Opposition Briefm — Trust v. Perry (No. 06-36)

FILED

f é } AUG 2 = 2006

— OFFICE OF THE CLERK

SUPREME COURT, U.S.

No. 06-36

IN THE

Supreme Court of the Gnited States

PUBLIC AGENCY COMPENSATION TRUST (PACT),

Petitioner,

v.

COLIN PERRY ET AL.,

Respondents.

On Petition for a Writ of Certiorari

to the Supreme Court of Nevada.

BRIEF IN OPPOSITION

BARBARA GRUENEWALD ROBERT S. PECK* .

ANDERSON & GRUENEWALD CENTER FOR CONSTITUTIONAL

439 MARSH AVENUE LITIGATION, P.C.

Reno, NV 89509 1050 31st Street, N.W.

(775) 322-3366 Washington, DC 20007

(202) 944-2874

*Counsel of Record

QUESTION PRESENTED

Whether the conclusive presumption in NRS

617.457, applicable only to state agencies and political

subdivisions employing police or firefighters, violates the

Due Process Clause of the Fourteenth Amendment.

if

TABLE OF CONTENTS

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BRIEF FOR RESPONDENT IN OPPOSITION ............... 1

STATEMENT OF THE CASE..............cccccsccssecsorcsessesseseeee 1

REASONS FOR DENYING THE PETITION................... 3

I. PETITIONER HAS NOT ASSERTED A

CONFLICT THAT REQUIRES’ THIS

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Il. NO FEDERAL ISSUE REQUIRING THIS

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TABLE OF AUTHORITIES

CASES

City and County of San Francisco v. Workers’

Compensation Appeals Bd., 583 P.2d 151 (Cal.

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"Fidelity & Cas. Co. of N.Y. v. Masters, 335 So.2d

722 (La. Ct. App. 2d Cir. 1976), writ denied,

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Flint River Mills v. Henry, 236 S.E.2d 583 (Ga.

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Great American Ins. Co. v. United States, 575 F.2d

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Gregory v. Ashcroft, 501 U.S. 452 (1991) ........... cc eecceeeeeeees

Grover v. Town of Manchester, 357 A.2d 922,

appeal dismissed, 423 U.S. 805 (1975).............0. ceeeeeee

Joslin Mfg. Co. v. City of Providence, 262 U.S. 668

McDonald v. Chrysler Corp., 242 N.W.2d 810

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New York v. United States, 505 U.S. 144 (1992).............5

Pullman Co. v. State of Kansas ex rel. Coleman,

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Stanley v. Illinois, 405 U.S. 645 (1972) .......cccceeesesecceeeeeees

Sweazey v. New Hampshire, 354 U.S. 234 (1957).............

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Turner v. Dep’t of Employment Sec., 423 U.S. 44

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U.S. Dep't of Agric. v. Murry, 413 U.S. 508 (1978)........... 4

Usery v. Turner Elkhorn Mining Co., 428 U.S. 1

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Vlandis v. Kline, 412 U.S. 441 (1978) oo... eeeeeeseeeeeeees 4

Williams v. Mayor and City Council of Baltimore,

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Nevada Industrial Insurance Act.................ccccsseeeeeceneeeees 8

Nevada Occupational Disease Act.......2.....ccccceseeesessseeeeesees 8

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OTHER AUTHORITIES

Larson, The “Heart Cases” in Workmen's

Compensation: An Analysis and Suggested

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RULES

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BRIEF FOR RESPONDENT IN OPPOSITION

Respondent Colin Perry respectfully requests that

this Court deny the petition for writ of certiorari that

seeks review of the Nevada Supreme Court’s decision in

this case.

STATEMENT OF THE CASE

Petitioner Public Agency Compensation Trust

(PACT) has provided workers compensation insurance to

the Elko County Sheriffs Department since the mid-

1990s. Respondent Perry served as a Deputy Sheriff for

Elko County from 1986 to 2000. In 1992, he suffered an

injury to his heart and the workers compensation insurer

for the Elko County Sheriffs Department at that time

- accepted his claim. In 1998, as a result of a new heart

injury, Perry unsuccessfully attempted to reopen his prior

claim. He then made a new claim with the department’s

new insurer, PACT, which PACT rejected.

