Floyd v. Department of Labor and Industries

• Decision Date: 09 April 1954
• Docket Number: No. 32666,32666
• Citation: 44 Wn.2d 560,269 P.2d 563
• Court: Washington Supreme Court
• Parties: FLOYD, v. DEPARTMENT OF LABOR AND INDUSTRIES et al.

Page 560

44 Wn.2d 560

269 P.2d 563

FLOYD, v. DEPARTMENT OF LABOR AND INDUSTRIES et al.

No. 32666.

Supreme Court of Washington, En Banc.

April 9, 1954.

Rehearing Denied May 21, 1954.

McMicken, Rupp & Schweppe, Seattle, for appellant.

Walthew, Oseran & Warner, Seattle, for respondent.

Zabel & Poth, Grosvenor Anschell, Seattle, L. Presley Gill, Seattle, amici curiae.

DONWORTH, Justice.

The sole question presented in this action is whether § 15 of chapter 225, Laws of 1951, RCW 51.52.115, which provides for a review of decisions of the board of industrial insurance appeals by a trial de novo in superior court, is unconstitutional as an attempt to delegate to the judiciary a purely legislative or administrative function.

Appellant United States Plywood Corporation, the employer of respondent Floyd, appeals from a judgment of the superior court for King county, entered on a jury verdict. The judgment ordered:

'* * * that the plaintiff do have and recover of and from the defendant, Department of Labor and Industries, in the sum of 35 percent for combined loss of hearing. * * *'

Two amici curiae representing labor unions have filed briefs in support of the judgment for respondent Floyd.

This appeal is here upon an agreed statement of facts which may be summarized as follows:

Respondent, while an employee of appellant, sustained an industrial injury in the course of his extrahazardous employment. The board of industrial insurance appeals sustained an order of the supervisor of industrial insurance awarding respondent compensation based on a permanent partial disability equivalent to twenty-five percent of the maximum allowable for unspecified disability. Respondent appealed to the superior court. A jury was summoned to hear the appeal.

At the opening of respondent's evidence and at the conclusion of all of the evidence appellant demurred to the evidence, challenged its sufficiency and moved to dismiss, contending that RCW 51.52.115, governing appeals from the board of industrial insurance appeals, was an unconstitutional delegation of legislative or administrative power to the judiciary. Appellant argued that, since there was no proof that the board acted illegally, arbitrarily and capriciously, the appeal could not be maintained.

The court overruled the demurrer and denied the challenge and motion and submitted the case to the jury. The instructions to the jury advised the jurors that they could find that the board of industrial appeals was wrong in its decision awarding respondent a twenty-five percent disability rating if in the opinion of the jurors the evidence in the board's record 'preponderated' against the findings of the board.

Appellant requested the court to instruct the jury that:

'Your are instructed that, unless you find that the decision of the Board of Industrial Insurance Appeals was arbitrary and capricious and wholly unsupported by any evidence whatsoever, your verdict must be for the defendant.'

The trial court refused to give this instruction.

By its verdict the jury found that the decision of the board of industrial insurance appeals was wrong and that respondent had suffered a thirty-five percent disability instead of only twenty-five percent, as the board had found. Judgment was entered on the verdict.

Appellant's three assignments of error raise the single question heretofore stated relating to the constitutionality of RCW 51.52.115, which provides that on an appeal from a decision of the board of industrial insurance appeals:

'* * * The hearing in the superior court shall be de novo, but the court shall not receive evidence or testimony other than, or in addition to, that offered before the board or included in the record filed by the board in the superior court * * *.'

Appellant relies principally on our decision in Household Finance Corp. v. State, 40 Wash.2d 451, 244 P.2d 260, 261, and asserts that this court must, necessarily, either reverse the judgment in this case or overrule the Household Finance case. Therefore, we shall analyze that case in some detail.

The plaintiff in that case had appealed to the superior court from an order of the supervisor of banking denying its applications for licenses for two additional places of business under the small loan act, Laws of 1941, chapter 208, p. 609. The statute provided that on such an appeal 'A trial shall be had in said Superior Court de novo.' Section 23.

