ALCEE PIERCE v. LAFOURCHE PARISH COUNCIL

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MAY 16, 2000 SUPREME COURT OF LOUISIANA NO. 99-CA-2854 ALCEE PIERCE VERSUS LAFOURCHE PARISH COUNCIL ON APPEAL FROM THE COURT OF APPEAL, FIRST CIRCUIT, PARISH OF LAFOURCHE * MARCUS, JUSTICE On injured or while in about September 24, 1994, the full-time Alcee employment of Pierce the was Lafourche Parish Council (council). He was seventy-two years old at the time of the accident. As a result of his injuries, he was unable to return to his former employment or to employment at wages equaling ninety percent or more of his pre-injury wages, so the council paid him supplemental earnings benefits under La. R.S. 23:1221(3)(d)(iii) of the Louisiana Workers Compensation Law. On November 20, 1995, Pierce filed a petition for declaratory relief in the district court against the council. He alleged that at the time of his accident, he was receiving federal social security old age retirement benefits. Pursuant to La. R.S. 23:1221 (3)(d)(iii), supplemental earnings benefits would be limited to 104 weeks rather than 520 weeks if the employee was receiving old Federal Social Security Act. La. R.S. 23:1221(3)(d)(iii) age insurance benefits under The Pierce sought a judgment declaring unconstitutional under La. Const. art. I, § 3 as a denial of equal protection of the laws on the * Lemmon, J., not on panel. Rule IV, Part 2, § 3. basis of age. The petition was also served upon the attorney general. council The general filed jurisdiction.1 an answered exception the of lawsuit. lack of The attorney subject matter After the exception was denied, cross-motions for summary judgment were filed by Pierce and the council. In an affidavit in support of his motion for summary judgment, Pierce stated that due to his injuries, he was unable to return to his former employment percent or or more to of employment his at former wages equaling earnings. He ninety received supplemental earnings benefits following his injury, but they were terminated after 104 weeks. He further stated that for all months following the time he attained age 70 and until he became unable to work due to injury, he worked full time while collecting Federal Social Security Old Age Retirement benefits. The summary trial judgment judge upholding granted the the council s constitutionality motion of 23:1221 (3)(d)(iii) and dismissed plaintiff s suit. appealed. La. for R.S. Plaintiff The court of appeal reversed and found that La. R.S. 23:1221(3)(d)(iii) discriminated arbitrarily, against unconstitutionally denied capriciously persons them age equal 62 and and protection unreasonably older of under article I, § 3 of the Louisiana Constitution.2 the and laws The writ application filed on behalf of the council and the state was 1 The attorney general alleged in the exception of lack of subject matter jurisdiction that the Office of Workers Compensation hearing officers were vested with original, exclusive jurisdiction of this matter rather than the district court. The trial judge granted the exception and dismissed the suit. Pierce appealed and the court of appeal reversed and remanded to the district court based on this court s decision in Albe v. La. Workers Comp. Corp., 97-0581, 97-0014 (La. 10/21/97), 700 So. 2d 824. See Pierce v. Lafourche Parish Council, 96-1603 (La. App. 1st Cir. 12/29/97), 706 So. 2d 178. 2 Pierce v. Lafourche Parish Council, 98-1758 (La. App. 1st Cir. 6/25/99), 739 So. 2d 297. 2 granted and docketed as an appeal before this court.3 La. Compensation earnings R.S. Act 23:1221(3)(a) provides benefits for for injury of the the Louisiana payment resulting of in Workers supplemental the employee s inability to earn wages equal to ninety per cent or more of wages at the time of injury. employee is entitled is The amount of benefits to which an equal to sixty-six and two-thirds percent of the difference between the average monthly wages at time of monthly injury wages thereafter in 23:1221(3)(d) and average the employee any employment provides in monthly is or able wages to earned earn or in self-employment. pertinent part that the average any La. month R.S. right to supplemental earnings benefits pursuant to this Paragraph shall in no event exceed a maximum of five hundred twenty weeks, but shall terminate: (iii) When the employee retires or begins to receive old age insurance benefits under Title II of the Social Security Act, whichever comes first; however, the period during which supplemental earnings benefits may be payable shall not be less than one hundred four weeks. La. Const. art. I, § 3 provides in pertinent part: No person shall be denied the equal protection of the laws. No law shall discriminate against a person because of race or religious ideas, beliefs or affiliations. No law shall arbitrarily, capriciously, or unreasonably discriminate against a person because of birth, age, sex, culture, physical condition, or political ideas or affiliations. (Emphasis added). In Manuel v. State, 95-2189 (La. 7/2/96), 692 So. 2d 320, 339 (on rehearing), we explained that La. Const. art I, § 3 sets up a spectrum for analyzing equal protection challenges 3 Pierce v. Lafourche Parish Council, 99-C-2854 (La. 12/10/99), ___ So. 2d ___. La. Const. art. 5, § 5(D) provides that a case shall be appealable to the supreme court if a law or ordinance has been declared unconstitutional. 