Second Circuit Won’t Rule on Constitutionality of NY Workers Comp Amendments

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Liberty Mut. Ins. Co. v. Hurlbut

(2nd Cir. (N.Y.) Nov. 4, 2009)

 

The Second Circuit refused to exercise federal jurisdiction over claims by Liberty Mutual that recent amendments to New York’s Workers Compensation Law are unconstitutional. Liberty’s claims stemmed from an amendment to the Workers Compensation Law that requires insurers to make deposits to an aggregate fund for all permanent partial disability cases. Another amendment bestows settlement authority for indemnity benefits on trustees of that aggregate fund. Liberty and its affiliates sued the commissioners of the New York State Insurance Fund and members of the New York State Workers Compensation Board, alleging that the amendments violated the Contracts, Takings, Due Process, and Equal Protection provisions of the United States Constitution.

 

The Second Circuit affirmed the district court’s dismissal of Liberty’s complaint, but on different grounds. The Second Circuit held that that the district court’s reliance on the abstention doctrine set out in Younger v. Harris, 401 U.S. 37 (1971) was misplaced because no State proceedings challenging the amendments are pending, a requirement of Younger abstention. Rather, the Second Circuit relied on the abstention doctrine set forth in Burford v. Sun Oil Co., 319 U.S. 315 (1943). The Burford court concluded that proper respect for independent state action commands abstention in certain circumstances. Accordingly, the Second Circuit held that “[f]ederal review of the 2007 amendments here would unduly disrupt the administration of the New York WCL, would interfere with matters of substantial public concern and would hamper resolution by the state of challenges similar to those made here.”

 

For a copy of the decision, click here

 

Carrie Appler and Richard Cohen

 

https://www.goldbergsegalla.com/attorneys/Appler.html

https://www.goldbergsegalla.com/attorneys/Cohen.html