Professional Documents
Culture Documents
783
94 S.Ct. 2028
40 L.Ed.2d 540
Syllabus
In this action (brought initially by appellant Dillard and in which appellant
Williams was allowed to intervene) Williams claimed that the Due
Process Clause of the Fourteenth Amendment prevented Virginia from
permitting suspension of workmen's compensation benefits as a result of a
claimed change in condition without notice to the claimant and a prior
adversary hearing. The District Court rejected the constitutional claim on
the merits. Held: If, as indicated in the briefs and oral arguments in this
Court, state law permits a claimant whose benefits have been suspended to
have them reinstated by the state trial courts, which act in a purely
ministerial capacity, pending a full administrative hearing before the State
Industrial Commission on the merits of his claim, it was probably
unnecessary to address the federal constitutional question. Accordingly,
the case must be remanded to the District Court for reconsideration. Pp.
784798.
347 F.Supp. 71, vacated and remanded.
John M. Levy, Richmond, Va., for appellants.
Stuart H. Dunn, Richmond, Va., for Industrial Commission of Va. and
others.
J. Robert Brame, III, Richmond, Va., for The Aetna Casualty & Surety
Co.
Mr. Justice POWELL delivered the opinion of the Court.
Appellants seek to establish that, under the Due Process Clause of the
Fourteenth Amendment, Virginia may not permit the suspension of workmen's
compensation benefits without a prior adversary hearing. A three-judge United
States District Court, over one dissent, rejected appellants' constitutional
arguments. 347 F.Supp. 71 (E.D.Va.1972). We noted probable jurisdiction. 414
U.S. 1110, 94 S.Ct. 838, 38 L.Ed.2d 736 (1973). Although the parties have
focused primarily on the due process issue, the briefs and oral arguments have
indicated that under state law a claimant whose workmen's compensation
benefits have been suspended may have them reinstated by a state trial court
pending a full administrative hearing on the merits of his claim. If this is an
accurate reading of state law, it is in all probability unnecessary to address any
questions of federal constitutional law in this case. Accordingly, the case must
be remanded to the District Court for reconsideration.
'Any party in interest may file in the circuit or corporation court of the county
or city in which the injury occurred, or if it be in the city of Richmond then in
the circuit or law and equity court of such city, a certified copy of a
The state courts have construed their enforcement duty under 65.1100 as
purely ministerial. They do not inquire into whether a claimant's condition
continues to justify compensation. Rather, they simply enforce agreements and
awards that have been approved and not formally rescinded by the
Commission.4 Thus, a workmen's compensation claimant in Virginia has at his
disposal a ready mechanism in the state trial courts to enforce any facially valid
award or agreement. Since judicial enforcement is a ministerial act, this relief
appears to be available with a minimum of delay or procedural difficulty.
'Upon its own motion or upon the application of any party in interest, on the
ground of a change in condition, the Industrial Commission may review any
award and on such review may make an award ending, diminishing or
increasing the compensation previously awarded . . .. No such review shall
affect such award as regards any moneys paid . . ..' Va.Code Ann. 65.199
(1973).5
The last sentence of the above quotation from 65.199 prevents an employer
or insurance company from recovering benefits erroneously paid prior to the
Commission's formal termination of an award or agreement. See Gray v.
Underwood Bros., 164 Va. 344, 182 S.E. 547 (1965). Accordingly, an
employer or insurer with cause to believe that a claimant is no longer entitled to
benefits has an obvious incentive unilaterally to cease payment at the time it
seeks a 65.199 hearing before the Commission. If the Commission
ultimately holds in its favor, the employer or insurer will not be required to pay
any further benefits, and it will have protected itself against unmerited
payments in the period prior to the Commission's full hearing. If the
Commission rules against it, it will be required to reinstate benefits
retroactively to the date of the application for a hearing, but at least it will have
avoided paying benefits for which there was no true legal obligation.
10
In order to police this tendency of employers and insurers to terminate first and
litigate later, the Commission promulgated its Rule 13. See Manchester Bd. &
Paper Co. v. Parker, supra.8 Rule 13 sets forth certain requirements that an
employer or insurer must meet, with precision, see ibid., before it can obtain the
65.199 hearing which is a prerequisite to formal termination of an award or
agreement on the ground of change in condition.9 For example, the Rule
requires employers and insurers to continue benefits up to a defined date. And
since April 1, 1972, the Rule has imposed the following requirements on such
applications:
11
'All applications by an employer or insurer shall be under oath and shall not be
deemed filed and benefits shall not be suspended until the supporting evidence
which constitutes a legal basis for changing the existing award shall have been
reviewed by the Commission, or such of its employees as may be designated
for that purpose, and a determination made that probable cause exists to believe
that a change in condition has occurred.'