3 based on discriminatory classifications. At one extreme are laws that classify persons based on race or religious beliefs, and under the second sentence repudiated completely. laws that classify of Section 3, such laws are At the other end of the spectrum are persons on any basis other than those expressly enumerated in Section 3 which must pass the minimum standard of being rationally governmental purpose. related to a legitimate In the middle of the spectrum are laws that classify persons on the basis of the six grounds enumerated in the third sentence of Section 3 including age. When the court reviews such a law, the burden is on the proponent of the classification and the standard of review is heightened, requiring the proponent to establish that the classification is not arbitrary, substantially capricious, furthers an or unreasonable appropriate because governmental it objective. In Manuel, a statute setting the minimum drinking age at a level higher than age of majority survived an equal protection challenge based upon age because it furthered an appropriate governmental purpose of improving highway safety. More recently, in State v. Ferris, 98-2442 (La. 5/18/99), 747 So. 2d 487, we reaffirmed that the standard for determining the constitutionality of a statute which classifies persons on the basis of age is whether the classification furthers an appropriate governmental purpose. substantially The task before us is to determine whether La. R.S. 23:1221(3)(d)(iii) results in the disparate treatment of plaintiff by denying him the same supplemental earnings benefits as others based upon his age. La. R.S. 23:1221(3)(d)(iii) provides for two events which trigger the termination of supplemental earnings benefits. The first is when the employee retires. In the instant case, Pierce did not retire from the workforce so the issue of whether 4 this portion of the statute terminating benefits employee retires was not before the court of appeal. when an The court of appeal erred in reaching this issue and declaring this part of La. R.S. 23:1221(3)(d)(iii) unconstitutional. Therefore, the unconstitutionality of this part of La. R.S. 23:1221 (3)(d)(iii) is not before us. The second event that triggers a termination of supplemental earnings benefits after 104 weeks instead of 520 weeks is when the employee begins to receive old age insurance benefits under Title II of the Social Security Act. It is this event which plaintiff argues results in age based discrimination for the following reason. Only persons 62 years of age or older can receive old age insurance benefits.4 Therefore, only persons 62 or over who are injured while employed are subject to the termination of supplemental earnings benefits after 104 weeks. Hence, even though nevertheless, this the part statute of the does not statute s mention age, application treats persons in the workforce over age 62 differently from persons under age council 62 and and the results state in argue age that based the discrimination. The triggering for event treating individuals differently is not age but the receipt of social security old age benefits. They further argue that the statute is based upon economic and social considerations, and as such, only a minimal level of constitutional scrutiny is required to uphold this portion of the statute. We find that this part of La. R.S. 23:1221(3)(d)(iii), which terminates supplemental earnings benefits when the claimant receives social security old age benefits, results in the disparate treatment of employees injured in the workplace who are 62 years of age or older from those under age 62. 4 See 42 U.S.C. § 401 et seq. 5 A law that discriminates based upon age is unconstitutional unless the proponents of the statute (the council and the state) can carry their burden of proving that the classification substantially furthers a legitimate governmental purpose. The council and the state contend that this part of La. R.S. 23:1221(3)(d)(iii) governmental purposes. seeks The to first further is to two legitimate preserve the fiscal integrity of the workers compensation system by reducing the cost of compensation paid by employers into the overall system. They argue that the statute can reduce the exposure for employers who employ older workers and encourage the hiring of older workers employer by faces limiting if an the older amount employee of is liability injured that on the an job. While the