# Petition for Writ of Certiorari — Lofty v. Richardson > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_0002%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1971 - **Citation:** 404 U.S. 985 ## Text TABLE OF CONTENTS I a ca coke énaaxe onesies ceeeehuen I SURES 2NKy bs aa ed Seb eh eee NOs sa eo‘P Question Presented ..............cc cece eens Statutes, Constitutional Provisions and Regula- OOD EIVGEVO iia ried c csc cdas sacsadnccv ents De MI, OE TP ROI, 0 kode dkc cs esw ede be wsiave 6. Reason for Granting Writ of Certiorari........ FF} Set a eo ais pg bbc dahtawawh : ME 6 Se no Khu bp eden e he hand de 904s bisks Appendix B—42 U.S.C.A. 424a, Pub. L. 89-97, Title Mi ron has 0a oo 94 054s a4 oh nee ee eee es 16 19 TABLE OF AUTHORITIES Cases Cited: Page Bartley v. Finch, 311 F. Sgpp. 876 (1970)........ 5,7 Belcher v. Richardson, 317 F. Supp. 1294 (S.D.W. Ws EE hve ead accniees PAT Pr ere errr 4,7 Bolling v. Sharpe, 347 U.S. 497 (1954).......... 8 Flemming v. Nestor, 363 U.S. 603 (1960)..... d, 7, 8, 9, 16 Goldberg v. Kelly, 397 U.S. 254 (1970).......... a Helvering v. Davis, 301 U.S. 619 (1937).......... 5 Knapezyk v. Ribicoff, 201 F. Supp. 283 (N.D. Ill. Ee re rer errr rey frre 9 Morey v. Doud, 354 U.S. 457 (1957) .............. 8 Railway Express Agency v. New York, 336 U.S. WE EE 5 Neb vi oko es esas eed ncennesvdenewas 15 Schneider v. Rusk, 377 U.S. 163 (1964).......... 8 Shapiro v. Thompson, 394 U.S. 618 (1969)...... 8 Sherbert v. Verner, 374 U.S. 398, 404 (1963)...... 8 Williamson v. Lee Optical Co., 348 U.S. 483 (1955) 8 Texts Cited: 3 Larson, Workmen’s Compensation Law, Sec. eee eT ere Ter eT Te eee 13 2 Schneider, Workmen’s Compensation Text, Sec. TTT Teer ee TTT ee Tee 13 Statutes Cited: Page Title 42, U.S.C. ED vc cascceccdveensecinekeadtel 10 co 9 Section 405(g) .............. grtiteeeeeeees 3 Section 423 ...........ccccce (vie bee eee 11, 12 II ios) wa coda wiedeeceer doses 2, 3, 4 ED hace ee ka cit neelgee eee 11 Mich. Stats Ann.: Ek re Seal aneaue aks 13 IE BRUNY aancain sa wwnevucncenvcncccns 14 Ore. Rev. Stats §656.002 et Me Sikcdawstnae ees er 14 West Virginia Code 23-3-1...................06... 6 Wyo. Stats §27-63 et seq. ................0....... 14 IN THE Supreme Court of the United States _—_—-——- ' ELLIOTT RICHARDSON, SECRETARY OF HEALTH, EDUCATION AND WELFARE, Respondent. —_—p———. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE — SIXTH CIRCUIT Ss aeainienh aimee To the Honorable, the Chief Justice of the Umited States and the Associate Justices of the Supreme Court of the United States: The petitioner, by his attorneys Kelman, Loria, Downing & Schneider prays that a Writ of Certiorari issue to re- 5) — view the opinion and judgment of the United States Court of Appeals for the Sixth Circuit entered in this matter on March 4, 1971. 1. OPINION BELOW The opinion of the United States Court of Appeals for the Sixth Cireuit decided and filed on March 4, 1971 and judgment in accordance with that opinion hereinafter (set forth appendix A) is not yet officially reported. 2. JURISDICTION The jurisdiction of this court is invoked under Tile 28 U.S.C. §1254(1). 3. QUESTION PRESENTED Does Section 224 of the Social Security Act as amended in 1965, 42 U.S.C. §424a deny Fifth Amendment Due Pro- cess of Law by unreasonably singling out workmen’s com- pensation as the only offset against social security dis- ability benefits? 4. STATUTES, CONSTITUTIONAL PROVISIONS, AND REGULATIONS INVOLVED Section 424, Title 42 U.S.C. (set forth appendix B). 5. STATEMENT OF THE CASE On March 29, 1966 petitioner filed an application for social security disability benefits, asserting inability to engage in “substantial gainful activity’? from and after January 19, 1966. The application was allowed and a per- iod of disability was established, effective J anuary 19, 1966. Petitioner and his auxiliary beneficiaries, his wife and five children, became entitled to benefits totalling $269.80 per month, commencing August, 1966. However, those benefits were reduced to $25.80 per month on the ground that havng received a net lump-sum redemption settlement of his workmen’s compensation claim under Michigan Law, Section 224 of the Social Security Act, as amended in 1965 (42 U.S.C. §424a), required such reduction. Petitioner protested the reduction and was granted a hearing before a Social Security Hearing Examiner. The Examiner rendered a decision sustaining the Administra- tion determination and crediting of benefits. On J anuary 18, 1968, the Social Security Administration Appeals Council refused review of the Hearing Examiner’s deci- sion. Petitioner ‘then filed a civil suit in the United States District Court for the Eastera District of Michigan, Southern Division, pursuant to the jrdicial review provi- sions of 42 U.S.C. §405(g) contending that section 224 of the Social Security Act as amended in 1965 denied Fifth Amendment Due Process of Law by unreasonably singling out workmen’s compensation as the only offset against social security disability benefits. Defendant-respondent interposed a motion for summary judgment which was granted by the United States District Judge by order en- tered on March 25, 1970. . 4 Pursuant t stasis mae and provided. petitioner filed an appeal wy the Vntet State Sour of Appees for the Sixth Cireait amd sid Coot rendered en opinion deted Mareh 4, 191 speeding te veetitutionelity of Section 224a (appendiz 4. ct 6. REASON POR GRANTING WRIT OF CERTIORARI An important federn. yueeien 2 presented in this cose In that petitioner 2eeerm te ue weny or reduction of Social seemrity Cisatacy “euette we wouek ne end bis de f pendents have teen serutet mur 42 USC. (Abe de prives petitioner 2nd ss cepemders of property withont due proses of law 22 crctetes or te Fifth Amendment of the Constitatica of ste Utes Breer. ox chee sel provi- ions 36 diserim nas eget peer eel other persons 2A In similar sitnacicas. 