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Meek v. Unocal (4/26/96), 914 P 2d 1276
Notice: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0607, fax (907) 276-5808.
THE SUPREME COURT OF THE STATE OF ALASKA
JAMES R. MEEK, )
) Supreme Court No. S-6462
) Superior Court No.
v. ) 3AN-93-6216 Civil
UNOCAL CORPORATION (SELF- ) O P I N I O N
INSURED) and THE ALASKA )
WORKERS' COMPENSATION BOARD, )
Appellees. ) [No. 4344 - April 26, 1996]
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Anchorage
Dana Fabe, Judge.
Appearances: William J. Soule, Law Office of
William J. Soule, Anchorage, for Appellant.
Constance E. Livsey and Suzanne K. Ishii-
Regan, Faulkner, Banfield, Doogan & Holmes,
Anchorage, for Appellees.
Before: Rabinowitz, Matthews, Compton and
Eastaugh, Justices. [Moore, Chief Justice,
The issues in this workers' compensation case are
whether Meek may claim permanent total disability benefits after
requesting reemployment benefits, and whether the statute and
regulation defining remunerative employability are
constitutional. The Alaska Workers' Compensation Board held that
Meek was not entitled to permanent total disability benefits, but
declined to address the constitutional issues. On appeal, the
superior court affirmed the benefits decision, and held that the
statute and regulation are constitutional. We affirm the
superior court's decision regarding the constitutionality of the
statute and regulation, but reverse its decision regarding
II. FACTS AND PROCEEDINGS
James Meek was injured in January, 1991 in the course
of his employment with Unocal. At the time of his injury, Meek
worked seven days on, seven days off. He was compensated at a
rate of $23 per hour, but also received significant overtime pay
due to his unusual hours.
As a result of his injury, Meek collected temporary
total disability (TTD) benefits under Alaska's Workers'
Compensation Act (Act). AS 23.30.005-.270. After a brief return
to light-duty work, Meek intermittently collected TTD and
temporary partial disability (TPD) benefits. He was declared
medically stable in February, 1992, and thereafter collected
permanent partial impairment (PPI) benefits.
Meek requested and was deemed eligible for reemployment
benefits under AS 23.30.041. That statute provides for the
development of a reemployment plan, at employer expense, to
return injured persons to the work place. AS 23.30.041. When
Meek's PPI benefits were exhausted, Unocal began paying him
subsection .041(k) interim wages. See AS 23.30.041(k). The
reemployment plan eventually developed called for Meek to be
retrained as an electronics technician. Unocal agreed to the
plan's provisions, but Meek did not. The rehabilitation benefits
administrator (RBA) approved the plan.
At a hearing before the Workers' Compensation Board
(Board), Meek sought review of the RBA's approval of the
reemployment plan, arguing that he was unable to perform the
physical tasks required of an electronics technician, and that he
could not achieve the remunerative wage the reemployment plan
forecast. Meek also claimed he was eligible for permanent total
disability benefits (PTD) from the time his PPI benefits were
exhausted until a reemployment plan was in place, and,
accordingly, that subsection .041(k) interim wages were not an
appropriate substitute. Finally, Meek challenged the
constitutionality of the statute and regulation used to calculate
his remunerative employability wage rate.
The Board remanded the reemployment plan to the RBA to
determine whether Meek could perform the physical tasks required
of an electronics technician. The Board also directed the RBA to
make findings of fact about the viability of Meek's forecasted
remunerative employability rate of $13.98 an hour upon completion
of the plan. The Board denied Meek's request for PTD benefits,
concluding it would be "incongruous"to hold that an "employee,
for whom a reemployment plan is being devised, is, at the same
time, an employee who is permanently and totally disabled." Meek
v. Unocal, AWCB No. 9101334 (June 18, 1993) (quoting Bell v.
Dalton Electric, Inc., AWCB No. 92-0287 (Nov. 23, 1992). The
Board declined to address Meek's constitutional arguments.
Meek appealed to the superior court, see Alaska
Appellate Rules 601-611, which affirmed the Board's denial of
Meek's PTD benefits claim. The superior court considered and
rejected Meek's constitutional challenges. Meek appeals.
