Appellees Brief — Richardson v. Belcher

X

Page

Opinion below ----~=-~-----~------------------__ 1

Jurisdiction —---------:---- 1, 2

Question Presented __<----------- __ 2

Statutes and Regulations Involved __---______ —— 3

Si || a a ----. 2, 3,4

Summary of Argument —------------.--_______ 4,5,6

Argument:

I. The reduction in Social Security bene-

fits required by Section 224 of the Social

Security Act deprives appellee of a prop-

erty right in violation of due pro- ;

CSS == 0, 7,8, 9, 10.

II. The reduction in Social Security bene-

_- fits required by Section 224 of the Social

Security Act deprives appellee of equal

protection under the law -----___ 11, 12, 13, 14

Conclusion —--------------- 14

Appendix: — 7 ;

W.Va. Code, Chapter 23, Article 2, Sec-

tions 1, 6, 6-a, 7, 8, 9 ----_-_-_____-_____ 15, 25

. - CITATIONS |

Cases: ° os | 7

Flemming vs. Rhodes, 331 U.S. 100 --.---- 1, 2

Flemming vs. Nestor, 363 U.S. 603, 604- :

1 ne a 2, 6, 7, 10; 11

| Goldberg vs. Kelly, 397 U.S. 254 . 6, 7, 9, 10, 11

Goding vs. Ott, 77 W.Va. 487, 87 S.E.

OOF i ae is

2

4

Landcaster vs. State Compensation Com- -

missioner, 125 W.Va. 190, 23 'S.E. 2d 601 -: 13

maeaeeit vs. Wiarkmen 5 Compensation Appeal

~ Board; 118 W.Va. 198, 189 S.E. 670 -—---- 13

Boling vs. Sharp, 347 US. 497, 74 Sup. Ct.

693 14

Schneider Ja Ruck, 377 U.S. 163 —----------- 14

Constitution, statutes and regulation: |

SE Oe 1) a ee en |

Social Security Act:

Title 42, U.S.C.A. 424(a), Public Law

89-97, Title 3, 335, 79 Stat. 406 (amended

tana 2, 1968, Public Law 90-248, Title

1. 159(a) 81 Stat. eam) & eee 1,2,4 0

Section DIANE) escent 3, 4, 5, 6, 8, 11, 12, 13

West Virginia Workmen’ s Compensation Law:

” W.Va. Code, Chapter 23, Article 2,

BECHON | ees 15, 16, 17, 18, 19

Secu On 6 me3 2 _ 19

4SCCHON (6-4. <-so2 Sevag 19

DOCCHON: 7. come an _ | _.. 20.

BOCHON 6 gees eLearners ae 20, 21

DCCHON 2 eee 21, 22, 23, 24, 25

. 102 Cong. Rec. 15110 ------- = eon 7, 10

li

IN THE

; Scien Court of the United States

OCTOBER TERM, 1970

NO. 1091

ELLIOT L. RICHARDSON, SECRETARY OF

HEALTH, EDUCATION AND WELFARE,

Appellant

Vv.

RAYMOND BELCHER, Appellee

_ ON APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE SOUTHERN

DISTRICT OF WEST VIRGINIA

BRIEF FOR THE APPELLEE

OPINION BELOW

The opinion of the district court (Appendix 8-14)

is reported at 317 F. Supp. 1294. |. _

JURISDICTION

The judgment of the district court declaring 42

U.S.C. 424a unconstitutional ‘as applied to appellee

Raymond Belcher was entered on September 14, 1970

(Appendix 9-16). Notice of appeal was filed on October

13, 1970 (Appendix 16) and probable jurisdiction was

noted on March 1; 1971 (Appendix 19). The jurisdic-

tion of this court is conferred by 28 U.S.C. 1252. Flem-

«4.

ming vs. Rhodes, 331 U.S. 100; cemenin) Vs. Nestor,

363 U.S. 603, 604-08.

QUESTION PRESENTED

Whether the provisions of Title 42, U.S.C.A.

424(a), Public Law 89-97, Title 3, 335, 79 Stat. 406,

. and as amended on January 2, 1968 Public Law 90-248,

Title 1, 159(a), 81 Stat-B69, commonly referred to a5

the Social Security Act, and the provisions therein con-

tained requiring the reduction of disability insurance

benefits under the Social Security Act of the appellee,

Raymond Belcher, because of the simultaneous receipt

of West Virginia Workmen’s Compensation benefits

may be constitutionally applied.

_ STATUTES AND REGULATIONS INVOLVED

Title 42 U.S.C.A. 424(a), Public Law 89-97, Title

3, 335, 79 Stat. 406, and as amended January 2, 1968,

Public Law 90- 248, Title 1, 159(a).81 Stat. 869, and the

relevant Department of Health, Education and Welfare

regulations set forth in appendix to appellant’s brief,

Pages 21 to 38.

STATEMENT

Appellee, Raymond Belcher, a resident of West

Virginia, was awarded a period ‘of disability with dis-

ability insurance benefits commencing in October, 1968,

in the amount of $329.70 per month, which included

~ $156.00 per month for himself and $57. 90 each for his

wife and two children (Appendix. 34-38). In January,

1969, the Social Security Administration of the Depart-

ment of Health, Education and Welfare notified Bel-

cher that $104.40 would be withheld from his monthly

Social Security benefits because he was receiying $47.00

a week, or $203.60 a month, in State Workmen’s Com-

‘pensation benefits, thereby reducing his monthly Social .

