Rodriguez v. Brand West Dairy
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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 2 Opinion Number: 3 Filing Date: JUNE 22, 2015 4 Nos. 33,104 & 33,675 (Consolidated) 5 NOE RODRIGUEZ, 6 Worker-Appellant, 7 v. 8 BRAND WEST DAIRY, uninsured 9 employer and UNINSURED EMPLOYER’S 10 FUND, statutory payor, 11 Employer/Insurer-Appellees, 12 Consolidated With 13 MARIA ANGELICA AGUIRRE, 14 Worker-Appellant, 15 v. 16 M.A. & SONS CHILI PRODUCTS and 17 FOOD INDUSTRY SELF INSURANCE 18 FUND OF NEW MEXICO, 19 Employer/Insurer-Appellees. 20 APPEAL FROM THE WORKERS’ COMPENSATION ADMINISTRATION 21 Victor S. Lopez and David L. Skinner, Workers’ Compensation Judges 1 2 3 4 New Mexico Center on Law & Poverty Gail Evans Maria Martinez Sanchez Albuquerque, NM 5 for Appellants 6 7 8 9 Hector H. Balderas, Attorney General Santa Fe, NM Richard J. Crollett, Special Assistant Attorney General Albuquerque, NM 10 for Appellee Uninsured Employers Fund 11 Maestas & Suggett, P.C. 12 Paul Maestas 13 Albuquerque, NM 14 15 16 17 for Appellees and Amicus Curiae New Mexico Cattle Growers’ Association, New Mexico Farm and Livestock Bureau, Dairy Producers of New Mexico and Dairy Farmers of New Mexico 1 OPINION 2 ZAMORA, Judge. 3 {1} In these consolidated appeals, Workers challenge the dismissals of their 4 workers’ compensation claims, which were based on the portion of the Workers’ 5 Compensation Act, NMSA 1978, §§ 52-1-1 to -70 (1929, as amended through 2013), 6 excluding farm and ranch laborers from its coverage. See § 52-1-6(A) (“The 7 provisions of the Workers’ Compensation Act shall not apply to employers of . . . 8 farm and ranch laborers.” (the exclusion)). The question presented is whether the 9 exclusion violates Workers’ rights to equal protection under Article II, Section 18 of 10 the New Mexico Constitution. Holding that the exclusion does violate Workers’ 11 rights to equal protection, we reverse and remand for further proceedings. 12 BACKGROUND 13 {2} Workers each suffered work-related injuries working as farm and ranch 14 laborers. Worker Aguirre was injured picking chile for M.A. & Sons Chili Products. 15 Worker Rodriguez was injured working for Brand West Dairy as a dairy worker and 16 a herdsman. Workers each sought workers’ compensation benefits. Both claims were 17 dismissed pursuant to the exclusion. Workers filed separate appeals challenging the 18 constitutionality of the exclusion. The cases were consolidated on appeal. 1 DISCUSSION 2 {3} Workers challenge the constitutionality of the exclusion, claiming that it 3 violates equal protection guarantees. Workers also contend that dismissal of their 4 respective claims for compensation was precluded by a previous district court 5 decision that declared the exclusion to be unconstitutional, Griego v. New Mexico 6 Workers’ Compensation Administration, Second Jud. Dist. No. CV 2009-10130, and 7 a subsequent memorandum opinion of this Court that did not reverse that decision. 8 Griego v. New Mexico Workers’ Compensation Administration, No. 32,120, memo 9 op. (N.M. Ct. App. Nov. 25, 2013) (non-precedential). M.A. & Sons Chili Products 10 and Food Industry Self Insurance Fund of New Mexico (collectively, M.A. & Sons) 11 argue that the exclusion does not violate equal protection guarantees, while Brand 12 West Dairy and the State of New Mexico Uninsured Employer’s Fund (collectively, 13 Brand West) take no position on the constitutionality of the exclusion. All 14 Employers/Insurers agree that the Griego decisions do not control in this case. 15 I. The Griego Decisions 16 Griego involved a constitutional challenge to the exclusion. Griego, No. {4} 17 32,120, memo op. ¶ 2. An injured worker was denied workers’ compensation benefits 18 pursuant to the exclusion. The worker attempted to challenge the constitutionality of 19 the exclusion before a Workers’ Compensation Judge (WCJ); however, WCJs do not 2 1 have authority to rule on the constitutionality of statutes. Chevron Res. ex rel. Blatnik 2 v. N.M. Superintendent of Ins., 1992-NMCA-081, ¶ 19, 114 N.M. 371, 838 P.2d 988. 3 Nonetheless, the worker requested that he be allowed to make the argument in order 4 to make a record for the purposes of an appeal on the constitutional issue. 5 {5} Subsequently, the worker, joined by two individual plaintiffs and two 6 organizational plaintiffs, brought a declaratory action against the Workers’ 7 Compensation Administration (the WCA) and its director, seeking a declaration that 8 the exclusion violated the workers’ right to equal protection. Griego, No. 32,120, 9 memo op. ¶ 2. The plaintiffs also requested that the WCA be required to re-open the 10 individual plaintiffs’ claims and to stop relying on the exclusion to deny claims. Id. 11 The district court concluded that the exclusion was unconstitutional and ordered the 12 WCA to re-open the individual plaintiffs’ claims. Id. ¶ 3. 