Koskela v. Willamette Industries, Inc.

• Decision Date: 17 March 1999
• Citation: 159 Or.App. 229,978 P.2d 1018
• Parties: In the Matter of the Compensation of George D. Koskela, Claimant. George D. KOSKELA, Petitioner, v. WILLAMETTE INDUSTRIES, INC., Respondent. (WCB 95-08576; CA A97325)
• Court: Oregon Court of Appeals

Page 1018

978 P.2d 1018

159 Or.App. 229

In the Matter of the Compensation of George D. Koskela, Claimant George D. KOSKELA, Petitioner, v. WILLAMETTE INDUSTRIES, INC., Respondent.

(WCB 95-08576; CA A97325)

Court of Appeals of Oregon, In Banc.

Argued and Submitted Dec. 2, 1997.

Resubmitted En Banc Feb. 3, 1999.

Decided March 17, 1999.

David W. Hittle, Salem, argued the cause for petitioner. With him on the brief was Burt, Swanson, Lathen, Alexander, McCann & Smith.

David L. Johnstone, Portland, argued the cause for respondent. With him on the brief were E. Kimbark MacColl, Jr. and VavRosky, MacColl, Olson, Busch & Pfeifer, P.C.

David L. Runner, Appellate Counsel, filed a brief amici curiae for SAIF Corporation and South Hills Health Care Center.

Before DEITS, Chief Judge, and EDMONDS, De MUNIZ, LANDAU, HASELTON, ARMSTRONG, LINDER, WOLLHEIM and KISTLER, Judges, and WARREN, Senior Judge.

LINDER, J.

Claimant seeks review of a Workers' Compensation Board (board) order awarding him permanent partial disability (PPD) rather than permanent total disability (PTD). The petition for review raises only one issue: whether the administrative procedures for determining the extent of the permanent disability--in particular, the process for reconsideration and hearing--satisfy the requirements of the federal Due Process Clause. We hold that they do and affirm.

Claimant, who is approximately 60 years old, has a history of extensive temporomandibular joint (TMJ) difficulty, which involves episodic jaw pain and discomfort. He has been medically treated for that condition since at least 1982, and his treatment has included several surgeries. He suffered compensable injuries to his jaw twice, first in 1986 and again in 1989. In 1994, his treating physician declared him to be medically stationary, triggering the claim closure process. As part of that process, three other physicians independently examined claimant to assess the extent of his disability. Their examination included review of a videotape of defendant engaging in certain activities (e.g., mowing his lawn, driving his pickup, chopping wood, and fishing). Based on the videotape and their physical examinations, those physicians concluded that claimant could perform at least sedentary work. Claimant's treating physician also viewed the videotape and agreed that claimant likely could perform certain activities, but he was unsure whether claimant could do so on a daily basis.

The Department of Consumer and Business Services (DCBS) reviewed the medical reports and issued a determination order finding claimant to be medically stationary and awarding him PPD. Claimant requested reconsideration by DCBS, seeking a determination that his disability is total, rather than partial. In requesting reconsideration, claimant did not dispute the impairment findings used to rate the extent of the disability. As a result, DCBS submitted the claim to the Appellate Review Unit (unit) for reconsideration, rather than appoint a medical arbiter to review the rating. In its order on reconsideration, the unit reviewed the physicians' reports and agreed that claimant was only partially disabled. However, the unit modified the determination by increasing the PPD disability rating pursuant to a temporary rule. ¹

Claimant sought administrative review, invoking his right to a hearing before an administrative law judge (ALJ). Before the hearing, claimant indicated he was prepared to offer his testimony, the testimony of his family physician, and the testimony of a vocational expert "to substantiate claimant's case" and to show "in a convincing manner that claimant is permanently and totally disabled." Claimant could have submitted that evidence by affidavit at the prior level of administrative review (reconsideration), but he made no effort to do so. Because that evidence had not been submitted at reconsideration, the ALJ ruled it inadmissible under ORS 656.283(7). ² At the hearing, claimant's counsel again asked to present the testimony and asserted a right under the Due Process Clause to do so. The ALJ rejected claimant's due process argument and limited her consideration to the evidence presented at reconsideration and submitted at hearing for the ALJ's consideration. On the basis of that evidence, the ALJ found that claimant was not entitled to PTD. Claimant appealed to the board, asserting that under the Due Process Clause, the proffered testimony should have been considered. The board rejected the constitutional claim and, on de novo review of the record, affirmed the ALJ's order.