Security payments to $225.30 (Appendix 26, 32, 35, 38).

Upon reconsideration, the Social Security ‘Administra-

tion affirmed the reduction of Belcher’s Social Security

2.

. benefits on July 19, 1969 (Appendix 33-35).

The appellee requested a hearing. A hearing was

_ held, and the Hearing Examiner of the Bureau of Hear-

ings and Appeals, Social Security Administration, De:

partment of Health, Education and Welfare, upheld

the reduction of Belcher’s Social Security benefits, pur-

suant to Section 224 of the Social Security Act, because

of his receipts of State Workmen’s Compensation bene-

fits (Appendix 36-42). The appellee, Belcher, requested

review of the Hearing Examiner’s decision on Novem- :

ber 3, 1969 (Appendix\42-43), and the Appeals Council

of the Bureau of Hearings and Appeals, Social Security

Administration, Department of Health, Education and

Welfare, denied the appellee’s request for review on

* January 20, 1970 (Appendix 43-44). | |

Belcher thereafter filed civil action in the United _

States District Court for the Southern District of West

Virginia, at Bluefield, West Virginia, pursuant to 42 |

U.S.C. 405(g), seeking review of the final administra-

tive.decision upholding the reduction of his disability

insurance benefits. (Appendix 2-5). Belcher alleged that

Section. 224 of the Social Security Act in applying a

formula which takes into consideration: benefits received

by him from the West Virginia Workmen’s Compensa-

tion Act is unconstitutional because: (1) it discrimi-

nates irrationally between recipients of.. Workmen’s

Compensation benefits, whose Social Security benefits

are reduced, and all other recipiengs of benefits or

awards, such as private insurance beneficiaries and suc-

cessful tort plaintiffs whose Social Security benefits are

not reduced ; (2) it deprives him and his family of pre p-

erty, in the form of Social Security benefits for which

he has at least partially paid through Social Security

taxes without due process of law; and (3) the Act dis-

criminates against persons in the same class who have

periods of disability established prior.to June 1, 1965

and those having disability established after June 1,

1965, failing to provide-equal protection to all people

of the same class (Appendix 3-5).

2.

ot wl)

i. ~~

5 as Jf . |

The District Court, acting on motions for summary

judgment by the parties, rendered an opinion that Sec-

tion 224 cannot be constitutionally applied, since to do so

would deprive him of due process and equal protection .

of the law under the Fifth and Fourteenth Amendments

(Appendix 8-14). The District Court thereafter, on

September 14, 1970, entered a judgment order reversing

the decision of the’ Secretary of/ Health, Education and

Welfare, applying the offset provisions of Section 224

of the Social Security ant (Appendix es)

4

SUMMARY OF: ARGUMENT

The constitutional validity of Title 42, U.S.C.A.,

424(a), is involved and may be found at Public Law

89-97, Title 3, 335, 79 Stat. 406, and amended January

Z. 1968, Public Law 90- 248, Title 1, 159(a), 81 Stat.

869. The text of this section, with the additions contained

in the 1968 amendment, are as follows:

~. “(a) If for any month prior to the month

in which an individual attains the age of 62 -

, (t) such individual is entitled to ben-

efits under Section 423 of this title, and

.(2) such individual is entitled for

such month, under a Workmen’s Compen-

sation law or plan of.the United States or

a State, to periodic benefits for a total or

partial disability (whether or not perman-

ent); and the: Secretary hasf in a prior

; month, received notice of such entitlement

for such month, ‘ie

the total of his benefits under Section 423 of this

title for such month and of any benefits under

Section 402 of this title for such month based on

his wages and self-employment income shall be

“reduced (but not below zero) by the amount by

which the s sum of -

~4- 00

a

e «

’

6 8

’

(3) ‘such total of benefits under Séc-

tions 423 arid 402 .of this titlé for such

month, and. *

(4) such periodic ,benefits payable

(and actually paid) for such month ‘to

such individual under the Workmen’s

Compensation law dr plan, ,exceeds the

higher of - — |

(5) 80 percentum of his .“average

current camings”, or |

(6) the-total of such individual’s dis-

ability insurance 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 reduction under this section...

- (Appendix, Appellant’s brief; Pages 21 to 22).

The District Court, in holding that Section 224 of

the Social Security Act iyanconstitutional, stated:

(1) That Belcher, in meeting the requirements of

the Social Security Act for disability purposes, estab-

lished at that time a status or right to the receipt of ben-- _

efits under said Act which cannot be reduced based on

the receipt of monies or benefits from some other source

having no relation to. the administration of the Social

Security Act, such as West Virginia Workmen’s Com-

pensation benefits, which is a voluntary plan by Belch-

‘er’s employer to protect himself and prevent tort actions

against him.

(2) That Section 224 of the Social Security Act °

requires discrimination’ between two classes of disabled

workers essentially indistinguishable from each other,

except that one is composed of -those disabled persons

who also receive Workmen’s Compensation benefits, and

ane (5-4

°

2

the other is composed of those disabled persons who also

receive benefits from private disability insurance plans

or tort claim awards, thus the law failing to provide

equal protection.

The District Court, in holding Séction 224 of ‘the

Social Security Act unconstitutional, properly held that.