13 {6} The WCA appealed to this Court, arguing that the district court lacked both 14 jurisdiction over the individual plaintiffs’ claims and the authority to order the WCA 15 to re-open the claims. Id. ¶ 6. The WCA did not explicitly challenge the district 16 court’s determination regarding the constitutionality of the exclusion. Id. ¶ 7. We 17 concluded that the issues on appeal were moot because the individual plaintiffs had 18 settled their claims with the WCA. Id. ¶¶ 8-9. Since the WCA failed to appeal the 19 district court’s ruling as to the constitutional issue, that issue was not properly before 3 1 us and, as a result, we held that the district court’s declaration was final and binding 2 on the WCA. Id. ¶¶ 9-10. The appeal was dismissed. Id. ¶ 12. 3 {7} Here, Workers argue that the district court’s declaration in Griego that the 4 exclusion is unconstitutional, coupled with the holding of our subsequent 5 memorandum opinion, is binding on WCJs, as part of the WCA, and precludes 6 disposition of any workers’ compensation claims pursuant to the exclusion. We need 7 not determine whether the district court’s determination in Griego was binding in the 8 present cases. Any attempt at such an analysis is not necessary to our decision and 9 would only result in an advisory opinion, which we decline to give. See City of Las 10 Cruces v. El Paso Elec. Co., 1998-NMSC-006, ¶ 18, 124 N.M. 640, 954 P,2d 72 11 (stating that appellate courts avoid rendering advisory opinions). The WCJs in the 12 present cases refused to recognize the district court’s determination in Griego in light 13 of a 1980 decision by this Court that appeared to hold that the exclusion was 14 constitutional. Cueto v. Stahmann Farms, Inc., 1980-NMCA-036, ¶ 8, 94 N.M. 223, 15 608 P.2d 535 (stating, without explanation, that the exclusion did not deny the worker 16 equal protection). We therefore take this opportunity to clarify that Cueto has no 17 precedential effect and to determine conclusively that the exclusion is 18 unconstitutional. 4 1 II. Cueto’s Equal Protection Holding is Dictum 2 To the extent the WCJs concluded that the constitutionality of the exclusion {8} 3 was resolved by this Court in Cueto, we disagree. In Cueto, the dispositive issue on 4 appeal was whether the worker was a farm laborer as defined by the exclusion. Id. 5 ¶ 5. It is not clear from our decision that the statute’s constitutionality was squarely 6 before us in that case. See id. ¶ 8 (“[The worker] seems to argue that the exemption 7 is unconstitutionally vague [and] seems to argue that the exemption denies him equal 8 protection.” (Emphasis added.)). We summarily rejected what we surmised may have 9 been a constitutional challenge by the worker. See id. (“[The exclusion] does not 10 [violate equal protection]; the exemption is not arbitrary, but has a reasonable 11 basis.”). We note that to the extent that the statute’s constitutionality was not squarely 12 before us in Cueto, its determination is dictum. Fernandez v. Farmers Ins. Co., 199313 NMSC-035, ¶ 15, 115 N.M. 622, 857 P.2d 22 (“[C]ases are not authority for 14 propositions not considered.” (internal quotation marks and citation omitted)). 15 {9} We also note that Cueto was decided prior to our Supreme Court’s “modern 16 articulation” of the rational basis level of scrutiny, and it did not employ the same 17 standard of review to the constitutionality of the statute as is required by our courts 18 today. See Trujillo v. City of Albuquerque, 1998-NMSC-031, ¶ 14, 125 N.M. 721, 19 965 P.2d 305 (“To successfully challenge a statute under the rational basis test, a 5 1 plaintiff is required to show that the statute’s classification is not rationally related 2 to the legislative goal.). 3 III. Constitutionality of the Exclusion 4 Workers contend that the exclusion is unconstitutional because it violates their {10} 5 right to equal protection. We review the constitutionality of legislation de novo. 6 Rodriguez v. Scotts Landscaping, 2008-NMCA-046, ¶ 8, 143 N.M. 726, 181 P.3d 7 718. We presume that the challenged legislation is constitutional and “will not 8 question the wisdom, policy, or justness of legislation enacted by our Legislature.” 9 Id. (internal quotation marks and citation omitted). 10 {11} The New Mexico Constitution provides that no person shall be denied equal 11 protection of the laws. N.M. Const. art. II, § 18. Equal protection guarantees that 12 similarly situated individuals will be treated in an equal manner, “absent a sufficient 13 reason to justify the disparate treatment.” Wagner v. AGW Consultants, 2005-NMSC14 016, ¶ 21, 137 N.M. 734, 114 P.3d 1050. Thus, “statutory classifications that are 15 unreasonable, unrelated to a legitimate statutory purpose, or are not based on real 16 differences” do not comport with equal protection guarantees. Breen v. Carlsbad 17 Mun. Schs., 2005-NMSC-028, ¶ 7, 138 N.M. 331, 120 P.3d 413 (internal quotation 18 marks and citation omitted). “The threshold question in analyzing all equal protection 19 challenges is whether the legislation creates a class of similarly situated individuals 6 1 who are treated dissimilarly.” Id. ¶ 10. If Workers establish that, as a result of a 2 legislative classification, they have suffered dissimilar treatment from those who are 3 similarly situated, we then determine what level of scrutiny to apply to the challenged 4 legislation. Id. ¶ 8. 