24 we vivdetive of Sue process. In addition, the asent ee oe ct eppropriese one for review under Sapreme (ourt Bue 14 y) teense there exists a conflict mm tee coceene of our Federe) Courts on this question .- - On September 1) 10 me Ute Sete: Lnetrie Conrt for the Seathern Listes of Weer Virgie hended down ite decision in 13 compensation personal injury awards? Are they more re- liable than the 2 percent receiving workmen’s compen- sation benefits and can it be said that they would be less deterred from rehabilitation, though their combined bene- fits might well exceed their average prior wage? We think not. Duplication of Public Benefits The second rationale advanced by the Government for Section 224 as stated in its brief to the District Court and Court of Appeals is as follows: “{Blenefits which are not workmen’s compensa- tion but are received as a result of a non-work con- nected disability are significantly different—public monies are not involved and there is no duplication of public benefits which the Congress by enactment of the statute sought to avoid.” Again assuming that it is open to Congress to preclude or limit the ‘‘duplication of public benefits,” the Govern- ment argument completely misconceives and misdescribes workmen’s compensation. The Government asserted below that workmen’s compensation is ‘‘significantly different” from benefits received as a result cf non-work connected disability because the former entails the expenditures of ‘“‘public monies,” as the latter does not. This simply is not so. Workmen’s compensation benefits in most states are paid either directly by the employer (as self-insurer) or by the employer’s insurance carrier. See 3 Larson Workmen’s Compensation Law $92.10, p. 444; 2 Schneider, Workmen’s Compensation Text §2482, p. 207. In Michigan an employer may make payment by one of four methods set forth in Comp.. Laws §414.1, M. S. A. $17,195: 14 ‘First, upon furnishing satisfactory proof or bond in a reasonable amount as may be determined by the commission, to said commission of his sol- vency and financial ability to pay the compensation and benefits hereinbefore provided for, to make such payments directly to his employees, as they may become entitled te receive the same under the terms and conditions of this act; or “Second, to insure against such liability in any employer’s liability company authorized to take such risks in the State of Michigan; or ‘‘Third, to insure against such liability in any employer’s insurance association organized under the laws of the state of Michigan; or “Fourth, to request the commissioner of in- surance of the state of Michigan to assume the ad- ministration of the disbursement. of the premiums and assessments necessary to pay the same * * * ” It should be noted that even the last method of payment, through the administrative instrumentality of the state accident fund, in no way involves the use of ‘‘ public money.” Indeed the statute, Comp. Laws §415.1, M.S.A. §17.199, q specifically states that ‘‘neither the commissioner of insur- ance nor the state of Michigan shall become liable or re- sponsible for the payment of claims for compensation under the provisions of this act beyond the extent of the funds so collected and received by him... ” According to the Larson and Schneider treatises, supra, only five states provide for a state industrial accident fund as the exclusive vehicle for -2vment (Nevada, North Da- kota, Oregon, Washington, and Wyoming), but, again, the state fund is not composed of pubitic monies but of pre- miums paid by the employers. See, e.g., Ore. Rev. Stats $656.002 et seq., Wyo. Stats. §27-63 et seq. PELE ay ROT ae ON HE CSET NS, 15 Thus the premise on which the Government's “‘duplica- tion of public benefits” rationale depends is entirely in- applicable to workmen’s compensation benefits. In fact, Section 224 of the Social Security Act would actually permit a claimant to receive funds which are public in the most literal sense (i.e., taxpayer-provided) without suf- fering diminution of his social security disability benefits in @ case, for example, in which the claimant received a tort recovery from a municipality, state, or other unit of government. To invalidate Section 224, as we urge this Court to do, would not deprive Congress of the power to impose a ceil- ing on combined benefits. It would only require Congress, should that be its policy, to ect in an even-handed manner with respect to all practically and rationally indistinguish- able benefit sources. Writing in Railway Express Agency v New York, 336 U.S. 106, 112-13 (1949) (concurring opinion), Mr. Justice Robert Jackson developed this point with his customary grace of expression : “Invalidation of a statute or ordinance on due process grounds leaves ungoverned and ungovern- able conduct which many people find objectionable. “Invocation of the equal protection clause, on the other hand, does not disable any governmental body from dealing with the Subject at hand. It merely means that the prohibition or regulation must have a broader impact. I regard it as a salu- tary doctrine that cities, states and the Federal Government must exercise their powers so as not to discriminate between their inhabitants except upon some reasonable differentiation fairly related to the object of regulation. This equally is not merely abstract justice. The framers of the Con- stitution knew, and we should not forget today, that