Flemming vs. Nestor, 363 U.S. 603, was inapplicable, —

Or was not to be considered a viable and controlling pre-

cedent, especially in view of the more recent holding in

the case of Goldberg vs. Kelly, 379 U.S. 254, thus apply-

ing th aw correctly to the facts and: circumstances of

. the plaintiff.appellee’s \case.

. ARGUMENT

_ 1. THE REDUCTION IN SOCIAL SECURITY:

BENEFITS. REQUIRED BY SECTION 224 OF THE

SOCIAL SECURITY ACT DEPRIVES APPELLEE OF

A PROPERTY RIGHT IN VIOLATION OF DUE PRO-

CESS.

Section 224(a) ai the Social Security. Act, provides

that for any month in which an individual under-age

sixty-two # entitled to both Social Security benefits aird.

- periodic Workmen’s Compensation benefits under any -

federal and state law, such individual's Social. Security

benefits shall be reduced by the amount by which the’.

‘total benefits.received under the Social Security Act and

the Workmen’s Compensation program for that month

exceeds the higher of: (a) 80% of the individual’s “av-

erage current earnings’!; or (b) the total of certain

other designated disability benefits.

-1

An individual’s “average current earnings” is defined as .the

’- larger of the average monthly wage used for the purpose of com-

puting his benefits. under 42 U.S.C. 423, or 1/60th of his total wages

and self-emrploymert: income for the five consecutive years after,

1950 when they were highest. The: 1968 amendments (Public Law.

96-248, Title 1, Section 159(a), 81 Stat. 869), changed this clause to

. » 6 ,

.

The District Court held that one who has made

direct contributions to the Social Security fund and be-

comes entitled to disability benefits thereunder should

and ought to be accorded equal status and protection for

it-seems to us to be patently unfair for the welfare recipi-

ent under Goldberg “to have a property right status”

with all the procedural safeguards of due process while

the Social Security recipient under Nestor is deprived of

such status and protection. The distinction is not only

completely illogical, but is-grossly inequitable. Indeed

it appears to run counter to the intent of Congress as

reflected by the comments By Senator George, Chair-

man of the Senate Finance Committee, at the time of

the passage of the Social Security Act‘concerning its .

purpose and character. Social Security is not a handout,

it is not charity, it is.not relief. It is an earned right

based upon the contributions and earnings of the indi-

vidual, 102 Congressional Record 15110. The District:

Court, in rendering its opinion, ‘has said Nestor is no

longer a viable and controlling precedent, and. that’ this.

Court in Goldberg has said statutory entitlement once

met has a property right status which must be protected

‘by due process. The Goldberg vs. Kelly decision has

three areas of tremendous significance: first, it tolls the

death knell for right --privilege analysis as a valid test

for determining whether governmental benefits can .be

terminated without a prior administrative hearing and

adopts a more sophisticated balancing of interest test to

determine the necessity for this prior hearing; second, it

Footnote 1 continued: ;

provide that when an individual’s wages and self-employment in-

come for the five consecutive years during which they were highest

are usei to compute his “average current earnings”, then his actual

earnings, rather than those earnings creditable for purposes of

Social Security (which have an upper limit), are to be used.

Section 224(b) provides that, should such an individual receive

a lump sum settlement as a sutstitute for or a commutation of

periodic Workmen's Compensation benefits, the reduction “shall be

made at such time or times and in such amounts as the Secretary

finds will approximate as nearly as practicable the reduction pre-

scribed by subsection (a).”

a a

applies this balancing test to cases of welfare termination ~

or reduction to conclude that due process'of law requires

a prior hearing consonant with certain procedural due

process requirements; thifdly, it isa precedent requiring

a hearing before termination of Social Security benefits.

If a person is qualified for welfare benefits, such bene- °

fits are a matter of statutory entitlement and the relevant

constitutional restraints apply. Belcher has contributed

50% of the total amount of tax dollars in the way of

Federal Insurance Contributions to the trust fund of the

Social Security Act. Congress, in requiring Belcher and

his employer to pay taxes into the trust fund, set up cer-

tain statutory requirements which Belcher must meet to

be eligible to receive benefits from that fund based on

disability. To permit the Social Security Administra- .

tion to administer a fund involving the money of the

recipient must require treatment that once he meets. the

statutory requirements, some other program having no

logical connection or relation,may not take away his

’ benefits so long as he remains within the statutory re-

quirements of disability under the Act. To permit the

Legislature of West Virginia in establishing a Work-

men’s Compensation plan and fixing the weekly or

monthly benefits thereunder, either on a compulsory or

voluntary basis, would have the effect of permitting the .

Legislature of West Virginia under the application -of

Section 224 of the Social Security Act to determine the

monthly amount of Social Security entitlement a recipi-

ent would receive once you have met the disability re-

quirements of the Act. In other words, when the Legi-

slature of West Virginia increases or ‘decreases Work-.

men’s Compensation benefits, it would increase or de-

crease Social Security benefits of a person eligible to

receive benefits thereunder, and the Secretary of the

Department of Health, Education and Welfare would

have no control over this, under the application of Sec-

tion 224. It would be equally true for the Legislature-of

West Virginia, or of the several states, under the appli-

cation of Section 224 of the Social Security Act to reduce

Workmen’s Compensation benefits on a weekly or

-8- | -_

°

©

Uy

monthly basis to require maximum benefits to be paid

cunder the administration of the Social Security Act.

