendment, and this was not to say that any scale of compensation, however insignificant or onerous would be supportable. But, again, in the case at bar, no one was challenging the amount of compensation. The issue was whether the New York system, which the Court obviously found reasonable, could lawfully be compulsorily applied to objecting employers or employees.
Today, however, my eyes were drawn, as if for the first time, to this passage:
The subject matter in respect of which freedom of contract is restricted is the matter of compensation for human life or limb lost or disability incurred in the course of hazardous employment, and the public has a direct interest in this as affecting the common welfare. ‘The whole is no greater than the sum of all the parts, and when the individual health, safety, and welfare are sacrificed or neglected, the state must suffer.’ . . . . It cannot be doubted that the state may prohibit and punish self-maiming and attempts at suicide; it may prohibit a man from bartering away his life or his personal security; indeed, the right to these is often declared, in bills of rights, to be ‘natural and inalienable;’ and the authority to prohibit contracts made in derogation of a lawfully-established policy of the state respecting compensation for accidental death or disabling personal injury is equally clear.
This language was, of course, responding to the criticism that the (second attempt by New York at a) workers’ compensation statute had unconstitutionally interfered with the right of the employer and employee to contract out of coverage, in this case for extrahazardous occupations. (Essentially, a Lochner argument). The Court’s response was that the right to life or personal security were “natural and inalienable.” In other words, the court essentially said, “we won’t permit contracting out of a lawfully-established policy where the inalienable right to personal security is bartered away.” This hard-head continues to believe that the Supreme Court first authorizing a compulsory workers’ compensation scheme really did have in mind a baseline of benefits (would that it had clarified it!) beneath which workers’ compensation would become insignificant and not supportable. Neither individuals nor legislatures may barter away the inalienable right of personal security. Occasionally, even hard-heads find hidden gems.
Michael C. Duff
Tuesday, June 19, 2018
Back in May of 2012, the Federal District Court of Wyoming entered a $900,000 tort judgment against an employer, Reiman Corp., for an injury arising out of and in the course of employment by its undocumented worker, Omar Romero. (The case has been oddly difficult to retrieve – a LexisNexis account can be reviewed here). Why a tort case? Because at the time Wyoming explicitly excluded undocumented workers from coverage under its workers’ compensation act. Those not pleased by this outcome apparently did not understand the fundamental nature of the quid pro quo under some state constitutions: if you categorically exclude a category of injured worker from eligibility under workers’ compensation, you arguably must restore underlying tort rights. This is how Judge Nancy Freudenthal of the federal district court of the District of Wyoming, who heard the case, saw Wyoming law. Hence, the tort suit was not barred by exclusivity.
Subsequent to the Reiman decision, the Wyoming legislature enacted a very unusual undocumented worker rule: an “alien” is an employee for purposes of eligibility for Wyoming workers’ compensation benefits if “authorized to work by the United States department of justice, office of citizenship and immigration services [or is an alien] whom the employer reasonably believes, at the date of hire and the date of injury based upon documentation in the employer's possession, to be authorized to work by the United States department of justice, office of citizenship and immigration services.” The corollary to this rule is that an alien who is not properly authorized to work, and whom the employer does not reasonably believe to be properly authorized based on documents in the employer’s possession, is not a statutory employee. To my knowledge, and here I attach the excellent summary chart produced recently by Judge David Torrey and now-Attorney Justin Beck, Wyoming is the only state possessing an explicit statutory exclusion for undocumented workers, albeit an odd partial one based on someone’s subjective belief of something.
So, the really bad employer is not liable for workers’ compensation but is possibly liable in tort. Not a bad trade, I’d say, given the relatively low likelihood of an employer being sued by an undocumented worker in a long-running tort suit (though it did, of course, happen in Reiman, above).
One irony of this structure is that, if an undocumented worker wishes to pursue a tort case against his or her employer for a work-related injury in Wyoming, a workers’ compensation exclusivity bar defense would probably have to go to the jury (all other elements of the negligence prima facie case would have to satisfy evidentiary pleading requirements, of course). Whether the documents relied upon by the employer are the type upon which a reasonable belief of authorization could be founded is perhaps a question of law for the court. But before you can get to the question of reasonable belief there is the preliminary question of actual belief. Did the employer actually believe (whatever the basis of the belief) that the undocumented worker was authorized to work by United States officials? It seems to me that question is squarely for the jury.
Michael C. Duff
In a new, well-crafted article, a recent law graduate, and former naval officer, outlines in brief the law and procedure of veterans’ disability benefits claims – and sets forth a critique of the same. See Scott W. Taylor, Improving Services for Those Who Served: Practical Recommendations for the Department of Veterans Affairs’ Disability Benefits Model, 68 Hastings Law Journal 1291 (August 2017).
He first explains the creation of the program in the early 1930s, its essentially charitable, non-adversarial structure, and the character of the benefits payable. A disability award must, of course, be based on a disability incurred because of service in the military. The VA disability model, meanwhile, has, instead of stressing functionality, “always inferred a veteran’s ability to work based solely on the severity of the veteran’s ‘medical conditions and symptoms.’” Benefits are, meanwhile, payable without reference to whether the claimant is working again. Veterans’ disability payments are made on a monthly, not lump-sum, basis, in a manner which the author correctly refers to as paternalistic.
The author then sets forth the administrative claim/dispute resolution structure, explaining that a veteran’s initial claim for a disability award is submitted to a regional office of the VA. In the event of a denial, an appeal is taken to the Board of Veterans’ Appeals (BVA). Further review is available in an Article I court called the United States Court of Appeals for Veterans Claims. Consistent with the law’s purpose (taking care of the serviceman and his family in the wake of service-related injury), the “reasonable doubt rule” prevails. In other words, if the proofs are in equipoise, the claim is resolved in the veteran’s favor. The author also notes that assistance is available in-house and from volunteers for claimants to pursue their claims, and more recently lawyers are allowed to represent veterans in their appeals.
The author believes that the VA’s disability assessment and disability benefits models are obsolete and should be reformed. To aid in the analysis, the author compares the U.S. approach to that of Canada, a system which has the same goals yet several system features that differ from those of our country.
