Sloan v. N.D. Workforce Safety & Ins.

• Decision Date: 19 September 2011
• Docket Number: No. 20100385.,20100385.
• Court: North Dakota Supreme Court
• Parties: Claud SLOAN, Claimant and Appellant,v.NORTH DAKOTA WORKFORCE SAFETY & INSURANCE, AppelleeandANG Coal Gasification Associates, Respondent.

804 N.W.2d 184

2011 ND 194

Claud SLOAN, Claimant and Appellant,

v.NORTH DAKOTA WORKFORCE SAFETY & INSURANCE, AppelleeandANG Coal Gasification Associates, Respondent.

No. 20100385.

Supreme Court of North Dakota.

Sept. 19, 2011.

Mark G. Schneider, Fargo, N.D., for claimant and appellant.Jacqueline Sue Anderson, Special Assistant Attorney General, Fargo, N.D. for appellee.MARING, Justice.

[¶ 1] Claud Sloan appeals from a district court judgment affirming a Workforce Safety & Insurance (“WSI”) order awarding him additional permanent impairment benefits. We affirm, concluding WSI's promulgation of administrative rules for assessing pain impairment does not conflict with its statutory authority and was not arbitrary, capricious, or unreasonable.

I

[¶ 2] In December 1985, Sloan sustained a compensable work-related injury while employed at a coal gasification plant in Beulah, North Dakota. WSI awarded Sloan permanent impairment benefits for his injury and has issued several permanent partial impairment orders since his original injury. Effective April 1, 2009, WSI promulgated N.D. Admin. Code § 92–01–02–25(4) to address pain impairment ratings. Based on the newly adopted rule, WSI reviewed Sloan's pain rating and determined he had sustained an eight percent impairment for pain which, when combined with his prior impairment ratings, totaled a whole body impairment rating of 38 percent. On June 11, 2009, WSI issued an order awarding Sloan additional permanent impairment benefits, in the amount of $8,464.50, based on his combined whole body impairment of 38 percent for his cervical spine, depression, dysphagia, and chronic pain. Sloan requested a rehearing.

[¶ 3] At a November 2009, hearing before an administrative law judge (“ALJ”), a staff attorney for WSI appeared as the only witness and testified regarding the WSI's promulgation of N.D. Admin.Code § 92–01–02–25. The ALJ subsequently issued an order affirming WSI's June 2009 order awarding Sloan additional permanent impairment benefits. Sloan appealed to the district court, which affirmed the order.

II

[¶ 4] Under the Administrative Agencies Practice Act, courts exercise limited review in appeals from decisions by an administrative agency. Johnson v. North Dakota Workforce Safety & Ins., 2010 ND 198, ¶ 10, 789 N.W.2d 565. On appeal from the district court, we review the administrative agency's decision in the same manner that the district court reviewed the agency's decision. N.D.C.C. § 28–32–49. Under N.D.C.C. § 28–32–46, a district court must affirm an administrative agency order unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

[¶ 5] In reviewing the agency's findings of fact, we do not make independent findings or substitute our judgment for the agency's judgment. Workforce Safety & Ins. v. Auck, 2010 ND 126, ¶ 9, 785 N.W.2d 186. Rather, we decide whether a reasoning mind reasonably could have determined the findings were proven by the weight of the evidence from the entire record. Auck, at ¶ 9. We give similar deference to the factual findings when reviewing an appeal from a final decision by an independent ALJ. Id. We, however, do not give deference to the ALJ's legal conclusions. Id. Questions of law, including statutory interpretation, are fully reviewable on appeal. Id.

III

[¶ 6] Sloan argues N.D. Admin. Code § 92–01–02–25(4), which purports to “cap” pain impairments at a maximum of nine percent, conflicts with the statute it implements, N.D.C.C. § 65–05–12.2(10).

A

[¶ 7] Generally, under N.D.C.C. § 65–02–08, the legislature has authorized WSI to promulgate and enforce administrative rules necessary to carry out N.D.C.C. tit. 65. Section 65–05–12.2, N.D.C.C., specifically requires WSI to promulgate rules to govern permanent impairment evaluations, and at the time relevant to this case, provided in part:

6. A doctor evaluating permanent impairment shall include a clinical report in sufficient detail to support the percentage ratings assigned. The organization shall adopt administrative rules governing the evaluation of permanent impairment. These rules must incorporate principles and practices of the fifth edition of the American medical association's “Guides to the Evaluation of Permanent Impairment” modified to be consistent with North Dakota law, to resolve issues of practice and interpretation, and to address areas not sufficiently covered by the guides. Subject to rules adopted under this subsection, impairments must be evaluated under the fifth edition of the guides.