there is no more effective practical guaranty against arbitrary and unreasonable government 14 than ww recurs wa tue priueipier Of law whieh CfGiasA WF ee ys & erty Wut be un- pose generat (“Currersery. uvtumy gpene the Bae oy RSET ete ft eo etrvery we w allow these fleas teed But Cuvee UY 2 few to Whom they wll army peel tI tone 10 epmpe the tehitieal retro aa mogEt ve visited upon them 2 arger runner vere effete Court can taAZe BG “ACS? memes WY eeBUre tet lewe will be past than we rere ue ee ee eRe Wo Uperation.” In ita present form Sem 2 eee ut atverse treat ment th resitaenta of were + sulmpeuseuen and to them alome. N-ther 17 tte pire ue Goverment suugnt w aserite te, Comgree aa stuvuely yueufy tue treatment Barring te sro of oe eau oyettive tw wich benefit-retusuea lace. uM Ov oremer: scompensauon ub relevant amd meme 124 eres ty ub tne pection stands aa an act of eee eT we Te vee ents Of Workmen's COMMPENSAUGE of % Va) et ue aeves for curtailing the System's tenets orcinw Secer of owurse it sufficient justifiestiom for tne creeoee Te Coperiucnetion in short is invidious im te scares peut. Aud for the court to declare 2 Tevatcn ff Pd Asuendient due process here is net % extent gutucea fur segieetive wisdom. put to fired thas Seta 2 ew owen fle within the prohilated we cose or Fem +. Nestor, supra, beramse it “manatees ¢ teri erutrery ceselficetion utteriy laszing = ratte guewtemuv.” 17 CONCLUSION For the reasons aforementioned, petitioner does pray that a Petition for Writ of Certiorari to the Court of Ap peals for the Sixth Circuit should be granted. Respectfully submitted, JEROME W. KELMAN For Kelman, Loria, Downing & Schneider Attorneys for Petitioner 2800 Cadillac Tower Detroit, Michigan 48226 961-7363 19 APPENDIX A No. 20484 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT Barber Lofty, Plaintiff-Appellant, v. Elliott L. Richardson, Secretary of Health, Educaton and Welfare, Defendant-Appellee. Appeal from the United States District Court for the Eastern District of Michigan, Southern Disrict. Decided and Filed March 4, 1971 Before: Edwards and Miller, Circuit J udges, and O’Sul- livan, Senior Circuit Judge. Edwards, Circuit Judge. In this case appellant attacks the constitutionality of an amendment to the Social Secu- rity Act adopted in 1965 (42 U.S.C. § 424(a), as amended, (Supp. V, 1969) ) which had the effect of reducing a claim- ant’s Social Security disability benefits by the amount of Workmen’s Compensation benefits received by him where the total received under the two programs exceeded 80% of his previous average monthly wages. Appellant claims this provision violates the due process clause of the United States Constitution because when Congress made Work- men’s Compensation the only subject for such deductions, it thereby created a patently arbitrary classification. 20 We begin our consideration of this case, as indeed we must, with the Supreme Court’s last ruling upon an invi- dious classification argument in a Social Security case. “This is not to say, however, that Congress may exercise its power to modify the statutory scheme free of all constitutional restraint. The interest of 4 covered employee under the Act is of sufficient sub- stance to fall within the protection from arbitrary governmental action afforded by the Due Process Clause. In judging the permissibility of the cut-off provisions of § 202 (n) from this standpoint, it is not within our authority to determine whether the Con- gressional judgment expressed in that section is sound or equitable, or whether it comports well or ill with the purposes of the Act. ‘Whether wisdom or un- wisdom resides in the scheme of benefits set forth in Title II, it is not for us to say. The answer to such inquiries must come from Congress, not the courts. Our concern here, as often, is with power, not with widom. Helvering v. Davis, supra, at 644. Particu- larly when we deal with a withholding of a noncon- tractual benefit under a social welfare program such as this, we must recognize that the Due Process Clause can be thought to interpose a bar only if the statute manifests .a patently arbitrary classification, utterly lacking in rational justification.” Flemming v. Nestor, 363 U.S. 603,611 (1960). (Emphasis added.) Since we cannot say that the classification herein at- tacked was ‘utterly lacking in rational justification,” we cannot hold as app2llant asks that Congress was without power to pass the 1965 amendment. Claimant in this case was granted total and permanent disability benefits under the Social Security Act starting H : : 21 in 1966. In June of 1966 he accepted a lump sum ‘‘redemp- tion settlement” in full payment of his Workmen’s Com- pensation claim arising out of the same injuries which produced his total and permanent disability for Social Se- curity benefits. Taking into account the Workmen’s Compensation settle- ment, the Secretary reduced claimant’s Social Security benefits from $269.80 a month to $25.80 per month for 44 months, or until the Compensation settlement had been ex- hausted at the rate of $57 per week. This action was taken under 42 U.S.C. § 424(a), as amended, (Supp. V, 1969), which placed a Iimit of 80% of claimant’s previous average ‘monthly earnings upon the total of Social Security and Workmen’s Compensation benefits which he was to re- ceive. Section 424(a) required that only the difference, after deduction of Workmen’s Compensation benefits, should be paid by Social Security. This reduction formula was adopted by Congress in 1965, effective January 1, 1966. Much of the testimony which preceded its adoption argued that double disability bene- fits close to or exceeding prior earnings