The author advocates that, in contrast to the traditional model, the focus of disability assessment should be on the veteran’s residual functionality. This is an argument inspired by recommendations from the World Health Organization and, notably, is the same type of thinking that inspired the AMA to revise the AMA Guides and create the 6th Edition.
The author also asserts that blindly (my term) paying lifetime monthly disability awards, regardless of whether a veteran is employable, is simply unsatisfactory. He argues that, rather than regarding disability payments as an “entitlement,” finite periods of benefits – with an attendant focus on rehabilitation, and/or even the closure of cases with lump sums – should be the preferred approach. This latter advocacy is drawn from the Canadian example. Such advocacy mirrors that of the debates in the workers’ compensation community over whether delivery of benefit via periodic payments or lump sum is superior. While the latter form of payment creates the “risk of financial mismanagement,” the “finite award provides closure for less severely injured veterans, as well as the sense that their service-related condition does not necessarily impede their ability to earn an income. Simply put, the finite award enables non-permanently disabled veterans to move on with their lives and begin the process of rehabilitation.”
Monday, June 18, 2018
More from my excursion writing a Wyoming workers’ compensation treatise. (Oh, the places you’ll go!). Wyoming’s largest private sector employer, Walmart, is not covered by the state’s workers’ compensation act. Why? Because it is not engaged in an “extrahazardous” employment. Unlike any other state in the nation, the Wyoming statute compulsorily applies to extrahazardous employment and to non-extrahazardous employment only when employers opt in to the statute. The application of the statute to only extrahazardous employment is in fact dictated by the state’s constitution, which does not permit limitations on personal injury damages except in the case of workers’ compensation, as carefully defined and separately authorized by the state constitution. Because that authorization (for a monopolistic) workers’ compensation fund pertains only to extrahazardous employments, mandatory workers’ compensation for non-extrahazardous employments is unconstitutional. (An echo of prairie populism).
But the story gets stranger. Although a few states continue to have vestigial references to extrahazardous employments, those provisions have – to put it in the words of the Larson’s treatise – “no substantial operative importance.” In contrast, Wyoming’s extrahazardous employment character is fundamental. Employers are defined in terms of their participation in extrahazardous employments, as noted in the previous paragraph. Employees are those employed by employers engaged in extrahazardous employment. You get the picture.
Well, what’s a state to do with a statute appearing to cover an extremely limited segment of the workforce? I’ll tell you what I would do: I’d get the constitution amended and then amend the statute to very broadly cover work. But that’s not what Wyoming did. Over the decades, it expanded the definition of “extrahazardous”. Many, many employments that you and I would not think of as extrahazardous are defined as such now as a matter of law. And not exactly transparently so. Extrahazardous employment is defined by reference to several “codes” from the North American Industry Classification System (NAICS) manual. You think you have Protz problems? Here, a private manual seems on the surface to be defining the jurisdiction of the Act. I’d call that a delegation issue. I have it on good authority that once upon a time department store-type retail employers (there are several different kinds of “retail” coded under NAICS) were included in the system as extrahazardous. Then, allegedly, Walmart lobbied the legislature to remove this type of retail establishment from extrahazardous designation. The legislature agreed. Walmart declined to opt in, but other similar retailers opted in. Experienced hands tell me that things may be yet more complicated than I’ve explained. But this is all I can get my head around now.
I’m still not done. Whatever else this system is, it is one in which the largest private sector employer in the state is not covered (including, by the way, employees at a large Walmart warehouse distribution center in Cheyenne). Well, what does a worker do if injured? This is not as bad as the overruled Oklahoma structure. You’ll recall that there, the plan was to allow employers opting out of the system to utilize alternative plans and in the process employees received neither workers’ compensation coverage nor could they bring a tort suit. In Wyoming, employees of non-covered employers can bring a tort suit, so the quid pro quo is maintained to that extent. But many (most?) employees “agree” to participate in the Walmart alternative benefit plan, for all the obvious reasons. You will no doubt recall that such alternative plans are necessarily governed by ERISA. Under ERISA, an employer is not required to pay any specific level of indemnity or medical benefits. The federal courts, at best, will require that the employer’s plan pay what the employer promised (and I am also reliably informed that not nearly enough is even promised under the plans). Any state lawsuits for amounts above what the alternative benefit plan promised to pay are preempted by ERISA. This is the system applicable to the largest private sector employer in my state. We had Oklahoma opt out. We still have Texas opt in. And to that list you can add Wyoming opt in (h/t: George Santini).
Michael C. Duff
Saturday, June 16, 2018
As a western U.S. resident currently suffering through rather dramatic wildfires here in the Laramie, WY area, this story from TortsProfBlog caught my eye:
In California, the "tort wars" have been quiet recently. That may change due to wildfires and a court decision finding lead paint manufacturers liable for a public nuisance. The state's utilities, potentially on the hook for billions of dollars in damage caused by wildfires, and lead paint manufacturers have sought legislation to protect themselves from damages. The Mercury News has details.
Michael C. Duff
Friday, June 15, 2018
No Reimbursement for Medical Marijuana in Maine Workers’ Compensation and a Subtle Connection to Undocumented Workers
As a Maine workers’ compensation lawyer, I was interested to read the Maine Supreme Judicial Court’s just-issued opinion in Gaetan Bourgoin v. Twin Rivers Paper Co. In the opinion, the Court holds that Twin Rivers is not required to reimburse Bourgoin for medical marijuana used to treat his chronic back pain from a work-related, permanently disabling injury. Bourgoin had previously used opioids for pain management, but found marijuana, lawfully obtained and used under state law, more effective and less secondarily debilitating. Because of the opinion, he will probably be forced to return to opioid consumption, a very unsatisfactory outcome.
The legal basis for the opinion, which the Court repeatedly asserted as “narrow” despite all appearances to the contrary, was that the federal Controlled Substances Act preempted Maine’s medical marijuana law. Characterizing an employer’s requirement to subsidize an employee’s acquisition as a “positive conflict” between federal and state law, the Court concluded that principles of conflict preemption rendered the Maine administrative order unenforceable against Twin Rivers. Of course, the ruling also means that no other Maine employer can be compelled to reimburse an injured worker for medical marijuana expense.
