Nevada Indus. Commission v. Reese, 7901

• Decision Date: 09 March 1977
• Docket Number: No. 7901,7901
• Citation: 93 Nev. 115,560 P.2d 1352
• Parties: NEVADA INDUSTRIAL COMMISSION et al., Appellants, v. Luther REESE et al., Respondents.
• Court: Nevada Supreme Court

Page 1352

560 P.2d 1352

93 Nev. 115

NEVADA INDUSTRIAL COMMISSION et al., Appellants, v. Luther REESE et al., Respondents.

No. 7901.

Supreme Court of Nevada.

March 9, 1977.

[93 Nev. 116] Cooke, Roberts & Reese, Reno, William J. Crowell and Riley M. Beckett, Nevada Industrial Commission, Carson City, for appellants NIC and Commissioners.

Manoukian, Scarpello & Alling, Ltd., Carson City, for appellant Bortolin.

Rice & Goedert, Reno, for respondents.

OPINION

MOWBRARY, Justice:

This is an appeal from a judgment of the district court declaring unconstitutional certain 1973 amendments to the Nevada Industrial Insurance Act.

During the 1973 Legislature, Assembly Bill No. 339 was enacted as chapter 762, Stats.Nev.1973, at 1595--1598. This statute amended the Nevada Industrial Insurance Act, chapter 616 of NRS. Among other things, the amendment provided for the incorporation of the Nevada Administrative Procedure Act (ch. 233B of NRS) into the Nevada Industrial Insurance Act and for the establishment of an Appeals Officer, appointed by the Governor, to conduct administrative hearings in contested claims. The amendment also provided that a decision of the Appeals Officer was to constitute a 'final decision' under the Nevada Administrative Procedure Act and that the record for purposes of judicial review of the decision of the Appeals Officer was limited solely to the evidence received during the hearing before the Appeals Officer. Section 6 of chapter 762 provided that no judicial proceedings could be instituted for the recovery of compensation for injury or death under the Nevada Industrial Insurance Act unless a claim for compensation had been filed in accordance with the provisions of NRS 616.500 and there had been a final decision rendered by the NIC Appeals Officer on such claim. Additionally, section 6 provided that judicial proceedings instituted by a dissatisfied claimant after a final decision would be limited to the scope of judicial review of an administrative decision, pursuant to the Nevada Administrative Procedure Act, sections 233B.130--233B.150. As a result, the decision of the NIC Appeals Officer was afforded the same status as a decision of an administrative agency under the Nevada Administrative Procedure Act. NRS 233B.140, subsections 4 and 5. ¹

The respondents, Luther Reese, Daniel G. Mahoney, and Michael E. Ausich, as dissatisfied claimants of benefits under the Nevada Industrial Insurance Act, commenced this original action in the Second Judicial District Court to challenge the constitutionality of the 1973 amendments to the Nevada Industrial Insurance Act. Appellant Richard Bortolin, in his official capacity as the NIC Appeals Officer, was named a party defendant, along with the NIC and the Commissioners, in their official capacities. The district judge, in his amended judgment filed April 22, 1974, ruled sections 4, 5, 6, 7, 8, 9, and 12 of [93 Nev. 118] Chapter 762 unconstitutional because they violated article 6, section 1, of the Nevada Constitution. ²

Respondents predicate their argument that the amendments to the Industrial Insurance Act are unconstitutional on the principal ground that they violate the traditional separation of powers doctrine, article 3, section 1, of the Nevada Constitution ³ and the judicial power provision set forth in article 6, section 1, of the Constitution. ⁴

In 1880, the Supreme Court of the United States declared in Kilbourn v. Thompson 103 U.S. 168, 190, 191, 26 L.Ed. 377, that all powers entrusted to government are divided into executive, legislative, and judicial branches, and that it is essential to the successful working of this system that the persons entrusted with power in any one of these branches shall not be permitted to encroach upon the powers confided to the others, but that each shally by the law of its creation be limited to the exercise of the powers appropriate to its own department and no other. The pronouncement was predicated upon reasoning stemming from Plato and Locke. The basic doctrine had been stated by Blackstone a century before Kilbourn, in 1765:

'In all tyrannical governments, the supreme magistracy, or the right of both making and of enforcing the laws, is vested in one and the same man, or one and the same body of men; and wherever these two powers are united together, there can be no public liberty. . . .' 1 Blackstone Commentaries on the Laws of England 146 (Lewis's ed. 1902 at 133).