5 A. Disparate Treatment of Similarly Situated Individuals 6 Workers contend that farm and ranch laborers are similarly situated to other {12} 7 workers within the state. More specifically, Workers contend that farm and ranch 8 laborers, who primarily harvest crops or work with animals and are excluded from 9 workers’ compensation coverage, are similarly situated with other agricultural 10 workers who are not excluded. M.A. & Sons claim that this Court has already 11 determined that workers who primarily harvest crops or work with animals are not 12 similarly situated, relying on our decisions in Tanner v. Bosque Honey Farm, Inc., 13 1995-NMCA-053, 119 N.M. 760, 895 P.2d 282 and Holguin v. Billy the Kid Produce, 14 Inc., 1990-NMCA-073, 110 N.M. 287, 795 P.2d 92. M.A. & Sons’ reliance on these 15 decisions is misplaced. 16 {13} Both Tanner and Holguin involved the same sole issue of whether specific 17 agricultural duties fall within the statutory definition of farm or ranch labor such that 18 the farm and ranch laborers exclusion would apply. See Tanner, 1995-NMCA-053, 19 ¶¶ 1, 11-12 (holding that a worker assisting in the harvesting of honey was a farm 7 1 laborer under the exclusion); Holguin, 1990-NMCA-073, ¶¶ 1, 20-21 (holding that 2 a worker whose primary duties were filling and stacking sacks of onions prior to 3 shipment was not a farm laborer under the exclusion and ordering that the worker’s 4 claim be reinstated). The distinction drawn in each of these cases between farm 5 laborers and other agricultural workers serves only to define farm labor under Section 6 52-1-6(A). It does not inform our analysis of whether the two groups of workers are 7 similarly situated for equal protection purposes. Fernandez, 1993-NMSC-035, ¶ 15 8 (“[C]ases are not authority for propositions not considered.” (internal quotation marks 9 and citation omitted)). 10 {14} In determining whether the two classes of workers are similarly situated, “we 11 must look beyond the classification to the purpose of the law.” Griego v. Oliver, 12 2014-NMSC-003, ¶ 30, 316 P.3d 865 (internal quotation marks and citation omitted); 13 see Corn v. N.M. Educators Fed. Credit Union, 1994-NMCA-161, ¶ 16, 119 N.M. 14 199, 889 P.2d 234, overruled on other grounds by Trujillo, 1998-NMSC-031. 15 {15} In 1929, our workers’ compensation law did not expressly exclude agricultural 16 laborers from workers’ compensation coverage; however, agricultural laborers were 17 deemed excluded because agricultural pursuits were not included in the enumerated 18 list of extra-hazardous occupations covered by the statute. Compare NMSA 1929, 19 § 156-110 (1929), with § 52-1-6(A). See Koger v. A. T. Woods, Inc., 1934-NMSC8 1 020, ¶¶ 7-9, 38 N.M. 241, 31 P.2d 255. In 1937, the Legislature added a provision 2 explicitly excluding farm and ranch laborers from workers’ compensation coverage. 3 1937 N.M. Laws, ch. 92, § 2. From 1937 until 1975, farm and ranch laborers were 4 “excluded from compensation benefits both by the explicit exclusion and by the 5 failure to include agricultural labor as an extra[-]hazardous occupation.” Varela v. 6 Mounho, 1978-NMCA-086, ¶ 6, 92 N.M. 147, 584 P.2d 194. In 1975, the extra7 hazardous occupation requirement was repealed. 1975 N.M. Laws, ch. 284, § 14. 8 However, the explicit exclusion of farm and ranch laborers from workers’ 9 compensation coverage has remained substantively unchanged. See 1989 N.M. Laws, 10 ch. 263, § 5; 1987 N.M. Laws, ch. 260, § 1; 1979 N.M. Laws, ch. 368, § 4; 1975 N.M. 11 Laws, ch. 284, § 3; 1973 N.M. Laws, ch. 240, § 2; 1971 N.M. Laws, ch. 253, § 1; 12 1971 N.M. Laws, ch. 261, § 2; 1959 N.M. Laws, ch. 67, § 2; 1953 N.M. Laws, ch. 87, 13 § 1; 1937 N.M. Laws, ch. 92, § 2; NMSA 1941, § 57-904 (1937). 14 {16} Our review of the history of the workers’ compensation statutes back to 1929 15 has not revealed an articulable purpose for the exclusion. The purpose of the 16 Workers’ Compensation Act (the Act) as a whole is to provide “quick and efficient 17 delivery of indemnity and medical benefits to injured and disabled workers at a 18 reasonable cost to the employers who are subject to [its] provisions.” NMSA 1978, 19 § 52-5-1 (1990). “One policy factor of great concern is that any judicial analysis 9 1 under the Act must balance equally the interests of the worker and the employer 2 without showing bias or favoritism toward either.” Salazar v. Torres, 2007-NMSC3 019, ¶ 10, 141 N.M. 559, 158 P.3d 449 (emphasis added); see § 52-5-1 (stating that 4 the Act is not to be interpreted “in favor of the claimant or employee on the one hand, 5 nor are the rights and interests of the employer to be favored over those of the 6 employee on the other hand”). Workers who are unable to perform work duties due 7 to an accident arising out of and in the course of employment are eligible to receive 8 compensation. Breen, 2005-NMSC-028, ¶ 10. The stated purpose of the Act is not 9 served by creating classifications among the state’s workers. 