Coal workers pneumoconiosis and equal protection in Kentucky Cain v Lodestar Energy, Gardner v Vision Mining and Martinez v Peabody Coal

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1 Trinity College Dublin, Ireland From the SelectedWorks of Mel Cousins October, 2010 Coal workers pneumoconiosis and equal protection in Kentucky Cain v Lodestar Energy, Gardner v Vision Mining and Martinez v Peabody Coal Mel Cousins, Glasgow Caledonian University Available at:

2 Coal workers pneumoconiosis and equal protection in Kentucky Cain v Lodestar Energy, Gardner v Vision Mining and Martinez v Peabody Coal 1 This note discusses a number of recent decisions of the Kentucky courts concerning coal workers pneumoconiosis and equal protection. The Kentucky Court of Appeals has recently found unconstitutional a special consensus procedure by which coal workers affected by pneumoconiosis 2 were required to prove their claim for workers compensation. The case is currently under appeal to the Kentucky Supreme Court. The law The Kentucky Revised Statutes (KRS) mandates a special consensus procedure in coal workers pneumoconiosis claims. Under the workers compensation scheme Under this procedure, the worker and the employer each submits a chest x-ray and a B reader's interpretation of the x-ray. If there is a consensus between the interpretations, this can be accepted. 3 If there is no consensus, KRS (3)(b)4.e requires that the x-rays be interpreted by a panel of three B readers. KRS (13) provides a rebuttable presumption that a consensus of the three B readers is correct but allows a worker to rebut this with clear and convincing evidence. 4 If no consensus is reached the administrative law judge (ALJ) must make a decision based on the evidence. Durham v Peabody Coal 5 The issue had earlier been considered by the Kentucky Supreme Court in Durham v Peabody Coal. In Durham, the workers argued that the consensus procedure found in KRS discriminated unlawfully between workers who were injured by a harmful occupational exposure to coal dust and those who became disabled by a traumatic injury. They argued that the procedure denied them equal protection in two ways. 1 Cain v Lodestar Energy 302 S.W.3d 39 (Ky. 2009); Gardner v Vision Mining No CA WC (Ky. Ct. App. 2010).; and Martinez v Peabody Coal No CA WC (Ky. Ct. App. 2010). The latter case is under appeal as Martinez v. Peabody Coal Company, 2010-SC Pneumoconiosis is defined as: [I]nflammation commonly leading to fibrosis of the lungs due to the irritation caused by the inhalation of dust incident to various occupations, such as coal mining, knife grinding, stone cutting, etc.; the most prominent symptoms are: pain in the chest, cough, little or no expectoration, dyspnea, reduced thoracic excursion, sometimes cyanosis, and fatigue after slight exertion. Stedman's Medical Dictionary It is also known as black lung disease. 3 KRS (3)(b)4.f. requires two x-ray interpretations to be within the same major classification and within one minor classification to be in consensus. 4 This has been defined as evidence substantially more persuasive than a preponderance of the evidence, but not beyond a reasonable doubt : Fitch v. Burns, 782 S.W.2d 618, 622 (Ky.1989) S.W.3d 192 (Ky. 2008). See M.A. Cocanougher, Breathing Easier: Equal Protection and Workers in Durham v. Peabody Coal Company Kentucky Journal of Equine, Agriculture, & Natural Resources Law, 2(2) ( ) This was, in fact, a joined case including a number of challenges to the same law involving different parties and there have also been a number of unpublished decisions following Durham. In Hunter Excavating v. Bartrum, 168 S.W.3d 381, 385 (Ky.2005), the Supreme Court had earlier decided that the consensus procedure did not deny due process to workers who suffer from coal workers' pneumoconiosis.

