Little v. Traynor
Decision Date | 27 June 1997 |
Docket Number | No. 960283,960283 |
Citation | 1997 ND 128,565 N.W.2d 766 |
Parties | Stephen D. LITTLE and Kathryn L. Dietz, Petitioners and Appellees, v. J. Patrick TRAYNOR, Executive Director of the North Dakota Workers Compensation Bureau, and the North Dakota Workers Compensation Bureau, Respondents and Appellants. Civil |
Court | North Dakota Supreme Court |
Dean J. Haas, of Dietz, Little & Haas, Bismarck, for petitioners and appellees.
Brent J. Edison (argued), Special Assistant Attorney General, and Tracy Vigness Kolb (appearance), Special Assistant Attorney General, Bismarck, for respondents and appellants.
¶1 The Workers Compensation Bureau appeals from a judgment invalidating its rulemaking action involving N.D.A.C. § 92-01-02-11.1, which sets a maximum claimant attorney fee rate and various fee caps, and limits reimbursement for a claimant's costs to $100 absent prior Bureau approval. The Bureau also appeals from an order awarding Stephen D. Little and Kathryn L. Dietz $450 in attorney fees. We conclude the Bureau's adoption of an $85-per-hour maximum hourly rate and various fee caps to compensate a claimant's attorney in N.D.A.C. § 92-01-02-11.1(1) and (3)(b) through (i) was based on an adequate administrative rulemaking record and was not an arbitrary or capricious application of its statutory authority, and its adoption in N.D.A.C. § 92-01-02-11.1(9)(e) of a $100 limit for reimbursement of a claimant's reasonable and necessary costs, unless approved by the Bureau in advance of their accrual, was not beyond the scope of the Bureau's authority. We also conclude the district court did not abuse its discretion in awarding Little and Dietz attorney fees under N.D.C.C. § 28-32-21.1. We therefore reverse the judgment invalidating parts of N.D.A.C. § 92-01-02-11.1, and affirm the order awarding attorney fees.
¶2 During the latter part of 1995, the Bureau conducted rulemaking proceedings under N.D.C.C. Chapter 28-32 to consider its proposed amendments to N.D.A.C. § 92-01-02-11.1 relating to payment of costs and attorney fees for claimants in workers compensation litigation. Little and Dietz, attorneys who represent numerous claimants before the Bureau, see Little v. Tracy, 497 N.W.2d 700, 702 (N.D.1993), appeared, along with others, at the public hearing and submitted written comments objecting to the proposed amendments.
¶3 The new rules were promulgated and, on October 30, 1995, were found by the Attorney General to be in compliance with N.D.C.C. § 28-32-02. Effective January 1, 1996, the parts of N.D.A.C. § 92-01-02-11.1 at issue here provide:
¶4 In January 1996, Little and Dietz appealed the Bureau's rulemaking action to district court. The Bureau moved for leave to pursue discovery and seek information about Little and Dietz's recovery of attorney fees from their clients' permanent partial impairment awards and their recovery of fees from their clients in instances where fees were not paid by the Bureau. Little and Dietz opposed the motion and requested an award of attorney fees under either N.D.R.Civ.P. 11 or N.D.C.C. § 28-32-21.1(1) for having to respond to the motion. The Bureau then withdrew its motion, and the district court awarded Little and Dietz $450 in attorney fees.
¶5 The district court ruled the Bureau had arbitrarily and capriciously applied the authority granted to it by N.D.C.C. § 65-02-08 in setting either "a reasonable maximum hourly rate" or the fee caps in the rule. The court found "no evidence at all that would support a determination that $85 is a reasonable maximum hourly rate or that the maximum fees are reasonable." The court invalidated those provisions and remanded the matter to the Bureau "so that it can adopt a reasonable maximum hourly rate and a maximum fee rate based upon an adequate record."
¶6 The district court also held N.D.A.C. § 92-01-02-11.1(9)(e), requiring advance agreement by the Bureau to reimburse costs in excess of $100, was invalid. The court ruled, because there is no limiting language in N.D.C.C. § 65-02-08 that relates to costs, the Bureau acted beyond the scope of its statutory authority in enacting that provision.
¶7 The district court had jurisdiction under N.D. Const. Art. VI, § 8, and N.D.C.C. §§ 27-05-06 and 28-32-15(2). The Bureau's appeal to this Court was timely under N.D.R.App.P. 4(a) and N.D.C.C. § 28-32-21. This Court has jurisdiction under N.D. Const. Art. VI, §§ 2 and 6, and N.D.C.C. §§ 28-27-01 and 28-32-21.
¶8 In an appeal from an administrative agency's rulemaking action, our standard of review is the same standard applied by the district court. See N.D.C.C. § 28-32-21. We must affirm the agency's rulemaking action unless the provisions of N.D.C.C. Chapter 28-32 have not been substantially complied with in the proceedings, the rule is unconstitutional on the face of the language adopted, the rule is beyond the scope of the agency's authority to adopt, or the rule is on the face of the language adopted an arbitrary or capricious application of authority granted by statute. See N.D.C.C. § 28-32-19.1; Tracy at 702 n. 8.
¶9 The Legislature specifically directed the Bureau to "establish, by administrative rule, a reasonable maximum hourly rate and a maximum fee to compensate an injured employee's attorney for legal services following issuance of an administrative order under chapter 28-32 reducing or denying benefits." N.D.C.C. § 65-02-08. See also N.D.C.C. § 65-02-15 ( ); N.D.C.C. § 65-10-03 ( ). Under N.D.C.C. § 65-02-08, attorney fees are to be paid only when the employee prevails, and "[e]xcept for an initial determination of compensability, an attorney's fee may not exceed twenty percent of the amount awarded, subject to a maximum fee set by administrative rule." The statute further provides it "does not prevent an injured employee or an employer from hiring or paying an attorney; however, the employee's attorney may not seek or obtain costs or attorney's fees from both the bureau and the employee relative to the same services." N.D.C.C. § 65-02-08. The Bureau promulgated N.D.A.C. §...
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