Surely Congress did not intend that Section 224 should _

have such application, and surely Congress did not

intend that the several State Legislatures should deter-

mine the monthly amount a disabled Social Security

recipient is entitled to. Nevertheless, that is the hard

cold facts. To permit some other legislative body to take

action which would reduce or increase monthly benefits

to which a disabled Social Security recipient is entitled

to from a fund to which he has contributed his own

. money is the taking of property without due process of °

law.in its worst form. |

The appellant argues that Section 224 has a reason-

able basis and may be constitutionally applied. The Dis-

trict Court, in answer to this, stated: ;

“However, we are not convinced that the

issue raised in this case ‘deserves such cavalier

_ treatment, especially in view of the more recent

decision of the Supreme Court in Goldberg vs.

Kelly, 397 U.S. 250 (1970); which tends to ele-

vate entitlement to welfare to the status of a

property right and to surround. it with all the

safeguards required. by due process. Such bene-

fits, the Court states (page 262), area matter

of ‘statutory entitlement for persons qualified to

receive them,’ and as support for this conclu-

sion, the Court, in footnote 8 of the same page,

refers to an article in the Yale Law: Review.

stating that, ©

‘It may be realistic today to regard

welfare entitlement as more like ‘property’

than a ‘gratuity’. $

Therefore, since the Court in Goldberg appears

to have determined that entitlement to welfare

is in the nature of a property right, pretected

by the Due Process Clause of the Fifth Amend-

_ ment, by the same rationale it must be deter-

ae |

mined that one who has made direct contribu-

tion to the Social Security fund and. becomes

entitled to disability benefits thereunder should

and ought to be accorded equal status and pro-

tection. For it seems to us to be patently unfair

for the welfare recipient under Goldberg to

have-‘property right status’ with all the proced-

ural safeguards of due process; while the Social

Security recipient, under Nestor, is deprived of

such status and protection. The distinction is

, not only completely illogical, but is grossly in-

equitable. Indeed, it appears to run counter to

the intent of Congress as reflected by the com-

ments by Senator George, Chairman of the

Senate Finance Committee, at the time of the

passage of the Social Security Act concerning

its purpose and character, as quoted in the

Nestor dissent, page 623:

Tt comports béter than any substitute

we have discovered-with the American con-

cept that free men want to earn their secur-

ity and not ask for doles -. that what is due

as a matter of earned right is far better

than a gratuity ... (Emphasis added).

‘Soctal Security 1s not a handout; it ts

not charity; it 1s not-relief. It is an earned

right based upon the contributions and

earnings of the individual. As an earned

right, the individual is eligible to teceive

his benefit in. dignity and self-respect.’

(Emphasis added) 102 Cong. Rec. 15110.’

-Thus, we must conclude that the concept

espoused by the majority in Nestor, that one ,

who has. contributed to the Social Security

fund and later becomes eligible to receive the

benefits provided by the Social Security Act

has no indefeasible property right to such bene-

fits, is no longer to be considered a viable and ©

#10.

controlling precedent for that principle, in

view of the more recent holding in Goldberg

that a welfare recipient who has made no direct

contribution to the fund from which he draws»

benefits does have a recognizable property

right to such benefits and one which js pro-

‘tected by all the safeguards of due process.”

(Appendix 11-12).

It is submitted that Section 224 of the Social Se-

curity Act is contrary to the very purpose of the Social

Security Act and bears no rational relation to its pur-

pose, and that Section 224 of said Act operates to the

detriment of persons‘who are to be benefited by the

Social Security Act, and thus subverts the very objective

that it is intended to serve, violates due process, and this

appears to be abundantly clear from a close reading of —

the dissent in the Flemming vs. Nestor case. The Fifth

Amendment to the Constitution of the United States of |

America provided in pertinent part that “no person

shall . .. be deprived of life, liberty, or property with-

out due process of law...”..

It, therefore, would seem abundantly clear that if

a welfare recipient who has met statutory entitlement is.

protected by the due process clause of the Fifth Amend-

ment, then surely the Social Security recipient should

and must be afforded the same protection, especially in .

view of the fact that theoretically he has contributed

50% of the trust fund set up by. the Social Security Act.

II. THE REDUCTION IN SOCIAL: SECURITY

BENEFITS REQUIRED BY SECTION 224 OF THE

SOCIAL SECURITY ACT DEPRIVES APPELLEE OF

EQUAL PROTECTION UNDER THE LAW. —

The appellee contends that the offset provisions of

Section 224 creates arbitrary discrimination between

two classes of disabled workers, essentially indistinguish-

able from each other, except that one is composed of

those disabled persons who also receive Workmen’s

-11-.

,

{

Compensation benefits, and the other is composed of.

those disabled persons who also receive benefits from

private disability insurance plans or tort claim awards;

and that on the basis of this difference alone, the first

“class has benefits reduced, while the second class has

benefits left untouched. The appellee further argues

that the offset provisions also discriminates between

those persons who were disabled prior to June 1, 1965

and those who became disabled after June 1, 1965.