A. Standard of Review
We review the Board's denial of Meek's PTD benefits
claim under the independent judgment standard, making our own
interpretation of the statutes involved. Rydwell v. Anchorage
School Dist., 864 P.2d 526, 528 (Alaska 1993). We review Meek's
constitutional challenges de novo, adopting the "'rule of law
that is most persuasive in light of precedent, reason, and
policy.'" Municipality of Anchorage v. Leigh, 823 P.2d 1241,
1243 n.5 (Alaska 1992) (quoting Guin v. Ha, 591 P.2d 1281, 1284
n.6 (Alaska 1979)). Because the superior court acted as an
intermediate court of appeal, we give no deference to its
decision. Rydwell, 864 P.2d at 528.
B. The PTD Benefits Claim
1.A claim for PTD benefits is not incompatible
with a request for reemployment benefits.
Unocal argues, in line with the Board's holding, that
Meek cannot claim PTD benefits after requesting reemployment
benefits. Nothing in the Act, however, implies that an employee
must be less than permanently and totally disabled to be eligible
for reemployment benefits, nor is it "incongruous" for an
employee who has requested reemployment benefits to claim PTD
The Act defines "disability"as "incapacity because of
injury to earn the wages which the employee was receiving at the
time of the injury in the same or any other employment." AS
23.30.265(10). We have held that "total"disability means "the
inability because of injuries to perform services other than
those which are so limited in quality, dependability or quantity
that a reasonably stable market for them does not exist." J.B.
Warrack Co. v. Roan, 418 P.2d 986, 988 (Alaska 1966). Under the
"odd-lot"doctrine, which we have adopted, "'total disability may
be found in the case of workers who, while not altogether
incapacitated for work, are so handicapped that they will not be
employed regularly in any well-known branch of the labor
market.'" Olson v. AIC/Martin J.V., 818 P.2d 669, 674 (Alaska
1991) (quoting 2 Arthur Larson, Workmen's Compensation, ' 57.51,
p. 10-53 (Desk Ed. 1990)).
The concept of total disability includes an education
component. See Roan, supra; Vetter v. Alaska Workmen's
Compensation Bd., 524 P.2d 264, 266 (Alaska 1974) ("Factors to be
considered in making [a finding that a person's earning capacity
was decreased due to a work-related injury] include not only the
extent of the injury, but also age, education, employment
available in the area for persons with the capabilities in
question, and intentions as to employment in the future.").
Thus, a person's lack of education, as much as his physical
injury, may be the "handicap"preventing him from obtaining all
but "odd-lot" jobs. See generally 1C Arthur Larson, Workmen's
Compensation Law ' 57.51(d), p. 10-336 (1994) ("A considerable
number of the odd-lot cases involve claimants whose adaptability
to the new situation created by their physical injury was
constricted by lack of mental capacity or education.").
If a lack of education can be overcome through
vocational rehabilitation, then a disability that was once
"total"may no longer be so. This is precisely what section .041
aims to do; its goal is to retrain and educate permanently
impaired employees1 so that they can attain "remunerative
employability."2 Id. "Reemployment benefits" available under
section .041 include on-the-job training, vocational training,
academic training, and self-employment. AS 23.30.041(i).
Through the rehabilitation process established by section .041, a
person suffering from a "total"disability can gain the skills
and education necessary to allow him or her to reenter the job
market and attain "remunerative employability." As this analysis
makes clear, a claim for PTD benefits is not incompatible with a
request for reemployment benefits. The Board therefore erred in
holding that Meek could not claim PTD benefits after requesting
2. The presumption of compensability applies to Meek's claim.
AS 23.30.120(a)(1)4 establishes a presumption of
compensability which places the burden of producing evidence on
the employer. Sokolowski v. Golden Lion Hotel, 813 P.2d 286, 292
(Alaska 1991). Unocal argues that AS 23.30.120(a)(1) only
creates a presumption that an injury is work-related, and does
not apply to an employee's claim that his or her disability "fits
within a particular category, such as PTD." However, "[i]t is
well established that the presumption [of compensability] goes
far beyond the issue of whether an injury is work-related."