In the real world, parties simply contract around these kinds of obstacles. Because the alternative may be extended-duration use of opioids, with all that goes with that process, if medical marijuana cannot be explicitly reimbursed, the parties will simply find other ways to put the required funds in an injured worker’s hands. What interests me as a law professor, however, is the analysis by which the Court arrived at its preemption conclusion, because that analysis could carry unintended consequences.
The Court recites that, under Title 18 U.S.C.S. § 2(a), a federal prosecution can be directed against any individual who “commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission.” This provision, argues the Court, “reflects a centuries-old view of culpability: that a person may be responsible for a crime he has not personally carried out if he helps another to complete its commission.” Thus, the argument ultimately concludes, the employer here could have been prosecuted under federal law if it took an “active role” in furtherance of the marijuana offense with the intent of facilitating the offense’s commission. The employer on this reading is provided the Hobson’s Choice of violating state or federal law.
But a violation of federal law hardly seems a foregone conclusion. As the dissent points out, it would be nearly impossible to prove an employer had specific intent to violate federal law, a necessary element for conviction. I, of course, agree with the Court that former federal guidance documents expressing a disinclination to federally prosecute marijuana possession purportedly authorized by state law does not save the state marijuana law from preemption. But imagine trying to prosecute an employer for specific intent to violate federal law where, in the context of a countervailing, authorizing state marijuana law: 1) internal federal documents suggest a (broadly publicized) federal lack of interest in prosecuting; and 2) not a single medical provider, employer, or insurance carrier acting under color of state marijuana laws could be shown to have been prosecuted under the Controlled Substances Act. Could it be said in those circumstances that an employer complying with a state workers’ compensation order to reimburse for medical marijuana possessed specific intent to violate federal law? That strikes me as implausible and, as a former federal lawyer, I would not be happy to prosecute such a case.
Furthermore, how would the broad “aid or abet” formulation laid out by the Court work in the context of, to take one stark example, undocumented workers? Does an employer, merely by complying with a workers’ compensation award in favor of its injured, undocumented worker “aid or abet,” in violation of federal law, e.g., 18 U.S.C.S. § 1325 (illegal entry), or 18 U.S.C § 1542 (providing false information to obtain a passport)? Would the employer thereby possess specific intent to violate immigration laws? Surely, state courts in upholding the lawfulness of workers’ compensation awards have implicitly or explicitly rejected such arguments. Will Maine courts now have difficulty with such cases after Twin Rivers?
A final somewhat obscure preemption problem is discussed in the case. The Controlled Substances Act states that it did not intend to “occupy the field in which that provision operates, including criminal penalties, to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State unless there is a positive conflict between that provision of this title and that State law so that the two cannot consistently stand together.” So, states are not forbidden from legislating, regulating, or enforcing in the field of controlled substances. But state law must yield to federal law where there is a “positive conflict” between the two. When does that happen? The dissenting opinion quoted constitutional scholar Erwin Chemerinsky:
The phrase “positive conflict . . . so that the two cannot consistently stand together” in [the Controlled Substances Act] has been interpreted as narrowly restricting the preemptive reach of the CSA to “cases of an actual conflict with federal law such that ‘compliance with both federal and state regulations is a physical impossibility.”’ Justice Scalia has written that the plain language of [the Controlled Substances Act] states a congressional intent that the CSA preempt only state laws that require someone to engage in an action specifically forbidden by the CSA. As a California appellate court succinctly put it, “mere speculation about a hypothetical conflict is not the stuff of which preemption is made.”
It is not physically impossible to comply with both the CSA and state marijuana laws; nothing in the more liberal state laws requires anyone to act contrary to the CSA. Only if a state law required a citizen to possess, manufacture, or distribute marijuana in violation of federal law would it be impossible for a citizen to comply with both state and federal law. Similarly, if a state were to make state officers the manufacturers or distributors of marijuana, it might well be impossible for those officials to comply with both state and federal law. No state marijuana law, however, has attempted to require state or local officials to violate the CSA in this manner.
In a nutshell, state marijuana laws do not “require,” they “permit,” in the sense that state authorities agree not to prosecute certain marijuana offenses under state law. The laws are passive in a manner that is reminiscent of state laws or practices that permit business (including through awarding of workers’ compensation benefits) to be conducted “around” illegal immigration. In both contexts the situation is created when a paralyzed federal government is simply unable to keep up with evolving facts on the ground within the states. I doubt Twin Rivers will be followed because there is every indication that the preemptive sweep of the Controlled Substances Act is not nearly as broad as the Court contends.
Michael C. Duff
Wednesday, June 13, 2018
Many in the workers' compensation community complain that seriously injured workers can develop a disability lifestyle, become dependent on drugs, and unreasonably extend their disabilities. Instead of falling into such a lifestyle, these critics argue, disabled workers should show "resilience." This rhetoric, which I have written about before on this blog, has its genesis in progressive medical/rehabilitation thinking, Muscular Christianity (I think), and, realistically, employer/insurer cost considerations.
The complaint is legitimate, and one with which I have some sympathy. I also believe that some legitimately injured workers do indeed unreasonably extend their disabilities -- if only waiting for a generous lump sum settlement. Many readers will know of the sharp critique of this type advanced by Dr. Nortin Hadler in his many books.
On the other hand, the "duty-of-resilience" critique can go too far, and is often articulated in overly simplistic terms. At my agency's conference in Hershey, Pennsylvania (June 7-8), an articulate industry speaker, addressing an audience about medical marijuana, posited forcefully that the "choice between opioids and medical marijuana [for chronic pain patients] is a false choice...." What workers need to do, instead, is show some resilience and "get off their asses!" After all, a friend of his, who is partially paraplegic, has shown resilience and will often go hiking with him. If she can do it, so can others!
I believe the speaker knew his audience and thus took some pleasure in feeding these lions of the community some red meat, and indeed they rewarded this coarse declaration with a leonine roar of applause.
Yet, his panel partner, Dr. Michael Wolk, thereupon gently reminded the industry speaker -- and the audience -- that not all people respond to pain and other impairments the same way; indeed, he posited that science has shown that one's genetic make-up can affect the ability to be resilient.