Under the pertinent Nevada statute, NRS

617.457, on the books since 1989, Perry’s coronary artery

disease is conclusively deemed to be occupationally

related as a result of his continuous service as a police

officer over a period of more than five years. Even so,

Nevada law permits an employer to challenge eligibility

by showing that the employee failed “to correct

predisposing conditions which lead to heart disease when

so ordered in writing by the examining physician

subsequent to the annual examination.” NRS 617.457(6).

Such predisposing conditions can include diabetes,

overweight, smoking, high blood pressure, and high

cholesterol.

After receiving extensive evidence on the medical

issues from both parties, see Pet. at 5a-7a, a hearing

officer of the Nevada Department of Administration

found that PACT’s denial of Perry’s claim to be erroneous

2

and held that Perry’s claim was valid. PACT

unsuccessfully appealed that decision administratively

and then to a state district court, challenging the

conclusive presumption’s constitutionality at the same

time. The district court’s decision was affirmed by the

Nevada Supreme Court.

In its Petition for Certiorari, PACT provides no

basis for further review by this Court. It asserts a single

conflict between the Nevada decision this year and a 1971

Connecticut Supreme Court decision that has been

superceded by statute, while failing to disclose a

California Supreme Court decision that reached the same

conclusion as the court below. Respondent respectfully

submits that the Connecticut court’s decision is doubly

flawed in a manner that cancels out any conflict. First,

the decision erred in predicting that this Court would

liberalize its standing jurisprudence and allow a political

subdivision to make a due-process claim against the State

that created it, thereby reaching a question no other

court has entertained. In fact, in the 35 years since the

Connecticut court’s prediction, this Court has neither

relaxed its starding requirements nor accorded political

subdivisions due-process rights against its sovereign.

Second, the Connecticut court permitted the legislature to

create special compensation requirements as a substitute

for the conclusive presumption it found unconstitutional,

creating a distinction without a difference. If the

decisions in Nevada and Connecticut, 35 years apart, are

in actual conflict, a dubious claim at best, ic hardly cries

out for this Court’s attention.

Alternatively, PACT erroneously asserts that the

Nevada Supreme Court has failed to apply the correct

applicable law of this Court. Even if correct, which

Respondent disputes, Rule 10 of this Court’s rules makes

plain that petitions based on claims of misapplication of

the law are “rarely granted.” Sup. Ct. R. 10. This

petition should be denied.

3

PACT further asserts that the question presented

will have considerable public policy impact in Nevada,

Pet. at 13-14, but such an assertion provides no basis

upon which to invoke this Court’s jurisdiction. Its public

policy claim is entirely premised on a newspaper article

and actuarial studies making representations about

expenses associated with this statute that were not part

of the record at the factfinding stage of this case and only -

submitted, improperly, to the Nevada Supreme Court

with Petitioner’s unsuccessful motion for reconsideration

en banc. It was not considered by the court below. It

should not be first reviewed by this Court - or by any

court, for that matter, because whatever expense this

program entails is a matter of Nevada legislative

cognizance and not Federal constitutional dispute.

Finally, it should be noted that PACT asserts a

due-process right that cannot be accorded to its insured.

As a political subdivision of the State, neither Elko

County nor its Sheriff's Office may assert a due-process

claim against the sovereign that created it. Moreover,

PACT was fully aware of the challenged statute when it

wrote its insured’s policy and cannot claim a lack of

notice for the liabilities it was insuring against.

REASONS FOR DENYING THE PETITION

I, PETITIONER HAS NOT ASSERTED A

CONFLICT THAT REQUIRES THIS COURT’S

ATTENTION

PACT focuses its Petition primarily on an

assertion that the Nevada Supreme Court’s decision

conflicts with this Court’s precedents that have

invalidated other conclusive presumptions on due-process

grounds. Pet. at 6-9. The cases cited, however, are

inapplicable to this matter and provide no basis for this

Court’s review.