Cluff v. NANA-Marriott, 892 P.2d 164, 170 n.5 (Alaska 1995). We
have held that "the text of AS 23.30.120(a)(1) indicates that the
presumption of compensability is applicable to any claim for
compensation under the workers' compensation statute."
Municipality of Anchorage v. Carter, 818 P.2d 661, 665 (Alaska
1991) (emphasis added). In Wien Air Alaska v. Kramer, 807 P.2d
471, 474 (Alaska 1991), we applied the presumption of
compensability to a temporary total disability claim. We now
hold that the "pro-worker"presumption in AS 23.30.120(a)(1),
NANA-Marriott, 892 P.2d at 170, also applies to PTD claims.5
On remand, the Board should apply the presumption of
compensability to Meek's claim. Unocal may rebut the presumption
with substantial evidence that Meek is not permanently totally
disabled.6 See Olson, 818 P.2d at 672. If Unocal produces such
substantial evidence, the presumption will "drop out," and Meek
will then have the burden of proving all elements of his PTD
claim.7 Burgess Const., 623 P.2d at 316.
3. Meek may receive PTD benefits while
participating in the reemployment plan.
Unocal argues that once Meek agreed to participate in a
reemployment plan, he was limited to receiving interim wages
under AS 23.30.041(k). That provision speaks only to the
employer's obligations when an employee's PPI benefits are
exhausted, and does not limit an employee's benefits exclusively
to subsection .041(k) interim wages. See AS 23.30.041(k) ("If
the employee's permanent impairment benefits are exhausted before
the completion or termination of the reemployment plan, the
employer shall provide wages equal to 60 percent of the
employee's spendable weekly wages but not to exceed $525, until
the completion or termination of the plan."). Subsection .041(k)
contemplates the payment of other types of benefits during the
pendency of a plan. See Id. (providing that an employee
receiving TTD benefits before completion of a reemployment plan
is entitled to PPI benefits once he or she reaches medical
stability). Unocal's argument that Meek is limited to subsection
.041(k) interim wages is without merit.
C. The Constitutional Challenges
Meek argues AS 23.30.041(p)(7) and 8 AAC 45.490, the
statute and regulation defining "remunerative employability" and
"gross hourly wages,"violate the equal protection clause8 and
due process clause9 of the Alaska constitution.
AS 23.30.041(p)(7) defines "remunerative employability"
to mean wages equivalent to "at least 60% of the worker's gross
hourly wages at the time of injury." According to Board
regulation, "gross hourly wages"is determined in accordance with
8 AAC 45.490, which reads:
(1) If the employee was paid on an hourly
basis at the time of injury, gross hourly
wages are the actual hourly wage at the time
of injury, exclusive of premium time or
(2) If the employee was paid on a weekly or
monthly salary basis at the time of the
(A) The weekly salary must be multiplied
by 52 and divided by 2080 to compute
gross hourly wages; or
(B) the monthly salary must be
multiplied by 12 and divided by 2080 to
compute gross hourly wages.
(3) If at the time of injury the employee
received bonuses, commissions, gratuities, or
room and board during the course of
employment, gross hourly wages are computed
by dividing the gross weekly earnings, as
determined under AS 23.30.220, by 40.
To determine Meek's gross hourly wages, the RBA applied 8 AAC
45.490(1), and found that Meek's remunerative employability wage
was $13.98, or 60% of his actual hourly wage of $23 per hour.
Meek's equal protection challenge is based on his claim
that North Slope workers have their remunerative wage calculated
under 8 AAC 45.490(3), and that this difference in methodology
"arbitrarily distinguish[es] between similarly situated workers."
We agree with the superior court that "Meek's work situation was
not at all the same as that of a remote site worker who receives
room and board; Meek lived near his work place and did not
receive room and board." Meek v. Unocal Corp., 3AN-93-6216,
Decision at 10 (June 10, 1994). Because Meek was not similarly
situated to North Slope workers, his equal protection argument
must fail. See Coghill v. Coghill, 836 P.2d 921, 929 (Alaska
1992) ("[E]qual protection has never required that differently
situated persons be treated in the same way.").