Dr. Wolk (my God, an astonishing speaker) might also have remarked, as have other physicians at our Pennsylvania conferences, that heroism is not appropriately considered the recovery standard in the first place. Commentators like the industry speaker, talking about resilience, often invoke exceptional individuals, like Christopher Reeve, but most of us realize that not everyone is Superman.
This point was vividly made two years ago in the memoir, A Body Undone: Living on After Great Pain (NYU Press 2016). The author, Christina Crosby, a professor at Wesleyan University, was rendered quadriplegic in a cycling accident, and has been left with chronic pain as well. She recounts in her memoir what life is like with such a catastrophic injury, shows that she indeed has great resilience -- but leaves the heroism narrative behind. She makes clear that her circumstances, like education; a life of reflection and discipline; and the unflagging love and support of her family, make her ability to bounce back possible. Most of us know that not every injury victim will have these advantages. (My complete review of Professor Crosby's book is posted at the research website www.davetorrey.info.)
Is all this not common sense? We have known for a century, after all, that young men respond differently to their traumatic wartime exposures. Some show a grim resilience; some are troubled for life, but are able to continue on; some are broken. In the modern day, most of us would not address such veterans with the admonition that they get off their asses. Injured workers deserve the same respect.
New Book by Professor Douglas E. Litowitz Treats Kafka's Legal Fiction ... and his Workers' Compensation Job!
Aha! The perfect person has written the perfect book for which many of us, lo these many years, have been waiting. Douglas E. Litowitz, who has a Ph.D. in philosophy, and who is also a law professor and practicing attorney, has capped a longtime interest in Franz Kafka by dissecting the gloomy writer/lawyer’s fiction and sharing his findings and analysis with us. In the end, he formulates, as you can tell from the title, a thesis with regard to Kafka’s overall view of the law. See Douglas E. Litowitz, Kafka's Indictment of Modern Law (University Press of Kansas 2017). The book is highly accessible (Litowitz first summarizes the essential stories where law is the focus, and then offers his interpretations), a pleasure to read, and animated throughout by the author’s intimate engagement with the subject, sense of humor, and healthy cynicism.
For the full review, see www.davetorrey.info.
Wednesday, June 6, 2018
“Quid pro quo” arguments resonate more forcefully in Kansas and Florida than in many other states, and there is a state constitutional doctrinal reason why this is so.
By quid pro quo, I mean the idea that legislatures abolished workers’ rights to civil negligence law suits in exchange for reasonable or adequate workers’ compensation benefits. The workers got “this for that” (the literal translation of quid pro quo). The employers, of course, gave up common law defenses (the unholy trinity) in exchange for tort immunity. That was their “this for that.” A theory exists that if the “quid pro quo” is undone there has been a breach of the deal, and that constitutional infirmity somehow ensues. (I hold the theory in somewhat modified form). The theory makes sense, but surprisingly enough, under both federal and state constitutional law, it is murky as to whether a constitutional violation results from such a breach. The strongest support for the theory would be if the negligence action the worker gave up was itself constitutionally grounded. I have written at some length on this issue (see the link below) and suffice it to say that, as a matter of federal constitutional law, I think the proposition is on shaky ground. It does not help that the U.S Supreme Court has been aggressively uninterested in considering the interplay of state workers’ compensation law and the 14th Amendment. (I suspect that is the ultimate reason the Court did not take up the carriers’ invitation, in American Insurance Carriers et al. v. New York et al., to review the challenge by multiple insurance carriers to the closure of the New York Special Fund for Reopened Cases: Extreme caution in identifying any federal constitutional interest in a state workers’ compensation case.
Thus, the quid pro quo argument—that a state legislature violates the constitution by arbitrarily taking back what it originally promised in exchange for a (fundamental? important?) negligence right—could probably only gain traction in a state supreme court. “Can the legislature really do that?” Such constitutional litigation raises issues very similar to those arising when a legislature attempts to limit or even eradicate tort damages (e.g., in medical malpractice or noneconomic damages). “Can a legislature really do that?” There are essentially three approaches courts have taken when seeking to answer questions of personal injury rights (including workers’ compensation) reduction: a historically tied approach, a “reasonable alternative” public policy approach, and a legislative power approach.
1). A historically tied approach holds that relevant state constitutional provisions, like right to remedies and open courts provisions, protect only common law causes of action that existed at the time of the adoption of the relevant constitutional clause. Those causes of action are preserved unless the legislature substitutes another adequate remedy or “quid pro quo” for the affected litigants. This is really the only kind of approach that is necessarily responsive to workers’ compensation claimants’ quid pro quo arguments.
2). A public policy approach permits the legislature to limit any cause of action and remedy if it creates a reasonable alternative, but, even without creating a substitute, it may alter former rights if it acts for a very important reason or is responding to an overwhelming public need. Under this approach, a state government has an “out” for not providing a reasonable alternative to a cause of action and remedy, but, from the plaintiff’s point of view, and unlike upcoming approach 3, the state must at least establish that it is for a very important reason or is responding to an overwhelming public need. Workers’ compensation claimants’ have a better opportunity to attack workers’ compensation provisions in a state that uses this approach, but not as good a chance as with approach 1.
3). A third theory allows legislatures the broadest power to alter common law rights and remedies by redefining the notion of legal injury. This theory is sometimes known as “legislative supremacy.” Workers’ compensation claimants have almost no chance of prevailing on a quid pro quo theory in a state using this approach. Just as a state had plenary authority to enact workers’ compensation in the first place, the argument goes, so it has plenary authority to modify workers’ compensation in essentially any way it likes.
You can probably tell from this scheme (you can reader a fuller exposition and some supporting citations here at pp. 168-172), that the success of quid pro quo litigation will depend heavily on a state’s constitutional law doctrine. You may also have discerned that the reason that quid pro quo litigation has been successful in Florida and Kansas is that their state courts employ a variation of approach 1 or 2, above. In Kluger v. White, a 1970s-era Florida personal injury case, the Florida Supreme Court said,
Where a right of access to the courts for redress for a particular injury has been provided by statutory law predating the adoption of the  Declaration of Rights of the Constitution of the State of Florida, or where such right has become a part of the common law of the State . . . the Legislature is without power to abolish such a right without providing a reasonable alternative to protect the rights of the people of the State to redress for injuries, unless the Legislature can show an overpowering public necessity for the abolishment of such right, and no alternative method of meeting such public necessity can be shown.