10 {17} Excluding farm and ranch laborers from workers’ compensation coverage 11 denies them the benefits, including but not limited to the monetary benefits, that the 12 Act was intended to provide. It also circumvents the policy and philosophy of the 13 Act—to balance the interests and rights of the worker and the employer. See Salazar, 14 2007-NMSC-019, ¶ 10. The exclusion tips the scale in favor of employers. Employers 15 of farm and ranch laborers have the option to elect to be subject to the Act while that 16 option is not available to farm and ranch laborers. Section 52-1-6(B). Employers of 17 farm and ranch laborers avoid the cost of providing workers’ compensation insurance, 18 which results in expensive drawn out litigation being the only available option to the 19 worker. While the exclusion exposes the employers to tort liability, the injured 10 1 workers are less likely to pursue a tort claim. See Salazar, 2007-NMSC-019, ¶ 16 2 (recognizing that many injured workers “are not in a financial position to wait out a 3 lengthy, expensive, and risky court proceeding to be compensated for the injury, due 4 to the problems of pressing medical bills, and often the inability to work” and would 5 benefit from workers’ compensation (internal quotation marks and citation omitted)). 6 Employers, on the other hand, may be in a better position to plan for and manage the 7 additional cost of providing coverage. 8 {18} We conclude that farm and ranch laborers seeking compensation are similarly 9 situated to other workers in the state who are likewise seeking compensation; both 10 groups consist of workers suffering work-related injuries or disabilities who are in 11 need of indemnity and medical benefits. 12 {19} The farm and ranch laborers exclusion creates classifications of workers that 13 are not based on real differences. In the general context of farm labor, workers who 14 perform tasks essential to the cultivation of crops are excluded from coverage, 15 whereas workers performing tasks incidental to farming, such as processing crops, 16 are included. See Holguin, 1990-NMCA-073, ¶ 13 (holding that farm labor excluded 17 from workers compensation coverage does not include “all things incident to 18 farming” (internal quotation marks and citation omitted)); Cueto, 1980-NMCA-036, 19 ¶ 9 (holding that farm labor includes duties essential to the cultivation of crops). 11 1 {20} The statute similarly distinguishes between workers who care for and train 2 animals as an intrinsic part of a farm and ranch operation and other workers 3 performing similar duties. See § 52-1-6.1 (stating that “ ‘farm and ranch laborers’ 4 shall include those persons providing care for animals in training for the purpose of 5 competition or competitive exhibition. Employees of a veterinarian and laborers at 6 a treating facility or a facility used solely for the boarding of animals, which is not an 7 intrinsic part of a farm or ranch operation, are not covered by this provision”). Not 8 only do these distinctions created by the exclusion fail to serve the stated purpose, 9 policy, and philosophy of the Act, but these distinctions also result in dissimilar 10 treatment of similarly situated workers. Accordingly, we must determine whether the 11 “disparate treatment . . . is sufficiently justified such that it does not violate equal 12 protection.” Rodriguez, 2008-NMCA-046, ¶ 13. 13 B. Constitutional Standard of Review 14 “There are three levels of equal protection review based on the New Mexico {21} 15 Constitution: rational basis, intermediate scrutiny[,] and strict scrutiny.” Breen, 200516 NMSC-028, ¶ 11. The level of scrutiny applied depends on “the nature and 17 importance of the individual interests asserted and the relationship between the 18 statutorily created classification and the importance of the governmental interest 12 1 involved.” Rodriguez, 2008-NMCA-046, ¶ 14 (alteration, internal quotation marks, 2 and citation omitted). 3 {22} Rational basis review is the “most deferential to the constitutionality of the 4 legislation.” Breen, 2005-NMSC-028, ¶ 11. The party challenging the legislation 5 bears the burden of proving that it “is not rationally related to a legitimate 6 governmental purpose.” Id. (alteration, internal quotation marks, and citation 7 omitted). This level of scrutiny is applied to “general social and economic legislation 8 that does not affect a fundamental or important constitutional right or a suspect or 9 sensitive class.” Id. Where the challenged legislation impacts “important but not 10 fundamental rights, or sensitive but not suspect classifications, intermediate scrutiny 11 is warranted.” Wagner, 2005-NMSC-016, ¶ 12. Applying intermediate scrutiny, the 12 State must demonstrate that the statute is substantially related to an important 13 governmental purpose. Id. Strict scrutiny review is applied where laws draw suspect 14 classifications or impact fundamental rights. Id. Under a strict scrutiny standard, the 15 state must show “that the provision at issue is closely tailored to a compelling 16 government purpose.” Id. 17 {23} The parties in this case do not dispute that strict scrutiny is inapplicable in this 18 case. Workers and M.A. & Sons seem to agree that rational basis review is 19 appropriate in this case. However, to the extent that Workers argue that intermediate 13 1 scrutiny would also be applicable, we disagree. Intermediate scrutiny review is 2 appropriate where “the challenged legislation (1) restrict[s] the ability to exercise an 3 important right[,] or (2) treat[s] the person challenging the constitutionality of the 4 legislation differently because they belong to a sensitive class.” Rodriguez, 20085 NMCA-046, ¶ 15 (alteration, internal quotation marks, and citation omitted). 