12
Thus, under Rule 13, as amended, an employer or insurer must pay benefits up
to a certain date, must make application under oath, and must submit
'supporting evidence which constitutes a legal basis for changing the existing
award . . ..' If these requirements are met and if the Commission finds that
'probable cause exists to believe that a change in condition has occurred . . .,'
the employer or insurer will be accorded a hearing that may lead to rescission
of the prior award or agreement. If the Rule 13 requirements are not met, the
request for a hearing will be denied, and the award or agreement at issue will
remain subject to enforcement in the state courts.
II
13
Appellant Dillard was the original named plaintiff in this class action under 42
U.S.C. 1983. He contended that the Due Process Clause of the Fourteenth
Amendment prevented Virginia from permitting the suspension of workmen's
compensation benefits without notice to the claimant and an adversary hearing
at the time the Commission makes a probable cause determination pursuant to
Rule 13. A three-judge United States District Court, over one dissent, rejected
this argument on the merits. 347 F.Supp. 71 (E.D.Va.1972). Dillard appealed,
but then settled his claim, and we remanded the case for a determination of
mootness. 409 U.S. 238, 93 S.Ct. 566, 34 L.Ed.2d 444 (1972). In an unreported
order, the District Court subsequently permitted the intervention of appellant
Williams and reinstated its published opinion. Williams then appealed, bringing
up the due process arguments initially espoused by Dillard.
14
15
Every indication in the record and in the state authorities is that Williams had at
his disposal a state court enforcement right that he simply failed to utilize. See
n. 4, supra. As the Commission declared in its motion to dismiss before the
District Court:
17
The District Court itself noted that Rule 13 probably does not permit an
employer or insurer to escape 65.1100 of the Act.16 It reached appellants'
federal constitutional claim only by assuming, arguendo, 'that the Rule is
authority for the employer or insurer to terminate payments . . ..' 347 F.Supp., at
75. Based on what has been brought to our attention and our review of state
law, such an assumption in all likelihood would be inaccurate.17 In any event,
that court must resolve any doubts on the issue before reaching appellants'
federal claim. If there is significant doubt about the status of state law, the court
should consider abstention, as the state law question may well be dispositive.
E.g., Lake Carriers' Ass'n v. MacMullan, 406 U.S. 498, 92 S.Ct. 1749, 32
L.Ed.2d 257 (1972). If, as appears to be the case, state law clearly provided
Williams an adequate state court remedy he did not pursue, then the court will
be presented with a wholly different issue from the one it decided. Assuming it
is also established that the Commission's Rule 13 procedures are necessarily ex
parte,18 then the only question is whether the interruption, if any, of benefits
between the time of suspension and the time a claimant obtains reinstatement of
benefits by petitioning the state courts is of any controlling significance. If the
court determines that a claimant as a general rule may obtain reinstatement of
benefits without undue delay following a finding of probable cause by the
Commission under Rule 13, then the court should dismiss the complaint.
19
20
It is so ordered.
21
22
23
This case involves a class action brought on behalf of all persons who, as a
result of sustaining employment-related injuries, are recipients of benefits under
the Virginia Workmen's Compensation Act, Va.Code Ann. 65.11 et seq.
The action challenges the constitutionality under the Due Process Clause of the
Fourteenth Amendment of that part of the Act allowing a termination of benefit
payments by the employer or insurer as a result of an asserted change in
condition prior to a full hearing on the alleged change before the Commission.
The complaint prayed for an injunction to restrain enforcement of that part of
the Act. A three-judge District Court was convened, 28 U.S.C. 2281, and the
challenged portions of the Act were found constitutional, one judge dissenting.
347 F.Supp. 71 (E.D.Va.1972).
24
The Act provides a system allowing the employer and the employee to escape
personal injury litigation for on-the-job injuries; it provides for the payment of
compensation under fixed rules. Once the Industrial Commission approves an
award of benefits, the Commission or any party in interest may move for
review of the award 'on the ground of a change in condition.' Va. Code Ann.
