Second Injury Fund suit dismissed in federal court

As Legal Sonar previously reported, Missouri’s Second Injury Fund has arrived at the precipice of insolvency, unable to serve its purpose: funding victims with pre-existing health conditions whose workplace injuries preclude them from continuing their jobs.

According to Missouri Attorney General Chris Koster, the caretaker of the Fund, the Fund is running out of cash.

Koster quit paying awards a year ago.  Now, 169 permanently disabled Missouri workers are owed more than $11.8m in first-time payments.

Such delinquent payments are subject to a 9% interest fee by statute.

Many blame the Fund’s financial troubles on a cap put in place by Missouri lawmakers in 2005.

Kansas City attorney John Boyd, a principal at Boyd & Kenter, P.C., filed a lawsuit in federal court asking a judge to remove the cap or rule that the state must pay the fund’s liabilities.

Now, U.S. District Court Judge Nanette Laughrey has now thrown out that lawsuit, granting a motion to dismiss from Missouri state officials.  That lawsuit alleged that denying to pay workers from the Fund violated the Americans with Disabilities Act, amongst others claims ranging from an infringement on both contract rights and due process.

Judge Laughrey dismissed the suit ruling that no violation of the four workers’ rights had occurred.  According to Judge Laughrey, those workers are still owed the awards, regardless of the Fund’s inability to pay.

According to the Kansas City Business Journal: “Decisions over what programs to fund or not to fund generally represent a basic right and power possessed by the legislative branch,” she wrote. “Plaintiffs have cited no case law, and the Court is not aware of any, which stands for the proposition that a legislative decision to de-fund a program can represent a taking of a plaintiff’s entitlement.”

She also said the plaintiffs presented no evidence that the state was denying them the payments strictly because they were disabled.

Laughrey declined to rule on some parts of the plaintiff’s lawsuit, saying they depended on state laws, which she said were better handled by a Missouri state court.

Missouri House members, worried in part about a court decision forcing their hand on repairing the fund, approved legislation earlier this month that would slowly increase the surcharge cap to 6 percent and restrict new claims to workers whose previous injury was work related or received on account of military service. The bill, HB 1403, is being considered in the Senate.

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From the Kansas City Business Journal: Missouri Second Injury Fund suit is dismissed