Porteadores Del Noroeste S.A. De v. Indus. Comm'n of Ariz.
| Decision Date | 14 January 2014 |
| Docket Number | No. 1 CA–IC 12–0038.,1 CA–IC 12–0038. |
| Citation | 234 Ariz. 53,316 P.3d 1241 |
| Parties | PORTEADORES DEL NOROESTE S.A. DE, C.V., uninsured employer, Petitioner v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent Adan Valenzuela, Respondent Employee Special Fund Division/No Insurance Section, Respondent Party in Interest. |
| Court | Arizona Court of Appeals |
OPINION TEXT STARTS HERE
Weeks Law Firm PLLC, Tucson By Stephen M. Weeks, for Petitioner.
Industrial Commission of Arizona, Phoenix By Andrew F. Wade, for Respondent.
Taylor & Associates, PLLC, Phoenix By Weston S. Montrose, for Respondent Employee.
Special Fund Division/No Insurance Section By Kathryn E. Harris, for Respondent Party in Interest.
OPINION
¶ 1 Adan Valenzuela, a citizen and resident of Mexico, was injured in a work-related accident in Arizona. The question we address is whether his employer, a corporation located in Mexico, was subject to Arizona's workers' compensation statutes at the time of Valenzuela's injury. For the following reasons, we reject the employer's argument that requiring a foreign employer to comply with such statutes would violate federal law. We therefore affirm the decision of the administrative law judge (“ALJ”).
¶ 2 Porteadores Del Noroeste S.A. DE, C.V. (“Porteadores”) transports diesel fuel from Phoenix, Arizona to Nogales, Mexico. Valenzuela, a Porteadores truck driver, was involved in a rollover accident north of Nogales and sustained numerous injuries. Valenzuela first received treatment at a Nogales hospital and was then transferred to University Medical Center (“UMC”) in Tucson. He was discharged from UMC shortly thereafter and returned to Mexico, where he promptly requested a determination of disability and benefits from the Instituto Mexicano del Seguro Social (“IMSS”).1 Porteadores did not have Arizona workers' compensation coverage for its employees at the time of Valenzuela's accident.
¶ 3 IMSS determined that Valenzuela qualified for disability benefits and began paying him benefits. IMSS also provided him medical examinations and treatment until he was cleared to work several months after the accident. IMSS declined, however, to pay more than $17,000 in billings from Dr. Ramirez, a physician in Mexico who practices outside the IMSS network.
¶ 4 Valenzuela filed an injury report with the Industrial Commission of Arizona (“ICA”) in September 2010, naming Porteadores as his employer. 2 Because the ICA claims division was unable to locate a valid Arizona workers' compensation policy in effect for Porteadores, the matter was referred to the Special Fund/No Insurance Section (“Special Fund”). The Special Fund issued a notice of determination, accepting the claim and classifying Porteadores as a “non-insured employer.”
¶ 5 At the time Valenzuela filed his injury report, the only medical bills presented to the Special Fund for payment were those related to the emergency visit to UMC, which the Special Fund paid. Valenzuela later asked the Special Fund to pay Dr. Ramirez's bills. The Special Fund determined it would not pay the Ramirez bills on the ground that “full compensation benefits have been paid to [Valenzuela] by the [IMSS].” The Special Fund also determined that it “ha[d] a lien against any third party recovery to the extent of benefits paid or payable.” Valenzuela protested both determinations and requested a hearing, alleging he had not received full compensation.
¶ 6 Prior to the hearing, Porteadores filed a motion to dismiss based on lack of subject matter jurisdiction, arguing the ICA did not have jurisdiction over a “company located solely within Mexico[.]” The Special Fund responded that if the ICA determined it lacked subject matter jurisdiction over Porteadores, that determination necessarily would mean the Special Fund had no obligation to pay benefits to Valenzuela. The ALJ denied the motion, concluding that the ICA “has both subject matter jurisdiction and personal jurisdiction.” Porteadores moved for reconsideration, asserting the North American Free Trade Agreement (“NAFTA”) controlled its corporate activities in the United States and therefore the ICA lacked subject matter jurisdiction.
¶ 7 Following the hearing, the ALJ denied Porteadores' motion to reconsider, and determined that Valenzuela was “entitled to medical, surgical, and hospital benefits as a result of the injury,” including the medical care provided by Dr. Ramirez. Recognizing that a claimant is not entitled to “exceed the benefits” that could be received in any one jurisdiction, the ALJ concluded the “State of Arizona” is entitled to a credit for workers' compensation benefits paid in Mexico, to be calculated after determinations of an average monthly wage, temporary disability benefits, and impairment.
