# Amicus Curiae Brief — General Motors Corp. v. Romein > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0087%3A07 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1991 - **Citation:** 500 U.S. 915 ## Text No. 90-1390 _— IN THE Supreme Court of the United States OcTOBER TERM, 1990 GENERAL MOTORS CORPORATION, Petitioner 7 EVERT ROMEIN, ET AL., Respondents FORD MOTOR COMPANY, Petitioner v. ARTURO GONZALEZ, ET AL., Respondents On Petition For A Writ Of Certiorari To The Supreme Court Of Michigan BRIEF OF AMICUS CURIAE, THE NATIONAL COUNCIL OF SELF-INSURERS, IN SUPPORT OF PETITIONER DOUGLAS F. STEVENSON STEVENSON, Rusin AND FRIEDMAN, Lp. 10 South Riverside Plaza Suite 1530 Chicago, Illinois 60606 (312) 454-5110 Counsel for Amicus Curiae Midwest Law Printing Co., Chicago 60611, (312) 321-0220 mat i TABLE OF CONTENTS REASONS FOR GRANTING THE PETITION .. I. THE DECISION BELOW VIOLATES THE CON- TRACT CLAUSE OF THE U.S. CONSTITUTION. THIS COURT DECLARED IN STATE INDUS- TRIAL COMMISSION v. NORDENHOLT CORP., 259 U.S. 263 (1922), THAT A WORKERS’ COM.- PENSATION “AWARD IS READ INTO AND BE- COMES PART OF THE CONTRACT” OF EM- PLOYMENT. SO, ALL THE PAYMENTS MADE HERE FROM 1982 TO 1987 WERE PURSUANT TO THAT EMPLOYMENT CONTRACT, IN AC- CORDANCE WITH THE 1981 STATUTE AND ITS EXPRESS APPROVAL BY THE MICHIGAN SUPREME COURT IN 1985. THESE PAYMENTS VALIDLY DISCHARGED CONTRACTUAL OBLI- GATIONS. THE DECISION BELOW REOPENS ALL THESE CONTRACTS AND DEFINITIVELY INVADES THE CONSTITUTIONAL PROVISION FORBIDDING THE IMPAIRMENT OF CON. pp INO Tere rrr ear ee ee LETT ELLE A. The Contract Clause Is Stated In Terms As Absolute As The First Amendment’s Protection Of Free Speech. It Forbids “Any Law Impairing The Obligation Of Ce See ee etek adeeeeen eee ii B. The Majority Opinion Below Does Not Pass Any “Rational Relationship Test’? Even If That Test Is Applicable ................ 1. The Impairment of Contract Is Not a Pe 2. There Is No Impairment Because “the Defendants Knew That Their Rights Were Subject to Alteration” ........ 3. The Legislature and the Courts May Impair Contracts in the “Reasonable Exercise of the Police Power” ...... II. LEGISLATORS MAY ACT ONLY DURING THE PERIOD THEY HOLD OFFICE. A CURRENT LEGISLATURE CANNOT ACT FOR OR BIND FUTURE OR PAST LEGISLATORS WITHOUT VIOLATING DUE PROCESS OF LAW....... CUONRCLUBION on ccccsvsdvcceenen enna APPENDIX: U.S. Department of Labor, January, 1990, “Off- set Provisions in State Workers’ Compensation YM 11 12 13 14 16 20 la ili TABLE OF AUTHORITIES Cases PAGE Alessi v. Raybestos-Manhattan Corp., 451 U.S. 504 UPR ArEEe se seen secessccesccecce 3,4 Allied Structural Steel v. Spannaus, 438 U.S. 233 ecu eee eeeeeeecceecescee. 12, 14, 18 Brown vy. Elder Outdoor Advertising Co., 139 Mich. App. 7, 360 N.W.2d 322 (1984) ............. 9, 12 Chambers vy. General Motors Corp., 422 N.W.2d ee Redes cccesscccececces 6 Chicago Board of Realtors v. City of Chicago, 819 CM MED cccccccccccscsccecs 11 Energy Reserves Group v. Kansas Power & Light Sg EY GD GEUED co cccccccsccccccess 13 Franks v. White Pine Copper Div., 422 Mich. 636, i i ED co cccccccccccccsccces 6, 17 Garris v. Hanover Insurance Co., 630 F.2d 1001 ee ccc e sce ceeccseccees 15 Home Building & Loan Assn. vy. Blaisdell, 290 eres wees eccbccececccccs 11 Richardson vy. Belcher, 404 U.S. 78 (1971)..... 4,5 State Industrial Commission v. Nordenholt Corp., ED < cccscsecescccccccccces a Thomas v. Parker Rustproofing Co., 284 Mich. 260, 2TO N.W.2d GO4 (19GB) ........... ccc eeeees 4 United States Trust Co. v. New Jersey, 431 U.S. Ee CC keke eccececccceccccccss 9,15 iv Other Citations Article I, Section 10, U.S. Constitution ....... Michigan Statutes: ED cccadcuccecoescceessvereees ey GEE vo ccccucccdececucedenensede Public Act 203 of 1981 .............ees00e- Fe & £ —Pee ee rear American Bar Foundation Journal, 1987, pp. 379 et seq. “Temporal Limits on the Legislative 10 10 10 16 15 Mandate: Entrenchment and Retroactivity” . 17, 18, 19 No. 90-1390 IN THE Supreme Court of the United States OcTOBER TERM, 1990 GENERAL MOTORS CORPORATION, Petitioner y EVERT ROMEIN, ET AL., Respondents FORD MOTOR COMPANY, Petitioner v. ARTURO GONZALEZ, ET AL., Respondents On Petition For A Writ Of Certiorari To The Supreme Court Of Michigan BRIEF OF AMICUS CURIAE, THE NATIONAL COUNCIL OF SELF-INSURERS, IN SUPPORT OF PETITIONER tien (Pursuant to the consent of all the parties, this brief is filed under Supreme Court Rule 37.) The National Council of Self-Insurers speaks for major employers of the United States, frequently multi-state employers. These are employers who assume the direct responsibility of paying workers’ compensation benefits to their employees, a method sometimes referred to as “self-insuring” under applicable state and federal workers’ compensation laws. It is generally accepted that 30% of the employees of the United States work for employers who are self-insured. This National Council is also the parent organization for 30 state self-insurance associations who are active in each state on workers’ compensation issues. The National Council supports the workers’ compensa- tion laws as an essential part of the social and economic framework of our society. But, like our state and federal governments, the National Council is concerned with the proliferation of duplicating benefits in our society. The cost of benefits has grown enormously, affecting price levels to consumers and inhibiting the ability of United States employers to export their products. The proliferation and cost of benefit programs is the subject matter of this case. STATEMENT The workers’ compensation issue before the Court in this matter is often described as “‘coordination” or “in- tegration” of benefits, the offsetting of alternative benefits for income maintenance against workers’ compensation benefits for that same income maintenance purpose. The issue has a historic background. Workers’ compen- sation was this nation’s first no-fault program for sustain- ing the income capacity of an employee injured in his alin employment. In the 1910-1920 period, every state and the federal government adopted workers’ compensation stat- utes covering employment in each jurisdiction. Beginning in the 1930’s, other programs developed to maintain the income of individuals suffering wage loss for other reasons. The federal government enacted unemploy- - ment benefits for the unemployed, and social security for retirees and the disabled. These programs were indepen- dently enacted with little regard for each other, and