Could Connecticut’s treasurer exempt a tribal casino employer from Second Injury Fund assessments?

Plain-English summary

In July 2002, Connecticut’s AG concluded that a former state treasurer could not excuse the Mohegan Tribal Gaming Authority from Second Injury Fund assessments in exchange for its voluntary participation in the state workers’ compensation system. The correspondence did not form a contract with the tribe. Even if it had, the treasurer lacked authority to waive an assessment that state law made mandatory for participating employers.

The AG separated that issue from tribal sovereignty. Under federal law as the opinion understood it, Connecticut could not compel the tribe’s reservation enterprise to join the state workers’ compensation system or pay into the Fund without its consent. But if the tribe chose to participate, the AG concluded that state law required its Fund contribution. The opinion also said there was no derivative exemption for non-Indian contractors and subcontractors working on the reservation.

State treasury and Fund officials at the time

The treasurer’s general contract power did not include authority to dispense with the Fund assessment. The former treasurer’s letter of concurrence could not bind the Fund to an exemption the statute did not allow.

The tribal enterprise at the time

The AG treated the tribe’s participation as voluntary under federal law. His state-law conclusion addressed the terms of that participation, not a power to compel the tribe to join.

Contractors on the reservation at the time

The AG said they acquired no exemption through the proposed tribal arrangement. He separately cited federal authority permitting the state compensation system to apply to non-Indian contractors and subcontractors employing workers on the reservation.

Currency note

This opinion was issued in 2002. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the former treasurer’s letters exempt the Mohegan employer from the Second Injury Fund?
A: No. The AG found no contract with the tribe in the letters and said the treasurer lacked statutory authority to grant that exemption.

Q: Could Connecticut force the tribal casino authority to pay Fund assessments?
A: The opinion said the state could not require this tribal enterprise to participate in its workers’ compensation system or Fund without its consent under federal law. If it elected to participate, the AG said the state assessment applied.

Q: Were contractors working on the reservation exempt too?
A: No. The AG rejected a derivative exemption and distinguished non-Indian contractors and subcontractors from the tribal enterprise.

Background and statutory framework

The treasurer’s office asked about a 1997 exchange of letters among tribal counsel, the workers’ compensation commissioner and the former treasurer. The AG found that one letter stated the tribe’s proposal, another was subject to treasury approval, and the treasurer’s response to the commissioner contained no agreement terms directed to the tribe. He then read the Fund assessment language as mandatory and beyond the treasurer’s power to waive. He noted, without deciding, a separate question about the commissioner’s agreement to allow the tribe to participate under the Employment Rights Act.

Citations and references

Statutes: Conn. Gen. Stat. § 31-354; Conn. Gen. Stat. § 3-11a.

Case: White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980).

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/2002-formal-opinions/honorable-denise-l-nappier-office-of-the-treasurer--2002024-formal-opinion-attorney-general-of-conne

Original opinion text

Honorable Denise L. Nappier, Office of the Treasurer, 2002-024 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

July 18, 2002

Honorable Denise L. Nappier

Treasurer

Office of the Treasurer

55 Elm Street

Hartford, CT 06106-1773

Dear Treasurer Nappier:

You requested an opinion of this Office as to whether former State Treasurer Paul Silvester had the authority to exempt the Mohegan Tribal Gaming Authority (the "Tribe") from the Second Injury Fund ("the Fund") assessment, required of all state employers pursuant to Conn. Gen. Stat. § 31-354, and to bind the Fund to an apparent agreement for this purpose. We conclude that because the Treasurer does not have the authority to exempt employers from Fund assessments, any purported agreement for this purpose would not be legally binding on the Second Injury Fund. In addition, although we conclude that no exemption is authorized, it is also important to note that, under federal law, the State has no jurisdiction to require the Tribe to participate in the Fund.

Based on various letters you have provided to this Office, it appears that in 1997, then State Treasurer Paul Silvester, the Workers' Compensation Commissioner, Jessie Frankl, and the Tribe agreed that the Tribe would continue to participate in the State's workers' compensation system, as a self-insured entity, in exchange for its “exemption” from the Fund. To our knowledge, this agreement was never memorialized in a written agreement or memorandum of understanding, nor was it ever reviewed or approved by this Office.

You have provided us with three letters related to this arrangement. The first is a letter dated August 8, 1997 from Lewis B. Rome, counsel to the Tribe, to Mr. Silvester setting forth the Tribe's position that it would agree to continue to participate in the workers' compensation system, but that it "does not feel in any way responsible for the support of the Second Injury Fund nor is it willing to enter into any arrangement which requires it to make contributions for that fund." Attached to Mr. Rome's letter was an August 7, 1997 memorandum to him from several tribal officials outlining in more detail the Tribe's position and proposal. The Tribe's memorandum specifically states the Tribe's "desire that you fully explore this proposition with the proper officials at the Attorney General, Treasurer, Workers Compensation and Insurance Department offices."1 Mr. Rome's letter does not constitute a contract as it merely sets forth the position of one party, the Tribe, in the matter.

The second letter is dated August 18, 1997, and is addressed to the Tribe from Commissioner Frankl. In his letter, Mr. Frankl agreed to allow the Tribe to participate in the State's workers' compensation system as a self-insured entity and "confirms, subject to the approval of the Treasurer's Office," that the Tribe will not be responsible for any Fund assessments. Since Commissioner Frankl has no statutory authority over the Fund or any ability to bind another state agency to a contract, this letter does not constitute a binding commitment on behalf of the Treasurer's Office or the Fund.

