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Case name: Caldwell v. MACo, No. DA 10-0427 (Mont. 07/11/11).

Ruling: The Montana Supreme Court held that a state law eliminating rehabilitation benefits to retired disabled workers eligible for Social Security retirement benefits was unconstitutional.

Summary: A 77-year-old airport manager slipped and fell on an icy airport taxiway while working. He suffered traumatic head injuries. The airport's insurer accepted his claim and paid his medical and wage-loss benefits. At the time of his injury, the manager had been drawing Social Security benefits for 15 years and was retired from the Army for 33 years. The manager stopped working only due to his injury. He sought rehabilitation services to gain training that would enable him to return to the workforce. The insurer denied him benefits based on a state law that eliminated rehabilitation benefits to workers deemed "retired." Disabled workers eligible for Social Security retirement benefits were considered retired. The manager challenged the constitutionality of the law. The Montana Supreme Court held that the law was unconstitutional.

The court found that the law created two similarly situated classes and treated them differently. The court noted that age and the eligibility for Social Security retirement benefits are unrelated to a person's ability to engage in meaningful employment.

The court concluded that the governmental interest in creating a wage replacement system "bears little relevance" to rehabilitation benefits. The court also rejected the notion that the governmental interest in providing reasonably constant rates to employers is served by eliminating rehabilitation benefits. The court also rejected the insurer's argument that the legislature was trying to avoid a duplication of benefits.

The court explained that there was an underlying belief that "society should not rehabilitate older people because the return on investment may not be as high." However, the legislature cannot violate the equal protection rights of those who must continue working at ages beyond eligibility for Social Security to provide for themselves or their families.

A concurring judge noted that a rehabilitation plan must account for a worker's age, and the system limits the number of people eligible for benefits. Older workers will not be guaranteed rehabilitation benefits.

A dissenting judge said that it was rational to use eligibility for Social Security benefits as a line of demarcation to target workers' compensation resources to those of working age.

Read more at the WorkersComp Forum homepage.

September 6, 2011

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