II. Rodriguez v. Brand West Dairy
a. Factual Background
The case is the result of two consolidated cases in which both workers suffered work-related injuries as farm and ranch laborers. Maria Angelica Aguirre sued her employer, M.A. and Sons, Inc., seeking compensation for a broken wrist while picking chiles. [21] M.A. and Sons, Inc.’s insurance company, the Food Industry Self Insurance Fund of New Mexico, raised the defense that Ms. Aguirre’s claims were barred by the farm and ranch laborer exclusion of Section 52-1-6(A), and the workers compensation judge (the “judge”) dismissed her claims with prejudice. [22]
Noe Rodriguez sued his employer, Brand West Dairy, after a cow caused him to fall on a cement floor. [23] Brand West Dairy’s insurer, the New Mexico Uninsured Employers’ Fund, moved to dismiss Mr. Rodriguez’s claims due to the farm and ranch laborer exclusion, and the judge dismissed his claims. [24]
Ms. Aguirre’s and Mr. Rodriguez’s (“Workers”) appeals were consolidated at the New Mexico Court of Appeals. [25]
b. The New Mexico Court of Appeals Opinion
On June 22, 2015, the New Mexico Court of Appeals held that the farm and ranch laborer exclusion was unconstitutional as a violation of the workers’ equal protection rights. [26] The Court of Appeals distinguished its previous holding in Cueto.[27] It emphasized that in Cueto, the statute’s constitutionality was not squarely before the court, and instead the dispositive issue was whether the worker constituted a farm laborer, as defined by the act. [28] Turning to the constitutionality of the farm and ranch laborer exclusion, the Court concluded that “review of the history of the workers’ compensation statutes back to 1929 [do] not reveal[] an articulable purpose for the exclusion.” [29] The Court determined that the “stated purpose of the Act is not served by creating classifications among the state’s workers.” [30] Since the Court concluded that there was no substantial relationship between the exclusion and the government interest, the Court held the exclusion unconstitutional. [31] Brand West Dairy, M.A. and Sons, Inc., and the Self Insurance Fund appealed the constitutional issue to the New Mexico Supreme Court. [32]
c. The Supreme Court’s Opinion
i. The Majority Opinion
The Workers argued to the Supreme Court that the farm and ranch laborer exclusions violated their equal protection rights under the New Mexico Constitution, and could not survive any level of scrutiny. [33] Under New Mexico equal protection analysis, the Court looks at “whether the legislation creates a class of similarly situated individuals and treats them differently.” [34] If so, the Court applies “the appropriate level of scrutiny to determine whether the legislative classification is constitutional.” [35]
The Court concluded that: (1) the farm and ranch laborer exclusion created differential treatment among a class of similarly situated individuals of agricultural employees; [36] and (2) the farm and ranch laborer exclusion did not pass rational basis because the Workers proved it was not rationally related to a legitimate government purpose. [37] The purported government interest of saving costs for agricultural employees was not rationally related to the means of excluding the farm and ranch workers from workers’ compensation. [38] The New Mexico Supreme Court concluded that the farm and ranch laborer exclusion was “nothing more than arbitrary discrimination,” and accordingly, is unconstitutional. [39]
Considering the reliance interests of employers and the practical difficulty of allowing retroactive application, the Court directed the holding to “be prospectively applied to any injury that manifests after the date that our mandate issues in this case.” [40] The Court modified the holding to allow an exception for Ms. Aguirre and Mr. Rodriguez, since they gave the Court an “opportunity to change an outmoded and unjust rule of law.” [41] Ms. Aguirre and Mr. Rodriguez’s case was therefore remanded to apply the unconstitutionality of the exclusion and allow their case to proceed. [42]
The Dissent
Justice Nakamura dissented from the majority opinion and found that the statute passed equal protection, that invalidating this statute was not in the Court’s power, and that the majority opinion threatened to harm small, “economically fragile” farms in New Mexico. [43]
While the majority framed the statute as an exclusion of the workers, the dissent framed it as an exclusion of the employers. [44] The dissent stated that the Legislature has always allowed employers of farm and ranch laborers to decide whether to participate in the workers’ compensation program. [45] Justice Nakamura reasoned that the issue is best fit for a legislature to determine because the question of what is best for a particular industry within the State’s economy is a legislative question and is outside the powers of the Court. [46] And, the dissent pointed out, the Legislature has been maintaining the Act for the past 99 years. [47]
Notably, the dissent highlighted that the exclusion gives the employers a choice whether to obtain workers’ compensation coverage. [48] Employers could weigh the factors and “elect the option that entails the lowest expected costs.” [49] Given this choice, “29% of New Mexico farms and ranches (including many of the largest agricultural firms in the State) have elected to provide workers' compensation.” [50]
The dissent described the Legislature’s purpose in maintaining this exclusion as an attempt “to contain regulatory costs incurred by economically precarious farms and ranches in New Mexico.” [51] The dissent cited to a 2009 attempt to repeal the exclusion. That year the Legislature contemplated repealing the exclusion but, according to the Fiscal Impact Report, such repeal would have had “a significant financial strain on the farming and ranching part of the industry.” [52] The Fiscal Impact Report noted that nationally, the average cost per claim was approximately $16,876 and the national average net income per farm was $19,373, “only slightly more than the average cost per workers’ compensation claim.” [53] In fact, in 2013 in New Mexico, the average cost per claim was $13,976, [54] and the average net income of farming operations in New Mexico in 2012 was $9,501. [55]
The dissent took issue with not only the majority’s analysis of equal protection under New Mexico law, [56] but also the majority’s “depart[ure]” from the “myriad” of other analogous state farm and ranch laborer exclusions to mandatory workers’ compensation statutes and the other appellate courts upholding those similar statutes. [57]
III. Workers’ Compensation Law in New Mexico Today
One year after the Rodriguez decision, it is too soon to conclusively understand the effect of the invalidation of the farm and ranch laborer exclusion provision on New Mexico. The New Mexico Supreme Court analyzed only one case since the decision, and it merely applied the prospective holding and dismissed the case. [58] Will Justice Chavez and his majority’s view of a victory to workers prevail? Will Justice Nakamura’s image of harm to small New Mexico farms and ranches come to fruition? What we do know moving forward is that New Mexico farms and ranches that used to be excluded from the requirement of providing workers’ compensation have now been incorporated into the same mandatory program of other employers.