¶ 8 Porteadores and the Special Fund requested review of the decision upon hearing. Porteadores argued that the ALJ failed to adequately address whether there was subject matter jurisdiction, asserting conflicts with federal statutes and constitutional provisions. The Special Fund asserted the decision would “alter the legal obligations of the applicant and the [Special Fund] in contravention of Arizona law.” In the decision upon review, the ALJ affirmed, finding that federal law does not “preempt Arizona law in this matter.” Porteadores then filed this statutory special action.3
¶ 9 Porteadores argues that requiring a foreign employer to comply with Arizona's workers' compensation laws would violate federal law.4
¶ 10 In reviewing an ICA award, we “make an independent determination of legal issues,” Anton v. Indus. Comm'n, 141 Ariz. 566, 569, 688 P.2d 192, 195 (App.1984), but review factual determinations “in a light most favorable to sustaining the Commission's award,” id. Because the workers' compensation statutes and constitutional provisions “are remedial and designed to provide compensation for those persons injured in business or industry,” we liberally construe the statutes and constitutional provisions to carry out that purpose. Id.
¶ 11 States have a strong interest in protecting employees working within their borders. DeCanas v. Bica, 424 U.S. 351, 356–58, 96 S.Ct. 933, 47 L.Ed.2d 43 (1976) () superseded by statute on other grounds as stated in
Chamber of Comm. v. Whiting, ––– U.S. ––––, 131 S.Ct. 1968, 179 L.Ed.2d 1031 (2011). Consistent with that principle, the Arizona Constitution requires the legislature to enact workers' compensation laws “in order to assure and make certain a just and humane compensation law” and relieve workers and their dependents from “burdensome, expensive and litigious remedies.” Ariz. Const. art. 18, § 8.
¶ 12 To implement the constitutional mandate, our legislature enacted the Arizona Workers' Compensation Act, Arizona Revised Statutes (“A.R.S.”) sections 23–901 to –1104, which requires employers to either (1) obtain a workers' compensation policy for their employees, or (2) provide proof of financial ability to pay the compensation directly. A.R.S. § 23–961(A)(1)–(2). The Act applies to “employers and their employees engaged in intrastate and also in interstate and foreign commerce[.]” A.R.S. § 23–903. As defined in A.R.S. § 23–902(A), “employers” subject to the Act include “every person who employs any workers or operatives regularly employed[.]” An employer that does not carry the requisite workers' compensation insurance is liable for all benefits paid to injured employees and subject to civil penalties, including administrative costs, necessary expenses, and attorneys' fees. A.R.S. § 23–966(C).
¶ 13 Additionally, the Act provides that an employee injured in Arizona is eligible for workers' compensation benefits even if the employee was not hired in the state. SeeA.R.S. § 23–904(B).5 The ICA has “exclusive jurisdiction to determine all issues of law and fact relating to a claimant's entitlement to compensation benefits under the [Act].” Rios v. Indus. Comm'n, 120 Ariz. 374, 376, 586 P.2d 219, 221 (App.1978); see alsoA.R.S. § 23–921.
¶ 14 It is well-settled that states have the power and authority “to regulate the status of employer and employee, and to enforce the public policy of the state, as it relates to work[ers]' compensation for employees engaged in interstate or foreign commerce” unless abrogated by federal law. See, e.g., Indus. Comm'n of Ariz. v. J. & J. Constr. Co., 72 Ariz. 139, 145, 231 P.2d 762, 766 (1951) (). Porteadores argues nonetheless that Arizona's authority to regulate workers' compensation relating to interstate commerce is preempted by federal law. Specifically, Porteadores asserts that (1) NAFTA and the North American Agreement on Labor Cooperation (“NAALC”) preempt workers' compensation claims that are covered by IMSS; and (2) the Foreign Commerce Clause prevents application of workers' compensation statutes to Porteadores' employees engaged in business in Arizona.
¶ 15 Following extensive negotiations among the governments of the United States, Canada, and Mexico, NAFTA was signed on December 17, 1992. Made in the USA Found. v. United States, 242 F.3d 1300, 1302–03 (11th Cir.2001). Congress passed, and the President signed, the NAFTA Implementation Act, effective January 1, 1994, which approved NAFTA and created comprehensive legislation to implement and enforce NAFTA's provisions. iD.; see also19 U.S.C.A. §§ 3301 to –3473. tHe...
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...compensation benefits from the defendant special employer if she applied for such benefits); see also Porteadores Del Noroeste S.A. De C.V. v. Indus. Comm'n, 234 Ariz. 53, 59–60, ¶ 21, 316 P.3d 1241, 1247–48 (App.2014) (recognizing that a foreign company, as a special employer under the len......