Thus, in a very significant way, negligence actions have been constitutionalized in Florida. A legislature cannot extinguish a negligence right (or eviscerate the workers’ compensation substitute for the right) unless it “can show an overpowering public necessity for the abolishment of such right, and no alternative method of meeting such public necessity can be shown.” Any wonder why plaintiffs can win in Florida?
Consider the situation in Kansas, which just recently played out again this week in Pardo v. United Parcel Service. Here is the shortest version of the story I can tell. Kansas uses the 6th Edition of the American Medical Association Guides to Permanent Impairment as a proxy for “disability” (some might say slavishly). Pardo received an award for a 2013 shoulder injury. He injured the same shoulder in 2015, but in a separate location in the shoulder. The injury was clear. But the 6th Edition of the AMA Guides dictated no additional disability compensation. The agency did not appear to be fully on board with the determination: it would leave Pardo with no remedy for his injury. But it was (as it is in many states) beyond the agency’s mandate to rule on the constitutionality of the application of the Guides. You know the question: Can the legislature do that? No, as it turns out, because the quid pro quo is built directly into the Kansas constitution under a long string of authority. See if you recognize the analysis (internal citations omitted):
If a remedy protected by due process is abrogated or restricted by the legislature, such change is constitutional if  the change is reasonably necessary in the public interest to promote the general welfare of the people of the state, and  the legislature provides an adequate substitute remedy to replace the remedy which has been restricted.
The case was remanded. We will see if it is appealed.
There are several states where quid pro quo constitutional arguments may work, either because approach 1, above, has been adopted or because no clear approach has yet been articulated. But it is easy to identify those states where the arguments will almost certainly not work. Just read the constitutional tort reform cases in your state. If you discern approach 3, you have your answer.
Michael C. Duff
Saturday, June 2, 2018
According to columnist Peter Rousmaniere, a movement exists in the insurance community which promotes the adjuster as not just passive dispenser of checks and payer of bills, but instead as a proactive “claims advocate.” Adjusters in the present day, he says, “want to be on the side of the injured worker as he or she tries to navigate the medical system, keep her home life in order, and return to work.” He applauds this movement (he refers to claims professionals, but the rhetoric seems also to be that of the nurse case manager community) and suggests that perhaps state legislatures can similarly act in an enlightened manner and change aspects of workers’ compensation laws that are “unexamined, outmoded, [and] sometimes indefensible.” Peter Rousmaniere, Walking in the Shoes of the Injured Worker, IAIABC Perspectives, p.18 (March 2018).
Of note is that in developing his thesis, he cites with sympathy some of the aspirational 19 recommendations of the National Commission, a set of advisories that many in the present day (usually without explanation) claim to be obsolete.
What, in any event, are these unsatisfactory items that Rousmaniere identifies? They are not complex, he notes, like trying to make permanent partial disability awards accurate and adequate. Instead, he claims, they are fairly simple.
First, persuaded by recent studies, Rousmaniere would do away with employer control of medical treatment. One study, in this regard, showed no real savings by employers when they get to pick the claimant’s physicians, and another actually shows that litigation may increase in employer-control jurisdictions. Instead of lists and employer control, perhaps the better way to address overutilization and other abuses is better injured worker and provider education. “And,” he adds, “utilization review, drug formularies, and other mandated programs may be better ways to improve the quality of care than employer choice laws….”
Second, Rousmaniere would follow the National Commission recommendation and either eliminate or drastically cut back waiting periods to just a few days. He acknowledges the traditional employer anxiety that waiting periods are necessary to curtail fraudulent claims, but seems unimpressed by that concern. (My own concern would be not outride fraud but exaggeration.) The other justification (new to this writer) was that they “were a recognition of built-in delays in reporting and response.” Regarding this concern Rousmaniere has only contempt: “A supervisor’s smartphone can, within minutes of the incident, take and transmit a video of the site of an injury to the claims organization. Immediate triage by phone or telepresence tells the claims payer much of what it needs to know about the injury.”
Third, Rousmaniere endorses the National Commission thesis that wage replacement be adequate so that the injured worker and his family can keep house and home. The National Commission in its studies discovered replacement rates as low as 30%, and recommended that states set the benefit as a percentage, to wit, “at least 80% of the worker’s disposable income, that is, income after taxes.” Rousmaniere, however, thinks that the figure should likely be higher; after all, the worker, when he goes off work, must still pay for essential benefits such as health, dental and short-term disability. “It appears,” he declares, that “many workers can’t afford to be injured…. No state to my knowledge has ever looked unto the shortfall problem with the exception of Texas…. [T]hese issues are researchable.”
Fourth, Rousmaniere would alter the how maximum compensation payable rates are established, rates which in most, if not all, states, are still figures well below the National Commission-recommended 200% of the jurisdiction’s Statewide Average Weekly Wage. Rousmaniere seems to endorse the approach of the Canadian policy wonk Terry Bogyo, who “says they should be based, not on average wage, but on a percentile of wages in a state. A 90th percentile cap would mean that weekly wage replacement could not exceed the gross wages of the 90th highest paid worker in the state. Bogyo notes that labor economists figured out how to calculate wage percentiles 40 years ago, but no state has converted to this method of designing a cap.”
Friday, June 1, 2018
In a new article, the articulate chair of the Virginia Workers’ Compensation Commission discusses the unprecedented number of constitutional challenges we have seen the last two years or so surrounding state workers’ compensation laws.
Commissioner Marshall first points out that the basic constitutionality of such laws was long ago confirmed by the U.S. Supreme Court. Further challenges through the decades, meanwhile, have generally been unsuccessful. It is specific provisos, he observes, that in the present day have been the principal target of attack. Most of these challenges, notably, are to markedly retractive laws. Here he reviews challenges to limited attorney’s fees in Florida and Utah, the ability of large corporations to opt out in Oklahoma, the automatic adoption of the 6th Edition of the AMA Guides in Pennsylvania, and the exclusion of agricultural workers in New Mexico (that was actually a longstanding law). See Wesley G. Marshall, Modern Constitutional Challenges to Workers’ Compensation Systems, IAIABC Perspectives, p.6 (March 2018).