6 {24} Workers do not argue that the benefits conferred under the Act are important 7 rights in the constitutional sense. Instead, they suggest that farm and ranch laborers 8 are members of a sensitive class as a result of being historically mistreated by 9 employers and having a lack of political power “which also has a racial and ethnic 10 overtone.” This generalized argument does not provide any basis to conclude that 11 Workers belong to a sensitive class with respect to the exception, and it is insufficient 12 to trigger intermediate scrutiny review. See Headley v. Morgan Mgmt. Corp., 200513 NMCA-045, ¶ 15, 137 N.M. 339, 110 P.3d 1076 (stating that this Court will not 14 consider unclear or undeveloped arguments). Having no basis to conclude that 15 Workers belong to a sensitive class, we review the constitutionality of the exclusion 16 applying the rational basis test. 17 C. The Exclusion is Not Rationally Related to a Legitimate State Interest 18 We presume that legislative acts are valid and are typically subject to rational {25} 19 basis review. See Valdez v. Wal-Mart Stores, Inc., 1998-NMCA-030, ¶ 13, 124 N.M. 14 1 655, 954 P.2d 87. Though deferential to the constitutionality of the statute, this level 2 of scrutiny is not a “rubber stamp for challenged legislation.” Wagner, 2005-NMSC3 016, ¶ 24 (internal quotation marks omitted). Under the rational basis test, Workers 4 must demonstrate that the legislative classification is not rationally related to a 5 legitimate state goal. See id.; Valdez, 1998-NMCA-030, ¶ 10. 6 {26} The Legislature’s principal objectives in enacting the Act were: “(1) 7 maximizing the limited recovery available to injured workers, in order to keep them 8 and their families at least minimally financially secure; (2) minimizing costs to 9 employers; and (3) ensuring a quick and efficient system.” Wagner, 2005-NMSC10 016, ¶ 25. M.A. & Sons argues that the exclusion serves these objectives by: (1) 11 simplifying the administration of the workers’ compensation system and (2) 12 protecting the state’s agricultural industry from additional overhead costs. Workers 13 contend that the exclusion is arbitrary and irrational and that the relationship between 14 the purported state interests and the statutory classification created by the exclusion 15 does not survive rational basis scrutiny. 16 {27} To successfully challenge the statute under rational basis scrutiny, a worker 17 must demonstrate that the classification created by the legislation is not supported by 18 evidence in the record or a firm legal rationale. Id. ¶ 24. In these consolidated 19 appeals, Worker did not have the opportunity to create a factual record to support 15 1 their constitutional challenge of the exclusion because the WCJ “does not have the 2 authority to determine the constitutionality of a statutory enactment.” Montez v. J & 3 B Radiator, Inc., 1989-NMCA-060, ¶ 7, 108 N.M. 752, 779 P.2d 129; see Chevron, 4 1992-NMCA-081, ¶ 19 (same). Accordingly, the lack of a factual record is not fatal 5 to Workers’ constitutional argument if Workers can demonstrate that the exclusion 6 is not supported by a firm legal rationale. See Montez,1989-NMCA-060, ¶ 7 7 (addressing the worker’s claim that a statute was facially unconstitutional despite the 8 lack of preservation and, implicitly a factual record); see also Chevron, 1992-NMCA9 081, ¶¶ 19, 21-24 (analyzing the worker’s constitutional challenge based solely on 10 legal rationale in the absence of a factual record). 11 {28} As Workers point out, the exclusion is arbitrary on its face and as applied. 12 Legislative classifications must be based on “real differences of situation or 13 condition” that are related to the statutory purpose. Burch v. Foy, 1957-NMSC-017, 14 ¶ 10, 62 N.M. 219, 308 P.2d 199. Under the exclusion, workers whose primary duties 15 are essential to the cultivation of crops are considered farm laborers, while workers 16 involved primarily in the processing of the same crops are not. See Cueto, 198017 NMCA-036, ¶¶ 9, 10. This distinction is seemingly without purpose or reason and 18 leads to absurd results. In some instances, employees working for the same 19 agricultural employer may not all be covered under the Act. For example, workers 16 1 involved in irrigation, fertilization, and harvesting crops are not covered under the 2 Act, while workers who sort, pack, and ship the very same crops are. See Holguin, 3 1990-NMCA-073, ¶ 20. We fail to see any real differences between workers who fall 4 under the statutory definition of a farm and ranch laborer and workers who do not. 5 We also fail to see any real differences between farm and ranch laborers and all other 6 workers in New Mexico that would justify the exclusion. 