with- out regard to other duplicative programs, such as workers’ compensation. Following World War II, programs for group insurance, for weekly benefits payable during a period of non-occu- pational disability, and for company retirement programs developed rather fully in major industries. Many of these private income maintenance programs were adopted with- out regard for the other programs already in place for income maintenance. =e As a result, individuals in our society often sought and obtained income maintenance benefits from more than one of these programs. In combination, amounts received by an individual for income maintenance while not working often exceeded his earnings when he did work. As a corollary, efforts to control the costs of workers’ compensation, social security, pension programs and med- ical disability programs were totally frustrated when all these income avenues were available and could accumulate. The effort to coordinate or integrate these various bene- fits to prevent abuse has been a continuing one. In the last section of the Occupational Safety and Health Act of 1970, Congress created the National Commission on State Workmen’s Compensation Laws (84 Stat. 1600 et seq.) to examine and make recommendations about work- ers’ compensation. That Commission reported its recom- = mendations back to Congress in 1972. Its Recommenda- tion R. 33 stated: We recommend that . . . the benefits of other public insurance programs should be coordinated with work- men’s compensation benefits. Report of National Com- mission on State Workmen's Compensation Laws, p. 58. The International Association of Industrial Accident Boards and Commissions (the associetion of state workers’ compensation administrators, commonly referred to as the IAIABC) formally adopts recommended standards for all the states. In 1980 it adopted coordination of benefits as one of its standards: 11. Coordination of Benefits Compensation payable for total disability or survivor benefits should be coordinated under the jurisdiction’s law with social security and other employer-funded disability programs so as to best effectuate the ob- jectives of wage replacement and rehabilitation. And in the explanation, it added “. . . to avoid overlapping and duplication of benefits.” This remains its current stan- dard. Journal of International Association of Industrial Accident Boards and Commissions, Summer Issue, 19990, p. 43. The importance of controlling the costs of these multi- ple benefit programs did not escape Congress. In 1974, Congress enacted ERISA, a program governing pension plans. ERISA expressly permits this same coordination or integration of benefits. In 1977, when the State of New Jersey passed a statute forbidding any integration or coor- dination of workers’ compensation and pension benefits, this Court in Alessi v. Raybestos-Manhattan, 451 U.S. 504 (1981), declared the state statute null and void as pre- empted by ERISA, a federal law. This preserved the same coordination or integration of benefits involved in the instant case. oe The Congress in 1967 amended the Social Security Act to require coordination (or offsets) between workers com- pensation and social security disability benefits. Sec. 224, Social Security Act, upheld in Richardson v. Belcher, 404 U.S. 78 (1971). Alessi was decided in March, 1981. The Michigan leg- islature in December of its 1981 session adopted, effective March 31, 1982, integration or coordination of workers’ compensation with pensions and social security benefits much like this Court described in Alessi. Its action was prospective; no claimant had to pay back any amounts previously received, but continued “‘double dipping’’ was eliminated. The instant case arises because of the efforts of the plain- tiffs below to retain the duplicating benefits of pension, social security, and workers’ compensation, which collec- tively exceeded the plaintiffs’ income when they worked. The facts of this case, as stated by the majority opin- ion below, portray the 1981 situation. Plaintiff (and GM employee) Romein was receiving $12,513.80 a year in workers’ compensation benefits, pursuant to a formula en- titling him to two-thirds of his gross earnings. Such work- ers’ compensation benefits are tax-free under Internal Revenue Code §104(aX1), so this $12,513.80 was very close to his former “take home pay” when he worked. In ad- dition, Romein was receiving social security and General Motors’ company pension, which with his workers’ com- pensation benefits totalled $19,377.80 a year, more than he had ever made when he worked, and virtually all of it tax free. The Michigan legislature, concerned about its business climate and its unemployment rate of over 14%, passed a statute in 1981 forbidding these duplicative payments. Aside from the background of recommendations by the National Commission and the IAIABC, supra, and this ulin Court’s decision in Alessi, its statute was supported by copious legislative history concerning its aims and pur- poses, perhaps best summarized in Governor William Mil- liken’s statement: . we must keep in mind that the purpose of work- ers’ compensation is to restore wage-earning capacity lost in on-the-job accidents. Workers’ compensation was never intended to be more lucrative than gain- ful employment, or be a retirement bonus. . . . (Gov- ernor Milliken, November 18, 1981, quoted in the Opinions below) (This Court noted and followed the same rationale in upholding Congress’ action for “coordination of benefits”’ between social security and workers’ compensation in Rich- ardson v. Belcher, 404 U.S. 78 (1971), noting that the two benefits collectively exceeded earnings.) Against this background, the Michigan legislature en- acted its “coordination of benefits” legislation in 1981, ef- fective March 31, 1982. The workers’ compensation benefit (two-thirds of wages on a tax-free basis) was not reduced, and if he was truly retired (and 62 years of age), he could receive half of his social security benefits (the 50% paid for by his own tax payments) in addition. But, the statute provided that the employer could offset any employer- financed wage loss programs such as company pensions against its workers’ compensation obligation. There was no retroactivity; no claimant had to pay anything back. The ‘‘double dipping” was eliminated only as payments became due after March 31, 1982. Thus, this statute put some control on the problem of proliferating, accumulating benefit costs. This workers’ compensation