The phenomenon of the recent constitutionality challenges has been treated in a number of publications. What is remarkable about Commissioner Marshall’s essay is his identification of five factors that have prompted or contributed to the trend.
> He first notes that in the last years of the Obama Administration, increased attention was being paid by the federal government to perceived benefit inadequacies in state workers’ compensation laws. “National attention,” he posits, “may have caused some lawyers and judges to examine laws with greater scrutiny.”
> Commissioner Marshall then notes, secondly, that the various media critiques (like the sharp assessment of state systems by ProPublica and NPR) “may have raised awareness about an unbalancing of the system.”
> Third, “fundamental challenges to the system,” reflected by such things as the radical retraction of Oklahoma opt-out, make aggressive responses more likely; here the author quotes Professor Duff: “When you have legal changes which challenge the fundamental aspects of the whole legal system, then anything is fair game.”
> Commissioner Marshall adds, as a fourth factor, “good lawyering” – groups like the Workers Injury Law Group (WILG), for example, “developed a collaborative approach to identify vulnerable system features and the best venues in which to pursue them.” The author might well have added that in a principal battleground, Oklahoma, the heroic injured worker lawyer Bob Burke threw down the gauntlet against opt out (and other overreaching), and has succeeded in having many of the most offensive provisos, and opt out itself, struck down. Great Caesar’s Ghost, there has not, in the history of workers’ compensation, been such an astonishing performance. “Good lawyering” indeed.
> Finally, as a fifth factor, Commissioner Marshall notes that injured worker attorneys have a vested pecuniary interest in vigorous challenges to benefit cuts. Cuts in benefits (a classic example of retractive legislation) “obviously have a direct impact on attorney compensation. So it seems undeniable that the pursuit of [attorney] compensation is one key consideration.”
Thursday, May 31, 2018
"A Rough System That Should Obtain Just Results": Professor Burton on Work Comp in Israel, Compensation for Diseases, and Restrictive Standards
In a 2017 article, Professor Burton suggests, perhaps rhetorically, that diseases (defined broadly to include non-acutely-traumatic injuries, like carpal tunnel syndrome, degenerative back problems, and gradual mental stress maladies), be widely compensated and not tied to the demand that work causation always be shown. Instead, a different program altogether would be established to fund, process, and compensate such claims. See John F. Burton, Jr., Is the Work-Related Test Desirable for all Diseases that Disable Workers?, 39 Comparative Labor Law and Policy Journal 247 (Fall 2017), https://cllpj.law.illinois.edu/ (subscription required; also on WestLaw).
The article, originally part of a collection of essays, reflects the author responding to an assertion of an Israeli colleague that firm rules on disease recovery be established under the workers’ compensation laws of that country. There, confusion apparently exists in this realm, leading to criticism over the integrity of the law. His colleague has called for reform in his country.
Professor Burton’s plan is largely rhetorical (as I have already suggested), and proposed as a mock solution – here, at least – to the longstanding challenge presented of trying to compensate non-obvious injuries which are nevertheless caused in whole or in material contributing part by work exposures. Removing them from the system altogether is a sort of nuclear option that simply eliminates the issue with one fell blow. An advantage, Burton points out, would be the elimination of the litigation (there is lots of it) that surrounds these non-obvious claims. A disadvantage would be that contests would endure over whether a disease in a particular case exists and the level, if any, of disability which it has produced.
Along the way to the conclusion of this largely academic venture, Professor Burton succinctly identifies the other solutions which have, in fact, been attempted in the United States. Here, he provides the reader with a welcome refresher on the trends seen in our country. He identifies, in this regard, four categories of “changes in compensability rules” that are evident among states since 1990.
- The first is the legislature limiting pathologic conditions altogether, such as the West Virginia law’s exclusion of mental stress causing mental disability cases.
- The second is the legislature restricting compensability when the injury involves aggravation of a pre-existing condition, such as the Florida law’s mandate that, before an injury is compensable, the work causation be the “major contributing factor” (to wit, over 50%), in the malady.
- The third is legislative change that demands that “objective medical evidence” be submitted to document the authenticity of allegedly disabling conditions, such as (I believe) the Ohio law that “subjective complaints, without objective diagnostic findings, objective clinical findings, or objective test results, are insufficient to substantiate a substantial aggravation.”
- Fourth, and perhaps most jarring to the Pennsylvania reader, are legislative acts, as in California and Colorado, that allow apportionment in permanent disability awards; under apportionment laws, the employer will be liable only for the degree of disability ascribable to the work injury.
Burton is dispirited by these restrictive rules (freedom from which we in Pennsylvania have, to date, enjoyed): “I am discouraged by the U.S. experience in recent decades because compensability rules for workers’ compensation benefits have been tightened not on the basis of scientific evidence but instead on the basis of cost-minimization.”
The reader also learns from Professor Burton of the basic structure of the workers’ compensation laws of Israel. The program there is a national enterprise that began in the 1950s. All employees and self-employed workers are covered by the law. Workers’ compensation is not, however, the exclusive remedy. Instead, the employer may also be sued in tort, with the employer receiving a credit against damages for any workers’ compensation benefits previously received. As for underwriting of the program, risks are insured by the “National Insurance Institute” (Nil), and are financed by payments from the employer that do not vary among employers. Nil also administers the program. All of this shows that Israel has followed the European model (like that of Germany) in establishing its system. It is also notable that in Israel, like most of the industrialized world, all residents are entitled (since 1995 in that country) to medical care through a general health program. The workers’ compensation laws also provide for vocational rehabilitation benefits, another typical feature of European systems.
As with any article by Professor Burton, one comes away with a lot of new knowledge. It is perhaps his Israeli colleague, to whom the author is responding, who has the most memorable line. In seeking to reform the system to provide a clear disease compensability standard, “Our foremost concern [is] to fashion a workable model to function well within the existing system. Much like the WC system overall, it is a rough system that should obtain just results….”
Wednesday, May 30, 2018
I am embarked, along with my research assistants, rising University of Wyoming College of Law 2Ls John Hornbaker IV and Jeremy Meerkreebs, on the construction of Wyoming’s first workers’ compensation treatise. It is my intention to provide some status updates along the way for those that might have passing interest in such a process.