defeated the pur- pose of motivating injured beneficiaries back toward pro- ductive work and tempted the states to reduce or elimi- nate Workmen’s Compensation benefits and throw full re- sponsibility on the national Social Security scheme. The amendment enacted by Congress is now attacked, not because the purposes claimed for it might not be argu- ably rational grounds for congressional action, but because Congress in establishing the reduction provision referred to above did not also include such benefits as private in- surance proceeds and benefits resulting from damage suits in civil courts. It is claimed that existence of these benefits without deductions makes the selection of Workmen’s Com- 22 pensation as the only deduction against Social Security benefits an arbitrary and capricious classification which cannot stand when tested against the due process clause. The District Judge who heard this case below dismissed it with a brief opinion which cited the reasons for the amendment referred to above and held that ‘‘it is therefore reasonable to preclude a claimant from receiving amounts as @ result of retirement or disability far in excess of his earnings received while working.” The District Judge held that the classification involved herein was not patently ar- bitrary within the meaning of Flemming v. Nester, 363 U.S. 603 (1960). We have already set forth above the essential holding of the Flemming case upon which the District Judge based decision. But there is a good deal of case law which serves to illustrate the breadth of legislative power accorded the Congress (or the states) by the Supreme Court’s interpre- tation of the constitutional limitations contained in the due process and equal protecion clauses. Irn the following two cases, former Chief Justice Warren wrote for the Court: ‘‘The constitutional safeguard is offended only if the classification rests on grounds wholly irrelevant to the achievement of the State’s objective. State legislatures are presumed to have acted within their constitutional power despite the fact that, in practice, their laws result in some inequality. A statutory dis- crimination will not be set aside if any state of facts reasonably may be conceived to justify it. See Kotch v. Board of River Port Puot’s Comm’rs, 330 U.S. 552; Metropolitan Casualiy Ins. Co. v. Brownell, 294 U.S. 580; Lindsley v. National Carbonic Gas Co., 220 US. 61; Atchison, T. dé S. F. R. Co. v. Matthews, 174 US. Ub 6 Pe A AP dit oh ahs oh aa ae the i 23 96.” McGowan v. Maryland, 366 US. 420, 425-26 (1961). (Footnotes omitted.) **[S]Jome basic guidelines have been firmly fixed. The distinctions drawn by a challenged statute must bear some rational relationship to a legitimate state end and will be set aside as violative of the Equal Protec- tion Clause only if based on reasons totally unrelated to the pursuit of that goal. Legislatures are presumed to have acted constitutionally even if source ma- terials normally resorted to for ascertaining their grounds for action are otherwise silent, and their statutory classifications will be set aside only if no grounds can be conceived to justify them. See Mc- Gowan v. Maryland, 366 U. S. 420 (1961); Kotch v. Board of River Pilot Commissioners, 330 U. S. 552 (1947) ; Lindsley v. National Carbonic Gas Co., 220 U.S. 61 (1911). With this much discretion, a legislature traditionally has been allowed to take reform “one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind,” Williamson v. Lee Optical of Oklahoma, Inc., 348 U.S. 483, 489 (1955), and a legislature need not run the risk of losing an entire remedial scheme sim- ply because it failed, though through inadvertence or otherwise, to cover every evil that might conceivably have been attacked. See Ozan Lumber Co. v. Union County National Bank, 207 U. S. 251 (1907).” Mce- Donald v. Board of Election Commissioners of Chi- cago, 394 U. S: 802, 809, (1969). Even more recently Justice Stewart dealt with a some- what similar classification argument: “In the area of economics and social welfare, a State does not violate the Equal Protection Clause merely because the classifications made by its laws are imper- 24 fect. If the classification has some ‘reasonable basis,’ it does not offend the Constitution simply because the classification ‘is not made with mathematical nicety or because in practice it results in some in- equality.’ Lindsley v. National Carbonic Gas Co., 220 US. 61, 78. ‘The problems of government are practical ones and may justify, if they do net require, rough accommodations — illogical, it may be, and unscien- tific.” Metropolis Theatre Co. v. City of Chicago, 228 US. 61, 69-70. ‘A statutory discrimination will not be set aside if any state of facts reasonably may be con- ceived to justify it.” McGowan v. Maryland, 366 U.S. 420, 426.” Dandridge v. Williams, 397 U. S. 471, 485 (1970). With these rule pertaining to legislative power before us,’ we turn directly to the backgrcunc and purpose of the disputed amendment. The legislative record plainly shows that Congress had the Workmen’s Compensation-Social Security overlap be- fore it as a problem for a decade. When the Social Secu- rity Act was first passed in 1935, it provided no disability benefits. Act of Aug. 14, 1935, ch. 531 49 Stat. 620 et seq., (42 U.S.C. §301 (if) ). When benefits for total and per- 1The McGowan, McDonald and Dandridge cases are, of course, at- tacks upun state statutes, wherein appellant’s reliance was upon the equal protection clause of the Fourteenth Amendment. As to an as- sertion of an arbitrary classification argument, there is a wide area of overlap between the effect of the Fifth Amendment’s due process clause and the Fourteenth Amendment’s equal protection clause. Boll- ing v. Sharpe, 347 U.S. 497, 499 (1954). If there be a difference between the effect of these two clauses, it would appear that since the equal protection clause is the more “ex- plicit” of the two clauses, the cases quoted above would apply a fortiori to this attack upon a federa! statutory classification where reliance is had on due process. 