Most state constitutions, as the Nevada Constitution, contain explicit provisions having something in common with the Kilbourn statement. Nev.Const. art. 3, § 1, supra.

The Federal Constitution, however, contains no specific provision that the three kinds of powers shall be kept separate. It goes no further than to provide separately for each of the three branches of Government: 'All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.' Art. I, § 1. 'The executive Power shall be vested in a President of the United States of America. . . .' Art. II, § 1. 'The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish . . .' Art. III, § 1.

The Supreme Court of the United States has held that judicial powers may be conferred upon administrative agencies. See Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 60 S.Ct. 907, 84 L.Ed. 1263 (1940); Reconstruction Fin. Corp. v. Bankers Trust Co., 318 U.S. 163, 63 S.Ct. 515, 87 L.Ed. 680 (1943). The High Court, without disapproval, said of the Federal Trade Commission, in 1935: 'To the extent that it exercises any executive function--as distinguished from executive power in the constitutional sense--it does so in the discharge and effectuation of its quasi-legislative or quasi-judicial powers, or as an agency of the legislative or judicial departments of the government.' (Footnote omitted.) Humphrey's Executor v. United States, 295 U.S. 602, 628, 55 S.Ct. 869, 874, 79 L.Ed. 1611 (1935). ⁵ Since a typical administrative agency exercises many types of power, including executive, legislative, and judicial, a strict application of the theory of separation of powers would make the very existence of such an agency unconstitutional.

While an administrative officer such as the NIC Appeals Officer cannot validly exercise purely judicial functions under article 6, section 1, or article 3, section 1, of the Nevada Constitution, we have heretofore recognized a distinction between purely judicial acts and quasi-judicial administrative acts. As a result, administrative officials can exercise administrative powers which are quasi-judicial in nature without violating the separation of powers doctrine. Provenzano v. Long, 64 Nev. 412, 427, 183 P.2d 639, 646 (1947). The NIC Appeals Officer's authority is limited to the power to conduct administrative hearings and make findings and render administrative decisions thereon. To execute these duties, it is necessary to exercise quasi-judicial powers. In Ormsby County v. Kearney, 37 Nev. 314, 346, 142 P. 803, 808 (1914), this court held that a statute which invests an administrative commission or official with administrative powers does not violate the separation of powers clause of the State Constitution, even though some of the administrative powers exercised by the official are quasijudicial in nature. The statute upheld in Kearney created the office of State Water Engineer and empowered that official to conduct hearings, take evidence, and make decisions that determined water rights. The exercise of these quasi-judicial administrative powers by the State Water Engineer was held not violative of either article 3, section 1, or article 6, section 1, of the Nevada Constitution. The court in Kearney, in upholding the statute against an attack based on the separation of powers clause, quoted from an earlier case, Sawyer v. Dooley, 21 Nev. 390, 396, 32 P. 437, 439 (1893): 'It would be impossible to administer the state government were the officers not permitted, and required, in many instances, to discharge duties in their nature judicial, in that they must exercise judgment and discretion in determining the facts concerning which they are called upon to act, and in construing the laws applicable to them.'

Kearney is persuasive authority for upholding the constitutional validity of the office of the NIC Appeals Officer. In both cases the statutes challenged had created an administrative position and delegated to the official in that position the power to carry out administrative duties that are quasi-judicial in nature. The duties of both officials are almost identical in that, like the State Water Engineer, the NIC Appeals Officer is granted the power to conduct hearings on contested claims, take evidence relevant to those claims, and render final administrative decisions thereon. See also, Humboldt Land & Cattle Co. v. Sixth Judicial Dist. Court, 47 Nev. 396, 224 P. 612 (1924). In Mallatt v. Luihn, 206 Or. 678, 294 P.2d 871 (1956), the court considered the question of a legislative delegation of power which allegedly constituted a violation of the doctrine of separation of powers. The court stated, at 880: '. . . (T)he mere fact that some functions usually performed by courts are conferred upon an administrative body does not necessarily bring the legislation into conflict with the principle of the separation of powers.' And in Mulhearn v. Federal Shipbuilding & Dry Dock Co., 2 N.J. 356, 66 A.2d 726, 731 (1949), the Supreme Court of New Jersey ruled that the State Division of Workmen's Compensation was not a court, but was an administrative tribunal in a department that was a component part of the State executive department. In addition, the court made a distinction between administrative quasi-judicial duties of an official of the executive branch of...