Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Colorado Department of Labor and Employment v. Dami Hospitality, LLC

Supreme Court of Colorado, En Banc

June 3, 2019

Colorado Department of Labor and Employment, Division of Workers' Compensation, Petitioner
v.
Dami Hospitality, LLC; and Industrial Claim Appeals Office. Respondents

          Certiorari to the Colorado Court of Appeals Colorado Court of Appeals Case No. 16CA249

          Attorneys for Petitioner: Philip J. Weiser, Attorney General John T. Lee, Senior Assistant Attorney General Emmy A. Langley, Assistant Solicitor General Denver, Colorado

          Attorneys for Respondent Dami Hospitality, LLC: Law Offices of Daniel T. Goodwin Daniel T. Goodwin Paige Orgel Broomfield, Colorado

          Attorney for Amici Curiae Cato Institute and Independence Institute: David B. Kopel Denver, Colorado

          No appearance on behalf of Industrial Claim Appeals Office.

          OPINION

          HART, JUSTICE.

         ¶1 This case requires us to consider whether the Eighth Amendment's prohibition on the government imposition of "excessive fines" applies to fines levied on corporations.[1]We conclude that the purpose of the Excessive Fines Clause is to prevent the government from abusing its power to punish by imposing fines, and nothing in that purpose or in the text of the Eighth Amendment limits its reach to fines imposed on individuals. We further conclude that the proper test to assess the constitutionality of government fines under the Eighth Amendment is that set forth by the United States Supreme Court in United States v. Bajakajian, 524 U.S. 321, 334 (1998), which requires an assessment of whether the fine is grossly disproportional to the offense for which it is imposed. We thus reverse the court of appeals' ruling and remand to that court for return to the Division of Workers' Compensation with instructions to, as appropriate and necessary, develop an evidentiary record sufficient to determine whether the $250-$500 fine that a business was required to pay for each day that it was out of compliance with Colorado's workers' compensation law is proportional to the harm or risk of harm caused by each day of noncompliance.

         I. Facts and Procedural History

         ¶2 Dami Hospitality, LLC ("Dami") is the owner-operator of a Denver motel located on Peoria Street. Dami employs between four and ten people at any given time. As an employer of three or more persons, Dami is required by statute to maintain workers' compensation insurance. See § 8-43-409, C.R.S. (2018).

         ¶3 Dami allowed its workers' compensation coverage to lapse on or about July 1, 2005. Upon receiving notification of the lapse from the Division of Workers' Compensation ("DWC"), Dami conceded the violation and paid a corresponding settlement in June 2006.

         ¶4 Approximately two months later, Dami again allowed its workers' compensation coverage to lapse. This time, Dami went without coverage from August 10, 2006, through June 8, 2007.

         ¶5 From June 9, 2007, to September 11, 2010, Dami carried the proper insurance, but the company's workers' compensation coverage again lapsed on September 12, 2010. Dami was without such insurance from that time until July 9, 2014.

         ¶6 On February 19, 2014, the DWC discovered that Dami had allowed its workers' compensation insurance to lapse for these periods of time and issued a notice to Dami regarding this. That written correspondence was dispatched to Dami's Peoria Street address, which was the address on file with the Colorado Secretary of State for both the limited liability company and its registered agent, Soon Pak. The DWC notice advised Dami that it had twenty days to return an enclosed compliance questionnaire and to submit documents either establishing that it had maintained coverage during the relevant periods or demonstrating an exemption from the coverage requirement. It also specified that Dami could "request a prehearing conference on the issue of default."

         ¶7 After Dami failed to respond to the notice of subsequent violation, the DWC mailed a second notice to Dami on June 25, 2014, this time sending it to an East Dartmouth Place address.[2] For the second time, Dami was given twenty days to return the same compliance questionnaire and to submit documents either establishing coverage during the relevant periods or demonstrating an exemption from the coverage requirement. The DWC also specified, again, that Dami could request a prehearing conference on the issue of default.

         ¶8 On July 11, 2014, the DWC received a faxed certificate of workers' compensation insurance for Dami effective from July 10, 2014, through July 10, 2015. Dami did not offer any other documentation or any explanation for the extended periods of noncompliance.

         ¶9 Having received no claim of exemption or proof of coverage for the second and third periods of noncompliance, and no request for a prehearing conference, the DWC concluded its legally mandated investigation into Dami's noncompliance on October 29, 2014. The applicable statutory framework provides that the DWC shall:

For every day that the employer fails or has failed to insure or to keep the insurance required by articles 40 to 47 of this title in force, allows or has allowed the insurance to lapse, or fails or has failed to effect a renewal of such coverage: impose a fine of: (I) Not more than two hundred fifty dollars for an initial violation; or (II) Not less than two hundred fifty dollars or more than five hundred dollars for a second and subsequent violation.

§ 8-43-409(1)(b), C.R.S. (2018). In implementing this provision, the DWC promulgated Rule 3-6(D), 7 CCR 1101-3, which provides that:

For the Director's finding of an employer's second and all subsequent defaults in its insurance obligations, daily fines from $250/day up to $500/day for each day of default will be assessed in accordance with the following schedule of fines until the employer complies with the requirements of the Workers' Compensation Act regarding insurance or until further order of the Director:
Class VII 1-20 Days $250/Day
Class VIII 21-25 Days $260/Day
Class IX 26-30 Days $280/Day
Class X 31-35 Days $300/Day
Class XI 36-40 Days ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.