7 {29} We are not persuaded by M.A. & Sons’ contention, that simplifying the 8 administration of the workers’ compensation system and protecting the State’s 9 agricultural industry from additional overhead costs justify the arbitrary classification 10 created by the exclusion. See Plyler v. Doe, 457 U.S. 202, 227 (1982) (“[A] concern 11 for the preservation of resources standing alone can hardly justify the classification 12 used in allocating those resources.”); see also Schirmer v. Homestake Min. Co., 199413 NMSC-095, ¶¶ 8-9, 118 N.M. 420, 882 P.2d 11 (holding that the challenged statute 14 was “unconstitutional notwithstanding its rational relationship to the valid legislative 15 goal of lowering employer costs” because the resulting legislative classification was 16 arbitrary and was not “based upon some substantial or real distinction” instead of 17 “artificial or irrelevant differences”); Halliburton Co. v. Prop. Appraisal Dep’t, 197518 NMCA-123, ¶ 25, 88 N.M. 476, 542 P.2d 56 (holding that a tax statute based on 17 1 administrative convenience alone did not survive rational basis scrutiny and violated 2 equal protection guarantees). 3 {30} The classification created by the exclusion is also under-inclusive. 4 “Discriminatory legislation is under-inclusive if the classification does not include 5 all of those who are similarly situated with respect to the purpose of the law.” Griego, 6 2014-NMSC-003, ¶ 60. As to the purported state interest in efficient administration 7 of workers’ compensation cases, the legislation is under-inclusive because the statutes 8 do not exclude all transient or mobile workers from coverage. And as to the purported 9 state interest in protecting the agricultural industry from the cost of providing 10 workers’ compensation coverage, the legislation is under-inclusive because it does 11 not exclude all agricultural workers. 12 {31} We conclude that there is no substantial relationship between the exclusion and 13 the purported government interests of increased workers’ compensation efficiency 14 and lower costs for the agricultural industry. There is nothing rational about a law that 15 excludes from worker’s compensation benefits employees who harvest crops from the 16 field while providing benefits for the employees who sort and bag the very same crop. 17 See Madrid v. St. Joseph Hosp., 1996-NMSC-064, ¶ 34, 122 N.M. 524, 928 P.2d 250 18 (stating that equal protection guarantees “prohibit the government from creating 19 statutory classifications that are unreasonable, unrelated to a legitimate statutory 18 1 purpose, or are not based on real differences”). Moreover, excluding farm and ranch 2 laborers from workers’ compensation coverage directly controverts the purpose and 3 evenhanded philosophy of the Act by placing farm and ranch employers at an 4 advantage and denying workers the benefits the Act was intended to provide. 5 Legislative classifications that are arbitrary and oppressive without any rational basis 6 are the most objectionable. Burch, 1957-NMSC-017, ¶ 12. 7 IV. Modified Prospective Application of This Opinion 8 Because we have declared the exclusion to be unconstitutional, we address {32} 9 M.A. & Sons’ argument that we apply our holding prospectively. Our courts have 10 adopted a presumption that new rules imposed by judicial decisions in civil cases will 11 apply retroactively. Beavers v. Johnson Controls World Servs., Inc., 1994-NMSC12 094, ¶ 22, 118 N.M. 391, 881 P.2d 1376. However, this presumption can be overcome 13 where sufficient justification exists for avoiding retroactive application. Padilla v. 14 Wall Colmonoy Corp., 2006-NMCA-137, ¶ 12, 140 N.M. 630, 145 P.3d 110. To 15 determine whether retroactive application is justified we consider: “(1) whether the 16 case creates a new principle of law that has been relied upon[,] (2) the prior history 17 of the rule[,] and (3) the inequity of retroactive application.” Id. (internal quotation 18 marks and citation omitted). 19 1 {33} “Under the first factor, the decision to be applied nonretroactively must 2 establish a new principle of law, either by overruling clear past precedent on which 3 litigants may have relied, or by deciding an issue of first impression whose resolution 4 was not clearly foreshadowed.” Jordan v. Allstate Ins. Co., 2010-NMSC-051, ¶ 27, 5 149 N.M. 162, 245 P.3d 1214 (internal quotation marks and citation omitted). “The 6 extent to which the parties in a lawsuit, or others, may have relied on the state of the 7 law before a law-changing decision has been issued can hardly be overemphasized.” 8 Beavers, 1994-NMSC-094, ¶ 27. “The reliance interest to be protected by a holding 9 of nonretroactivity is strongest in commercial settings, in which rules of contract and 10 property law may underlie the negotiations between or among parties to a 11 transaction.” Id. ¶ 28. 12 {34} Since 1937, our statutes have expressly excluded farm and ranch laborers from 13 workers’ compensation coverage. Our holding in this case sets forth a new principle 14 of law, not clearly foreshadowed by our previous decisions. Until now, employers of 15 farm and ranch laborers have legitimately relied on the exclusion’s constitutionality. 