Meek argues that AS 23.30.041(p)(7) and 8 AAC 45.490
violate due process because they bear no reasonable relationship
to any legitimate governmental purpose. See Municipality of
Anchorage v. Leigh, 823 P.2d 1241, 1244 (Alaska 1992)
("Substantive due process is denied when a legislative provision
bears no rational relationship to a legitimate government
interest."). The party asserting a due process claim bears the
heavy burden of demonstrating that no rational basis exists, and
"if any conceivable legitimate public policy for the enactment is
apparent on its face or is offered by those defending the
enactment, the opponents of the measure must disprove the factual
basis for such a justification." Concerned Citizens of S. Kenai
Peninsula v. Kenai Peninsula Borough, 527 P.2d 447, 452 (Alaska
The purpose of the Alaska Workers' Compensation Act is
to "ensure the quick, efficient, fair and predictable delivery of
indemnity and medical benefits to injured workers at a reasonable
cost to employers." ' 1, ch. 79, SLA 1988. Classifying a
worker's gross hourly wages based on the type of compensation
received is entirely consistent with this purpose. The reason
North Slope workers have their remunerative wage calculated under
8 AAC 45.490(3) is that they, unlike Meek, receive room and board
as part of their compensation; hence, in order to fully
compensate Slope workers, different treatment is required. The
challenged statute and regulation legitimately and rationally
distinguish between those employees who receive certain types of
benefits or non-wage compensation and those who do not. Meek's
due process argument is without merit.
The Board's decision denying Meek's PTD benefits claim,
and the superior court's affirmance of that decision, are
REVERSED. The superior court's decision rejecting Meek's
constitutional arguments is AFFIRMED. This case is REMANDED to
the Board for proceedings consistent with this opinion.
1 An employee is not eligible for reemployment benefits
if, inter alia, "at the time of medical stability no permanent
impairment is identified or expected." AS 23.30.041(f)(3).
2 "'[R]emunerative employability' means having the skills
that allow a worker to be compensated with wages or other
earnings equivalent to at least 60 percent of the worker's gross
hourly wages at the time of injury . . . ." AS 23.30.041(p)(7).
3 Subsection .041(k) interim wages may not be paid while
an employee is receiving PTD benefits since subsection .041(k)
interim wages are only payable upon the exhaustion of the
employee's permanent impairment benefits. AS 23.30.041(k).
4 AS 23.30.120(a)(1) provides:
In a proceeding for the enforcement of a
claim for compensation under this chapter it
is presumed, in the absence of substantial
evidence to the contrary that (1) the claim
comes within the provisions of this
chapter. . . .
5 AS 23.30.180, which governs PTD benefits, does not
require that PTD benefits be excluded from the presumption.
Rather, the statute specifies that, except for certain
predetermined disabilities which automatically constitute
permanent total disability, permanent total disability "is
determined in accordance with the facts." AS 23.30.180(a). This
language does not exempt PTD benefits from the presumption of
Unocal argues that there is a presumption against
permanent total disability, but the cases it cites do not support
this proposition. Rather, they hold that once an employee
establishes a claim of disability, the employee retains the
presumption of continuing disability, unless and until the
employer introduces substantial evidence to the contrary. This
does not mean that the employee presumptively remains in one
category of disability until substantial evidence is introduced
to place the employee in another category. See Olson v.
AIC/Martin J.V., 818 P.2d 669, 672 (Alaska 1991) ("[W]e hold that
an employee [who has received TTD benefits] presumptively remains
temporarily totally disabled unless and until the employer
introduces 'substantial evidence' to the contrary.");
Municipality of Anchorage v. Carter, 818 P.2d 661, 665 n.10
(Alaska 1991) (same); Bailey v. Litwin Corp., 713 P.2d 249, 254
(Alaska 1986) (Presumption of compensability applies to a claim
of temporary total disability.).
6 Unocal argues that it has presented substantial
evidence that Meek is not permanently totally disabled. We
prefer to allow the Board to make the initial determination as to
whether Unocal has satisfied its burden.
7 In this context it is worth noting that a failure to
achieve remunerative employability does not, by itself,
constitute permanent total disability. AS 23.30.180(b).
8 "[A]ll persons are equal and entitled to equal rights,
opportunities, and protection under the law." Alaska Const. art.
I, ' 1.
9 "No person shall be deprived of life, liberty, or
property, without due process of law." Alaska Const. art. I, '