....

8. An injured employee is not entitled to a permanent impairment award due solely to pain.

....

10. If the injury causes permanent impairment, the award must be determined based on the percentage of whole body impairment in accordance with the following schedule....

(Emphasis added.) Under that statute, WSI must adopt rules that incorporate the “principles and practices” of the fifth edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment (“AMA Guides”), but which are “modified to be consistent with North Dakota law, to resolve issues of practice and interpretation, and to address areas not sufficiently covered by the guides.”

[¶ 8] At the time of order in this case, N.D. Admin. Code § 92–01–02–25(4), which WSI adopted to implement N.D.C.C. § 65–05–12.2, assigned specific pain impairment percentages to table 18–3 of the AMA Guides, stating in part:

g. To determine whether the pain is ratable or unratable, the evaluating physician must answer the three questions in this section. If the answer to all three of the following questions is yes, the evaluating physician should consider the pain ratable. If any question is answered no, the pain is unratable.

(1) Do the individual's symptoms or physical findings, or both, match any known medical condition?

(2) Is the individual's presentation typical of the diagnosed condition?

(3) Is the diagnosed condition one that is widely accepted by physicians as having a well-defined pathophysiologic basis?

h. If the pain is unratable, no percentage may be assigned to the impairment.

i. If the pain is ratable, the evaluating physician shall classify the individual into one of the categories in table 18–3 [of the AMA Guides] and, using the combined values chart of the fifth edition, calculate a combined overall impairment rating.

j. The impairment percentages assigned to table 18–3 are:

(1) Class 1, mild: one to three percent.

(2) Class 2, moderate: four to five percent.

(3) Class 3, moderately severe: six to seven percent.

(4) Class 4, severe: eight to nine percent.

(Emphasis added.) Table 18–3 in the fifth edition of the AMA Guides does not provide specific impairment percentages for each of the categories of ratable pain. Section 92–01–02–25(4)(j), N.D. Admin. Code, therefore, purports to address an area not sufficiently covered in the AMA Guides by assigning specific impairment percentages to the four categories of ratable pain and limiting the maximum percentage for “severe” pain to nine percent.

[¶ 9] Sloan does not contest that his pain impairment was properly found to be “ratable” or that his pain was properly classified as “severe.” Rather, he challenges WSI's rule to the extent it assigns a maximum percentage of nine percent to the “severe” category. He claims that allocation is in “conflict” with N.D.C.C. § 65–05–12.2(10).

B

[¶ 10] Administrative rules that have been properly promulgated have the force and effect of law. N.D.C.C. § 28–32–06. However, if an administrative regulation exceeds or supersedes an agency's statutory authority or conflicts with the statute it implements, we have said that such a regulation is void or invalid. North Dakota Dep't of Human Servs. v. Ryan, 2003 ND 196, ¶ 10, 672 N.W.2d 649; Little v. Tracy, 497 N.W.2d 700, 704 (N.D.1993); Moore v. North Dakota Workmen's Comp. Bur., 374 N.W.2d 71, 74 (N.D.1985); Steele v. North Dakota Workmen's Comp. Bur., 273 N.W.2d 692, 701 (N.D.1978); see N.D.C.C. § 28–32–47. Whether an administrative agency has acted within its statutory authority presents a question of law, which is fully reviewable on appeal. See Shiek v. North Dakota Workers Comp. Bur., 2002 ND 85, ¶ 10, 643 N.W.2d 721; see also In re Hubbard, 778 N.W.2d 313, 318 (Minn.2010).

[¶ 11] We have also said that the Administrative Agencies Practice Act limits a court's review of an agency's rulemaking proceeding and that “[w]hen an administrative agency adopts rules under the Act, it is acting in a quasi-legislative, not a quasi-judicial, capacity.” See Little v. Traynor, 1997 ND 128, ¶¶ 11, 12, 565 N.W.2d 766. Under N.D.C.C. § 28–32–47, in an appeal from an agency's rulemaking action, a court must affirm the rulemaking unless:

1. The provisions of [N.D.C.C. ch. 28–32] have not been substantially complied with in the agency's rulemaking actions.

2. A rule published as a result of the rulemaking action appealed is unconstitutional on the face of the language adopted.

3. A rule published as a result of the rulemaking action appealed is beyond the scope of the agency's authority to adopt.

4. A rule published as a result of the rulemaking action appealed is on the face of the language adopted an...