3 First, it requires them to submit clear and convincing evidence to rebut the panel's consensus, while other workers may prove an injury with only a preponderance of the evidence. Second, it limits them to proving the existence of the disease with x- ray evidence, which strips the ALJ of the discretion to consider a worker's credible testimony regarding breathing difficulties and the length and nature of the exposure to coal dust. However, the Supreme Court concluded that although KRS treated workers who suffer from coal workers' pneumoconiosis differently from those who sustain a traumatic injury, it was neither arbitrary nor unfair to the former group. In particular, the Court took the view that that inherent differences between coal workers' pneumoconiosis and traumatic injuries provide a reasonable basis or substantial and justifiable reason for different statutory treatment. 6 The Court pointed out that pneumoconiosis develops gradually and can be difficult to diagnose, whereas traumatic injuries generally occur suddenly and are more easily diagnosed. In addition, medical evidence was that coal workers who suffer from pneumoconiosis should be encouraged to find other employment 7 whereas workers who sustain traumatic injuries are not, as a rule, advised to change employment to avoid the risk of further injury. Thus the Court was not convinced that the two groups were similarly situated. In addition, it took the view that although KRS (13) might appear to be discriminatory, it did not actually impose a greater burden of proof on workers who claim benefits as a result of traumatic injury (under KRS ). The Court held that KRS (13) only acknowledged the reality that, faced with equally convincing evidence, the claimant must offer more persuasive evidence in rebuttal or lose. It ruled that the provision impose[d] no greater burden than on any other worker whose evidence is met with very persuasive contrary evidence. Cain v Lodestar Energy 8 Cain involved a rather unusual factual situation (at least one hopes it is unusual). The appellant had submitted evidence that he had category 2 CWP while the employer s evidence was that he was category 1. Either level was sufficient to qualify for the retraining benefit he sought but as there was no consensus between the two reports the claim was submitted to a panel. The panel reached a consensus that there was no CWP. The ALJ decided that the original evidence was not sufficiently clear and convincing to overturn the consensus. The court of appeals rejected a constitutional challenge on the basis that the treatment was based on the amount of disparity between the parties' x-ray interpretations. However, the Supreme Court came to a different conclusion. The appellant had argued that the procedure discriminated against CWP claimants generally. He argued that, first, the statute required coal workers who suffer from 6 Sections 1, 2, and 3 of the Kentucky Constitution provide that the legislature does not have arbitrary power and shall treat all persons equally. A statute complies with Kentucky equal protection requirements if a reasonable basis or substantial and justifiable reason supports the classifications that it creates. 7 Kentucky Harlan Coal Company v. Holmes, 872 S.W.2d 446 (Ky. 1994) S.W.3d 39 (Ky. 2009).

4 pneumoconiosis to submit clear and convincing evidence to rebut the panel's consensus, while workers may prove an injury with only a preponderance of the evidence. Second, it limited coal workers to proving the existence of the disease with x-ray evidence, which deprived an ALJ of the discretion to consider a worker's credible testimony regarding breathing difficulties and the length and nature of the exposure to coal dust. However, in the light of Durham, the court rejected this broad argument holding that the appeal raised nothing which had not been considered in the earlier case. However, Cain also raised a narrower argument that the procedure in his case had deprived him of his right to benefits even though the original evidence showed the existence of CWP. The Supreme Court accepted this argument holding that KRS (3)(b)4.e. denied the claimant equal protection because it discriminated between him and a similarly-situated worker whose employer also submitted evidence of category 1 disease but whose claim was not subject to the second phase of the consensus process. KRS (3)(b)4.e. creates two classes of workers based solely on the amount of discrepancy between the worker's and employer's evidence. Gardner and Martinez In Durham, the Supreme Court noted that the workers had failed to raise the argument that the statute unfairly treats individuals who suffer from coal workers' pneumoconiosis differently from those who suffer from other occupational pneumoconioses or diseases before the court of appeals and thus, the argument was not properly before the Durham court. However, it has now been raised and decided in favor of the workers in two separate decisions of the court of appeals, one of which (Martinez) is currently under appeal to the Supreme Court. The two judgments, although coming to the same decision, have somewhat different approaches. In Gardner, following disagreement between the worker s and employer s medical experts, the x-ray was submitted to a panel of readers, two of whom agreed that he did not have coal workers' pneumoconiosis. On that basis, his claim was rejected and he challenged the constitutionality of the requirement. The Gardner court took the view that The clear and convincing evidence standard for coal workers sharply contrasts with the prevailing standard applied to workers seeking compensation for other pneumoconiosis claims such as exposure to limestone, various particulates, talc, graphite, etc. Not only was there a different evidentiary standard for coal workers than for others suffering from pneumoconiosis, the statutory scheme for adjudicating coal worker pneumoconiosis claims was significantly different. The principal difference was the use of the three physician B reader panel and the requirement that a claimant must show clear and convincing evidence to overcome a panel consensus. The court opined that [a]s a practical matter, overcoming the presumption created by a B reader consensus is impossible. It pointed out that other pneumoconiosis claimants were not subject to this procedure, and that the standard of proof required was preponderance of the evidence

