S.D. SC rules against woman in Workers' Comp claim

By Jessica M. Karmasek | Sep 21, 2011


PIERRE, S.D. (Legal Newsline) - The South Dakota Supreme Court last week upheld the dismissal of a woman's Workers' Compensation claim.

The appellant, Vera Martin, lives in Belle Fourche, S.D., but worked at an American Colloid Co. plant in Colony, Wyo.

After suffering a work-related injury at the Colony plant, Martin received Wyoming Workers' Compensation benefits. She later filed a claim for South Dakota workers' compensation benefits.

The South Dakota Department of Labor dismissed her claim for lack of jurisdiction, and the Hughes County Circuit Court affirmed.

The state's high court, in its Sept. 14 opinion, affirmed, but disagreed with the circuit court's approach.

According to its 12-page ruling, the Court took issue with the lower court's conclusion that Title 62, which governs workers' compensation in South Dakota, provides a "clear answer" to the jurisdictional question in this case.

"The circuit court applied SDCL 62-3-3 and the statutes referenced therein, and concluded that, because American Colloid did not carry workers' compensation insurance for Martin in South Dakota, it was not subject to the South Dakota workers' compensation statutes. We disagree with this interpretation," Justice Glen A. Severson wrote.

"An employer does not escape the provisions of Title 62 by choosing not to obtain workers' compensation insurance for its employees. Rather, by doing so, it forfeits the protections of limited liability that Title 62 provides, and is subject to an action at law and potentially to double damages."

The uninsured employee, the Court explained, "may elect to proceed against the employer in any action at law to recover damages for personal injury or death; or may elect to proceed against the employer in circuit court under the provisions of (Title 62), as if the employer had (been insured)."

Therefore, even if American Colloid did not have South Dakota workers' compensation insurance for Martin, it may still be subject to the provisions of Title 62, the Court said.

"This statute suggests that the Legislature intended Title 62 to apply to at least some injuries that occur in another state, but the Title offers little further guidance on the scope of the Department's authority," it wrote.

"Thus, while many other states have addressed this issue by statute, we are left to use statutory interpretation."

When determining the presence or absence of coverage for injuries occurring out of state, of "primary importance," the Court said, is a determination as to the location of the employment relationship.

"The only connection between South Dakota and the employment relationship at issue in this case is that Martin was a South Dakota resident throughout her employment with American Colloid," the Court wrote.

"While this factor does, to some extent, strengthen the connection between South Dakota and the employment relationship, it is not alone sufficient to create the substantial connection necessary
to conclude that South Dakota is the place of the employment relationship."

Simply put, Martin was hired in Wyoming, worked exclusively in Wyoming and was injured in Wyoming. "There is no connection to South Dakota aside from Martin's residence," the Court said.

Therefore, the Court concluded that South Dakota is not the place of the employment relationship and that the labor department does not have jurisdiction over the matter.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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