65.199. According to the Commission's Rule 13, all such applications by an
employer or insurer to decrease or terminate benefits "require that an ex parte
inquiry be held by the Commission to determine whether probable cause exists
for a change in the award before any benefits may be temporarily suspended
pending a full hearing." 347 F.Supp., at 79.
25
26
Since I find the state remedy inapposite, I dissent from the remand to consider
its impact.
An amicus brief indicates that in the years 1967 to 1971 approximately 95% of
all claims for workmen's compensation were resolved by voluntary agreement.
Brief for American Insurance Association et al. 10.
See Richmond Cedar Works v. Harper, 129 Va. 481, 492493, 106 S.E. 516,
520 (1921): 'Section 62 (the predecessor to 65.1 100 of the Act) was clearly
enacted for the purpose of providing a means not only of enforcing an award
which had been affirmed on . . . appeal, but also all other final awards of the
commission from which there had been no appeal, as well as all agreements
between the parties approved by the commission. When this section is invoked,
however, the rights of the claimants have already been established. The
proceeding then resembles a motion under our statute for execution upon a
forthcoming or delivery bond. . . . (A)ll of the rights of the levels of
compensation, 65.154 to 65.157, determined, the court is required to
render judgment in accordance either with (a) the agreement of the parties,
which has been approved by the commission, (b) an award of the commission
which has not been appealed from, or (c) an award of the commission which
has been previously affirmed upon appeal. At this stage of the proceeding, the
court is vested with no discretion; the statute is mandatory, and the refusal to
render such judgment as that section requires could be compelled by
mandamus. . . . The order of the court under section 62 in rendering judgment
so that execution may be had, is the exercise of a ministerial function, and the
mere method provided by the legislature for enforcing the collection by legal
process of the amount already legally ascertained to be due . . ..'
Accord, Parrigen v. Long, 145 Va. 637, 134 S.E. 562 (1926).
5
There is no dispute in the instant case that the full hearing the Commission
ultimately conducts before it formally terminates an award or agreement under
65.199 of the Act satisfies the requirements of the Due Process Clause of
the Fourteenth Amendment. Appellants' attack has been directed only at
suspensions of benefits prior to the Commission's final hearing.
'The reason for the rule is stated in the opinion of the Commission as follows:
"More than thirty years ago when it was found by the Commission that some
employers were arbitrarily disregarding the effect of outstanding awards and
terminating payments directed by such awards, (Rule 13) . . . was promulgated .
. .. The Rule has since been continuously in force." 201 Va., at 331, 111 S.E.2d,
at 456.
Rule 13 was promulgated pursuant to the general rulemaking authority vested
in the Commission by the Act. Section 65.118 of the Act provides, in part:
'The Commission may make rules, not inconsistent with this Act, for carrying
out the provisions of this Act.' The state courts have held that Rule 13 is a valid
exercise of the Commission's rulemaking authority. See Manchester Bd. &
Paper Co. v. Parker, supra.
9
10
12
13
14
See n. 8, supra.
15
The Commission states that the purpose of Rule 13 is to require employers and
insurers 'to submit sufficient information to the Commission of the ultimate
merit of the suspension that the possibility of fraudulent, frivolous or arbitrary
suspensions is eliminated (sic) and the likelihood of suspension in nonfraudulent but otherwise non-meritorious cases is minimized.' Motion to Affirm
3. An Amicus brief indicates that in about one-third of all Rule 13 applications
the Commission finds no probable cause and thus does not permit employers or
insurers to have a 65.199 hearing. Brief for American Insurance
Association et al. 14.
16
hear the petition of the employer or insurer asserting any change in condition if
payments under the award have not been made up to the date the application is
deemed filed, with an admonition that benefits shall not be suspended until the
supporting evidence submitted with the petition has been reviewed and it is
determined probable cause exists to believe a change has occurred, and if a
finding of probable cause is made, the application will then be deemed filed.
Here again, it does not authorize or direct suspension of payments, but merely
provides the insurer or employer may not have a hearing on an alleged change
of condition unless and until the provisions of the Rule are complied with.' 347
F.Supp., at 7475 (emphasis in original).
17
In Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d
349 (1969), wages earned could not be seized under garnishment by a creditor
without prior notice and opportunity to be heard. By the same token, in the
present case entitlement to an award made by the Commission should not be
taken ex parte but only after prior notice and opportunity to be heard if
procedural due process is to control as it must by reason of the Fourteenth
Amendment.