Section 224 of the Social Security Act provides

where an individual under age. sixty-two is entitled to

disability Social Security benefits and is also entitled to

‘benefits under a Workmen’s Compensation law or plan

of the United States or a Staté to periodic benefits for a

total or partial disability, whether or not permanent,

then such disability, recipient shall have his benefits

reduced by the formula set forth in.Section 224. Section

224 of the Social Security Act does not include any

other plan other than a Workmen’s Compensation law

- or plan of the United States or of a State, thus restricting

its application to a segment of disabled persons that

might be receiving benefits under a Workmen’s Com-

pensation plan, either of State or Federal in nature. The

‘appellee contends that the Act discriminates against him,

and does not provide equal protection to him, in that

other disabled persons in the same class may be ‘drawing

the same benefits from a private insurance source.or

from a tort claim award, and yet the law could not apply

_ to him in reducing his Social Security benefits commen- .

surate with your appellee. The appellant argues that the

purpose of Section 224 of the Social Security Act was to

avoid duplication of public benefits. The appellee would

have no argument with the appellant’s statement if the

benefits he was receiving from the West Virginia Work-

-men’s Compensation Fund was a public benefit.- The

West Virginia Compensation Act, Chapter 23, Article

2, Section 1 (infra this brief, Appendix, P. 14-24),

makes it abundantly clear that no public funds are in-

volved, as the premiums paid into the fund are paid by

ae be

the employer and are part of the contract of employment

of the appellee. Goding vs. Ott, 77 W.Va. 487, 87 S.E.

862; Landcaster vs. State Compensation Commissioner, .

125 W.Va. 190, 23 S.E. 2d 601;.Harden vs. Workmen’s

. Compensation Appeal Board, 118 W.Va. 198, 189 S. E.

670.

| The District Court, in answer to the appellant’s,

justification of these discriminatory features of the off-

set provisions of Section 224 of the Social Security Act

was to avoid duplication of public benefits, stated:

“Tf this be its true purpose, it is certainly

a laudable one, and one with which this Court

could wholeheartedly accept; however, the ar-

gument is inapplicable here, for, as previously

shown, Workmen’s Compensation i in West Vir-

ginia is not a gift from the public largesse, but -

rather is an entitlement arising from a contrac-

tual relationship between employer and em-

“ployee, sanctioned by law, whereby each gave

up a legal right in return for a concomitant

legal benefit. That no public funds are involved

is made abundantly clear by the provisions of

West Virginia Code, 23-3-1. And, it is provid-

ed that the Workmen’s Compensation Fund

shall be supported by ‘premiums and other

funds paid thereto by employers’, from which

shall be paid all benefits due the employees or

_ their dependents and the expenses of admin-

istering the law. No public funds being thus ©

involved, the defendant’s .(appellant added)

argument that plaintiff's Workmen’s Compen- —

sation award should be treated as a public bene-

fit obviously becomes i untenable and must

be rejeceted”.

Although the Fifth Amendment to the Constitution

of the United States of America does not specifically

contain an equal protection clause, it does provide a

restraining and protecting effect on E ederal government

-13-

action which forbids discrimination that is so unjustifi-

able as to violative of due process. Boling vs. Sharp, 347

U.S. 497, 74 Sup. Ct. 693; Schneider vs, Rusk, 377 U.S.

163. And this same limitation is placed upon the States

by the Fourteenth Amendment to the Constitution of

‘the United States of America, which bars any State

from similarly depriving a person of his property with-

out due process of law, or acts to discriminatory as to

amount to violation of due process of law.

CONCLUSION

For the reasons stated, the judgment of the District

Court should be affirmed and the application of Section

224 of the Social Security Act cannot be applied, since ©

~ to do so would deprive the appellee of his property -

without due process of law and deprive the appellee of

_ equal protection under the law as contained in the Fifth

and Fourteenth Amendments of the Constitution of the

’ United States of America.

Respectfully submitted,

MARSHALL G. WEST

Attorney at Law

Pineville, West Virginia

JOHN C. HARRIS

Attorney at Law

1500 Belleview Boulevard

Alexandria, Virginia

Counsel for Appellee 7

-14-

APPENDIX |

W. Va. Code, Chapter 23, Article 2, provides:

Section 1. Employers and Employees, ineluding State,

Its Agencies and Political Subdivisions. Subject to Chap-

ter.—The state of West Virginia and all governmental »

agencies or departments created by it, including county

_ boards of education, are hereby required to subscribe to,

and pay premiums into, the workmen’s compensation

fund for the protection of their employees, and shall be

subject to all requirements of this chapter, and all rules

and regulations prescribed by the commissioner with ref-

erence. to rates, classification and premium payments.

All persons, firms, associations and corporations reg-

ularly employing other persons for the purpose of carry-

_ing on any form of industry, service or business-in this

state, including county courts, municipalities, other polit-

ical subdivisions of the state, ‘and civil defense organiza-

tions organized under article five, chapter fifteen of this

code, are employers within the meaning of this chapter

and subject to its provisions: Provided, That the provi-

sions of section eight, article two of this chapter shall not’

apply to such county courts, municipalities, other political

- subdivisions of the state, or civil defense organizations

organized as aforesaid: Provided, however, That the fail-

ure of such county courts, municipalities, other ,political

subdivisions of the state, or civil defense organizations

organized as aforesaid, to elect to subscribe to, and to pay

premiums into, the workmen’ s compensation fund, shall

~ not impose any liability upon them, or either of them,

other than such liability as would exist notwithstanding

the provisions of this chapter. All persons in the service

of.employers as herein defined, and employed by them

for the purpose of carrying on the industry, business,

service, or work in which they are engaged, including

persons regularly employed in the state whose duties

necessitate employment of a temporary or transitory —

nature by the same employer without the state, and

-15-

check-weighmen employed according to law, all members. .