16 Their reliance interest weighs in favor of prospective application because, in a general 17 sense, the workplace is a commercial setting and employment is of a contractual 18 nature. Padilla, 2006-NMCA-137, ¶ 15. 20 1 {35} The second factor considers the new rule’s history, purpose, and effect to 2 determine whether retroactive application will further its operation. Id. ¶ 20. As we 3 discussed earlier, the purpose of the Act is to provide quick and efficient benefits to 4 injured and disabled workers at a reasonable cost to employers. Section 52-5-1. The 5 application of the Act’s provisions should balance the interests and rights of workers 6 and employers. Salazar, 2007-NMSC-019, ¶ 10. Our decision in this case seeks to 7 further both the purpose of the Act as well as its underlying philosophy of 8 evenhandedness, which retroactive application may achieve to some degree. 9 {36} However, we must also consider the third factor, “the inequity imposed by 10 retroactive application, for where a decision of [an appellate court] could produce 11 substantial inequitable results if applied retroactively, there is ample basis in our 12 cases for avoiding the injustice or hardship by a holding of nonretroactivity.” Jordan, 13 2010-NMSC-051, ¶ 29 (internal quotation marks and citation omitted). In this 14 circumstance, retroactive application of our decision would be analogous to the 15 enactment of a retroactive statute, which is generally disfavored in New Mexico. See 16 NMSA 1978, § 12-2A-8 (1997) (“A statute or rule operates prospectively only unless 17 the statute or rule expressly provides otherwise[,] or its context requires that it operate 18 retrospectively.”); see also Hill v. Vanderbilt Capital Advisors, LLC, 834 F. Supp. 2d 19 1228, 1262 (D.N.M. 2011) (“A retrospective law affects acts, transactions, or 21 1 occurrences that happened before the law came into effect and impairs vested rights, 2 requires new obligations, imposes new duties, or affixes new disabilities to past 3 transactions.”). Here, retroactive application would impose new obligations and 4 duties on employers of farm and ranch laborers and their insurers, and it would also 5 impact the interests of the Uninsured Employers’ Fund as well as the Food Industry 6 Self Insurance Fund of New Mexico. 7 {37} Nevertheless, the WCA was on notice that the district court in Griego had 8 declared the exclusion to be unconstitutional on March 30, 2012, and did not appeal 9 that ruling. Therefore, acknowledging the inequity of denying benefits to workers 10 whose claims were asserted after the date of the district court decision in Griego, we 11 conclude that this Opinion’s holding shall apply to workers’ claims that were pending 12 as of March 30, 2012, and that were filed thereafter. 13 CONCLUSION 14 {38} For the foregoing reasons, we reverse the dismissals of the Workers’ 15 compensation claims and remand for proceedings consistent with this Opinion. 16 17 18 {39} IT IS SO ORDERED. M. MONICA ZAMORA, Judge 22 1 I CONCUR: 2 3 CYNTHIA A. FRY, Judge 4 MICHAEL E. VIGIL, Chief Judge (dissenting in part, specially concurring in 5 part). 23 1 VIGIL, Chief J., dissenting in part, specially concurring in part. 2 {40} Workers’ first argument on appeal is that dismissal of their claims was 3 precluded by the declaratory judgment in Griego. The majority fails to address this 4 argument. Without providing a sufficient reason for doing so, the majority simply 5 declares, “We need not determine whether the district court’s determination in Griego 6 was binding in the present cases.” Majority Opinion ¶ 7. I dissent from this 7 proposition. Further, I respectfully submit that by answering Workers’ fully preserved 8 argument, we are not issuing an advisory opinion. 9 {41} In Griego, three individual plaintiffs and two organizational plaintiffs brought 10 a declaratory judgment action against the WCA and its director (WCA) contending 11 that the farm and ranch laborers exclusion in the Workers’ Compensation Act 12 violated their right to equal protection of the law under Article II, Section 18 of the 13 New Mexico Constitution. Griego, No. 32,120, memo op. ¶ 2. (I do not cite to Griego 14 for any precedential purposes, but only for the facts it discloses). The district court 15 held that the exclusion was unconstitutional, and the WCA appealed. Id. ¶ 3. The 16 WCA’s appeal only challenged the district court’s jurisdiction over the individual 17 plaintiffs’ claims on two grounds: (1) that they should have pursued an appeal from 18 the WCA instead of filing a separate declaratory judgment action; and (2) that the 19 district court did not have authority to order the WCA to re-open the individual 24 1 plaintiffs’ claims for consideration on their merits. Id. ¶¶ 6-7. The WCA did not 2 challenge the district court’s jurisdiction over the claims of the organizational 3 plaintiffs, nor did the WCA attack the district court’s determination of 4 unconstitutionality. Id. ¶ 7. 