problem in Michigan was not peculiar to Michigan. Some 25 states in this same gen- eral period took action to prevent this “double dipping”’ of benefits. Attached hereto as Appendix 1 is the 1990 U.S. Department of Labor publication summarizing similar willis statutory changes in 25 other jurisdictions, all set forth in Table 17 of this U.S. Department of Labor publication. The Michigan Supreme Court upheld the validity of this 1981 legislation in 1985, holding against plaintiffs like Ro- mein in this case. Franks v. White Pine Copper Div., 422 Mich. 636, 375 N.W.2d 715 (1985). The pragmatic result was that an employee received the highest benefit allow- able under any single program (usually his workers’ com- pensation benefit), but not a combination of all these wage loss programs. This decision was entered in 1985, in a combined opinion, one citation covering the two cases. Franks v. White Pine Copper Div. and Chambers v. Gen- eral Motors Corp., 422 Mich. 636, 375 N.W.2d 715 (1985). The definitive legislation of 1981, confirmed by Michi- gan’s highest court, did not settle this issue in Michigan. Thus this case and this Petition for Certiorari. In 1987, the Michigan legislature sought to overturn the Supreme Court decision of 1985. Its method was peculiar; it did not change the 1981 legislation in any respect, but pro- vided only that those injured before its effective date of March 31, 1982 should continue to receive multiple bene- fits. Almost like a “bill of attainder,” the 1987 legislative action named the case and stated that the Michigan Su- preme Court decision of 1985 had misconstrued the 1981 legislative intent. The actual statute reads as follows: The decision of the Michigan Supreme Court in Franks v. White Pine Copper Div., 422 Mich. 636 (1985) is declared to have been erroneously rendered insofar as it interprets this section, it having been and be- ing the legislative intention not to coordinate pay- ments under this section resulting from liability . . . for personal injuries occurring before March 31, 1982. It is the purpose of this amendatory act to affirm rd —_— .... Michigan Acts, 1987, PA 28, Sec. This 1987 act then directed employers to pay all arrear- ages back to 1982 within 60 days, with interest. = = As Chief Justice Riley points out in the dissent, p. &, only “11 of the 26 senators’”’ who voted in 1981 were still in the Senate in 1987, and only “20 of the 62 represen- tatives” who voted in 1981 were around in 1987. The 1987 action reflects the “intention” of its 1987 members, not the intention of the members voting in 1981. The instant case arises from these plaintiffs suing Gen- eral Motors and Ford under this 1987 act for all the ar- rearages in the multiple payments since March 31, 1982, despite the Michigan Supreme Court decision of 1985 de- claring that General Motors and Ford (and all other em- ployers) had validly discharged these precise obligations. The Court below then overruled its 1985 decision, bow- ing to this newly declared “intent,” and upheld plaintiffs’ claim retroactively back to March 31, 1982, the effective date of the earlier statute. It is this decision for which certiorari is sought. The issue before this Court is of great importance to this amicus curiae, the National Council of Self-Insurers, which has members in the 25 states who have enacted similar “coordination of benefit’? programs. For General Motors and Ford, the claims of these plain- tiffs amount to a retroactive $25-million liability. While Ford and General Motors may be two of Michigan’s larg- est employers, these two collectively are a distinct minor- ity of all Michigan employers who will now be required to make the retroactive back payments, with interest, commanded by the 1987 statute and the decision below of the Michigan Supreme Court. The total liability is in gross an amount considerably greater than the $25-million mentioned in the decisions below. Further, the question here, getting some kind of control over the proliferation and overlapping of benefit programs, is important to the nation’s economic health and is being colin addressed currently by many organs of government, fed- eral, state, and local. That effort gets a decided jolt by decisions such as this one by the Michigan Supreme Court. REASONS FOR GRANTING THE PETITION THE DECISION BELOW VIOLATES THE CONTRACT CLAUSE OF THE U.S. CONSTITUTION. THIS COURT DECLARED IN STATE INDUSTRIAL COMMISSION v. NORDENHOLT CORP., 259 U.S. 263 (1922), THAT A WORKER’S COMPENSATION “AWARD IS READ INTO AND BECOMES PART OF THE CONTRACT” OF EM- PLOYMENT. SO, ALL THE PAYMENTS MADE HERE FROM 1982 TO 1987 WERE PURSUANT TO THAT EM- PLOYMENT CONTRACT, IN ACCORDANCE WITH THE 1981 STATUTE AND ITS EXPRESS APPROVAL BY THE MICHIGAN SUPREME COURT IN 1985. THESE PAY- MENTS VALIDLY DISCHARGED CONTRACTUAL OB- LIGATIONS. THE DECISION BELOW REOPENS ALL THESE CONTRACTS AND DEFINITIVELY INVADES THE CONSTITUTIONAL PROVISION FORBIDDING THE IMPAIRMENT OF CONTRACTS. It is rudimentary that a workers’ compensation statute becomes part of every employment contract covered by that statute, as this Court expressly held in State Indus- trial Commission v. Nordenholt Corp., 259 U.S. 263 (1922). Workers’ compensation awards become part of that contractual obligation: The contract of employment, by virtue of the statute, contains an implied provision that the employer, if the employee be injured, will pay to him a certain sum... . Ilbid., p. 271. If not paid, this contractual obligation to pay can be sued upon and enforced like any other contractual obligation. The scope of a contract embraces not just the contract itself, but the state law and its judicial interpretations, = as this Court held in United States Trust Co. v. New Jersey, 431 U.S. 1 (1977). At pp. 19-20, it is stated: The obligations of a contract have long been regarded as including not only the express terms but also the contemporaneous state law pertaining to interpreta- tion and enforcement. Thus the 1981 statute and the 1985 decision of the Mich- igan Supreme court construing it constitute the contract here, a contract which is retroactively cancelled by the decision below. Past completed transactions pursuant “to the express terms ... and contemporaneous state law”’ have been reopened and new and different liabilities cre- ated. This is precisely what the Contract Clause forbids. Michigan’s own decisions as well as those of this Court hold that workers’ compensation obligations are contractual obligations. Brown v. Eller Outdoor