of rescue teams assisting in mine accidents with the con-

sent of the owner who, in such case, shall be deemed the .

employer, or at the direction of the director of the de-

partment of mines, and all forest fire fighters who, under

the supervision of the directgr of the department of nat-

ural resources or his designated representative, assist in

the prevention, confinement andisuppression of any for-

est fire, are employees within the meaning of this chapter

and subject to its provisions: Provided further, That this

chapter shall pores apply to employers of employees in

domestic service or persons whose employment is prohib-

ited by law, ‘nor to employees of an employer while em-

ployed without the state, except in case of temporary

employment without the state as hereinbefore provided; |

nor shall a member of a firm of employers, or any official

of an association or of a corporate employer, including

managers, or any elective or. appointiyé official:of the

state, county, county court, board of education, munici-

pality, other political subdivision of the state, or civil

defense organization organized as aforésaid, whose term

of office is definitely fixed by law, be deemed an em-

ployee within the meaning of this chapter: And provided

further, That employers of not more than three employ-

ees for a period of not more than one month, who shail be

called herein “casual employers”, employers of employees

in- agricultural service and duly incorporated volunteer

fire- departments .or companies may voluntarily elect to

subscribe to, and pay premiums into, the workmen’s com-

pensation. fund for the protection of the employees of

such employers and all of the members, including the.

chief, commander or other officials thereof, of such duly

‘incorporated volunteer fire departments or companies,

and in such case shall be subject to all requirements of

this chapter and all rules and regulations prescribed by

the commissioner with reference to rates, classifications. |

‘and premium payments, but such casual employers, em- .

ployers of employees in agricultural service and duly

.incorporated volunteer fire departments or companies

shall not be required to subscribe to the workmen’s com-

-16-

“ pensation fund and their failure to subscribe to such fund

shall not impose. any liability-upon them other than such

"~ liability as would exist notwithstanding the provisions of :

this chapter; nor shall the provisions of section eight of

this article apply to casual employers, employers of em-

ployees i in agricultural service or to such duly incorporat-

ed volunteer eee or companies,

The premium and. actual expenses in connection with

governmental agencies and departments of the state of

, West Virginia shal be paid out of the state treasury from

appropriations made for.such agencies and departments,

in the same manner as other disbursements are made by

suchvagencies and departments, : —_

County courts, municipalities, o{her political subdivi-

sions of the state, county boards of education, civil defense

organizations organized as aforesaid SRY | duly incorpor-> -

ated voluntéer fire departments or companies which shall

eect to become subscribers to the workmen’s- compensa- .

tion fund shall providé for the funds to pay their pre-

scribed premiums into the fund, and such premiums, and

premiums of state agencies and departments, including |

county boards of education, shall be-paid into the fund in

the same manuer as heréin provided for other employers

subject*to this chapter. In addition to its usual and ordin- .

apy meaning, the term “Employer” or “employers”, as

used-in this chapter, shall be taken to extend to and in- *

clude any duly incorporated volunteer fire department or

company, or civil defénse organi: zation organized as afore-

a

”

4 .

said, which shall elect to Subscribe to, and pay premiums ©

into, the workmen’s compensation fund, and in addition

to its usual and ordinary meaning, the term “Eimployee” -

or “Employees”, as used in this chapter, shall be taken to. .

extend to.and. include all of the members of’ ‘any such de-

partment, company or organization. All duly incorporated

volunteer firé. departments or companies, ge! civi

_ fense organizations organized as aforesaid, w Pik ol

elect to. subscribe to, and pay oup pr into 9, auch f

shall be placed in a : separate group pr class of subscribers :

a Vie ~

_ a |

\

- tobe established by the commissioner, and such depart-

-. méntg, companies or. organizations shall pay into the fund

such premiums (computed, notwithstanding the provi-

sions of section five of this article on such basis as to the

‘* commissioner shall seem right and proper) as may be

necessary to keep such group or class entirely self-sup-

porting. .

“Any employer whose employment in this ‘state is to

be for a definite or limited period, which could. not be

- considered “regularly employing” within the meaning of

this section, may elect to pay into'the workmen’s compen-

sation fund the premiums herein provided for, and at the

_—time of making application to the commissioner such em-

ployer shall furnish a statement under oath showing the

probable length of time the employment will continue in

this state, the character of the work, an estimate of the

monthly payroll, and any other’ information which may be

required by:the commissioner. At the time of making

‘application such employer shall. deposit with the state

compensation commissioner to the credit of the work-

men’s compensation fund the amount required by section

five of this article, which amount-shall be returned to

«such employer, if his application be rejected by the com-

missioner. Upon notice to such employer of the accept-

ance of his application by the commissioner, he shall be

an employer within the meaning of this chapter and sub-

ject to all of its. provisions, ;

Any foreign corporation saiploges electing to comply,

with..the provisions of this chapter and to receive the

benefits hereunder, shall, at the time of making applica-

tion to the commissioner, in addition to other require-

ments:of this chapter, furnish such commissioner with

certificate from the secretary of state showing that it has

complied with all the requirements necessary.to enable it

legally to“do business in this state, and no application of

such foreign corporation employer shall be accepted by

the commissioner until such: certificate is filed.