5 rather than clear and convincing evidence. While noting the Durham decision, the court pointed out that it explicitly had not reached the issue considered here. It cited the Cain decision as appearing to support Gardner's contention that the statute as applied is unconstitutional. While accepting that differential treatment of pneumoconiosis and traumatic injuries was appropriate, the court took the view this was not the case in relation to pneumoconiosis claims caused by different substances. The court took the view that there was no discernable difference between a worker who had developed pneumoconiosis as a result of inhaling coal dust and someone who developed the disease through inhaling something else. Therefore, it ruled that KRS is unconstitutional insofar as it requires the three-member consensus panel and imposes a higher burden of proof upon CWP claimants than on other pneumoconiosis claimants. The Court considered whether Kentucky Harlan Coal Co. v. Holmes, had any bearing on the outcome in this case. 9 In Holmes by a 4-3 majority the Kentucky Supreme Court upheld the constitutionality of KRS , a statute providing for income benefits and retraining incentive benefits for coal worker pneumoconiosis claimants. The employers had argued that treating coal workers pneumoconiosis differently from pneumoconiosis contracted in other industries was unconstitutional. The Court concluded that the provision was not unconstitutional based on the economic impact of an extraordinary number of coal workers pneumoconiosis cases at that time and the need to incentivize coal workers with pneumoconiosis to leave the industry, receive retraining, and to use objective medical criteria when awarding benefits. The Holmes case recognized a compelling economic rationale for distinguishing between coal workers pneumoconiosis and pneumoconiosis contracted in other industries. However, the Gardner court concluded that although the outcome was reasonable in that context, the case had little application to the difference in treatment in relation to the evidential procedures before it. 10 In Martinez, a similar issue was considered. The Court, like the Gardner court, noted the Durham and Cain decisions. The court shortly noted that CWP claimants were treated differently from other pneumoconiosis claimants: the difference being the burden of proof imposed upon him and others with pneumoconiosis due to coal mining. The court, therefore, asked if there was a substantial or justifiable reason for this difference but found none. Accordingly it ruled that KRS denied Martinez equal protection. This decision is now under appeal to the Supreme Court. Discussion The decision in Durham that the claimants had failed to show that the difference in treatment between CWP claimants and those with traumatic injuries was a breach of equal protection appears correct. However, the recent courts of appeals cases raise a much more S.W.2d 446 (Ky. 1994). 10 Keller J concurred as to the unconstitutionality of the clear and convincing evidence requirement but dissented from the ruling that the panel procedure was unconstitutional on the basis that CWP benefits were closely tied to x-ray findings unlike other forms of pneumoconiosis.

6 specific issue as to whether such a difference in treatment between CWP claimants and those with pneumoconiosis caused by another substance can be justified. Both courts adopted a rather straightforward approach holding that there was a difference in treatment and that there was no justification for this. Only Keller J was prepared to uphold the requirement that evidence be submitted to a panel. Although the issue was not explicitly discussed by either court of appeals, it would seem that CWP claimants are similarly situated to those who have developed pneumoconiosis from another source. But does the panel procedure amount to a denial of equal treatment? It will be recalled that the Durham court rejected the challenge in that case not only because CWP and trauma injury claimants were not similarly situated but also because the procedure did not actually impose a greater burden of proof on CWP claimants. The Supreme Court noted that the Kentucky workers compensation system required a workrelated harmful change in the human organism to be evidenced by objective medical findings. Therefore anyone claiming workers' compensation benefits is required to prove the existence of injury or disease though the evidence of a doctor gained through direct observation and/or testing that utilizes objective or standardized methods. The court ruled that the x-ray is the objective method by which physicians diagnose the presence of pneumoconiosis and categorize its severity. In contrast, a worker s statements concerning the nature and duration of his exposure to coal dust could according to the Supreme Court - assist in determining the cause of pneumoconiosis but did not constitute objective medical findings as regards the presence or category of the disease. But in Martinez the argument against the panel procedure was that the ALJ was precluded from considering the years of exposure to coal dust, the type of work performed, or the claimant s testimony concerning his symptoms and disabilities all evidence which the Supreme Court appears to consider irrelevant to the presence or category of pneumoconiosis. In neither recent case is it clear how the claimants could show that they have pneumoconiosis in the absence of the panel procedure. As to the clear and convincing evidence requirement, the Gardner court s interpretation of this requirement (as contrasting sharply with the prevailing standard) appears inconsistent with the Supreme Court s interpretation in Durham as imposing no greater burden than on any other worker whose evidence is met with very persuasive contrary evidence. In Hunter Excavating v. Bartrum, 11 the Supreme Court also specifically stated that [N]othing in KRS (3)... prevents a party from introducing the type of evidence that will rebut a consensus classification. 12 Both the Gardner and Martinez courts relied on Cain in support of their decisions. However, that decision specifically rejects a general challenge to the CWP procedure (although it appears that the comparison was again with claimants suffering trauma injury). More specifically, the Cain court held that arguments in relation to the evidential burden imposed and the limiting of evidence to x-rays raised nothing new. The outcome in Cain certainly does provide some support for the recent court of appeals decisions. However, the jurisprudential basis for that outcome is very unclear. The appellant s argument appears to have been that it was unfair that, having initially satisfied S.W.3d 381 (Ky. 2005). 12 At 385.