5 {42} The WCA and individual plaintiffs settled, rendering moot the issues raised on 6 appeal by the WCA. Id. ¶ 8. Nevertheless, the individual plaintiffs argued that the 7 appeal should not be dismissed as moot, because the WCA continued to urge that it 8 was not bound to enforce the district court judgment declaring the exclusion 9 unconstitutional. Id. The WCA maintained that the district court judgment invited 10 “chaos” because it appeared to conflict with Cueto, and WCJs would have to choose 11 whether to follow the district court judgment or Cueto. Id. ¶ 10. We rejected the 12 WCA’s assertion. We pointed out that the district court had considered Cueto and 13 determined that it was inapposite and distinguishable. Id. Therefore, we said, “As a 14 party to the declaratory judgment action, the WCA is bound by the district court’s 15 ruling.” Id. We also added that if the WCA believed that the district court had ruled 16 contrary to precedent, its remedy was to seek appellate review of that decision. 17 Id. ¶ 11. Having chosen not to do so, we concluded, the WCA “cannot now escape 18 the effect of unchallenged parts of the district court’s decision.” Id. Because the 19 issues raised on appeal were moot, the WCA’s appeal was dismissed. Id. ¶ 12. 25 1 {43} There can be no doubt that the district court judgment declaring the farm and 2 ranch laborers exclusion in the Workers’ Compensation Act unconstitutional is 3 binding on the WCA. “The doctrine of issue preclusion prevents a party from re4 litigating ultimate facts or issues actually and necessarily decided in a prior suit.” 5 State ex rel. Peterson v. Aramark Corr. Servs., LLC, 2014-NMCA-036, ¶ 34, 321 6 P.3d 128 (internal quotation marks and citation omitted). The four elements required 7 to apply issue preclusion are satisfied in this case. Those elements are: 8 9 10 11 12 (1) the party to be estopped was a party to the prior proceeding, (2) the cause of action in the case presently before the court is different from the cause of action in the prior adjudication, (3) the issue was actually litigated in the prior adjudication, and (4) the issue was necessarily determined in the prior litigation. 13 Id. The WCA fully litigated the constitutional issue in Griego and having lost, 14 deliberately chose not to appeal that issue. Thus, the WCA and WCJs were legally 15 obligated to follow and apply the declaratory judgment to these cases. The declaratory 16 judgment does not tell WCJs of the WCA how to decide any case on its merits; it only 17 precludes enforcement of the farm and ranch laborers exclusion. Moreover, the 18 refusal of the WCJs to follow and apply the declaratory judgment on the basis that 19 Cueto was conflicting authority was improper because the applicability of Cueto was 20 resolved in the very action in which the declaratory judgment was rendered, and no 21 appeal was taken on the constitutional question. See State ex rel. Maloney v. Sierra, 26 1 1970-NMSC-144, ¶¶ 8-11, 82 N.M. 125, 477 P.2d 301 (stating that the portion of a 2 declaratory judgment on a constitutional question that was not challenged on appeal 3 was final). 4 {44} The majority’s failure to specifically determine that the Griego declaratory 5 judgment is binding on the WCA in these cases is troubling. It encourages a litigant 6 not to comply with a final declaratory judgment rendered against it and to relitigate 7 the same issue in a new case. It also implies that a final judgment rendered against a 8 party in a prior case has no effect on appeal, even if the prior judgment was against 9 the same party and resolved the same issue. This dilutes settled principles of finality 10 and implies that a district court declaratory judgment does not merit recognition and 11 enforcement. I therefore dissent from the majority’s statement that “We need not 12 determine whether the district court’s determination in Griego was binding in the 13 present cases.” Majority Opinion ¶ 7. 14 {45} Whether Griego is binding on the employers and insurers in these cases 15 presents another question because they were not parties in the Griego litigation. Our 16 Declaratory Judgment Act specifically states, that “no declaration shall prejudice the 17 rights of persons not parties to the proceeding.” NMSA 1978, Section 44-6-12 18 (1975); see Gallegos v. Nevada Gen. Ins. Co., 2011-NMCA-004, ¶ 21, 149 N.M. 364, 19 248 P.3d 912 (stating that the Declaratory Judgment Act “forbids a party from being 27 1 prejudiced by a declaratory action to which he was not a party”). Thus, if the WCA 2 and WCJs had properly complied with the Griego declaratory judgment in these 3 cases, and the WCJ’s determined that Workers were entitled to workers’ 4 compensation benefits, the employers and insurers could have appealed from that 5 decision and argued that the farm and ranch laborers exclusion is not 6 unconstitutional. On this basis, I specially concur in the result, because I agree with 7 the majority’s analysis of the constitutional question and with modified prospective 8 application set forth in parts III and IV of the majority opinion. 9 10 MICHAEL E. VIGIL, Chief Judge 28
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