- 18 -

en oi NARA RNS)

‘

the workmen’s compensation fund.

For the purpose of this chapter, a mine shall be aa-

judged within this state when the main opening, drift,

shaft or slope is located wholly within this state.

Any employee within the meaning of this chapter

-whose employment necessitates his temporary absence

from this state in connection with such employment, and

such absence is directly incidental to carrying on an in- —

dustry in this state, who shall have received injury during

such absence in -the course of and resulting from his em-

ployment, shall not be denied the right to participate in

Sec. 6. Exemption of Contributing Employers from

liability. — Any employer subject to this chapter who

shall elect to pay into the workmen’s compensation fund

the premiums provided by-this chapter shall not be liable

to respond in damages at common law or by statute for the

injury or death of any employee, however occurring,

after such election and during any period in which such

employer shall not be in default in the:payment of such

premiums and shall have complied fully with all other

provisions of this chapter: Provided, That the injured

employee has remained in his service with notice that his

employer has elected to pay into the workmen’s compen-

sation fund the premiums provided by this chapter. The

continuation in the service of such employer with such

‘notice shall be deemed a waiver by the employee and by

the parents of any minor employee of the right of action

as aioresaid, which the employee or his or her ‘parents

. would otherwise have.

Sec. 6-a. Exemption from Liability of Officers, Man-

agers, Agents, Representatives or Employees of Contrib-

_uting Employers—The immunity from liability set out in. -

the preceding section shall extend to every officer, man-

ager, agent, representative or employee of such employer

when he is acting in furtherance of the employer’s busi-

ness and does ‘not inflict an injury with deliberate inten-

tion. _

-19-

_ Sec. 7. Notice to Employees; Waiver of Benefits of

Chapter by Contract Prohibited—Each employer elect-

ing to pay the premiums provided by this chapter into the

workmen’s compensation fund, or electing to make direct

payments of compensation as hereinafter provided, shall

post and keep posted in conspicuous places about his place

or places of business typewritten or printed notices stat- -

ing the fact that he has made such election, and the same

when so posted shall constitute sufficient notice to all his

employees and to parents of any minor employees of the

fact that he has made such election. No employer or em-

ployee shall exempt himself from the burden or waive the

benefits of this chapter by any contract, agreement, rule,

or regulation, and any such contract, agreement, rule or

regulation shall be pro tanto void.

Sec. 8. Election Not to Pay or Default in Payment of

Premiums; Defenses Prohibited.—All employers subject

to this chapter, except the state of West Virginia and the

governmental agencies or departments created by it, who

shall not have elected to pay into the workmen’s compen-

sation fund the premiums provided by this chapter and

have not elected to pay individually and directly or from

benefit funds compensation and expenses to injured em-

' ployees or fatally injured employees’ dependents under

the provisions of section nine of. this article, or having so

elected shall be in default in the payment of the same, or

not: having otherwise fully complied with the provisions’

of section five or section nine of this article, shall be liable

to their employees (within the meaning of this article)

for all demages suffered by reason of personal injuries

sustained in the course of employment caused by the

wrongful act, neglect or default of the employer or any

of the employer's officers, agents or employees while

acting within the scope of their employment and in the

course of their employment and also to the personal rep-

resentative of such employees where death results from

such personal injuries, and in.any action by any such

employee or personal representative thereof, such de-

fendant shall not avail himself of the following common

220 =

Spe lew \ok eos ern hata daa a

law defenses: The defense of the fellow - servant rule;

the defense of the assumption of risk; or the defense of

contributory negligence; and further shall not avail him-

self of any defense that the negligence in question was

_ that of some one whose duties are prescribed by statute:

Provided, however, That such provision depriving a de-

fendant employer of certain common law defenses under

the circumstances therein set forth shall not apply to an

action brought against’ a county court, board of educa-

tion, municipality, or other political subdivision of the .

state or against a casual employer or an employer of em-

ployees in agricultural ‘service.

Sec, 9. Election of Employer to Provide Own System

of Compensation.—Notwithstanding anything contained

in this chapter, employers subject to this chapter who are

_ of sufficient financial responsibility to insure the pay-

ment of compensation to injured employees and the de-

pendents of fatally injured employees, whether in the .

form of pecuniary compensation or medical attention,

funeral expenses or otherwise as herein provided of the

value at least equal to the compensation provided in this

chapter, or employers of such financial responsibility who

maintain their own benefit funds, or system of compen-

sation, to which their employees are not required or per-_

mitted to contribute, or such employers as shall furnish

bond or other security to insure such payments, may, upon

a finding of such facts by the compensation commissioner, —

elect to pay individually and directly, or from such bene-

fit funds, department or association, such compensation

and expenses to injured employees or- fatally injured em-

ployees’ dependents. The compensation commissioner

shall require security or bond from such ‘employer, to be

approved by him, and of such amount as is‘by him consid-

ered adequate and sufficient to compel or secure’to such

employees, or their dependents, payment of the eompen-

sation and expenses herein provided for, which shall in no

event be’ less than the compensation paid or furnished

out of the state workmen’s compensation fund in similar

cases to injured employees or the dependents of fatally

le

injured employees whose employers contribute to such

fund. Any employer electing under this section shall on

or before the twentieth day of the first month of each

quarter, for the preceding quarter, file with the commis-

sioner a sworn statement of the total earnings of all his

employees subject to this chapter for such preceding .