The final piece of correspondence you provided is a letter from Mr. Silvester to Mr. Frankl, dated October 6, 1997 stating his "concur[rence]" with Mr. Frankl on this matter and that he "[has] no objection to the exclusion of the Tribe in the payment of Second Injury Fund assessments." Although this letter expresses Mr. Silvester's acquiescence in the arrangement to exempt the Tribe from the Fund, neither it alone, nor in combination with the other letters, constitutes a contract between the Tribe and the Treasurer's Office.

It is well established that:

"To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties.... To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties.... If the minds of the parties have not truly met, no enforceable contract exists.... [A]n agreement must be definite and certain as to its terms and requirements.... So long as any essential matters are left open for further consideration, the contract is not complete." (Citations omitted; internal quotations marks omitted.) L & R Realty v. Connecticut National Bank, 53 Conn.App. 524, 732 A.2d 181, cert. denied, 250 Conn. 901, 734 A.2d 984 (1999).
Gerry v. Wentworth Laboratories, Inc., 60 Conn.App. 622, 627 (2000).

The October 6, 1997 letter is directed to Mr. Frankl, not the Tribe and contains no terms whatsoever. Accordingly, based on the information provided to us, the Treasurer's letter was not sufficient to constitute a contract between the Fund or the Treasurer's Office and the Tribe.

Moreover, even if these documents could constitute a contract, it would not be binding on the State because Mr. Silvester had no authority to enter into such a contract. Although the Treasurer has the general authority under Conn. Gen. Stat. § 3-11a to enter into "contractual agreements," such contracts must be "necessary and proper for the discharge of his duties." It is axiomatic that:

'Powers conferred on a public officer can be exercised only in the manner, and under the circumstances, prescribed by law, and any attempted exercise thereof in any other manner or under different circumstances is a nullity.' 67 CJS, Officers, Sec 103, page 371. 'The acts of public officers are binding only when they act within the scope of their authority. While officers are presumed to have acted within their authority, statutes delegating powers to public officers must be strictly construed.' Id. Sec. 103, Page 366.
74 Op. Atty. Gen. February 22, 1974, Letter to the Honorable Thomas J. Meskill; see also, State v. Hartford Accident & Indemnity Co., 138 Conn. 334, 339 (1951) ("e;[P]ublic officers must act within their statutory duties and . . . those who deal with them are bound at their peril to take notice of the scope and measure of the authority of such officers.").

The Treasurer's duties with respect to the Fund are set forth in Chapter 568, Part E of the General Statutes. In particular, under Section 31-354: "Each employer, other than the state, shall, within thirty days after notice given by the State Treasurer, pay to the State Treasurer for the use of the state a sum in payment of its liability under this chapter . . .." (Emphasis added.)2 This language is mandatory, and there is nothing in that section, or any other section, that allows the Treasurer to exempt any employers from making the required assessment to the Fund. Exempting employers from the Fund, therefore, would violate the statute and would be beyond the Treasurer's statutory powers with respect to the Fund.

Accordingly, since the Treasurer does not have the authority to exempt any employers from the Fund, Mr. Silvester could not bind the State to an agreement for this purpose.

Although we have concluded that the Treasurer lacks the authority to "exempt" employers from the Fund; and therefore any purported attempt to do so was a nullity, the fact that the employer in this case is a federally recognized Indian tribe, raises unique issues under federal law. Federally recognized Indian tribes have a unique quasi-sovereign status under federal law. As such, many of the State's civil regulatory laws are not applicable on their reservations. White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980).

As we explained in a previous opinion, under federal law, the Connecticut's Workers' Compensation Act, including the Fund provisions, does not apply to tribally owned and operated enterprises located on a federal reservation. 97 Op.Atty.Gen. December 19, 1997, Letter to Commissioner Jessie M. Frankl, Chairman, Workers' Compensation Commission (copy appended). It is our understanding that the Mohegan Tribal Gaming Authority, which is a tribal enterprise, is the employer in this case. As a result, under federal law, the State cannot require the Tribe to participate in its workers' compensation system or to contribute to the Fund absent its consent. However, under state law, if the Tribe chooses to participate in the workers' compensation system, it must contribute to the Fund.3

Finally, as to your question concerning contractors and subcontractors, since the Treasurer has no authority to exempt the Tribe from the Fund, there could be no derivative exemption for contractors and subcontractors working on the reservation. In fact, federal law permits the application of the State's workers' compensation system to non-Indian contractors and subcontractors working on the reservation and employing Indians and nonIndians. Begay v Kerr-McGee Corp. 682 F.2d 1311, 1319 (1982).

I trust that this opinion answers your concerns.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

Susan Quinn Cobb

Assistant Attorney General

RB/sqc

Enclosure

1As noted above, this Office was never consulted on the legality of this agreement.

2The Tribe falls with the definition of "employer" under the Workers Compensation Act. See Conn. Gen. Stat. § 31-275(10).

3We note, without deciding, that Mr. Frankl's agreement to allow the Tribe to participate in the State's workers' compensation system may raise concerns under Conn. Gen. Stat. § 31-57e, the Employment Rights Act. Under that Act, the State may not provide any federally recognized tribe engaged in a commercial enterprise any funds or services unless or until the tribe adopts an employment rights code in accordance with the Act. The Tribe has not adopted such a code to our knowledge.