25 manent disability were first added in 1956, Congress did require the offset of Workmen’s Compensation. Act of Aug. 1, 1956, Pub. L. No. 880, 70 Stat. 816-17. Two years later, however, acting on the assumption that the impact of the duplication was relatively slight, the offset provision was repealed. Act of Aug. 28, 1958, Pub. L. No. 85-840, Sec. 206, 72 Stat. 1025. In the years which followed it is clear that Congress received a great number of complaints about the repeal of the offset. These complaints—the overwhelming majority of them originating with large employers or large em- ployer organizations—let to reenactment of the Workmen’s Compensation offset (in somewhat different form) in the Soc. Sec. Amendments of 1965, eff. Jan. 1, 1966, Pub. L. No. 89-97, Tit. III, $335, 79 Stat 106. 42 U.S.C. § 424(a), as amended, (Supp. V, 1969). Hearings were held before adoption of Section 424(a) only in the Senate—but the record there amply serves to indicate the rationale of its advocates. Thus L. J. Dikovics, representing ‘he Council of State Chambers of Commerce, told the Seuate subcommittee: Thousands of disabled workers today are receiv- ing more tax-free income from social security disability benefits combined with State workmen’s compensation benefits than they were receiving before they became ill or were injured. Section 303 would add many more thousands to this number. When tax-free social insur- ance benefits exceed earning power there is little risk, pain, and struggle involved in attempting to become self-supporting again. A matter of equal concern is the impact of Federal disability payments on State workmen’s compensation programs. Legislative proposals have been offered 26 in several States (Colorado, Florida, Maryland, and Minnescta) to reduce workmen’s compensation benefits by the amount of OASI disability benefits payable to a disabled worker. If other Sta.es follow this direc- tion and section 303 of this bill is enacted, we believe it will be only a matter of time until state workmen’s compensation programs are destroyed. If that happens, a major impetus for this country’s remarkable achievements in occupational safety will be destroyed also. Workmen’s compensation insurance costs are based on the actual loss experience of indus- try groups and of individual employers. This gives the employer a direct financial incentive to improve safety on the job. If workmen’s compensation costs are absorbed into the social security program, employers without safety programs and those whose employment is hazardous would pay no more than those employers who have adopted safety programs or who have less hazardous employment. We strenuously object to any action which could have an adverse effect on safety programs and on the remarkable downswing in dis- abling accidents that has taken place over the last three decades. Hearings on H.R. 6675 Before the Sen- ate Comm. on Finance, 89th Cong., Ist Sess., p. 259 (1965). And J. Dewey Dorsett, representing the American In- surance Association, presented a table purporting to show that continued duplication of benefits under terms of the then pending bill would mean at least some payments in excess of prior average “take home pay”’ in every state, and up to a maximum of 247% in the instance of Arizona. mails ATI Ove ein) ek WRI Sw aera et 27 Chart I—Duplication of workmen’s compensation disabil- ity benefits by social security benefits in H.R. 6675 Alabama Alaska Arizona Arkansas California Colorado ‘Connecticut Delaware Combined workmen’s compensa- Average tion and weekly social take-home security pay? benefits } $ 96.62 $ 67.96 District of Columbia 137.48 86.30 Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana 172.00 130.10 22210 90.06 92.05 65.16 142.00 101.21 111.60 86.55 127.77 88.35 113.97 79.30 101.26 69.05 94.97 66.74 142.85 87.11 110.26 81.56 122.85 86.73 108.97 78.94 105.60 78.08 107.26 81.38 102.38 78.59 98.14 77.12 Workmen’s Combined compensa- benefits tion percentage maximum of weekly take-home benefit 5 pay $ 38.00 142 100.06 132 152.50 247 35.00 141 70.00 140 43.75 129 59.00 145 50.00 144 70.00 159 42.00 147 37.00 142 75.00 164 45.00 135 55.00 142 45.00 138 42.00 185 42.00 182 41.00 139 35.00 127 Aa el a et On ~-a- -- he Lf a> *- nr oe aes a Zi DW SL. FS 27 DW 57 OY 47 4S) Fhe ar 29 Combined Workmen’s Combined workmen’s compensa- benefits compensa- Average tion percentage State tion and weekly maximum of social take-home weekly take-home security pay 2 benefit 2 pay benefits 1 South Carolina 90.38 63.93 35.00 141 South Dakota 101.60 78.40 38.00 130 Tennessee 96.80 68.07 38.00 142 Texas 98.14 77.06 35.00 127 Utah 122.40 90.41 52.80 135 Vermont 103.26 69.00 44.00 150 Virginia 98.26 69.52 39.00 141 Washington 122.57 * 89.40 57.69 137 West Virginia 100.31 * 82.88 38.00 i271 * Wisconsin 130.18 83.50 64.00 156 Wyoming 118.51 * $4.37 55.38 140 Longshoremen’s Act 114.67 * 70.00 1 Compensation benefits for temporary total disability payable to a worker with a wife and 2 children. Social Security benefits provided in H.R. 6675 (medicare bill), pp. 164-165. 