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Thompson v. State

Court of Workers Compensation of Montana

April 28, 2006

LEE N. THOMPSON, DARIN SHARP, and SCOTT BAILEY Petitioners
v.
STATE OF MONTANA Respondent LIBERTY NORTHWEST INSURANCE CORPORATION and MONTANA STATE FUND Intervenors.

          Submitted: December 8, 2005

         Appealed to Supreme Court 05/15/06 Reversed 08/17/07

          ORDER DENYING INTERVENOR'S MOTION FOR RECONSIDERATION

          JAMES JEREMIAH SHEA JUDGE

         Summary: Intervenor Liberty Northwest Insurance Corporation moved for reconsideration of this Court's Order Granting Motions for Summary Judgment and Order Amending Order Granting Motions for Summary Judgment on various issues.

         Held: Liberty's motion for reconsideration is denied.

         Topics:

Attorney Fees: Private Attorney General Theory. While denying motion for reconsideration, WCC confirmed that as this Court had issued a declaratory judgment as permitted by the UDJA, the Court could likewise award attorney fees as permitted by the PAG doctrine under the UDJA.
Attorney Fees: Declaratory Judgment. While denying motion for reconsideration, WCC confirmed that as this Court had issued a declaratory judgment as permitted by the UDJA, the Court could likewise award attorney fees as permitted by the PAG doctrine under the UDJA.
Attorney Fees: Declaratory Judgment. Although § 39-71-2905, MCA, states that the penalties and assessments allowed against an insurer under chapter 71 are the exclusive penalties and assessments that can be assessed by the WCC against an insurer for disputes arising under chapter 71, when the respondent in a declaratory judgment action is not an insurer, the WCC is not constrained to the penalties and assessments allowed against insurers under chapter 71.
Remedies. Although § 39-71-2905, MCA, states that the penalties and assessments allowed against an insurer under chapter 71 are the exclusive penalties and assessments that can be assessed by the WCC against an insurer for disputes arising under chapter 71, when the respondent in a declaratory judgment action is not an insurer, the WCC is not constrained to the penalties and assessments allowed against insurers under chapter 71.
Constitutions, Statutes, Regulations, and Rules: Montana Code Annotated: 39-71-2905. Although § 39-71-2905, MCA, states that the penalties and assessments allowed against an insurer under chapter 71 are the exclusive penalties and assessments that can be assessed by the WCC against an insurer for disputes arising under chapter 71, when the Respondent in a declaratory judgment action is not an insurer, the WCC is not constrained to the penalties and assessments allowed against insurers under chapter 71.
Statutes and Statutory Interpretation: Absurd Results. A reasonable interpretation of §§ 39-71-611, -612, and -2905, MCA, would not prohibit the awarding of attorney fees by the WCC in a declaratory judgment under the UDJA.
Constitutions, Statutes, Regulations, and Rules: Montana State Constitution: Article II, § 10. Intervenor's argument that if a remedy does not appear in the annotations, it must not be a permissible remedy, is not only a questionable conclusion, it is also an erroneous statement of fact. Remedies aside from "nondisclosure" are included in the annotations to Mont. Const., Art. II, § 10.
Remedies. Intervenor's argument that if a remedy does not appear in the annotations, it must not be a permissible remedy, is not only a questionable conclusion, it is also an erroneous statement of fact. Remedies aside from "nondisclosure" are included in the annotations to Mont. Const., Art. II, § 10.
Pleading: Counter-claims. Intervenor intervened in this action, but did not file a cross-petition for declaratory judgment. Having not filed a cross-petition, Intervenor cannot demand a declaration upon a motion for reconsideration.
Constitutions, Statutes, Regulations, and Rules: Montana Code Annotated: 3-1-102. Although Respondent bases its claim that the WCC is not a court of record upon the WCC's lack of mention in § 3-1-102, MCA, the clear weight of authority, including other statutes and case law, tend toward a contrary conclusion. In the construction of a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted. Section 1-2-101, MCA. In this situation, Respondent asks this Court to insert language into § 3-1-105, MCA, so that it reads ". . . and the municipal courts and no others are courts of record." Although § 3-1-102, MCA enumerates several courts as courts of record, it contains no limiting language to indicate that only those courts mentioned qualify as courts of record in this State.
Statutes and Statutory Interpretation: Inserting or Removing Items. Although Respondent bases its claim that the WCC is not a court of record upon the WCC's lack of mention in § 3-1-102, MCA, the clear weight of authority, including other statutes and case law, tend toward a contrary conclusion. In the construction of a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted. Section 1-2-101, MCA. In this situation, Respondent asks this Court to insert language into § 3-1-105, MCA, so that it reads ". . . and the municipal courts and no others are courts of record." Although § 3-1-102, MCA enumerates several courts as courts of record, it contains no limiting language to indicate that only those courts mentioned qualify as courts of record in this State.
