Walters v. Flathead Concrete Products, Inc.
249 P.3d 913 (Mont. 2011)
In Walters v. Flathead Concrete Products, Inc., the Montana Supreme Court affirmed the constitutionality of the Workers’ Compensation Act (“WCA”)—specifically, the constitutionality of the WCA’s exclusive remedy provision and the provision providing a $3,000 lump sum payment to non-dependent parents of a deceased worker. Carol Walters (“Walters”), the mother of a deceased employee, asserted wrongful death and survivorship claims against her son’s employer, Flathead Concrete Products, Inc. (“FCP”). The Court affirmed the district court’s grant of summary judgment for FCP, finding that the WCA’s exclusive remedy provision barred Walters’ claims.
Walters’ son, Tim, died in a work-related accident while working for FCP. Tim was forty-two years old and single, and he had no children. He lived with Carol but did not provide her with sufficient support for her to qualify as a dependent. FCP provided workers’ compensation coverage to its employees through the WCA. As a non-dependent parent of a deceased worker, Carol was entitled to receive $3,000 under the WCA, plus medical, hospital, and burial benefits.
Walters conceded that she could not establish an intentional injury claim, which would allow her to circumvent the exclusive remedy provision of the WCA. Instead, she argued that the exclusive remedy provision of the WCA and the provision entitling her to only $3,000 were unconstitutional because the quid pro quo on which the WCA was premised was not satisfied. Based on the unconstitutionality of these provisions, she contended that her claims should proceed.
Walters broadly presented the issue as: “Is $3,000 for the death of a worker constitutional?” She argued that because Tim had no dependents, and thus no person was eligible to receive wage loss benefits, the quid pro quo was not satisfied. Walters further asserted that the provisions of the WCA were fundamentally unfair and violated substantive due process.
The Court looked to the Montana Constitution, Article II, § 16, which affords all persons full legal redress except in the case of an employee against his fellow employees or immediate employer when the employer provides coverage under the WCA. The Court also recited the exclusive remedy rule stated in Montana Code Annotated § 39–71–411:
An employer is not subject to any liability whatever for the death of or personal injury to an employee covered by the Workers’ Compensation Act . . . . The [WCA] binds the employee himself, and in case of death binds his personal representative and all persons having any right or claim to compensation for his injury or death . . . .”
Thus, the Court held that the WCA, on its face, barred all of Walters’ claims.
The Court reasoned that the quid pro quo of the WCA means that employers providing coverage under the WCA receive the exclusive remedy provision in exchange for providing workers with a no-fault recovery. The Court emphasized that the WCA’s purpose is to benefit both the employer and the employee, by immunizing the employer from lawsuits while assuring compensation for the employee. Further, it described the exclusive remedy provision as “perhaps the most firmly entrenched doctrine in workers’ compensation law.”
Walters’ challenge to the quid pro quo relied primarily on the Court’s holding in Stratemeyer v. Lincoln County (“Stratemeyer II”). There, the plaintiff-employee suffered a mental injury defined as a “mental-mental” injury. Because the Stratemeyer II Court determined that such mental injuries were not covered by the WCA, the Court concluded that the quid pro quo did not exist, and therefore the plaintiff was allowed to pursue a remedy via an action against his employer. The Court in Stratemeyer II held that “[a]bsent the quid pro quo, the exclusive remedy cannot stand, and the employer is thus exposed to potential tort liability.”
The Court distinguished Walters’ claim from Stratemeyer II, concluding that, unlike Stratemeyer’s “mental-mental” injury, Tim’s death was an injury covered by the WCA. The Court highlighted Maney v. Louisiana Pacific Corporation’s determination that “[the WCA’s] language is clear and unequivocal. An employer has no liability for an employee’s work-related injury or death which is compensable under the Act.” Accordingly, the Court held that because Tim’s injury was compensable under the WCA, “the basis for the Court’s conclusion in Stratemeyer II that the quid pro quo had failed . . . is not present in this case.”