2 Average weekly wages less Federal income and social security taxes (4 deductions). Based upon wages of employees to whom com- pensation paid, July 1964—National Council on Compensation Insur- ance. *As of May 1965. Includes maximum allowance for temporary total disability for worker with a wife and 2 children. (Michigan and New York reflect benefit increases contained in bills that have passed their legislature.) * Figures not available to National Council on Compensation In- surance for monopolistic State fund. Source: Production workers in manufacturing—1960 Statistical Supplement, Monthly Labcr Review, pp. 33-85 (U.S. Department of Labor). 5 Figures not available—varies in each State. OLE LON LALO LE LOLI SEL EG LOVEE DT IG SE ALLO LERLE AIOE LLE IE ELIOT TE LIGA ILE WO REL EL" OI ET FE ON NAT 30 Hearings on H.R. 6675 Before the Senate Comm. on Finance, 89th Cong., 1st Sess., p. 898 (1965). It is clear that employer advocates of the offset amend- ment outweighed their opponents in numbers of spokes- men and of exhibits tendered. But an opposing point of view was presented by the Secretary of Health, Education and Welfare’ and two of his top associates who sought to delay enactment of any change until a more thorough study had been made. Secretary Celebrezze. Senator, I think yesterday I explained that the Advisory Council on Social Secur- ity, which made a report recently, asked that a study be made, and the House Ways and Means Committee in their report also directed us to make a study of the extent and effects of the overlap between social se- curity and workmen’s compensation and to report by December 1966. I think I stated yesterday that per- haps 2 percent of the disability beneficiaries under social security also receive workmen’s compensation, and that there were many factors that had to be con- sidered in connection with this question. This issue has to be studied in depth. I can’t give you an off-the-cuff opinion on it, but let me tell you what some of the basic problems would be. First of all, if at the time of disability the man has a low-paying job, of course, that would have a bear- ing upon the amount of benefits he would receive. ‘Then, if a man is totally disabled as of a certain period, even though under a combination of work- 2 Hon. Anthony J. Celebrezze, now a Judge of this court. 3L men’s compensation and social security disability bene- fits he may receive more than his wages were, I think we have to give some consideration to the fact that had he not been disabled his wages would have been substantially higher, say, 10 or 15 years later, and to find a way of taking account of that fact. Another element is that the (Congress of the United ‘States in 1958 repealed the offset provision that had been in effect because it presented a great many tech- nical and administrative problems. In certain cases, the offset provision resulted in delays in paying dis- ability benefits because of the slow process, in some instances, of determination under workmen’s compen- sation and because we couldn’t move until we knew what the amount of compensation was when the award had been made. So there are many problems that have to be staffed out and thoroughly considered. I think the House Ways and Means Committee in its wisdom arrived at the right conclusion—that there is a need for the Social Security ‘Administration to make a thorough study of this question and to report back to Congress by December of 1966. Hearings on H.R. 6675 Before the Senate Comm. on Finance, 89th Cong., 1st Sess., p. 146 (1965). However persuasive this statement might appear to us, it is clear that the Senate committee did not desire to wait. Its report on which subsequently the Senate and then the House acted favorably provided: (b) Reduction of disability benefits on account of re- ceipt of workmen’s compensation benefits 32 The committee has taken note of the concern that has been expressed by many witnesses in the hear- ings about the payment of disability benefits concur- rently with benefits payable under State workmen’s compensation programs. While data of the kind re- quested by the House ‘Committee on Ways and Means in its report on this bill are not now available, the committee believes that amendatory legislation should not await completion of the requested study. Although there is some dispute as to the number of workers who receive benefits under these two programs and whether these payments are excessive, the committee believes that it is desirable as a matter of sound” prin- ciple to prevent the payment of excessive combined benefits. The committee believes that the provision it is recommending avoids the problems and inequities of the earlier offset provision in the social security law for reducing monthly disability benefits by the amount of any other benefit to which a worker was entitled under State workmen’s compensation laws, which was in effect from July 1957 to July 1958, but was repealed then. The new offset provision recommended by the committee provides for a reduction in the social se- curity disability benefit (except where the State work- men’s compensation law provides for an offset against social security disability benefits) in the event the total benefits paid under the two programs exceed 80 per- cent of the worker’s average monthly earnings prior to the onset of the disability. Under this provision, the worker’s average monthly earnings would be de- fined as the higher of (a) his average monthly wage used for purposes of computing his social security dis- 33 ability benefit or (b) his average monthly earnings, in employment covered by social security, during his high- est 5 consecutive years after 1950. (In no event, how- ever, would the total benefits payable with respect to a worker be reduced below the amount of the unre- duced monthly social