2009-102. Alaska R and C Communications LLC Appellant vs. State of Alaska Division of Workers' Compensation Appellee.

• Case Date: March 18, 2009
• Court: Alaska

Alaska Workers Compensation Decisions 2009. Workers' Compensation Appeals Commission 2009-102. Alaska R and C Communications LLC Appellant vs. State of Alaska Division of Workers' Compensation Appellee Alaska Workers' Compensation Appeals Commission Alaska R and C Communications, LLC, Appellant, vs. State of Alaska, Division of Workers' Compensation, Appellee Decision No. 102 March 18, 2009AWCAC Appeal No. 07-043 AWCB Decision No. 07-0328 AWCB Case No. 700001977Final Decision on Reconsideration Motion for Reconsideration of Alaska Workers' Compensation Appeals Commission Decision No. 088, issued September 16, 2008, on appeal from Alaska Workers' Compensation Board Decision No. 07-0328, issued October 26, 2007, by southcentral panel members Janel Wright, Chair; Janet Waldron, Member for Industry; and Mark Crutchfield, Member for Labor. Appearances: Talis J. Colberg, Attorney General, and Rachel L. Witty, Assistant Attorney General, for movant, appellee State of Alaska, Division of Workers' Compensation. Krista M. Schwarting, Griffin and Smith, for respondent, appellant Alaska R and C Communications, LLC. Commission proceedings: Appeal filed November 20, 2007. Oral argument on appeal presented June 17, 2008. Final decision on appeal issued September 16, 2008. Motion for reconsideration filed by appellee October 16, 2008. Opposition filed by appellant November 5, 2008. Order on Motion for Reconsideration issued November 10, 2008. Briefing on reconsideration completed December 9, 2008. Oral argument on reconsideration presented January 23, 2009.Commissioners: Jim Robison, Stephen T. Hagedorn,Kristin Knudsen.This decision has been edited to conform to technical standards for publication. By: Kristin Knudsen, Chair. The State of Alaska, Division of Workers' Compensation requests reconsideration of the commission's Decision No. 088.(fn1) The State argues that it may raise a new issue on reconsideration if the new issue is "created by the commission's order."(fn2) Thus, the State argues, it could not have anticipated that the commission would "impose new administrative burdens" on the Division and thus exceed its statutory authority.(fn3) The State argues that "a decision by the commission may have precedential effect on the board's determination of other cases," but that "implementing whole-scale reforms through the vehicle of an individual case decision exceeds the commission's authority." (fn4) The State argues that the commission "has gone beyond ruling on the particular circumstances of the case to impose many new requirements for all cases," and so exceeded its statutory authority and its function as a quasi-adjudicatory body.(fn5) The State argues that the board should follow the "abuse of discretion standard" in reviewing procedural decisions by the board and should "consider whether the decision can be upheld on other stated grounds" instead of remanding the case to the board.(fn6) The State argues that providing its citizens due process imposes "additional adjudicatory burdens for the board and the investigatory burdens for the Division."(fn7) Finally, the State argues that requiring notice and an opportunity to be heard before a penalty is imposed under AS 23.30.080(f) is "not applicable to penalizing employers"(fn8) because "curbing the serious economic and health consequences posed by uninsured employers" quickly and efficiently, and funding the benefits guaranty fund, is more important.(fn9) The appellant opposes and argues that the State waived arguments it now raises by not raising them below.(fn10) The appellant noted that it had asked the commission to give guidance to the board to prevent an exercise of unfettered discretion and the State did not oppose the request on grounds the commission lacked authority to do so.(fn11) The appellant also argues that the commission has the power to interpret the statutes and provide guidance in their application in the absence of regulation.(fn12) The appellant argues the commission may direct rehearing when key factual findings are missing rather than attempt to shore up a board decision on other grounds.(fn13) The appellant argues the commission correctly considered the appropriate due process concerns when an individual's property interests are affected by state action.(fn14) 1. Discussion. The State's request for reconsideration, emphasizing the burden placed on the board in penalty cases, raised the issue of which agency the State's attorney was representing.(fn15) The division was a party before the commission and the board. The division was the accusing agency, not a neutral adjudicating body. In proceedings before the commission, the adjudicating board panel is not represented as a party. Because the State did not argue before the commission that the board panels would be unable to engage in a systematic analysis of penalty factors, or should have unfettered discretion to set a penalty, the commission deems this argument waived. a. The commission may review the factors used to assess penalties as a matter of law. The State argues the commission may not assess the reasonableness, in light of the penalty statute, of the factors used by the board in fixing penalties.(fn16) The commission rejects the argument that the commission's review is strictly limited to determining if the board had substantial evidence to support the facts it relied upon to find the employer was subject to a penalty. AS 23.30.128(b) states the commission "shall exercise its independent judgment" in reviewing matters of law and procedure. The reasonableness of factors considered by the board in assessing penalties generally, when no guidance is provided by regulation or statute, is a matter of law the commission may review, because those factors are the basis of the board's application of the statute.(fn17) The process by which the accused employer was brought before the board, the hearing conducted, and evidence admitted are matters of procedure. In reviewing the board's findings of fact applying any particular factor, the commission will examine the record to determine if there is substantial evidence to support the board's findings of fact. A decision that rests on findings of fact without substantial evidence to support the findings is an abuse of discretion. But, making findings of fact without support is not the only way that discretion may be abused, as the commission's decision recognizes: The board is granted broad discretion in determining the penalty under AS 23.30.080(f). However, it is an abuse of the board's discretion to impose a penalty that (1) does not serve the purposes of the statute, (2) does not reflect consideration of appropriate factors, (3) lacks substantial evidence to support findings regarding those factors, or (4) is so excessive or minimal as to shock the conscience.(fn18) The commission's decision setting out standards for abuse of discretion merely restates familiar standards for determining that an abuse of discretion exists. Abuse of discretion has been described when a decision "is arbitrary, capricious, manifestly unreasonable, or which stems from an improper motive,"(fn19) fails to apply law or regulation,(fn20) or leaves the reviewing body with "a definite and firm conviction that a mistake has been made."(fn21) A penalty resulting from passion or prejudice is an abuse of discretion.(fn22) A penalty based on an arbitrary amount instead of appropriate penalty factors or without substantial evidence to support factual findings is an abuse of discretion. A penalty imposed to put an unpopular company out of business, instead of the purposes of the statute, is an abuse of discretion because it stems from an improper motive. A penalty so extreme that it shocks the conscience is manifestly unreasonable, and therefore an abuse of discretion. The State urges that the commission ought to uphold the board's decision on other grounds, although it does not specify what those grounds would be in this case. The commission has done so in appeals where there are adequate findings to support application of a different analysis,(fn23) or where modification may be appropriate.(fn24) However, in this case, the board's failure to allow the unrepresented employer to appear...