4

At bottom, the Nevada Supreme Court’s

constitutional analysis was appropriate. The Court found

that Petitioner did not carry its burden to demonstrate

that this 37-year-old law denies due-process. Pet. at 3c-

Ac.

Unlike the successful individual plaintiffs in the

cases cited by Petitioner,! all of which were reviewed in a

similar challenge by the California Supreme Court in

1978 and held to be inapplicable to this issue,? the

Nevada law only adversely affects cities and counties,

! Petitioner relies on Viandis v. Kline, 412 U.S. 441

(1973)(individual plaintiff instituted due process challenge to

conclusive presumption about nonresidency for purposes of

becoming eligible for in-state tuition); Cleveland Bd. of Educ. v.

LaFleur, 414 U.S. 632 (1973)(individual plaintiffs mounted due

process challenge to conclusive presumption that female

teachers who were five months pregnant could not continue in

job and must terminate employment); Stanley v. Illinois, 405

U.S. 645 (1972)(individual plaintiff challenged conclusive

presumption that unmarried fathers are not suitable parents);

U.S. Dep’t of Agric. v. Murry, 413 U.S. 508 (1973)(class of

individuals raised due process challenge to conclusive

presumption about relationship of tax dependency and

eligibility for food stamps); Turner v. Dep't of Employment Sec.,

423 U.S. 44 (1975) (individual plaintiff instituted due process

challenge to statute making pregnant woman ineligible for

unemployment benefits for period extending from 12 weeks

before expected date of childbirth and until a date six weeks

after childbirth).

2 Precisely the same U.S. Supreme Court caselaw was

cited to the California Supreme Court in support of an identical

argument against a similar workers compensation law

containing a conclusive presumption for the benefit of police

officers. The California Court found the cases easily

distinguishable. City and County of San Francisco v. Workers’

Compensation Appeals Bd., 583 P.2d 151, 160 (Cal. 1978).

5

rather than individuals. It imposes upon them the

burden of providing workers compensation benefits to

eligible firefighters and police officers who contract heart

disease. This Court has found no constitutional flaw in

similar legislation, finding only a rational connection is

necessary. Usery v. Turner Elkhorn Mining Co., 428 U.S.

1, 16 (1976) (legislation may “readjust rights and

burdens” and “impose a new duty or liability based on

past acts” consistent with the Constitution). It is well

established that counties and their departments, such as

Respondent Perry’s former employer, the Elko County

Sheriffs Department, as political subdivisions of the

State, do not have due-process rights under the

Fourteenth Amendment that may be asserted against the

state that created them. Williams v. Mayor and City

Council of Baltimore, 289 U.S. 36, 40 (1933)(“A municipal

corporation, created by the state for the better ordering of

government, has no privileges or immunities under th®

Federal Constitution which it may invoke in opposition to

the will of its creator.”). See also Joslin M/g. Co. v. City

of Providence, 262 U.S. 668, 674 (1923)(citations omitted)

(“political subdivisions of the state .. . are subject to the

will of the [State] Legislature and may be compelled not

only to recognize their legal obligations but to discharge

obligations of an equitable and moral nature as well.”).

For purposes of constitutional analysis, it does not

matter that the due-process claim is being made by

PACT, rather than the Elko County Sheriff's

Department. PACT, as the department’s insurer on this

claim, stands in the department's shoes and cannot

assert rights that its insured does not possess. Great

American Ins. Co. v. United States, 575 F.2d 1031, 1033

(2d Cir. 1978). It is significant that PACT is not asserting

a lack of notice to its potential responsibility for paying

the sheriff's department’s liability. The conclusive

6

presumption was added to NRS 617.457 in 1989.

