New workers comp system challenged in OK courts
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Published: 20-Sep-2013

OKLAHOMA CITY – “Eventually every important question in the United States becomes a subject for litigation.” That is not an original thought, but so pervasive in unreferenced memory that it has acquired the virtues of a maxim.

No surprise, the workers’ compensation reforms enacted in Oklahoma’s spring 2013 regular legislative session are being challenged in court. A bi-partisan team of legislators, joined by the Professional Firefighters of Oklahoma, have asked the state Supreme Court to slap down Senate Bill 1062, in part for alleged violations of the oft-cited “single-subject rule.”

The latter rule was fashioned as a way to offset what is dubbed “log-rolling” -- the traditional legislative practice of combining a wide range of issues and subjects into a single law, to increase it chances of approval. 

In addition to the single-subject stricture, critics of the new law say it violates separation of powers, unjustly discriminates against some workers, and illegally excludes from compensation certain injuries or conditions. 

State Rep. Emily Virgin, D-Norman, told Oklahoma Watchdog, “We filed this lawsuit because we believe that if an administrative system is the best alternative, there are better, more constitutionally-sound models to follow than the one contained in S.B. 1062.”

Virgin also assailed the final version of the legislation, which incorporated a modified “opt-out” provision that allows some businesses to create separate coverage systems, a step she contends will adversely “shrink the actuarial risk pool.”  

Senior challenger to the new law is state Sen. Harry Coates, R-Seminole, who said his main problem with the new administrative system lies in some of the limits on compensation, which he asserts would force workers to “pay back benefits after returning to work.” 

Unlike some critics of the new administrative structure, Coates backs such an approach – but not the particulars in the new legislation. In a statement to Oklahoma Watchdog, he said, “In 2012, the often-quoted Oregon Study showed that while Oklahoma had the sixth highest workers’ compensation rates in the nation, Missouri had one of the lowest rankings at number 36.  Oklahoma was 47 percent ABOVE the national median and Missouri was 14 percent BELOW the study median.

“Oklahoma needs to pass the Missouri law with no amendments and no changes.  Missouri and Oklahoma have similar constitutional provisions regarding injuries, and the Missouri law has already survived constitutional tests.  There is no doubt that their administrative system could work in Oklahoma and reduce rates for businesses, small and large.”

Prof. Andrew Spiropoulos, a constitutional law specialist with Oklahoma City University, told Oklahoma Watchdog, “"Everyone expected that this bill would provoke multiple constitutional challenges.  This lawsuit is only the first salvo in what will be a long legal and political war to preserve these important reforms.” 

Spiropoulos, also the Milton Friedman fellow at a free-market think tank, the Oklahoma Council of Public Affairs, continued, “The groups and individuals orchestrating these challenges aren't the sort who gracefully accept political defeat or are inclined to defer to the views of the majority."

A grass roots perspective came from one of the largest grass roots-oriented groups in the Sooner State. 

“Our activist network was very active supporting S.B. 1062. Obviously, the trial bar is going to do all it can to hold on to what power it has had for so many years. This bill is good for job creators and workers, and there’s no reason it shouldn’t survive,” commented Matt Ball of Americans for Prosperity – Oklahoma.

Gov. Mary Fallin said she was disappointed with the challenge to S.B. 1062, filed two weeks after the National Council on Compensation Insurance (NCCI) projected double-digit cost decreases could result from implementation of the new law.

Coates’ Republican colleague, Senate President Pro Temp Brian Bingman, R-Sapulpa, passionately defended the new law, among other things saying the measure “is landmark reform that has been needed for quite some time. Our state’s workers’ compensation rates are out of control, and it is impacting economic development and job creation in our state.” 

The state Chamber of Commerce’s president & CEO, former state Rep. Fred Morgan, assailed “trial lawyers” for trying to “overturn the will of the people and their elected representatives in order to maintain the status quo of Oklahoma’s broken workers’ compensation system.” 

The state constitutional single-subject stricture was the basis of a successful legal challenge to the Omnibus lawsuit reform legislation of 2009. A special legislation session, concluded just over a week ago, re-enacted the bulk of that measure, albeit one section at a time.

Judicial scrutiny of legislative action has focused the ire of Speaker of the House T.W. Shannon, R-Lawton, and many of his allies, who are seriously looking at limitations on court jurisdiction and/or changes in the selection process for High Court justices and appellate court judges. 

Rep. Virgin defended the lawsuit, saying it was necessary because S.B. 1062 “log-rolled the opt-out measure, which the legislature had voted down before, with the new administrative system.”

One passionate defender of S.B. 1062 is Commissioner of Labor Mark Costello, who pushed for its passage for two years, saying the state needed “workers’ comp, not lawyers’ comp’.” 

On October 16, a state Supreme Court hearing officer (“referee”) will decide if the court should take up the case immediately, or designate it to a state district court. 

Oklahoma’s historic litigation-based system of compensation insurance has led to one of the most expensive compensation insurance systems in the country. Authors of S.B. 1062 pressed to move away from lawsuits and toward an administrative structure, largely patterned on that in neighboring Arkansas, rather than the Missouri system Sen. Coates prefers.

You may contact McGuigan at Patrick@capitolbeatok.com .

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