To begin with, we have been canvassing state-specific workers’ compensation treatises around the country through WorldCat, both to evaluate treatise structures, and to assess the prevalence of such treatises generally.
I am surprised to learn – and I will appreciate being corrected by the community on this score if wrong – that 18 states do not possess (and appear never to have possessed) a state-specific treatise:
AZ, AR, DE, HI, KS, MI, MT, NE, NV, ND, OK, OR, SD, UT, VT, WA, WV, WY
The Western over-representation strikes me as interesting. In our own Rocky Mountain region, we think we have found that only Colorado possesses a treatise that is regularly updated. Idaho appears to have had a treatise, but from a distance it seems to be inactive.
Again, all corrections/refinements will be appreciated.
Michael C. Duff
Saturday, May 26, 2018
This, the third installment of my air ambulance series—see the other entries here, and here, is a preemption discussion. I’m sorry to inflict it upon you. Feel free to email me privately at the University of Wyoming for clarification. I’ll almost always respond. Really.
Air ambulance carriers charge a lot. So much so that state workers’ compensation regulators try to make them charge less for transporting injured workers within their respective state boundaries. Thus far, that attempt has been blocked by the preemption provision of the Airline Deregulation Act of 1978, 49 U.S.C.App. §1305(a)(1), which expressly pre-empts the States from “enact[ing] or enforc[ing] any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier . . . ” For purposes of this discussion assume that air ambulances are air carriers within the meaning of the Act.
It is common to hear commentators assert that every federal court that has considered the air ambulance preemption question has concluded that the Airline Deregulation Act preempts state attempts to regulate the price of air ambulance services. But it is probably more accurate to say that only two federal circuits, the 10th circuit in EagleMed, LLC v Cox, 868 F.3d 893 (10th Cir. 2017); and the 11th Circuit in Bailey v. Rocky Mountain Holdings, LLC, --- F.3d ---- (11th Cir. 2018), have dealt specifically and substantively with the air ambulance preemption provision enacted in 1994 (quoted and linked above). The other “modern era” (post-1994) reported air ambulance circuit court cases, Air Evac EMS, Incorporated v. Texas, Department of Insurance, Division of Workers' Compensation, 851 F.3d 507 (10th Cir. 2017) and California Shock Trauma Air Rescue v. State Compensation Ins. Fund, 636 F.3d 538 (9th Cir. 2011) concerned jurisdictional or standing issues.
The Airline Deregulation Act preemption language is broad and was meant to be. Essentially, all state laws “relating to” air carriers’ rates, routes, or services are effectively nullified. The language is sufficiently broad, in fact, that plaintiffs have thought it necessary to argue that as to certain state law claims it is “trumped” by another federal law, the McCarran–Ferguson Act, which provides in relevant part: “No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance.” There is more to say about this argument (and about the McCarran-Ferguson Act) than is presently necessary for my purposes. It is enough to say that EagleMed and Bailey rejected the argument because they concluded that setting of air ambulance fee schedules is not “regulation of the business of insurance,” an explicitly protected state sphere. This development was perhaps presaged in the 2003 Supreme Court ERISA case, Kentucky Assoc. of Health Plans, Inc. v. Miller, 538 U.S. 329 (2003). That analysis is too long to include here but, in brief, the Court in that case ceased using the McCarran-Ferguson Act as an interpretive aid for understanding the scope of ERISA’s insurance savings (of state law from preemption) provision.
The lead U.S. Supreme Court case on Airline deregulation Act preemption is Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992), a case in which airlines sued to enjoin state attorneys general from enforcing state deceptive practices laws against airlines’ advertising. The most important thing to know about Morales is that it utilized Employee Retirement Income Security Act of 1974 (ERISA) preemption principles to assess whether the Airline Deregulation Act preempted state law. Why? ERISA preempts all state laws “relating to” employee benefit plans. The Airline Deregulation Act preempts all state laws “relating to” carrier rates, routes or services. Very similar preemption language; very similar preemption analysis. The Court continued the ERISA analogy in American Airlines v. Wolens, 513 U.S. 219 (1995).
Under ERISA, the Supreme Court once read that statute’s “relating to” language in perhaps the broadest manner possible. A state law was said to relate to employee benefit plans when it had a “connection with” or made any “reference” to them. See Shaw v. Delta Airlines (1983). (the “reference to” line of cases is probably still good law; the “connection with” line of cases is fraught with complexity). After slightly more than a decade, the Supreme Court itself (in New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995) ) began making quasi-metaphysical observations that the Shaw language could not possibly be as broad as it seemed:
Section 514(a) marks for preemption “all state laws insofar as they ... relate to any employee benefit plan” covered by ERISA, and one might be excused for wondering, at first blush, whether the words of limitation (“insofar as they ... relate”) do much limiting. If “relate to” were taken to extend to the furthest stretch of its indeterminacy, then for all practical purposes pre-emption would never run its course, for “[r]eally, universally, relations stop nowhere,”. . . But that, of course, would be to read Congress’s words of limitation as mere sham, and to read the presumption against pre-emption out of the law whenever Congress speaks to the matter with generality.
The Court also remarked in Travelers that,
Indeed, in cases like this one, where federal law is said to bar state action in fields of traditional state regulation . . . , we have worked on the “assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.”
Thus, the Supreme Court began to conclude that ERISA could not be deemed to preempt state law unflinchingly because of the facial breadth of the ERISA preemption provision. (And to repeat, the ADA preemption provision also uses the “relate to phraseology). There must be demonstrated a clear and manifest purpose of Congress to preempt where historic state police powers are involved, and the presumption is against preemption of state law. I have seen no language from the Supreme Court suggesting that it will cease using ERISA principles when analyzing Airline Deregulation Act preemption claims. If that is correct, and because Morales preceded Travelers, I do not think EagleMed’s and Bailey’s seemingly perfunctory treatment of the “relate to” phraseology is warranted. If one assumes that regulation of workplace injury is a historic police power of the States—and I do—where is the evidence of Congress’s clear and manifest purpose to preempt traditional state workers’ compensation regulation of air ambulance services? In any event, I suspect this may be the last ground upon which Airline Deregulation Act preemption litigation may be realistically pursued in the circuit courts. The next move would belong to Congress.