state may have a valid interest in preserving the fiscal integrity of the system of workers compensation benefits, we find that the council and the state have not shown that the fiscal integrity of the workers compensation system is in need of legislation to preserve its is difficult employer in to believe the that overall the integrity. Moreover, it savings provided system by benefits to the reducing the supplemental earnings benefits from 520 to 104 weeks for workers in this age category would have any significant preserving the fiscal integrity of the system. effect on Therefore, the council and the state failed to prove that the classification furthers a application legitimate of the governmental statute results purpose. in placing When the burden the of reducing compensation benefits solely upon employees over age 62 who receive substantially then social furthering discrimination classification security based a age legitimate based on old upon this governmental age rationale 6 benefits, occurs. does not without interest, Hence, withstand constitutional scrutiny. The second rationale advanced by proponents is that this part avoids of the statute duplication Coordination of of wage coordinates benefits loss wage paid benefits to in loss any the benefits one overall and employee. system of workers compensation seeks to assure that the employee receive some degree of recovery of his lost wages while precluding the employee from recovering duplicative benefits under different parts of the system that could exceed the actual wages earned prior to the disability. Al Johnson Const. Co. v. Pitre, 98-2564 (La. 5/18/99), 734 So. 2d 623, 625. The theory is that an employee experiencing only one wage loss should be entitled to receive only one wage loss benefit from the employer. Garrett v. Seventh Ward Gen. Hosp., 95-0017 (La. 9/25/95), 660 So. 2d 841, 843 (overruled on other grounds), citing Worker s Compensation § 97.10 (1995). 4 Arthur Larson, The council and the state reason that Social Security old age benefits are part of the overall system of wage loss replacement benefits because such benefits are intended to partially replace the wages that were formerly earned before a person retired. Thus, La. R.S. 23:1221(3)(d)(iii) seeks to coordinate the receipt of old age benefits and workers compensation supplemental earnings benefits by limiting entitlement to both benefits to a period of only 104 benefits weeks after and that terminating period of the supplemental time. Hence, the earnings statute substantially furthers the appropriate governmental interest of avoiding the duplication of benefits. Plaintiff contends that workers compensation benefits and social security old age benefits do not represent duplicative benefits and should not be coordinated because they are based on two different theories 7 of recovery. Workers compensation benefits are provided to compensate employees for loss of income resulting from work-related injuries and are paid by employers in exchange for the employee s forbearance from suing the employer in tort. In contrast, social security old age benefits are provided to persons regardless of injury as long as the recipient has reached the statutory age, has been employed and has contributed to the Social Security Trust Fund. Thus, withholding who are workers receiving rationally social related to compensation security the goal benefits old of age from persons benefits preventing is not duplicative benefits because the two types of benefits do not serve the same purpose. For purposes of this decision, we need not decide whether workers compensation benefits and social security old age benefits should be coordinated because we find that La. R.S. 23:1221 (3)(d)(iii) is not a wage loss coordination statute. true wage loss coordination statute is designed to A prevent double recovery of benefits from different parts of the overall system while ensuring that an employee receives at least that amount that the employer is obligated to pay under the workers compensation law. in analyzing In Garrett, La. R.S. 23:1225, which is intended to be a true wage loss benefit coordination law, we stated that Section 1225(C)(1) the was wage-loss designed to coordination provision of add benefits not all the funded by the employee; and, if the combined benefits exceeded 66 2/3 percent of the employee s average weekly wage, the employer would be given an offset of the excess against the obligation to pay workers compensation benefits. Garrett, 660 So. 2d at 845 Compensation Louisiana § (quoting Dennis 12:5(1995)). employers with an P. Juge, Thus, offset 8 the Louisiana Workers statute provides against their workers compensation obligation employer-based sources of and benefits provided establishes a benefits to which an employee is entitled. by state different ceiling of Garrett, 660 So. 2d at 845.5 In contrast, La. R.S. 23:1221(3)(d)(iii) does