Next, the Court addressed Walters’ substantive due process challenge. The Court noted “the essence of substantive due process” is to protect individuals from the exercise of “unreasonable, arbitrary or capricious” State power.  Thus, the Court declared that substantive due process requires statutes to be reasonably related to a legitimate government objective.
The district court had rejected Walters’ substantive due process challenge altogether, finding that she had failed to assert a constitutionally protected property interest. The Court rejected this position:
We find it incongruent for the FCP to argue on the one hand that there was an exchange of interests sufficient to satisfy the quid pro quo bargain supporting the exclusive remedy, but to argue on the other hand that Walters lacks an interest sufficient to test whether the quid pro quo bargain satisfied substantive due process. 
Accordingly, the Court held that Walters demonstrated an interest sufficient to bring her substantive due process challenge.
Walters argued that the Montana Constitution mandates fairness and the $3,000 afforded to her under the WCA was unfair and unreasonable. She focused on the denial of wage loss benefits to support her argument that the quid pro quo was not satisfied. The Court expanded the inquiry and examined all benefits available to a worker who suffers a fatal, work-related injury, including medical and hospital expenses related to the injury and death, burial expenses, wage loss benefits available to various categories of dependents, and if no dependents exist, a lump sum payment of $3,000 to the decedent’s surviving parent or parents.
The Court then examined whether the statutes were logically related to the WCA’s purpose, which is “‘to provide, without regard to fault, wage-loss and medical benefits to a worker suffering from a work-related injury or disease. . . . at a reasonable cost to the employer.’” The Court held that the Legislature’s efforts to prioritize the allocation of resources from the workers’ compensation fund served a legitimate government objective. The Court concluded that “the challenged statutes evidence a legislative intention to manage resources by paying wage-loss benefits only to those people who are dependent upon the deceased worker’s wages.” The Court recognized that the amount awarded was “minimal”; however, it said that such an arrangement met the legitimate goal of preserving resources from the workers’ compensation fund for those people who need them most—the dependents of injured workers.
The Court emphasized that Walters’ burden in this case was high—to prove the WCA’s unconstitutionality beyond a reasonable doubt. The Court conceded that the WCA may not be perfect, but concluded that Walters had not met her high burden.
Ultimately, the Court held that the WCA is “rationally related to the recognized legitimate government objectives of the Act” in that, “[o]ut of available resources, the Legislature logically directed wage loss benefits to those persons who depended upon them, and paid a small amount to those who did not.” The Court concluded that the WCA is not arbitrary or unreasonable and that it satisfies both substantive due process and the quid pro quo.
Justice Cotter specially concurred, asserting that the quid pro quo only extends to the workers and their beneficiaries, not to persons who are not beneficiaries of the deceased worker. Justice Cotter warned that while further limitations on available benefits may create a scenario in which the quid pro quo no longer exists, that was not the situation here.
Justices Wheat and Nelson dissented. Justice Wheat argued that the quid pro quo was violated for two reasons: (1) the unavailability of wage loss benefits for non-dependent parents; and (2) the unreasonableness of the $3,000 payment. Justice Wheat pointed out that, outside the context of the WCA, an estate is entitled to seek future wage loss damages in a survivorship action, regardless of whether any members of the estate are dependents. Accordingly, Justice Wheat maintained that in order to satisfy the quid pro quo, a worker should be entitled to wage loss benefits even if no dependents exist. Justice Nelson agreed with Justice Wheat’s dissent. But he further argued that while this case may not be the case in which the WCA may be deemed unconstitutional, “given the direction of workers’ compensation reform, there will likely come a case which presents this Court with the issue of whether the whole Workers’ Compensation Act, or significant parts of it, has been rendered unconstitutional . . . because . . . the quid pro quo no longer exists.”
In sum, Walters is an important case because it affirms the constitutionality of the WCA and the Legislature’s power to allocate and prioritize distributions from the Workers’ Compensation fund. Further, Walters establishes that non-dependent family members of a deceased worker have a constitutionally protected property interest in the benefits due to the worker under the WCA. Finally, Walters sounds a warning to the Legislature that the Court is divided and that further limitations on compensating workers may render the WCA, or portions of it, unconstitutional.