The stage for this litigation was perhaps set by the Supreme Court’s opinion in Northwest, Inc. v. Ginsberg, 134 S.Ct. 1422 (2014). In Northwest, a breach of contract case involving an airline’s termination of a customer’s frequent flyer membership for alleged improper conduct, Justice Alito managed to make it through the majority opinion without once citing a single ERISA preemption case (let alone, Travelers), except indirectly through Morales, stating that the relevant state (contract-based) law was preempted if it had “a connection with, or reference to” airline prices, routes, or services. That is obviously ERISA language borrowed from Shaw, but it may not be an accident that Shaw was never cited. (Are there institutional concerns about muddying ERISA preemption law?)
The strongest argument against applying (or even thinking about) Travelers was identified by Justice Thomas's dissent in Wolens. “Congress has recently revisited § 1305 [in 1994], and said that it ‘d[id] not intend to alter the broad pre-emption interpretation adopted by the United States Supreme Court in Morales,’ H.R.Conf.Rep. No. 103-677, p. 83 (1994).” But this does not answer the question of how broad preemption should be under current law because Morales relied on Shaw, which was significantly modified by Travelers with apparent subsequent acquiescence by Congress. Morales, moreover, as had Shaw before it, embraced the proposition that “[s]ome state actions may affect [airline fares] in too tenuous, remote, or peripheral a manner” to have pre-emptive effect.
In the end, the federal courts must decide 1) if they will continue to apply ERISA preemption analysis; and 2) if so, whether that [Shaw] analysis must be updated considering Travelers. Even assuming Shaw [bizarrely] applies, where is the “tenuousness” line, and can there be any convincing argument that Congress meant to preempt state regulation of air ambulance services? So far as I can discern, EagleMed and Bailey failed to analyze these questions adequately.
Michael C. Duff
Friday, May 25, 2018
As I have pointed out at some length, Download Worse than Pirates final, there is a close relationship between state constitutional challenges to medical malpractice limitations on tort recoveries and challenges to workers’ compensation inadequacy similarly grounded in state constitutions. Over at TortsProf.com—which I highly recommend to those interested in thinking about evolving workers’ compensation law—two interesting medical malpractice cases have been featured recently.
First in Pennsylvania:
A mother and son who together experienced a failed liver transplant argued to the Pennsylvania Supreme Court on Monday that the seven-year med mal statute of repose should be struck down as violating the state constitution's "open courts" provision. The statute of repose was one of many provisions included in the MCARE statute, passed in 2003 to deal with an alleged med mal crisis in Pennsylvania.
And another In Wisconsin:
In 2011, a Wisconsin woman had all four limbs amputated. A jury determined health care providers were responsible by negligently failing to diagnose an infection and awarded her $25.3M. The non-economic damages portion of the award was approximately $16.5M. WI has a med mal cap on non-economic damages of $750,000. The trial judge ruled the cap was unconstitutional as applied to the plaintiff's case. The intermediate appellate court went further and ruled the cap was unconstitutional. Tomorrow the Wisconsin Supreme Court hears arguments in the case.
Again, for links to the full stories visit TortsProfblog.
Michael C. Duff
Monday, May 21, 2018
The Supreme Court’s ruling today in Murphy Oil/Epic Systems/Ernst & Young may be read narrowly as an opinion holding that the National Labor Relations Act does not trump the Federal Arbitration Act (FAA): Congress’s desire to facilitate arbitration, it appears, outweighs employees’ rights to engage in concerted activities for mutual aid or protection. One of the hats I wear is “labor law professor,” and my co-authors and I will be updating our labor law casebook to reflect the change.
But Murphy Oil means much more than which of two federal statutes prevails when there is a conflict between them. The right question to be asking is whether any employment statute, federal or state, may overcome the FAA. In the workplace context, what the FAA represents is a privileging of a fictitious agreement between employer and employee to waive a judicial forum for resolution of all workplace disputes. By fictitious, I do not mean that the employee failed to sign the arbitral agreement. The document is real. The employee’s signature on the document is real. What is fictitious is the notion that the employee realizes what she is signing or has any real choice in an era of expanding arbitration to refuse to sign it. Why bother? The next employer will insist on the same thing. But this is no more an agreement than the other contracts of adhesion I argued about many years ago in my first-year of law school contracts class. The employee unwittingly waives the right to judicial review of an adjudicator/arbitrator’s award. An arbitrator need not cite a case or analyze law. Indeed, a patently erroneous decision cannot be reversed simply because it is wrong. The employee has simply waived the substantive law.
And this is just the beginning. As I have written previously, arbitration has been expanding. I have harbored a suspicion that the only reason it was not expanding faster was that employers were concerned Murphy Oil/Epic Systems would come out the other way. I do not for a minute dispute a contention made by Justice Ginsburg, blithely dismissed by opinion-author Neil Gorsuch, that the decision will lead to the “underenforcement of federal and state statutes designed to advance the well-being of vulnerable workers.” And, as I have said previously, there is absolutely nothing to prevent the spread of forced arbitration to workers’ compensation cases. (I would love to hear arguments to the contrary—I’ve heard nothing convincing). Arbitration has already made its way into state tort law. It will continue to encroach on the rule of law until the U.S. Congress stops it.
A great irony for workers’ compensation lawyers is that the dilemma over “contracting out” was at the center of uncontroversial enactment of the UK’s workers’ compensation statute in 1897. During debate, in 1893, on amendment of the 1880 English Employer’s Liability Act, the contending factions could not come to agreement on the question of whether employers and employees should be permitted opt-out of statutory coverage in exchange for voluntary employer contribution to worker friendly societies. The strengthening organized labor movement and Asquith’s liberals were adamantly opposed to contracting out. Chamberlain’s Unionists and the Conservatives disagreed. When the factions could not agree, workers’ compensation was the resulting grand bargain, for years later. It is a long story and my reason for mentioning it here is to point out that roughly 120 years later we have returned to the same old question and find ourselves in an era of warmed-over Lochner and yellow dog contracts.
Michael C. Duff