security benefits.) This reduc- tion formula would generally avoid the inequity en- countered under the previous offset provision, where the reductions that were required frequently resulted in benefits that replaced no more than 30 percent or so of the worker’s earnings at disablement. S. Ren No. 404, 89th Cong., Ist Sess., p. 100 (1965). This then brings us to consideration of appellant’s argu- ment that the disputed amendment represents “a patently arbitrary classification, utterly lacking in rational justifi- cation.” Flemming v. Nestor, 363 U.S. 603, 611 (1960), and hence must be declared void. It seems to us that the result contended for by appellant would represent a very nar- row construction of the congressional power to enact, amend and modify social legislation as required by the circumstances reported to Congress concerning its opera- tion. If (as appellant concedes) the rationale for prevent- ing double coverage is a reasonable one (whether we might individually agree with it or not) then we believe that Congress also had the right to make it applicable to Work- men’s Compensation claimants and not to do so as to recipients of damage action judgments and private insur- ance proceeds. The legislative history of this amendment shows a great many complaints were registered before Congress about Workmen’s Compensation Social Security double coverage. The record is devoid of any complaints at all about double coverage resulting from private insurance or negligence aanraeesneennnees — ya ARE ALN HL PE ORIENT RAE EEE 34 actions in courts. It is neither novel nor necessarily ir- rational for Congress to fail to act upon a problem about which they have received no complaints and have been supplied no information, even when Congress, as here, does act upon a somewhat parallel problem as to which it had both. — Still another reason which might reasonably be conceived to justify the congressional classification is that adminis- tratively it would be relatively simple to enforce the Work- men’s Compensation deductions, whereas separating out the wage benefits from civil damage judgments, or deter- mining who had received private insurance benefits, might offer administrative problems of 9. serious nature. Finally, it is entirely conceivable to us that Congress may have considered Social Security benefits and Work- men’s Compensation benefits to be more arguably dupli- cative of one another than could appropriately be claimed concerning Social Security benefits and the other two types of payments. Both Social Security and Workmen’s Com- pensation programs are social welfare legislation. Private accident or disability insurance is a private contract, fre- quently paid for entirely by the recipient. And, of course, court awards for injuries are private rights derived from the common law involving the principle of compensation for negligence or fault. Most of the argument for the Workmen’s Compensation off-set came from employers who generlly pay all of the costs for Workmens’ Compensation and half the costs of the Social Security be. -fits. Their argument before Con- gress was that they were paying twice for the same injury. This argument would have, of course, no merit at all in relation to a damage action award or to the proceeds of privately purchased accident or disability insurance. 35 As we have already indicated, our conclusion is that Sec- tion 424(a) does not violate the due process clause of the United States ‘Constitution. ‘As to the other two issues presented in appellant’s brief, we affirm the judgment of the District Court for the rea- sons set forth in the opinion of the District. Judge. The judgment of the District Court is affirmed. APPENDIX B 42 U.S.C.A. 424a, Pub. L. 89-97, Title III, 335, 79 Stat. 406, Amended Jan 2, 1968, Pub. L. 90-248, Title I, 159(a), 81 Stat. 869 (a) If for any month prior te the month in which an individual attains the age of 62— (1) such individual is entitled to benefits under sec- tion 423 of this title, and (2) such individual is entitled for such month, under a workmen’s compensation law or plan of the United States or a State, to periodic benefits for a total or partial disability (whether or not permanent), and the Secretary has, in a prior month, received notice of such entitlement for suck month, the total of his benefits under section 423 of this title for such month and of any benefits under ection 402 of this title for such month based on his wages and self-employ- ment income shall be reduced (but not below zero) by the amount by which the sum of— (3) such total of benefits under sections 423 and 402 of this title for such month, and 7 Ea See a ae LO OE RIN AN ES LIT ELIT LOT (4) such periodic benefits payable (und actually paid) for such month to such individual under the workmen’s compensation law or plan, exceeds the higher of— (5) 80 percentum of his “average current earn- ings’’, or (6) the total of such individual’s disability insur- ance benefits under section 423 of this title for such month and of any monthly insurance benefits under section 402 of this title for such month based on his wages and self-employment income, prior to reduc- tion under this sectica. In no case shall the reduction in the total of such benefits under sections 423 and 402 of this title for a month (in a continuous period of months) reduce such total below the sum of— (7) the total of the benefits under sections 423 and 402 of this title, after reduction under this section, with respect to all persons entitled to benefits on the basis of such individual’s wages gnd self-employment income for such month which were determined for such individual and such persons