Martin v. Am. Colloid Co.

Decision Date14 September 2011
Docket NumberNo. 25739.,25739.
Citation2011 S.D. 57,804 N.W.2d 65
PartiesVera MARTIN, Appellant,v.AMERICAN COLLOID COMPANY and American Insurance Company, Appellees.
CourtSouth Dakota Supreme Court

OPINION TEXT STARTS HERE

Michael J. Simpson, Julius & Simpson, LLP, Rapid City, South Dakota, Attorneys for appellant.

Shiloh M. Macnally, Daniel E. Ashmore, Gunderson, Palmer, Nelson and Ashmore, LLP Rapid City, South Dakota, Attorneys for appellees.SEVERSON, Justice.

[¶ 1.] Vera Martin lives in Belle Fourche, South Dakota, but worked at an American Colloid Company plant in Colony, Wyoming. After suffering a work-related injury at the Colony plant, Martin received Wyoming workers' compensation benefits. She then filed a claim for South Dakota workers' compensation benefits. The South Dakota Department of Labor dismissed her claim for lack of jurisdiction, and the circuit court affirmed. We affirm.

Background

[¶ 2.] American Colloid is a Delaware corporation that conducts business in several states including Wyoming, South Dakota, Montana, North Dakota, Alabama, and Nevada. American Colloid's corporate headquarters is located in Hoffman Estates, Illinois. Primary management functions, including human resources, payroll, manufacturing, marketing, and information technology, are based in Illinois.

[¶ 3.] American Colloid operates a large manufacturing plant in Colony, Wyoming, for the production of bentonite and lignite products. The Colony plant operates with separate plant management on site. Plant management in Wyoming handles customer service, accounts payable, orders, and receiving. The plant also has a separate cost center at the Wyoming plant, which tracks the plant's revenue, expenses, and profit. Plant management in Wyoming interviews, hires, and fires employees. Although the corporate headquarters in Illinois issues paychecks to employees, plant management in Wyoming determines wages and verifies hours worked. American Colloid also operates a business office in Belle Fourche, South Dakota, which provides limited administrative assistance to plant management in Wyoming.

[¶ 4.] Martin applied for employment with American Colloid in early 2006. She submitted her application to the Belle Fourche office. In February 2006, four plant supervisors interviewed Martin at the Colony plant. She was subsequently hired as a line worker at the Colony plant. Before her formal hiring, plant management required Martin to complete a physical and urinalysis at a Belle Fourche clinic in South Dakota. Martin exclusively worked at the Colony plant in Wyoming until she was terminated in February 2008.

[¶ 5.] Martin sustained a work-related injury at the Colony plant in September 2006. The plant reported her injury to the Wyoming Workers' Safety & Compensation Division (WWSCD). Shortly after her injury, Martin signed a Wyoming Report of Injury and received a pamphlet that explained her Wyoming workers' compensation benefits. In an attempt to accommodate her light-duty restrictions, plant management allowed Martin to work in the lab at the plant. But plant management eventually terminated Martin because they could not provide her a permanent light-duty position in either Colony or Belle Fourche.

[¶ 6.] American Colloid paid workers' compensation premiums in Wyoming for Martin. Wyoming has a state-funded workers' compensation system, and each quarter the employer must provide the WWSCD a list of employees and wages paid to those employees. The list that American Colloid provided to the WWSCD included Martin's name and gross earnings. Martin received Wyoming workers' compensation benefits totaling approximately $38,000. She later received a five-percent permanent partial impairment rating.

[¶ 7.] In February 2008, Martin filed a petition for hearing with the South Dakota Department of Labor. She alleged that her present physical condition prevented her return to her former employment and that she was entitled to odd-lot disability benefits. American Colloid moved to dismiss her claim for lack of jurisdiction. Martin resisted the motion, arguing that the Department had jurisdiction because she resides in South Dakota. In January 2010, the Department dismissed Martin's claim for South Dakota workers' compensation benefits for lack of jurisdiction. Martin appealed to circuit court, which affirmed the Department's decision. Martin appeals.