Advertising Co., 139 Mich. App. 7, 360 N.W.2d 322 (1984); Thomas v. Parker Rustproof Co., 284 Mich. 260, 279 N.W.2d 504 (193%). The court below, on its own, makes one exception to its retroactive judgment, a curious exception in view of the broad, retroactive sweep it gives to the 1987 statute. It bows to the concept of res judicata, by exempting from the 1987 statute any case in which the parties had sued each other and that suit had reached a final judgment. This produces a curious result; those who respected the words of the legislature and the judicial holding in 1985 are the ones who now must pay the retroactive tribute. Those who did not respect the law and resorted to litiga- tion are exempt from it. The doctrine of finality is the principle of res judicata, as well as that of the Contract Clause. It is embodied in other sections of Michigan’s workers’ compensation stat- ute, sections not mentioned by the majority below or by the legislative act. One section provides, as a restriction on an employee reopening past transactions: =~ = . . . nO compensation shall be ordered for any period which is more than one year prior to the date of such action. MCL 418.833(a). The other section of the statute restricts an employer from reopening completed transactions after one year: When an employer or carrier takes action to recover overpayment of benefits, no recoupment of money shall be allowed for a period which is more than one year prior to the date of taking such action. MCL 418.833(2). These two sections, bilaterally fair to employee and em- ployer, were not mentioned in the 1987 statute or in the opinion below. They remain unimpaired in the statute, al- though the first quoted section is cancelled by the deci- sion below, wthout acknowledging it even exists. Thus, the statutory scheme of finality of all workers’ compensation transactions after one year is totally breached here; completed transactions running back to March 31, 1982 are reopened by the decision below. The opinion seems to believe making this exception for res judicata saves it from what might otherwise be a vio- lation of the U.S. Constitution. It does not; “finality’’ is the basis of the Contract Clause, too. We are dealing with completed contractual transactions protected by the Con- tract Clause. A. The Contract Clause Is Stated In Terms As Absolute As The First Amendment’s Protection Of Free Speech. It Forbids ‘‘Any Law Impairing The Obligation Of Con- tracts.” Article I, Section 10 of the U.S. Constitution provides simply that ‘“‘no state shall... pass any . . . law impair- ing the obligation of contracts... .” The Michigan court below reads the contract clause as if it stated, “No state shall pass any law unreasonably impairing the obligations of contracts.”’ “Reasonable” or _ “unreasonable” is not the issue when the constitutional impairment stands alone as here, with no competing con- stitutional issue involved. In Chicago Board of Realtors, Inc. v. City of Chicago, 819 F.2d 732 (7th Cir. 1987), Judge Posner wrote at p. 743: Imagine what freedom of speech would have come to mean if the court had interpreted the first amend- ment—which is no more absolute in its language or clearcut in its history than the contract clause—as loosely as it interprets the contract clause. Amicus suggests that the contract clause should be en- forced as it is written in the Constitution in the instant case. There is no competing constitutional value to weigh in this case, nor any “compelling demonstration of neces- sity” requiring that the contract clause be regarded as just one of a hierarchy of constitutional values. Nor is there any crisis shown here even faintly resembling the problem faced by this Court in the 1934 Depression re- quiring any balance of competing considerations as in Home Building & Loan Association v. Blaesdell, 290 U.S. 398 (1934). Cases may arise presenting a conflict between two con- stityional values, each absolute in itself, where some rule of reason may have to be applied. But in this case, only one constitutional value is involved, the Contract Clause and the Rule of Law in our society. No countervailing constitutional value is asserted which requires any weigh- ing or “rational relationship” test. The court below had no basis even to explore any “rational relationship” test. B. The Majority Opinion Below Does Not Pass Any ‘‘Ra- tional Relationship Test,’’ Even If That Test Is Appli- cable. The majority opinion seems to state first that there is no contract here to be impaired, despite the Michigan de- = = cisions clearly holding that these workers’ compensation issues involve contractual obligations. Brown v. Eller Out- door Advertising Co., 139 Mich. App. 7, 360 N.W.2d 322 (1984). The majority below then quickly leaves this position, admits there is a contract and a contractual impairment here, and discusses whether it can be justified. For this purpose, it launches into a three-part balancing test. Opin- ion, pp. 16-19, with the following assertions: 1. The Impairment of Contract Is Not Substantial. One assertion of the majority below is that the impair- ment of contract is not substantial. Amicus submits that the $25-million liability imposed on Ford and GM is “sub- stantial.” The majority opinion below avoids discussion of such a simple answer to its own question by going to the opposite extreme. It launches into a discussion of the employer's immunity from tort actions, asserting this immunity to be the “basic benefit’’ to the employer. Because this “basic benefit” is undisturbed by the 1987 legislation, the major- ity declares there is no “substantial” impairment of contract. Under this analysis, any amount of retroactive liability, perhaps trip''ng the compensation payments in all cases since 1920 (with compound interest) wouid be permissi- ble, so long as the exclusive remedy was not disturbed. Amicus submits this is not the law. This Court held in Allied Structural Steel v. Spannaus, 438 U.S. 233 (1978), that requiring an employer to pay pensions which had not yet contractually vested was a “substantial impairment of contractual expectations.” The question according to Justice Stewart is whether something significant has been taken away by the statute, not whether it leaves anything of some value. (The sum involved in = ™ Spannaus was $185,000 compared to the stated $25-million liability and was held to be a substantial impairment.) Under the majority’s analysis, there must be a total de- struction of all value before a legislative act could be con- sidered unconstitutional. But, as this Court has repeatedly held, “total destruction of contractual expectations is not necessary for a finding of substantial impairment.” Energy Reserves Group v. Kansas Power & Light, 459 U.S. 400 at 411 (1983); United States Trust Co. v. New Jersey, 431 U.S. 1 at 26-27 (1977). Most lower courts have so held, too. State of Nevada Employees Association v. Keating, 903 F.2d 1223, at 1227 (1990) (restriction of employees’ right to withdraw pension contributions without penalty); Michael v. Workers’ Compensation Court, 763 P.2d 1122, 1125 (Montana, 1988) (mandatory mediation of disputes causing delay in recovering benefits). So, contrary to the majority opinion below, the issue under the contracts clause is whether something substan- tial has been taken away, not whether anything of value is left. The decision below took “‘substantial’’ amounts away from these defendants. 