for the first month for which reduction under this section was made (or which would have been so determined if all cf them had been so entitled in such first month), and (8) any increase in such benefits with respect to such individual and such persons, before reduction under this section, which is made effective for months after the first month for which reduction under this section is made. 37 For purposes of clause (5), an individual’s average cur- rent earnings means the larger of (A) the average monthly wage used for purposes of computing his benefits under section 423 of this title, or (B) one-sixtieth of the total of his wages and self-employment income (computed with- out regard to the limitations specified in sections 409(a) and 411(b) (1) of this title) for the five consecutive cal- endar years after 1950 for which such wages and self employment income were highest. In any case where an individual’s wages and self-employment income reported to the Secretary for a calendar year reach the lim*tations specified in sections 409(a) and 411(b) (1) of this title, the Secretary under regulations shall estimate the total of such wages and self-employment income fcr purposes of clause (B) of the preceding sentence on the basis of such information as may be available to him indicating the extent (if any) by which such wages and self-employ- ment income exceed such limitations. (b) If any periodic benefit under a workmen’s compen- sation law or plan is payable on other than a monthly basis (excluding a bevefit payable as a lump sum except to the extent that it is a commutation of, or a substitute for, periodic payments), the reduction under this section shall be made at such time or times and in such amounts as the Secretary finds will approximate as nearly as prac- ticable the reduction prescribed by subsection (a) of this section. . ((¢) Reduction of benefits under this section shall be made after any reduction under subsection (a) of section 403 of this title, but before deductions under such section and under section 422(b) of this title. (d) 'The reduction of benefits required by this section shall not be made if the workmen’s compensation law or 38 plan under which a periodic benefit is payable provides for the reduction thereof when anyone is entitled to bene- fits under this subchapter on the basis of the wages and self-employment income of an individual entitle“ to bene- fits under section 423 of this title. (e) If it appears to the Secretary that an individual may be eligible for periodic benefits under a workmen’s compensation law or plan which would give rise to reduc- tion under this section, he may require, as a condition of certification for payment of any benefits under section 423 of this title to any individual for any month and of any benefits under section 402 of this title for such month based on such individual’s wages and self-employment in- come, that such individual certify (i) whether he has filed or intends to file any claim for such periodic benefits, and (ii). if he has so filed, whether there has been a decision on such claim. ‘The Secretary may, in the absence of evidence to the contrary, rely upon such a certification by such in- dividual that he has not filed and does not intend to file such a claim, or that he has so filed and no final decision thereon has been made, in certifying benefits for payment pnursuant to section 405(i) of this title. (f) (1) In the second calendar year after the year in which reduction under this section in the total of an indi- vidual’s benefits under section 423 of this title and any benefits under section 402 of this title based on his wages and self-employment income was first required (in a con- tinuous period of months), and in each third year there- after, the Secretary shall redetermine the amount of such benefits which are still subject to reduction under this sec- tion; but such redetermination shall not result in any de- crease in the total amount of benefits payable under this subchapter on the basis of such individual’s wages and 39 self-employment income. Such redetermined benefit shall be determined as of, and shall become effective with, the January following the year in which such redetermination was made. (2) In making the redetermination required by para- graph (1) of this subsection, the individual’s average cur- rent earnings (as defined in subsection (a) of this section) shall be deemed to be the product of his average current earnings as initially determined under subsection (a) of this section and the ratio of (i) the average of the taxable wages of all persons for whom taxable wages were re- ported to the Secretary for the first calendar quarter of the calendar year in which such redetermination is made, to (ii) the average of the taxable wages of such persons reported to the Secretary for the first calendar quarter of the taxable year in which the reduction was first computed (but not counting any reduction made in benefits for a previous period of disability). Any amount determined under the preceding sentence which is not a multiple of $1 shall be reduced to the next lower multiple of $1. (g¢) Whenever a reduction in the total of benefits for any month based on an individual’s wages and self-employ- ment income is made under this section, each benefit, ex- cept the disability insurance benefit, shall first be propor- tionately decreased, and any excess of such reduction over the sum of all such benefits other than the disability in- surance benefit shall then be applied to such disability insurance benefit. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385606_0002%3A1. Public record. Not legal advice.