7 the requirement for retraining benefit, he was deprived of that entitlement because of the panel procedure. More prosaically, however, he did not meet the requirement because 3 of the 5 doctors who examined him did not feel he met the medical requirements and the ALJ who considered his case did not feel that the original evidence submitted was sufficient to overturn the majority view. The Cain court of appeals view that requiring the panel procedure was justified on the basis of the amount of disparity between the initial evidence submitted seems correct. In contrast, it is unclear to whom the Supreme Court is comparing the appellant when it refers to a similarly-situated worker whose employer also submitted evidence of category 1 disease but whose claim was not subject to the second phase of the consensus process. In reality, any other worker (classified as category 2) whose employer submitted evidence of category 1 CWP would also be subject to the consensus procedure. Nor is it clear why the court feels there is no rational or reasonable basis for treating claimants differently because of the degree of discrepancy between the evidence as to their medical situation. To the contrary, it seems perfectly reasonable to require further examination where there is a significant discrepancy and not to do so where there is not. The Supreme Court s decision appears to reflect sympathy for the claimant rather than any rational approach to the equal protection clause. More generally, worker s compensation schemes (and not only in the USA) are riddled with specific measures which treat particular injuries and diseases in particular ways. These are, in part, a historical accumulation but many were initially adopted at a time when equal protection issues did not loom large for policy makers. Reviewing the case law, one can identify the following general principles: 1) There should be no difficulty in providing different (and more beneficial) treatment for specific diseases where this reflects the particular nature of the disease or the particular economic and social context; 13 2) Likewise it should be acceptable to impose an additional burden on persons suffering from a particular disease where (but only where) this relates to the particular nature of the disease; 14 3) However, where a requirement in relation to a specific disease treats persons differently (either by denying a benefit or imposing an additional burden) without any relevant reason it would seem possible that it would be inconsistent with the Federal and/or state guarantees of equal protection For example, in Jones v Weyerhaeuser Co. (NC App, 2000) 141 NC App 482 the court upheld a special compensation scheme for workers suffering from asbestosis or silicosis as this related to the incurable, latent and unique nature of these diseases, factors not apparent in other occupational diseases. See also Kentucky Harlan Coal Co. v. Holmes 872 S.W.2d 446 (Ky. 1994). 14 Thus in Sakotas v Workers Comp. Appeals Bd. (Cal App, 2000) 80 Cal. App. 4 th 262 the court upheld a requirement requiring a higher threshold of compensability in the case of psychiatric claims given the difficulty of defining the injury and establishing causation. Similarly in Tomsha v. City of Colorado Springs, 856 P.2d 13, 14 (Colo. App. 1992) the court upheld a requirement that a psychic injury claim be supported by the evidence of a physician or psychologist. 15 As reards an additonal probative burden, see, for example, Walters v Algernon Blair (NC CA, 1995) 120 NC App 398 (aff'd per curiam, 344 N.C. 628, 476 S.E.2d 105 (NC SC, 1996), cert. denied, 520 U.S (1997)) in which an additional requirement on persons affected by silicosis or asbestosis for which the court found no valid reason was struck down (see also Payne v Charlotte Heating (NC CA, 2005) 172 NC App 496). In Esser v. Industrial Claim Appeals Office of the State of Colorado 8 P.3d 1218 (Colo. App., 2000) the court struck down a

8 It will be interesting to see what approach the Supreme Court takes on the Martinez appeal and whether it follows its approach in Durham or the more palm tree justice approach of Cain. It is unfortunate that there is no evidence on the record of either recent court of appeals decision as to whether the different evidential procedures do impose a higher burden on CWP claimants. There is, for example, no evidence as to the proportion of claims determined successfully after the procedure compared to claims for other forms of pneumoconiosis. Obviously, if one had evidence that the clear and convincing evidence requirement was not simply on a par with the evidential requirements in other fields and that it did as the court of appeals alleged in Gardner make it impossible to overturn the panel s consensus, this might put a rather different complexion on the case. requirement that in a mental injury claim oral medical evidence was required (whereas for other injuries written evidence was acceptable) on the basis that there was no legitimate purpose for this additional requirement. As regards, restirtions on benefit, see Henry v. State Compensation Ins, Fund (Mont SC, 1999) 1999 MT 126 where the court ruled that denying vocational rehabilitation benefits to persons with occupational diseases (which were provided to persons injured by accident) was a breach of equal protection. Similarly in Schmill v. Liberty Northwest Ins. Corp., (Mont SC, 2003) 2003 MT 80 the court held that reducing benefits in the case of occupational diseases (due to non-occupational factors) was in breach of equal protection as this did not apply to occupational accidents.