2. There Is No Impairment Because ‘“‘the Defendants Knew That Their Rights Were Subject to Alteration.”’ This is a second pillar of the majority’s balancing test, and it doesn’t fit this case. Every citizen knows that fu- ture rights may be altered by a legislature. But, if past completed transactions can be reopened and altered, then no one in our society can possess any reasonable expec- tations or the confidence required to plan future commit- ments. Under the majority opinion below, there is no fi- nality at any time, on any issue, and no transaction is ever over or closed. No business, no citizen can make any plans for the future, if the past is so unstable. =e Justice Stewart, in Allied Structural Steel v. Spannaus, supra, wrote: If the Contract Clause is to retain any meaning at all, it must be understood to impose some limits upon the power of a state to abridge existing contractual rights, even. in the exercise of its otherwise legitimate police power. 438 U.S. at 242. Contracts ei able individuals to order their personal business affairs . . . . Once arranged, those rights and obligations are binding under the law, and the parties are entitled to rely on them. [bid. at 245. There can be no stability in this nation’s affairs if legislatures can suddenly reopen several years of com- pleted transactions and decree them null and void. The Contract Clause forbids such gross alteration. No citizen can plan a future, if they cannot rely on the finality of past, completed transactions. These petitioners had the legitimate expectation, protected by the Constitu- tion, that these past, completed transactions would not be altered. 3. The Legislature and the Courts May Impair Con- tracts in the “‘Reasonable Exercise of the Police Power.”’ This statement from the majority opinion is much too broad. If the police power is unlimited, there is no room left for the Contract Clause, the First Amendment, res judicata, or any other constitutional right. Such a state- ment leaves no place for the Rule of Law in our society. If the contract clause is to retain any meaning at all ... it must be understood to impose some limit up on the power of a state to abridge existing contrac- tual relationships, even in the exercise of its other- wise legitimate police power. J. Stewart in Allied Structural Steel v. Spannaus, 438 U.S. at 242. See also Pension Benefit Guaranty Fund v. R. A. Gray & Co., 467 U.S. 717 (1984); United States Trust Co. v. New Jersey, 431 U.S. at 22. As to whether the 1987 legislation meets any special need requiring the use of the police power, there is ab- solutely no legislative history or record concerning that need, no problem described in a legislative record, no ex- planation of any problem or how this legislation meets the problem. Garris v. Hanover Insurance Company, 630 F.2d 1001 (4th Cir. 1980) at p. 1009 states the necessity of legislative sources to evaluate the rationality of a con- tract clause challenge. There is none in this case. The majority opinion, however, invents its own assump- tion to support the lack of any legislative finding of prob- lem or need. It assumes, although it is nowhere stated in the statute or legislative history, that the legislature in 1987 wanted to help employees whose benefits were not increased in other legislation enacted in 1981. The majority opinion’s assumption is false, aside from the propriety of a court’s supplying its own justification, where the legislature itself has omitted any justification. The plaintiffs here suffered no decrease in benefits com- pared to other employees in 1981 or 1982. This coordina- tion of benefits statute was a separate bill having nothing to do with the amount of benefits. The opinion below con- fuses two separate legislative statutes enacted in this period, one of which gave a benefit increase to this Plain- tiff Romein. This was Michigan Public Act 357 of 1980. It had nothing to do with coordination of benefits. The statute gave increases to prior injury cases, such as these plaintiffs; all claimants having accidents between 1965 and 1979 received increased benefits, running from 10.3% to 86.6%. Plaintiff Romein, whose accident was in 1977, received $21 more per week. MCL 418 352. Record Exhibit II-4. (This $21 a week increase was paid from the =s state’s general fund, not by employers, thus avoiding any issue of retroactivity and impairment of contracts.) This clear fact destroys the assertion by the majority, its attempt to invent a “rational” reason for the 1987 statute; pre-1981 claimants did get increases in 1981. Coordination of benefits, the subject here, was passed later, in December, 1981, effective March 31, 1982, in a bill confined to that subject. Michigan Public Act 203 of 1981. Consequently, the court-supplied assumption to justify the 1987 legislation, that the 1987 legislature wanted to give benefits to pre-1981 claimants who received none, was a false one. No explanation other than this assertion by the court itself is offered of any need or intent, or _ how the 1987 legislation might meet that need. There is none in any legislative record, and the majority’s invented assumption is false. Amicus submits there is no problem or need described anywhere justifying even a “reasonable exercise of the police power” to justify retroactivity. There is no conflict between any competing constitutional rights requiring a weighing of “rational relationship,” nothing which permits a legal challenge to the clearly stated Contract Clause of the U.S. Constitution. LEGISLATORS MAY ACT ONLY DURING THE PERIOD THEY HOLD OFFICE. A CURRENT