December 2001 - Highlight

Law Court in Bernier Applies Legislative Repeal of Bernard Formula to Pending Cases

In the case of Bernier v. Data General Corp. (2002 ME 2) decided just before press time, the Law Court decided that the Legislature intended to apply a new statute, regarding inflation adjustments for old injuries to pending cases concerning those old injuries. In doing so, the Law Court declined to require an express reference to cases pending in litigation, even though the scope of the statutory provision regarding retroactive application of the statute could legitimately have been disputed. This article questions whether the Law Court has successfully maintained its longstanding requirement of finding "clear legislative intent" before applying new laws to pending cases.

The Bernard formula

The Bernier decision involves Legislative reaction to the case of Bernard v. Mead Publishing Paper Division (2001 ME 15), decided a year ago. In that case, the Law Court had set forth a formula for calculating partial benefits payable on certain old injuries that remained subject to pre-1987 inflation adjustment law under 39 M.R.S.A. §§ 55, 55-A. Under that decision, an employee's post-injury wage increases might be offset against his pre-injury average weekly wages, prior to applying the inflation factor. Under that formula, an employee whose wages had risen above his pre-injury level would not be entitled to benefits.

The Legislature reacted to Bernard by passing P.L. 2001, ch.390 (codified at 39-A M.R.S.A. § 224 (Supp. 2001) (effective Sept. 21, 2001)). The new statute effectively overruled the Bernard formula, providing:

The annual adjustment made pursuant to former Title 39, sections 55 and 55-A must be made as follows. The preinjury average weekly wage must first be adjusted to reflect the annual inflation or deflation factors as computed by the Maine Unemployment Insurance Commission for each year from the date of injury to the date of calculation. Once this weekly benefit amount is calculated, the amount must continue to be adjusted annually so that it continues to bear the same percentage relationship to the average weekly wage in he State as computed by the Maine Unemployment Insurance Commission as it did at the time of the injury.

The above statute was passed while the Bernier case was under appeal. As the Law Court noted, the continued application of the Bernard formula was at stake in the appeal:

Because Bernier's unadjusted pre-injury wage is lower than her post-injury work capacity, Bernier would receive no benefits after a comparison of pre- and post-injury wages if she is not entitled to an adjustment of her 1978 wage.

Ultimately, the Law Court applied the new statute, ruling that the Bernard formula would not deprive Mr. Bernier of benefits.

Retroactivity Requires Clear Intent

In concluding that P.L. 2001, ch.390 applied to this case, the Law Court interpreted § 2 of the Act, which stated: "This Act applies retroactively to benefit calculations made under the Maine Revised Statutes, former title 39, sections 55 and 55-A at any time after January 1, 1972, and applies notwithstanding any adverse order or decree." The Court noted that under 1 M.R.S.A. § 302, courts presume that new laws will not apply to pending cases unless there is a "clear statement of retroactive intent."

The interesting thing about this case is that it does not address what types of "benefit calculations" the Legislature had in mind in §2. Was §2 -- and its plain requirement for some type of retroactive application of the new law -- intended to apply only to revising past benefit calculations, or also to brand new benefit calculations in pending cases as well? Although the Law Court concluded that §2 applies at least to pending cases, it did not state why.

The applicability of §2 to pending cases was at least a debatable question. After all, regardless of any provision such as §2, future benefit calculations (except in pending cases) would have utilized the new statute as a matter of course. Therefore, future benefit calculations need not have been addressed at all to ensure the statute's ongoing application. Instead, §2 is addressed expressly to "retroactive" application of the new law. But what type of retroactive application did the Legislature have in mind?

Plainly, a future benefit calculation which revised a past decree or a past method of benefit calculation would constitute retroactive application of the statute. But did the Legislature mean more than this? If the Legislature had specifically mentioned pending cases or 1 M.R.S.A. §302, its intent to apply §2 to pending cases would have been clear, but no such language exists. Instead, the Law Court expressly dispensed with the need to require such references.

Did the Court Require Clarity?

Did the Law Court successfully require the Legislature to be clear in this case? The Court relied upon dicta in a footnote in the case of Stickney v. City of Saco (2000 ME 69) for the proposition that the Legislature can be clear without mentioning either the phrase §302 or "pending cases." That proposition, however, is beside the point, unless one ascertains whether the Leigslature's intent is clear without that language. There may indeed be instances where the Legislature's intent to apply a new law to a pending case is clear even if neither § 302 nor "pending cases"is mentioned. But did the Legislature intend that result in §2?

The Law Court has recognized in the past that the term "retroactive" can mean a number of different things, depending upon whether the intent is to apply the law to existing fact situations, existing cases, existing decrees, etc. The question is each case should be: Is the Legislature's intent to do any particular one of those things clear in the present case? The Law Court did not answer that question in the Bernier case.

What is clear is that the Legislature intended §2 to apply at least to the "retroactive" recalculation of prior "benefit calculations . . . notwithstanding any adverse order or decree." This particular application of §2 was not at issue in the case since no past decree had cut off Mr. Bernier's benefits under Bernard. The Law Court wisely declined to address whether §2 could constitutionally be applied to past decrees. What remains unclear is whether the Law Court was correct in holding that §2 was directed not just at past decrees but at future benefit calculations in pending cases.

- Thomas R. Kelly, Esq.