Gallagher v. City of Las Vegas, 959 P.2d 519, 522 n.2

(Nev. 1998). PACT was not the department’s workers

compensation carrier in 1992, when Perry made his first

claim but undertook that role prior to the present claim,

made in 1998. Because PACT is in the business of

providing workers compensation coverage to public

agencies and political subdivisions, see Pet. at 2 n.2, the

conclusive presumption was no surprise and must have

been within its calculus in setting its premiums. Simply

put, neither PACT nor its insured can mount any due-

process claim.

PACT also claims the Nevada decision conflicts

with a 35-year-old Connecticut Supreme Court decision,

Ducharme v. City of Putnam, 285 A.2d 318 (Conn. 1971)),

superceded by statute, where the Connecticut court struck

down a similar statute after erroneously predicting that

this Court was on the verge of liberalizing its standing

doctrine to allow a political subdivision to assert a due-

3 While PACT asserts that the presumption is irrational

because there is no consensus in the medical/scientific

community that the stress entailed in service as a police officer

or firefighter causes heart disease, Pet. at 5 n.3, the legislature

is entitled to adopt one side of a debatable proposition as the

State’s public policy. Usery v. Turner Elkhorn Mining Co., 428

U.S. 1, 33-34 (1976). Siding with one set of experts over

another is not arbitrary and capricious. Jd. at 34. The

California Supreme Court recognized that the division of

medical opinion was “probably the most prolific and

troublesome problem in workmen’s compensation law’ (Larson,

The “Heart Cases” in Workmen's Compensation: An Analysis

and Suggested Solution (1967) 65 Mich. L. Rev. 441, 441), [and]

arises from ‘the persisting cleavage in medical theory itself (id.,

at p. 475) as to the relationship between stress, physical

exertion and progressive heart disease.” City and County of

San Francisco, 583 P.2d at 154-55.

7

process violation against the state.4 Contrary to that

prognostication, in the more than three decades since

Ducharme was decided, no decision of this Court has even

suggested that political subdivisions had acquired due-

process rights that might be asserted against its own

State. Instead, this Court has strengthened its deference

to state sovereign authority. See, eg., Gregory uv.

Ashcroft, 501 U.S. 452, 460 (1991).

Moreover, even while striking down the conclusive

presumption statute, Ducharme suggested that the State

could accomplish its objective, without offending

constitutional principles, by imposing a straightforward

obligation on political subdivisions to pay benefits to the

same firefighters and police officers without calling it

“workers compensation.” See Gregory , 501 U.S. 452 at

322. The Connecticut legislature then took up the court’s

suggestion and enacted Conn. Gen. Stat. § 7-433c,

obligating political subdivisions to provide special

compensation in the manner of workers compensation

benefits without calling it that to firefighters and police

officers who suffer heart disease after meeting certain

eligibility requirements. This statute was subsequently

upheld against constitutional attack in Grover v. Town of

Manchester, 357 A.2d 922, appeal dismissed, 423 U.S. 805

(1975).

Ducharme, thus, must be regarded as a confused

decision and imperfect conflict, permitting a state to

accomplish directly -— by direct requirement of

compensation ~ what it did not permit to occur through

indirection, application of a conclusive presumption to the

4 The Connecticut Supreme Court found the due process

violation under betti the state and federal constitutions without

engaging in any analysis that would suggest that the decision

was based on adequate and independent grounds.

8

existing workers compensation system. The result is the

same and constitutes little more than a distinction

without a difference. Just as the “controlling influence of

the Constitution may not be destroyed by doing indirectly

that which it prohibits from being done directly,”

Pullman Co. v. State of Kansas ex rel. Coleman, 216 U.S.

56, 70 (1910), the Connecticut court’s attempt to draw a

distinction between the invalidated indirect attempt to

help police and firefighters in favor of its endorsed direct ©

attempt renders its precedential value a nullity and

deprives Petitioner of its asserted conflict.

PACT urges upon this Court Connecticut’s

schizophrenic approach. It states that if “Nevada has an

interest in making an outright gift or special benefit to

police officers and firemen, it must do so outside the

Nevada Industrial Insurance Act and Nevada -

Occupational Disease Act.” Pet. at 10 (emphasis added).