LEGISLATURE CAN- NOT ACT FOR OR BIND FUTURE OR PAST LEGIS- LATORS WITHOUT VIOLATING DUE PROCESS OF LAW. Due process of law in various forms is argued in other briefs. This amicus will confine itself to a discussion of the temporal time limits on assertions of power by legislators. As set forth under the Statement of Facts, the 1987 Michigan legislature purported to construe (actually to - = change) the “intent” of the 1981 legislature, after the 1981 statute passed through the crucible of judicial construc- tion in 1985. The 1987 statute as enacted simply stated that the 1981 legislature’s “intent” differed from that found by the Michigan Supreme Court in Franks v. White Pine Copper Div. and Chambers v. General Motors Corp., 422 Mich. 636, 375 N.W.2d 715 (1985). Chief Justice Riley in her dissent points out the ludicrous nature of the 1987 legislators’ determining the intent of the 1981 legislators; only 11 of the 26 senators in office in 1981 were still in the senate in 1987, and only 20 of the 62 representatives were still in office in 1987. Thus, there is no basis for the 1987 legislators to assert or change whatever “intent” existed among the 1981 legislators. It also invades the “time zone” of authority and sov- ereignty of the 1981 legislature itself by overturning its 1981 vote. This presents the due process question. Amicus urges the Court to examine an article on this subject, ““Temporal Limits on the Legislative Mandate: Entrenchment and Retroactivity,” 1987 American Bar Foundation Research Journal, beginning on page 379. The author is Professor Eule of the Law School at the Univer- sity of California at Los Angeles. Professor Eule explains why a current legislature can- not “rewrite history” by overturning the votes of its predecessor legislators. At p. 445: .. . What if, on January 3, the newly elected rep- resentatives conducted a “recount” of all legislative voting that had occurred during the preceding two years, substituting the votes of the new represen- tatives for those of their predecessors? If these recounts were accompanied by a decree that the bills which could no longer muster a majority vote were to be treated as never having been en- =~ = acted, we would surely conclude that the spirit, if not the letter of the Constitution had been violated. This is precisely what the Michigan legislature did in 1987. Professor Eule continues: The voters do not delegate authority to rewrite his- tory. Their earlier agents exercised legitimate author- ity when they enacted legislation. While such efforts may be repealed, this is not the same as retrospec- tive eradication. Again, Professor Eule describes exactly what the 1987 Mich- igan legislature did, eradicating not only the 1981 vote, but the 1985 Supreme Court decision, too. Professor Eule then examines the reverse situation, prior bills which did not pass: A decision that bills defeated by prior legislators can now be enacted and treated as if they had been en- acted earlier arguably runs afoul of this same prin- ciple. The then-authorized representatives made a choice, and their decision demands recognition of the polity for that point in time. Each set of elected of- ficials ought to be viewed as endowed by their sov- ereign with the mandate to make policy choices only within a bracketed temporal zone. Just as the delegation of authority does not encom- pass incursions into the domain of legislatures to come, it does not contemplate contravening the sanc- tity of the past. Drawing on this Court’s analysis in Allied Structural Steel v. Spannaus, 438 U.S. 233 (1978) (a case amicus has cited on impairment of contracts), Professor Eule poses this question: Assume that the Minnesota legislature, from 1963 to 1974, had defeated pension-vesting legisiation, but in 1974, that legislation finally squeaks through, not just for new pension plans, but retroactively to 1963, where such bills had been defeated: Doesn’t such an enactment invade the exclusive do- main of the predecessor legislatures? Jbid., p. 397. = Chief Justice Riley in her dissent, pp. 5-6, quotes ex- tensively from the floor debate of 1981 on this coordina- { tion of benefits bill. The remarks of Representatives Cush- ingberry, Emerson, Vanek, and Kelsey in opposition to its passage expressly recognized the bill’s content and its “intent” as it passed. And, in 1982, Senate Bill 834 proposing to repeal this 1981 vote on coordination of benefits was soundly defeated, a further demonstration of the legislative “intent” to enact and retain this “coordination of benefits” statute. Thus, the content and the “intent” was clearly fixed in 1981, as the Michigan Supreme Court held in 1985. The 1987 legis- lature can repeal the 1981 statute, but it cannot change the clearly expressed intent of that statute, or deny its enactment. Amicus submits that the 1987 legislature, consistent with due process of law, did not have the power to rewrite the history of 1981 and 1982 and declare that these clearly recorded actions embodying the content and the “intent” never occurred. Professor Eule submits that restricting legislatures to the time zone of their authority is part of due process, and “serves as our guide to assessing retroactivity where specific clauses of the Constitution, (ex post facto, contract or takings) are not applicable.” Jbid., p. 397. Without this constitutional structure of due process, there is no stability, past transactions are never final, plans and expectations based on stability of law are not allowed to any citizen. With actions and decisions such as occurred in Michigan, set forth fully and precisely in this record, there is no Rule of Law; when the past is unstable, there are no stable premises permitting citizens to make future com- ~20— mitments. The whims of legislators may control our fu- ture, but due process forbids those whims to control our past as well. CONCLUSION For these reasons, the National Council of Self-Insurers, as amicus curiae, urges this Court to grant the Petition for Certiorari. Respectfully submitted, DOUGLAS F. STEVENSON SreveNsON, Rusin AND FRIEDMAN, LTD. 10 South Riverside Plaza Suite 1530 Chicago, Illinois 60606 (312) 454-5110 Counsel for Amicus Curiae —la— APPENDIX 1 State Workers’ Compensation Laws U.S. Department of Labor Employment Standards Administration Office of Workers’ Compensation Programs Branch of Workers’ Compensation Studies January 1990 TABLE 17. OFFSET PROVISIONS IN STATE WORKERS’ COMPENSATION LAWS ALASKA Section 23.30.225(a)—When periodic retirement