quarter, and shall pay into the workmen’s compensation

fund a’sum sufficient to pay his proper proportion of the

expenses of the administration of his chapter, as may be

determined by the commissioner. The commissioner shall

make and publish rules and regulations governing the

mode and manner of making application, and the nature

and extent of the proof required to justify the finding of ©

facts by the commissioner, to consider and pass upon such

_ election by employers subject to this chapter, which rules —

and regulations shall be general in their application. Any

- employer subject to this chapter who shall elect to carry

his own risk and’ who has complied with the requirements

ofthis section and the rules of the compensation commis- .

sioner shall not be liable to respond in damages at com-

mon law or by statute for the injury or death of any em-

ployee, however, occurring, after such election and during

the period that he is allowed by the commissioner t6 carry

his own risk ; provided the injured employee has remained

in his service with notice given, as provided for in section

seven of this article, that his employer has elected to carry

his own risk as herein provided. The continuation in the

service of such employer with such notice shall be deemed

a waiver by the employee and by the parents of any minor

- employee of the right of action, as aforesaid, which the

employee or his or her parents would otherwise heave.

Any employer whose record upon the books of the

compensation commissioner shows, a liability against the

workmen’s compensation fund incurred on account-of

injury to or death of any: of his employees, in excess of

premiums paid by such employer, shall not be granted the

right, individually and directly or from such_ benefit

‘funds, department or association, to compensate his in-

jured employees and the dependents of his fatally injured

» 22.

ane Se. eg Neat Ls ct te ne er Cetkas Bi

employees until he has -paid into the workmen’s compen-

sation fund the amount of such excess of liability over

premiums paid, including his proper proportion of the

liability incurred on acécount of explosions, catastrophes

or second injuries as defined in séction one, article three

of this chapter; occurring within the state and charged

against such fund. |

All employers who have heretofore elected, or shall

hereafter elect, to pay compensation.and expenses direct- _

ly as provided in this section, shall, unless they give the

catastrophe and second injury security or bond_herein-

after provided for, pay into the surplus fund referred to

in section one, article three of this-echapter upon the same

basis and in the same percentages, subject to the limita-

tions herein set forth, as funds are set aside for the main-

_ tenance of the surplus fund out of payments made by

premium-paying subscribers, such payments to be made -

at the same time as hereinbefore provided with respect

to payment of proportion of expenses of administration. |

In case there be a catastrophe or second injury, as defin-

ed in section one, article three-of this chapter, to the em-

ployees of any employer making such payments, the

employer sha'l-not be liable to pay compensation or

expenses arising from or necessitated by the catastrophe

or second injury, and such compensation and expenses

shall not be charged against such employer, but such

- compensation and expenses shall be paid from the surplus

fund in the same manner and to the same extent as in

the case of premium-paying subscribers. :

If an employer elects to make payments into the sur-

- plus fund as aforesaid, then the bond or other security

required by this section shall be of such amount as the

commissioner considers adequate and sufficient to compel

or secure to the employees or their dependents payment

of compensation and expenses, except any compensation

and expenses that may arise from, or be necessitated by, .

any catastrophe or second injury,-as defined in section |

one, article three of this chapter, which last are secured

- 23 -

by and shall be paid from the surplus fund as hereinbe-

fore provided.

If any employer elect not to make payments into the

‘surplus fund, as hereinbefore provided, then, in addition

to bond or security in the amount hereinbefore set forth,

such employer shall furnish catastrophe and second in-

jury security or bond, approved by the commissioner, in *

such additional amount as the commissioner shall con-.

sider adequate and sufficient to compel or secure payment

of all compensation. and expenses arising from, or neces-

-sitated by, any catastrophe or second injury that oman

' thereafter ensue.

All employers hereafter making application a carry

their own risk under the provisions of this section; shall

with such application, make a written statement as. to

whether such employer elects to make payments afore-

said into the surplus fund, or not to make such payments

and to give catastrophe and second injury security or bond

hereinbefore i in Such’ case provided for. .

All euplovers who have heretofore elected to: carry

their own risk under the provisions of this section shall be

deemed to-have elected to make payments into the sur-

plus fund unless, within thirty days after. the effective

date of this act, they notify the commissioner in writing

to the eentrary: Provided, however, That such employers,

as have heretofore elected, under the rules heretofore

promulgated by the commissioner, not to make payments

into the surplus fund, shall be deemed to have elected to

‘give the catastrophe ‘and second injury security or bond

hereinbefore provided for and not to make payments into

the surplus fund. Any catastroplie and second injury se-—

curity or bond heretofore gives under rules and regula- .

tions promulgated by the commissioner and approved by

him shall be valid under this section, and any election

heretofore made under the rules and ‘regulations of the

commissioner to make payments into the surplus fund”

shall be valid and protective to the person so electing

. ° = 24-

é

from and after the date of such election. -

>In any case under the provisions of this section that

shall require the payment of compensation or benefits

by an employer in: periodical payments, and the nature

of the case makes it possible to compute the present value

of all future payments, the commissioner may in his dis-

- cretion, at any time compute and permit or require to be

paid into the workmen’s compensation fund an amount ‘

equal to the present value of all unpaid compensation for

which liability exists, in trust; and thereupon such ém-

ployer shall be discharged from any further liability upon

such award, and payment of the same shall be assumed

by the Workmen’s Compensation Fund. |

- 25.