The plaintiff there took the position that by a trial de novo was meant a trial after which, without regard to the supervisor's order, the superior court could decide upon the evidence presented at the trial whether or not the licenses should be issued. Defendant contended that the court's inquiry was 'limited to whether or not the supervisor had abused his discretion and had acted arbitrarily or capriciously' in denying the license applications.

The trial court held that despite the language of the statute providing for a trial de novo, the scope of its inquiry was limited to determining whether the supervisor had acted arbitrarily, capriciously, or contrary to law.

In affirming the trial court, this court said:

'The legislature in enacting this statute expressed dissatisfaction with what it may have considered to be prior judicial abdication in reviewing the orders of administrative boards and commissions, which have been uniformly upheld in the absence of a showing that they were arbitrary, capricious, or contrary to law.

'We are convinced that the legislature, whether or not it was dissatisfied with the application of the arbitrary or capricious test, with its minimum of judicial review to determine the validity of administrative action, has attempted to place in the superior court for Thurston county powers with which it cannot constitutionally be invested.

'It seems unnecessary to labor the fundamental doctrine of the constitutional division of powers and the reasons therefor. * * *

'We recognize that definite and analytical lines marking the separation of powers have not been and cannot be drawn. There is necessarily some mingling and overlapping of powers between the three separate departments of our government. [Citing cases.] The separation of governmental powers

"* * * is not a doctrinaire concept to be made use of with pedantic rigor. There must be sensible approximation, there must be elasticity of adjustment, in response to the practical necessities of government, which cannot foresee to-day the developments of tomorrow in their nearly infinite variety.' Mr. Justice Cardozo in his dissenting opinion in Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 257, 79 L.Ed. 446. It is the fusion of the different types of governmental power to deal with specific problems which has resulted in the development of the administrative process. Schwartz, American Administrative Law 18.

'However, we are not here concerned with a twilight-zone situation. The licensing and regulation of small loan companies * * * is * * * essentially a legislative and administrative function. [Citing cases.]

'It is clear that no 'elasticity of adjustment' can make the determination relative to the issuance of a license to operate a small loan business essentially or primarily a judicial power. If the statute had provided that applications for such licenses should be made to the superior court for Thurston county in the first instance, and had thereby charged that court with the responsibility of determining whether or not such licenses should issue, it would be agreed by everyone that the statute had imposed a nonjudicial power upon the court and that the portion of the statute so providing was unconstitutional. The addition of another step (original application to the supervisor of banking) does not place that determination any more within the scope of judicial power if, when the matter comes to the court, it is to be disposed of in the same manner as though it had originated there and without regard to the action of the supervisor from which the appeal is taken.

'We are constrained to hold that the portion of Rem.Supp.1941, § 8371-23, which purports to vest in the superior court for Thurston county the right to reverse on a trial de novo a decision of the supervisor with reference to the granting of such a license and, in effect, to substitute its judgment for that of the supervisor as to whether or not a license should issue, is unconstitutional as an attempt to vest a nonjudicial power in a constitutionally created court. We must reject this expansion of the court's power as firmly as we would resist a reduction of its rightful authority. [Citing cases.]' (Italics ours.)

A critical analysis of our opinion in the Household Finance case discloses that we there decided that the licensing and regulation of small loan companies is essentially a legislative and administrative function and not essentially or primarily a judicial function. We then held that since the administrative agent (the supervisor of banking) was given the authority under the small loans act to exercise his discretion in an essentially legislative or administrative function, the superior court had no authority, despite the statute, to review the exercise of that discretion except to determine whether the supervisor had acted in an arbitrary, capricious or illegal manner.

We did not decide in Household Finance--and the case cannot be considered as authority for the position--that all administrative agencies exercise essentially legislative and administrative functions and thus their decisions are not reviewable in a court of law except to determine whether their orders are arbitrary, capricious or illegal. Under the doctrine of stare decisis, it would be impossible for this court to set a precedent to be applied to all administrative agencies in a case dealing with an appeal from a decision of only one administrative body. The doctrine means no more than that the rule laid down in any...