Estate Benefit Ruled Unconstitutional

The court of appeals has published its decision in the Six Flags v. WCAB case.  This decision addresses the issue of whether a deceased employee's estate is entitled to receive $250,000.00 as an additional benefit above and beyond the payment made to the Death Without Dependents Unit where the injured worker leaves no dependents who would otherwise be entitled to benefits.

The WCAB and the trial level awarded $250,000 to the estate of the deceased employee in this case pursuant to Labor Code § 4702(a)(6)(B) based on a finding that there were no dependents.  Additionally payment was been ordered to the Death Without Dependents Unit of the State of California.  The defendant challenged the Award of Benefits to the estate of the employee based upon the lack of constitutional support for the ability of the WCAB to award benefits to an entity not mentioned specifically in the state constitution.   In the alternative defendant argued that the payment to the estate was in place of the award to the Death without Dependants Unit.  The constitutional challenge is one that the W.C.A.B. has no jurisdiction to address and therefore the first time that it can be properly raised and considered is before the Appellate Court.

The Court of Appeals had little difficulty in following a substantial body of existing authority in determining that the provision was not able to withstand judicial scrutiny:

".we hold that section 4702, subdivision (a)(6)(B), is unconstitutional because the constitutional enabling provision, article XIV, section 4 of the California Constitution (article XIV, section 4),[1] does not identify estates as a class of beneficiaries entitled to workers' compensation death benefits.[2]"

The court of appeals focusing on the defendant's argument that the state constitution provides for the legislature to create a workers' compensation system that allows awards of benefits to injured workers or their dependents or the State of California but without express language authorizing payment to the estate of an injured worker.  (As an interesting side note the language inserting the State of California and allowing the receipt of benefits for the Death Without Dependents Unit was part of Proposition 13 which is obviously much better known for the impact it had on our state property taxes.)  The Court also noted that the legislature and the Governor were both made aware on multiple occasions of the potentially constitutionally defective provision by the Division of Workers' Compensation and the Department of Industrial Relations as well as the

Based on this decision dependent heirs are going to be more willing to assert their rights of an heir rather than decrying any potential dependency benefits in hopes that the estate of the injured worker would receive the $250,000.00 windfall.  The statute which created this anomaly was part of the original increased benefits which issued as part of AB 749 in 2002.  It was immediately pointed out that there was a constitutional issue with providing for an Award of payment to the estate of an injured worker and in SB 486 the implementation of the statute was deferred until 2004.  It was anticipated that the legislature might address the issue in a cleanup bill however this never occurred and the provision was left in place.  The original statute had also provided for payment of a single dependency benefit to the conclusively presumed dependent parents of a deceased injured worker if there were no other dependents in existence.  The legislature rather than continuing to provide for the $125,000.00 dependency benefit for the dependent parents, repealed that provision and allowed estate payment of $250,000.00 to remain in place, presumably to benefit such dependent parents.

A copy of this decision can be located by clicking on the link on the case name above.

Richard M. Jacobsmeyer*

[1]              In 1918, the voters approved article XX, section 21 of the California Constitution (article XX, section 21) which was the original constitutional enabling provision establishing the workers' compensation system.  In 1976, article XX, section 21, was repealed and reenacted as article XIV, section 4, the provision at issue in this case.