or sur- vivors’ benefits are payable under Title II of the Social Security Act (42 U.S.C., 301 et seq.), the weekly compen- sation for total disability or death shall be reduced by an amount equal to one-half of the Federal benefits for such week. (b) When a claim has been filed under this chapter, any weekly disability benefits payable shall be offset by benefits in accordance with 42 U.S.C., 401 et seq., by an amount which exceeds 80 percent of the employee’s average weekly wage at the time of injury. (c) When em- ployer contributions to a pension or profit sharing plan are used in determining gross earnings and the employee is receiving pension or profit sharing payments, the week- ly compensation benefits for total disability and death will be reduced. Section 23.30.187—Compensation for temporary total dis- ability is not payable during any week in which unemploy- ment compensation benefits are also payable. CALIFORNIA Section 4753—Additional compensation for subsequent injuries shall be reduced by any monetary payments from any source, except for a pension or a service-connected disability which was incurred in the U.S. armed forces. Section 4904—Permits liens to be made against tem- porary total disability indemnity for any unemployment compensation disability benefits being received. COLORADO Sections 8-50-103 and 8-51-101—Benefits for disability in this State shall be reduced by 50 percent and death by 100 percent of any Federal OASDI payments, or the work- men’s compensation act of another State or of the Fed- eral Government, or of an employer pension or disability plan. Section 8-51-101(1XeXii)—Permanent total disability bene- fits shall be reduced by 50 percent of any Federal OASDI payments received after the claimant reaches the age of 65, or in the case of a claimant who begins to receive employer-paid retirement payments at the age of 65, by ‘an amount determined as a percentage of such benefits. Section 8-51-101(1Xf)—Weekly temporary and permanent total disability benefits shall be offset by 100 percent of any unemployment compensation benefits received for the same week, with certain exceptions. DISTRICT OF COLUMBIA Section 36-308(g)—Weekly compensation benefits are off- set if the sum of any Federal Old Age Survivors Insur- ance benefits, or any employee benefit plans subject to the Employee Retirement Income Security Act of 1974, = or any other employee income maintenance plan which is funded solely by the employer plus such weekly compen- sation benefits exceeds 80 percent of the employee’s aver- age weekly wage. FLORIDA Section 440.15(3\(b\4)—Provides that if an employee is entitled to both wage-loss benefits and social security retirement benefits, the social security retirement benefits will be primary and wage-loss benefits supplementary. The sum of any combined benefits must not exceed the amount of wage-loss benefits which would otherwise be payable. Section 440.15(9)—Weekly compensation benefits for dis- ability are offset by the amount of any Federal OASDI payments so that the claimant’s total benefits do not ex- ceed 80% of his/her average weekly wage. Section 440.15(10Xa)—No weekly compensation payments are made for temporary or permanent total disability under the workers’ compensation law for any week in which unemployment compensation benefits are paid. Section 440.15(19Xb)—Offsets wage-loss or temporary partial disability benefits by the amount of any unemploy- ment compensation benefit payments. LOUISIANA Section 1225—Permanent toial disability benefits payable under the Act will be reduced for those recipients who are also receiving Federal OASDI benefits. This reduc- tion is to be made only to the extent that the amount of the combined Federal and State workers’ compensa- tion benefits would otherwise cause or result in a reduc- tion of the Federal benefits pursuant to the Social Secu- rity Act (42 U.S.C., Section 424a). —49— Section 1225-B—No compensation will be paid for tem- porary or permanent total disability or supplemental earn- ings benefits during any week in which the employee is receiving or entitled to receive unemployment compensa- tion benefits. MAINE Section 111-A—Offsets benefits for personal injury or disease under an insured disability or medical payments plan against payments for workers’ compensation. Section 62-A—Reduces benefit payments by the amount of any concurrent unemployment compensation benefits, excluding lump sum settlements and scheduled permanent partial disabilities. Section 62-B—Reduces total and partial disability bene- fits by: (1) Fifty percent of the amount of old age insurance benefits received under the Federal Social Security Act; (2) The after tax amount of the payments received under an employee benefit plan provided by the same employer, if the employee did not contribute direct- ly to the plan; and, (3) The proportional amount, based upon the ratio of the employer’s contributions to the total contribu- tions, if the employee did contribute directly to the plan MARYLAND Section 36 (1Xa)—Cost-of-living increases for employees who are entitled to compensation for permanent total dis- ability under this section and for disability under the Fed- eral social security act will be reduced to avoid a diminu- tion of the Federal benefits. tallies MASSACHUSETTS Section 36 B(1)—No benefit shall be payable for tem- porary total and permanent total disability for any week in which the employee has received or is receiving unem- ployment compensation benefits. Section 36 B(2)—Any unemployment compensation bene- fits received will be credited against partial disability ben- efits for the same period or credited against any future partial disability benefits which are or may become pay- able. MICHIGAN Section 418.354—Temporary total disability benefits will be reduced by 50 percent of any Social Security benefits; and by amounts received after taxes under any self-insur- ance plan, wage continuation plan, pension or retirement plan provided by the employer to which the employee does not contribute. Section 418.354(1Xf)—Temporary total disability bene- fits will be coordinated with those from employer con- tributions to a qualified profit sharing plan where the employer does not provide a pension plan. Section 418.358—Offsets temporary total, permanent total, and permanent partial disability benefits under the workers’ compensation act dollar for dollar by un- employment compensation benefits. MINNESOTA Section 176.101, Subdivision 4—After $25,000 is paid for