not coordinate supplemental earnings benefits and social security old age benefits. supplemental Instead, earnings benefits the to statute terminate provides after 104 for weeks without regard to the amount of social security old age benefits the injured employee is receiving or will receive. assurance under this statute that after There is no termination of supplemental earnings benefits, an employee will receive twothirds of his former earnings. Thus, an employee s social security old age benefits could provide him with considerably less benefits than compensation law. he was receiving under the workers Moreover, a true coordination statute like La. R.S. 23:1225(C)(1) excludes from offset those contributions funded by the employee, whereas La. R.S. 23:1221 (3)(d)(iii) does not take into account the fact that a percentage of social security old age benefits is employee funded. If we were to reduce an employee s social security old age benefits by the percentage funded by the employee, it would be even more likely that an employee receiving social security old age benefits, 5 The issue presented in Garrett and later in Al Johnson was whether social security disability benefits should be coordinated and offset with workers compensation benefits under La. R.S. 23:1225(C)(1)(c). Those cases did not address whether workers compensation benefits should be coordinated and offset by social security old-age benefits. The issue of whether it is constitutional under an equal protection analysis to reduce workers compensation benefits under La. R.S. 23:1225(C)(1)(b) if the employee is also receiving social security old age benefits is not before us in this case. Courts of other jurisdictions that have confronted the issue of whether workers compensation benefits and social security old age benefits should be coordinated are divided in their resolution. 9 whose supplemental earnings benefits are terminated after 104 weeks, would receive considerably less than an employee under age 62 who is not a recipient of social security old age benefits. The council and the state had the burden of proving that this part of La. R.S. 23:1221 (3)(d)(iii) substantially furthered an appropriate governmental objective of coordinating wage loss benefits. replacement and preventing They have failed to do so. the duplication of The statute s application results in disparate treatment of employees over age 62 from employees under age 62 and thus unconstitutionally discriminates against those persons on the basis of age. In sum, we conclude that the part of La. R.S. 23:1221 (3)(d)(iii) which provides that supplemental earnings benefits shall terminate when an employee begins to receive old age insurance benefits under Title II of the Social Security Act after having received not less than one hundred four weeks of supplemental earnings benefits unconstitutionally denies plaintiff equal protection of the laws under article I, § 3 of the Louisiana Constitution. The unconstitutionality of one portion of a statute does not necessarily render the entire statute unenforceable. If the remaining portion of the statute is severable from the offending portion, this court may strike portion and leave the remainder intact. So. 2d whether 575, the 580 (La. 1981). unconstitutional The interrelated and connected with the they cannot manifested by be the separated without legislature in the offending State v. Williams, 400 test portions only of for severability is the statute so are rest of the statute that destroying passing the the act. intention Polk v. Edwards, 626 So. 2d 1128, 1148 (La. 1993); State v. Azar, 539 10 So. 2d 1222, 1226 (La.1989). In the instant case, it is clear that or removal of the phrase begins to receive old age insurance benefits under Title II of the Social Security Act will not affect the legislative intent behind La. R.S. 23:1221 (3)(d)(iii) which is to allow an employee to receive 520 weeks of supplemental earnings benefits, but to terminate the benefits after 104 weeks if the employee retires and removes himself or herself from the workforce. can be intact. severed while leaving the The offending portion remainder of the statute We find the court of appeal erred in so far as it declared La. R.S. 23:1221 (3)(d)(iii) unconstitutional in its entirety and it failed to sever the unconstitutional portion of the statute. DECREE For the reasons assigned, the judgment of the court of appeal declaring that portion of La. R.S. 23:1221 (3)(d)(iii) which states begins to receive old age insurance benefits under Title II of the Social Security Act, whichever comes first unconstitutional is affirmed. appeal declaring the remainder of La. R.S. 23:1221 (3)(d)(iii) unconstitutional district The judgment of the court of court is for reversed. further The case proceedings. against defendants. 11 is remanded Costs are to the assessed

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