Yet no principle of constitutional law requires a sovereign

state to eschew use of those two state statutes as a

vehicle for this end in favor of another. In fact, how a

State chooses to govern itself is largely outside the

cognizance of federal instruction. See, e.g., New York v.

United States, 505 U.S. 144, 162 (1992) (holding that “the

Constitution has never been understood to confer upon .

Congress the ability to require the States to govern

according to Congress’ instructions.”). See also Sweazey

uv. New Hampshire, 354 U.S. 234, 256 (1957) (“It would

make the deepest inroads upon our federal system for

this Court now to hold that it can determine the

appropriate distribution of powers and their delegation

within the forty-eight states.”) (Frankfurter, J.,

concurring).

Any conflict between Connecticut's Ducharme

decision and that of the Nevada Supreme Court in the

instant case turns on form rather than substance and

cannot be regarded as certworthy. Moreover, more recent

state supreme court decisions conclude that there is no

9

constitutional flaw. ‘n addition to the Nevada decision

below, the California Supreme Court upheld its similar

conclusive presumption in City and County of San

Francisco, supra.© In 1959, California amended its

relevant statute to provide that a five-year or greater

police force veteran's heart disease is occupationally

related, and the presumption is not subject to rebuttal on

the basis of evidence of a preexisting condition.® Id., 583

P.2d at 153. In response to an identical constitutional

challenge, the California Supreme Court found Usery,

supra, “directly on point and clearly demonstrates the

lack of merit in the city’s due-process contention.” City

and County of San Francisco, 583 P.2d at 160. In Usery,

this Court upheld a irrebuttable presumption in the

Black Lung Act, 30 U.S.C. § 921 (c)(1), (2), that the death

of a miner, who had worked in coal mines for 10 years

and who died of respiratory disease, arose out of and in |

the course of employment.

Il. NO FEDERAL ISSUE REQUIRING THIS

COURT'S ATTENTION IS PRESENTED

PACT further asserts that the importance of the

question presented can be gleaned from a newspaper

5 Other types of irrebuttable presumptions have also

been upheld, such as conclusive presumptions of dependency.

See Flint River Mills v. Henry, 236 S.E.2d 583 (Ga. 1977)

(stepchildren); McDonald v. Chrysler Corp., 242 N.W.2d 810

(Mich. 1976) (spouse, if living with worker); Fidelity & Cas. Co.

of N.Y. v. Masters, 335 So.2d 722 (La. Ct. App. 2d Cir. 1976),

writ denied, 338 So.2d 297 (La. 1976).

6 Petitioner cites Ducharme for the mistaken.

proposition that no other state had adopted a conclusive

presumption on the heart disease question as it affected police

or firefighters. Pet. at 5. In so opining, the Connecticut court

missed the 1959 California law.

10

article and recent actuarial studies alleging that the cost

of compliance with the challenged statute and several

others covering lung and hepatitis injuries on the job

would amount to $2.8 billion over the next three decades

for Nevada political subdivisions. Pet. at 4, 13. PACT

concedes that this information was not part of the record

during the administrative hearing and was submitted for

the first time below in a petition for en banc

consideration before the Nevada Supreme Court. Id.

Nevada Rule of Appellate Procedure 40A(c) prohibits

parties from raising issues in such a petition for the first

time. While the assertions should receive no credit at all

because it was not properly presented for consideration

nor actually considered below, the potential costs in-state

is properly a matter for state legislative consideration

and does not transform this intramural dispute into one

of sufficient national importance to draw this Court’s

attention.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted,

August 2006 ROBERT S. PECK*

CENTER FOR CONSTITUTIONAL

LITIGATION, P.C.

1050 31% Street, N.W.

Washington, D.C. 20007

(202) 944-2874 ~

Barbara Gruenewald

ANDERSON & GRUENEWALD

439 Marsh Avenue

Reno, Nevada 89509

(775) 322-3366

*Counsel of Record