Statute Requiring An Employer To Pay Workers’ Compensation Death Benefit To A Deceased Worker’s Estate When The Worker Has No Dependents Is Unconstitutional

In Six Flags, Inc. v. Workers’ Compensation Appeals Board, (06 Cal. Daily Op. Serv. 10,873, Cal.App. 2 Dist., Nov. 27, 2006), a California Court of Appeal considered the constitutionality of Labor Code section 4702, subdivision (a)(6)(B) which provides that an employer must pay a workers’ compensation death benefit to a worker’s estate when a worker who has no dependents suffers fatal injury during the course and scope of employment. The Court found that this section of the Labor Code is unconstitutional because the California Constitution “does not identify estates as a class of beneficiaries entitled to workers’ compensation death benefits.”

Facts

Bantita Rackchamroon sustained an accidental injury resulting in her death while employed by Six Flags, Inc. Rackchamroon had no dependents at the time of her death. The administrator of Rackchamroon’s estate filed an application for a workers’ compensation death benefit alleging that the fatal injury occurred in the course and scope of her employment. Six Flags’ insurer asserted that Labor Code section 4702, subdivision (a)(6)(B) is unconstitutional. The workers’ compensation judge awarded $250,000 to Rackchamroon’s estate. After the Workers’ Compensation Appeals Board denied the insurer’s petition for reconsideration, the insurer sought review by a California Court of Appeal.

Decision

The Court of Appeal held that Labor Code section 4702, subdivision (a)(6)(B) is unconstitutional. Section 4702, subdivision (a)(6)(B) provides “that when a worker without dependents suffers fatal injury during the course and scope of employment, the employer must pay $250,000 to the deceased worker’s estate as a worker’s compensation death benefit.” The Court found that article XIV, section 4 of the California Constitution “does not include estates as a class of beneficiaries entitled to workers’ compensation death benefits.” The Legislature, therefore, was without power to promulgate subdivision (a)(6)(B).

The Court noted the predecessor to article XIV, section 4, initially “identified two classes of beneficiaries of workers’ compensation benefits: (1) workers and (2) dependants.” It further noted that the California Supreme Court “has twice declared statutes unconstitutional when the Legislature attempted to expand the class of beneficiaries beyond the two classes identified in the Constitution.” In both instances, the Legislature had attempted to declare the state as a beneficiary of workers’ compensation death benefits. However, the Court concluded both attempts were unconstitutional because the constitutional enabling provision, which was the predecessor to article XIV, section 4, did not identify the state as an appropriate beneficiary to death benefits.

In 1972, voters approved a constitutional amendment which provided that the Legislature shall have the “power to provide for the payment of an award to the state in the case of the death, arising out of and in the course of the employment, of an employee without dependents, and such awards may be used for the payment of extra compensation for subsequent injuries beyond the liability of a single employer for awards to employees of the employer.” That same year, the Legislature promulgated a statute to allow death benefits to be awarded to the state.

In its present form, “article XIV, section 4, does not include estates as a class of beneficiaries entitled to workers’ compensation benefits.” After the 1972 amendment, the only beneficiaries included in article XIV, section 4, were workers, dependents, and the state.

The Court noted that when the Legislature promulgated subdivision (a)(6)(B) to provide for a $250,000 death benefit to the estate of a worker without dependents, it did not present to the voters an amendment to add a class of beneficiaries. The Court found that estates are not dependents under present law. The Court concluded that, because article XIV, section 4, does not identify estates as a class of beneficiaries that are entitled to workers’ compensation benefits, the Legislature did not have the power to promulgate section 4702, subdivision (a)(6)(B). Section 4702, subdivision (a)(6)(B) is therefore unconstitutional. The Court stated, “A constitutional amendment to article XIV, section 4, adding deceased workers’ estates as a class of beneficiaries . . . is necessary before the Legislature is empowered to promulgate a statute awarding workers’ compensation death benefits to a deceased worker’s estate.”

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