At the outset, it is helpful to clarify the precise legal challenge that claimant makes. Claimant asks us to declare invalid the 1995 amendment to ORS 656.283(7), which bars the admission of evidence at an ALJ hearing that was not presented at the prior stage of administrative review (reconsideration). Rogue Valley Medical Center v. McClearen, 152 Or.App. 239, 952 P.2d 1048, rev. den. 327 Or. 123, 966 P.2d 216 (1998). With that change, determining the extent of an accepted disability under Oregon's workers' compensation statutes is based primarily on the presentation of written medical reports and other documentary and written submissions. There is no point during the administrative closure process at which a claimant, as a matter of right, can orally submit his or her own testimony and the direct testimony of other witnesses.

Claimant wages a facial attack on that administrative structure, contending that it denies a claimant seeking PTD due process of law under the Fourteenth Amendment to the United States Constitution. Claimant briefly canvasses the closure, reconsideration, and hearing procedures, taking issue with the fact that, in light of the amendment to ORS 656.283(7), there is no point during the administrative process at which a claimant receives a trial-type hearing as part of determining the extent of a compensable disability. Claimant concludes by arguing:

"On balance the claimant's protected interest in permanent total disability benefits entitles him to a trial-type hearing. Such procedural safeguards were not provided at either the reconsideration or hearing level. Consequently, claimant was denied the procedural due process guarantees of the Fourteenth Amendment."

Thus, although claimant's immediate challenge is directed to the limitation on evidence newly imposed by ORS 656.283(7) at the ALJ level, the rationale for the challenge is the failure to provide a trial-type hearing at any point in the PTD determination.

Employer responds that the reconsideration and hearing processes, notwithstanding their evidentiary limitations, adequately protect claimant's due process interests. Employer points out that claimant had the opportunity to present his full case by written reports and affidavits at the reconsideration level, but that claimant chose not to avail himself fully of that opportunity. Additionally, employer observes that, at the hearing before the ALJ, claimant could have cross-examined the author of any written vocational report, pursuant to ORS 656.287(1), as long as that report was presented at reconsideration. All of those procedures provide, in employer's view, meaningful opportunities to contest the relevant issues and adequately ensure the reliability of the decision.

The Fourteenth Amendment provides that no state shall "deprive any person of life, liberty, or property, without due process of law." The question of what process constitutionally is due involves three inquiries: (1) whether the person invoking the due process claim has a constitutionally protected interest in the particular benefit at stake; (2) whether deprivation of that interest involves government action; and (3) whether the procedures used or available are constitutionally adequate. See generally Carr v. SAIF, 65 Or.App. 110, 117-18, 670 P.2d 1037 (1983), rev. dismissed 297 Or. 83, 679 P.2d 1368 (1984).

The parties do not dispute that an injured worker has a protected property interest in a determination of PTD status and that denial of that status involves government action. See id. at 118, 670 P.2d 1037. ³ The only issue, then, is the constitutional adequacy of the administrative procedures provided by state law to determine a claimant's entitlement to PTD benefits. As the United States Supreme Court has observed: "[O]nce it is determined that the Due Process Clause applies, 'the question remains what process is due.' " Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985) (quoting Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972)).

Fundamentally, the question posed by a procedural due process challenge is whether, given what is at stake, the procedures used to reach that decision provide sufficient confidence in the decision made. Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), frames the analysis as a three-part balancing test:

"[F]irst, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail."

The private interest at stake here is claimant's entitlement to PTD versus PPD benefits. PTD benefits serve as replacement wages for a worker who, due to the disabling effects of a compensable injury, permanently cannot return to regular and suitable gainful employment. ORS 656.206(2)(a). We recognized in Carr that temporary total disability (TTD) benefits, which compensate an injured worker on a temporary basis for the same inability to work, represent a significant interest to a claimant. Specifically, "[d]eprivation of compensation, even...