Standard of Review

[¶ 8.] SDCL 1–26–37 establishes the standard of review for administrative appeals. Under the statute, “the applicable standard of review ‘will vary depending on whether the issue is one of fact or one of law.’ Darling v. W. River Masonry, Inc., 2010 S.D. 4, ¶ 10, 777 N.W.2d 363, 366 (quoting Orth v. Stoebner & Permann Constr., Inc., 2006 S.D. 99, ¶ 27, 724 N.W.2d 586, 592). “The actions of the agency are judged by the clearly erroneous standard when the issue is a question of fact.” Id. (citing Orth, 2006 S.D. 99, ¶ 27, 724 N.W.2d at 592). Because an issue regarding jurisdiction is a question of law, we review the Department's decision to dismiss Martin's claim for South Dakota workers' compensation benefits de novo. See O'Toole v. Bd. of Tr. of S.D. Retirement Sys., 2002 S.D. 77, ¶ 9, 648 N.W.2d 342, 345 (citing In re Estate of Galada, 1999 S.D. 21, ¶ 8, 589 N.W.2d 221, 222).

Analysis and Decision

[¶ 9.] Martin has already received Wyoming workers' compensation benefits. She now seeks an award of benefits in South Dakota as well. Under the unique system of workers' compensation law, these “successive awards” are sometimes permitted. In holding that successive awards do not violate the Full Faith and Credit Clause of the United States Constitution, the United States Supreme Court has stated:

We therefore would hold that a State has no legitimate interest within the context of our federal system in preventing another State from granting a supplemental compensation award when that second State would have had the power to apply its work[ers'] compensation law in the first instance. The Full Faith and Credit Clause should not be construed to preclude successive work[ers'] compensation awards.

Thomas v. Washington Gas Light Co., 448 U.S. 261, 286, 100 S.Ct. 2647, 2663, 65 L.Ed.2d 757 (1980). See U.S. Const. art. IV, § 1 (“Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State.”). Thus, Martin's successive award of workers' compensation benefits would be permissible under constitutional due process analysis if South Dakota has the power to apply its workers' compensation law in the first instance. See id.

[¶ 10.] In this administrative appeal, there is some confusion as to the use of the term “jurisdiction.” ‘Jurisdiction’ in regard to administrative agencies generally may be defined as power given by law to hear and decide controversies.” 2 Am.Jur.2d, Administrative Law § 274 (1994). This Court has described the jurisdiction of administrative agencies as follows:

In administrative law the term jurisdiction has three aspects: (1) personal jurisdiction, referring to the agency's authority over the parties and intervenors involved in the proceedings; (2) subject matter jurisdiction, referring to the agency's power to hear and determine the causes of a general class of cases to which a particular case belongs; and (3) the agency's scope of authority under statute.

O'Toole, 2002 S.D. 77, ¶ 10, 648 N.W.2d at 345 (quoting 2 Am.Jur.2d Administrative Law § 274 (1994)). This jurisdiction issue involves the scope of the Department's authority under South Dakota statutes. In order to determine whether Martin was entitled to South Dakota benefits for this out-of-state injury in the first instance, we must look to the South Dakota statutes governing workers' compensation.

[¶ 11.] The Department and the circuit court both concluded that the Department lacked jurisdiction to hear this case, but used very different methods to reach this conclusion. While the Department applied a three-part test, the circuit court undertook an extensive examination of South Dakota's workers' compensation statutes. The Department followed the precedent of two prior Department decisions, which adopted a three-part test to determine jurisdiction under South Dakota workers' compensation law.1 Meyers v. A.R.A. Trailblazers, Inc., HF No. 93, 1988/89, 1990 WL 506839, at *2 (S.D. Dep't of Lab. April 18, 1990) (quoting 4 Larson, Workman's Compensation Law, § 87.00 (1990)); Kruse v. Mercer Transp., HF No. 393, 1993/94, 1995 WL 798372, at *2 (S.D. Dep't of Lab. Dec. 6, 1995). According to the Department's test, the Department has jurisdiction “if the place of injury, or the place of hiring, or the place of employment relation is within the state.” Meyers, 1990 WL 506839, at *2 (quoting 4 Larson, Workman's Compensation Law, § 87.00 (1990)).

[¶ 12.] This Court has held that ‘proceedings under the Work[ers'] Compensation Law ... are purely statutory, and the rights of the parties and the manner of procedure under the law must be determined by its provisions.’ Caldwell v. John Morrell & Co., 489 N.W.2d 353, 364 (S.D.1992) (quoting Chittenden v. Jarvis, 68 S.D. 5, 8, 297 N.W. 787, 788 (1941)). The controlling issue in this case is whether Martin's employment with American Colloid is within the jurisdiction of the Department based on the agency's scope of authority under statute. Thus, we must look to the South Dakota's workers' compensation statutes to determine the scope of the Department's authority. The Department's test may be followed by a majority of states, but most have adopted it by statute.

[¶ 13.] The circuit court was correct in its initial approach of looking to South Dakota's workers' compensation statutes to determine the Department's jurisdiction. But we disagree with its 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 app...

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