permanent total disability, benefits paid by any govern- ment disability program, or any old age and survivors’ insurance benefits program are credited against workers’ compensation benefits, if such disability benefits are oc- casioned by the same injury. —fa— Section 176.111, Subdivision 21—Death benefits shall not exceed 100% of the deceased employee’s weekly wage at the time of the injury causing his death, when the total weekly government survivor benefits and the state work- ers’ compensation benefits are combined, nor be payable for any week in which the government benefits exceed such percentage. MONTANA Sections 39-71-701(2) and 39-71-702(2)—If periodic disabil- ity benefits are payable to the worker under the Federal OASDI, weekly temporary total and permanent total dis- ability benefits resulting from both injury and occupational disease shall be reduced by an amount approximating one- half (but not below zero) of the Federal benefit for such week which amount is to be calculated from the date of the social security disability entitlement. NEW JERSEY Section 34:15-29—Workers’ compensation benefits may be offset against disability pension benefits or payments. Section 34:15-95.4—Supplemental benefits for permanent total disability and death shall be offset by any Federal survivor or disability benefits, black lung, or disability pension benefits. Section 34:15-95.5—Reduces permanent total disability or subsequent injury benefits of individuals under age 62 by Social Security benefits where the period of disability began after December 31, 1979. NEW MEXICO Section 52-1-70 A&B—Offsets unemployment compensa- tion benefits against total disability benefits. If a worker —14— , is concurrently entitled to both types of benefits, the un- employment compensation benefits shall be primary and total disability benefits shall be supplemental only, and the sum of the two benefits shall not exceed the amount of total disability benefits otherwise payable. NEW YORK Section 16(1-c) and (7)—Applies a statutory offset of a sole surviving spouse’s compensation by up to 50 percent of his or her social security benefits, if any. Further, pro- vides that in computing the offsets, any increase in bene- fits under the Social Security Act that occurs after the date of death shall not be considered; and any such off- set shall be equally applicable to payments under the So- cial Security Act which are received retroactively, but shall not apply to increases for such benefits received retroactively. NORTH CAROLINA Section 97-42.1—Provides that compensation for tempor- ary total or permanent total disability benefits may be reduced by the amount of any unemployment insurance benefits received for the same period. NORTH DAKOTA Section 65-05-08—Offsets partial or total disability bene- fits of any worker who fails to report wages received from any part-time or full-time employment. Section 65-05-09.1—The aggregate benefits payable for temporary total or permanent total disability shall be re- duced, but not below zero, by an amount equal as nearly as practical to one-half of the benefits payable under Title II of the Social Security Act (42 U.S.C. 423) and will not — be affected by any increase or decrease in Federal bene- fits. Any escalation of temporary or permanent total dis- ability benefits, which would adversely affect the bureau's right to offset workers’ compensation benefits against social security benefits, shall not be applicable to persons whose benefits are offset, as provided for in this chapter. Section 65-05-09.2—Retirement offset. If a claimant is entitled to permanent total disability benefits and social security retirement benefits under 42 U.S.C. sections 402 and 405, the aggregate wage-loss benefits payable under this title must be determined in accordance with this sec- tion. The employee’s social security retirement offset must equal forty percent of the calculated ratio of the employ- ee’s average weekly wages, as calculated on the com- mencement of the first, or recurrent, disability to the cur- rent State’s average weekly wage. Any offset calculated cannot exceed forty percent of the employee’s weekly so- cial security retirement benefits. If a claim has been ac- cepted on an aggregate basis and the worker is eligible for social security benefits, the bureau’s offset must be proportionally calculated. OHIO Section 4123.56—Applies an offset against temporary total disability payments in the event of concurrent and duplicative benefits under an employer funded nonoccupa- tional benefits plan. OREGON Section 656.209—Provides for a social security offset against permanent total disability benefits determined and authorized by the Department in each case. Such offset ; must not result in a reduction of benefits to an amoun' less than the greater of the workers’ compensation bene —9a— fit, the total family benefit under Social Security, or 80% of the average current earnings as determined by Social Security. UTAH Section 35-1-67(4)—After the first 312 weeks of perma- nent total disability payments have been made, future payments will be reduced by the dollar amount of 50 per- cent of the Social Security retirement benefits received by the employee during the same period. Section 35-1-68(2(A\ii)—Reduces weekly death benefits to wholly dependent spouses after the first six-year period following an employee’s death by 50 percent of any Fed- eral social security death benefits. WASHINGTON Section 51.32—Reduces temporary and permanent total disability benefits to allow an offset for social security retirement benefits under the Federal OASDI, in a man- ner similar to Section 51.32.220 below. Section 51.32.220—Reduces temporary and permanent total disability benefits for persons under age 65 by an amount equal to the benefits payable under the Federal OASDI, under certain conditions. WISCONSIN Section 102.44(5)—Reduces disability benefits under this section when the employee also receives social security disability benefits. Combined workers’ compensation and social security disability benefits are limited to 80 per- cent of the employee’s average current earnings. How- ever, such benefits may not be reduced to an amount less than the benefits payable under this chapter. —10a— WYOMING Section 27-14-401(iii)—Prohibits an employee who is re- ceiving unemployment compensation to receive disability benefits under the workers’ compensation act. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0087%3A07. Public record. Not legal advice.