Kansas Ruling Prompts Questions about Constitutionality of Texas Act

A Kansas state court of appeals has ruled portions of the Kansas workers’ compensation act unconstitutional, which has prompted some of our clients to question whether the Texas act is susceptible to a similar attack.

Last Friday, a three judge Kansas Court of Appeals ruled in Johnson v. U.S. Food Service that required the state to follow the AMA’s “Guides to Evaluation of Permanent Impairment, Sixth Edition” unconstitutionally limited an injured worker’s right to a legal remedy for an on-the-job injury. The court had previously held that the law was unconstitutional as it pertained to one particular worker. As workerscompensation.com notes in an article, under the new ruling, the court declared that the law was unconstitutional on its face, and that violated not only the Kansas Constitution’s Bill of Rights, but the US Constitution’s guaranteed of due process. The court wrote:

The gradual erosion of the fair exchange between rights under the Act and common-law rights to tort recovery have, for the injured worker, amounted to death by a thousand paper cuts. What is the last slice that tips the balance from a fair exchange of rights and remedies to one that is unconstitutionally inadequate from the injured worker’s point of view?

While our Supreme Court declared that the tipping point had not been reached with the 1993 amendments, we conclude that the tipping point has now been reached with the adoption of the Sixth Edition of the AMA Guides. We do not opine on the constitutionality of the Act as amended in 2011, though it is clear that those amendments at least moved the Act closer to the tipping point. But adoption of the Sixth Edition of the AMA Guides leaves the injured worker who suffers a permanent impairment in a situation not unlike that of Monty Python’s Black Knight.

The Johnson case joins a number of national decisions that address constitutional challenges to the grand bargain as well as to the use of the AMA Guides.

Last year, a split Supreme Court of Pennsylvania, in Protz v. Workers’ Comp. Appeal Bd. (Derry Area Sch. Dist.), 161 A.3d 827 (Pa. 2017), held that the provision of the state’s Workers’ Compensation Act [Section 306(a.2); 77 P.S. § 511.2(1)], requiring physicians to apply the methodology set forth in “the most recent edition” of the American Medical Association Guides to the Evaluation of Permanent Impairment (AMA Guides), violates the state’s constitutional requirement that all legislative power “be vested in a General Assembly” [Pa. Const. art. II, § 1].

Courts in Florida and Oklahoma have recently overturned portions of those states’ workers’ compensation acts on the basis that the balance has been tipped too unfairly against injured workers.

In Vasquez v. Dillard’s, the Oklahoma Supreme Court concluded that the core provision of the Opt Out Act, created impermissible, unequal, disparate treatment of a select group of injured workers. Therefore, the Court held that the Oklahoma Employee Benefit Injury Act was an unconstitutional special law under the Oklahoma Constitution, art. 2, section 59.3.

In Westphal v. City of St. Petersburg the Florida Supreme Court declared that legislatively mandated limits on the duration of temporary benefits were “not merely unfair, but fundamentally and manifestly unjust.”

We believe that it is safe to say that the Texas system’s reliance upon the 4th Edition of the AMA Guides is fairly safe from constitutional challenge. The 4th Edition was selected by the Division through proper rule making and Texas does not require the use of “the most current” version of the Guides, which the Protz court found to be an infirmity. Moreover, the 4th Edition of the Guides seems to be a balanced and well-thought-of methodology for measuring permanent impairment of work related injuries and diseases. Therefore, the analysis in Johnson would seem suspect in a Texas challenge.

Texas does not have an “opt out” provision similar to the statute challenged in Vasquez. Rather, Texas has an “opt-in” feature. So the unequal, disparate treatment of a select group of injured workers that concerned the Oklahoma Supreme court would not seem to be present in our workers’ compensation system.

Finally, the constitutionality of the benefit structure of the Texas Act was challenged in 1994 in TWCC v. Garcia. The Texas Supreme Court rejected the plaintiff’s contention that the benefit structure of the Texas system was an inadequate substitute for a claimant’s common law remedy.

There has rarely been a period of time since the 1989 Act was passed that there has not been a pending constitutional challenge to the workers’ compensation statute in Texas. However, the act has uniformly, and regularly survived such challenges.