Constitutions, Statutes, Regulations, and Rules: Montana Code Annotated: 2-4-501. While Respondent urges this Court to interpret § 2-4-501, MCA, to mean that the WCC's only authority to issue declaratory rulings is via MAPA, ARM 24.5.351 - the rule provided for under § 2-4-501, MCA - does not specifically limit the WCC to MAPA. Section 2-4-501, MCA, does not state that the WCC may not issue declaratory judgments under the auspices of the UDJA; it merely commands the WCC to promulgate a rule setting forth a procedure to dispose of those actions for declaratory judgment concerning the applicability of statutory provisions, rules, or orders of the WCC. Respondent asks the Court to read limiting language into a statute that is not there.
Constitutions, Statutes, Regulations, and Rules: Administrative Rules of Montana: 24.5.351. While Respondent urges this Court to interpret § 2-4-501, MCA, to mean that the WCC's only authority to issue declaratory rulings is via MAPA, ARM 24.5.351 - the rule provided for under § 2-4-501, MCA - does not specifically limit the WCC to MAPA. Section 2-4-501, MCA, does not state that the WCC may not issue declaratory judgments under the auspices of the UDJA; it merely commands the WCC to promulgate a rule setting forth a procedure to dispose of those actions for declaratory judgment concerning the applicability of statutory provisions, rules, or orders of the WCC. Respondent asks the Court to read limiting language into a statute that is not there.
Statutes and Statutory Interpretation: Inserting or Removing Items. While Respondent urges this Court to interpret § 2-4-501, MCA, to mean that the WCC's only authority to issue declaratory rulings is via MAPA, ARM 24.5.351 - the rule provided for under § 2-4-501, MCA - does not specifically limit the WCC to MAPA. Section 2-4-501, MCA, does not state that the WCC may not issue declaratory judgments under the auspices of the UDJA; it merely commands the WCC to promulgate a rule setting forth a procedure to dispose of those actions for declaratory judgment concerning the applicability of statutory provisions, rules, or orders of the WCC. Respondent asks the Court to read limiting language into a statute that is not there.
Declaratory Judgment: Uniform Declaratory Judgment Act. While Respondent urges this Court to interpret § 2-4-501, MCA, to mean that the WCC's only authority to issue declaratory rulings is via MAPA, ARM 24.5.351 - the rule provided for under § 2-4-501, MCA - does not specifically limit the WCC to MAPA. Section 2-4-501, MCA, does not state that the WCC may not issue declaratory judgments under the auspices of the UDJA; it merely commands the WCC to promulgate a rule setting forth a procedure to dispose of those actions for declaratory judgment concerning the applicability of statutory provisions, rules, or orders of the WCC. Respondent asks the Court to read limiting language into a statute that is not there.
Jurisdiction: Subject Matter Jurisdiction. Respondent argues that the WCC lacks jurisdiction to determine a constitutional issue because the WCC is a court of limited jurisdiction and specifically lacks jurisdiction to decide tort cases. Respondent, however, mischaracterizes Petitioners' declaratory judgment action as a "constitutional invasion of privacy tort action." No tortious conduct has been alleged. An action to declare a statute unconstitutional is a declaratory judgment action - not a tort action. Therefore, Respondent's argument that the WCC does not have jurisdiction in a tort action, while apparently true, is nonetheless irrelevant.
Jurisdiction: Workers' Compensation Court. Respondent argues that the WCC lacks jurisdiction to determine a constitutional issue because the WCC is a court of limited jurisdiction and specifically lacks jurisdiction to decide tort cases. Respondent, however, mischaracterizes Petitioners' declaratory judgment action as a "constitutional invasion of privacy tort action." No tortious conduct has been alleged. An action to declare a statute unconstitutional is a declaratory judgment action - not a tort action. Therefore, Respondent's argument that the WCC does not have jurisdiction in a tort action, while apparently true, is nonetheless irrelevant.
Constitutions, Statutes, Regulations, and Rules: Montana Code Annotated: 39-71-203. The WCC has the full power, authority, and jurisdiction to perform all things necessary in the exercise of any power, authority, or jurisdiction conferred upon it under Title 39, chapter 71. The constitutionality of a statute found within Title 39, chapter 71, must be part of the power, authority, and jurisdiction granted to the WCC under this statute.
Jurisdiction: Workers' Compensation Court. The WCC has the full power, authority, and jurisdiction to perform all things necessary in the exercise of any power, authority, or jurisdiction conferred upon it under Title 39, chapter 71. The constitutionality of a statute found within Title 39, chapter 71, must be part of the power, authority, and jurisdiction granted to the WCC under this statute.

         ¶1 Intervenor Liberty Northwest Insurance Corporation (Liberty or Intervenor) moves the Court to reconsider and amend its Order Granting Motions for Summary Judgment ("Order") and Order Amending Order Granting Motions for Summary Judgment ("Amended Order"), filed October 18, 2005, and October 19, 2005, respectively.

         ¶2 Intervenor raises several arguments which the Court restates as follows:

          ¶2a In holding §§ 39-71-604(3) and 50-16-527(5), MCA (2003), [1]unconstitutional, the Workers' Compensation Court (WCC) also held §§ 39-71-604(2) and 50-16-527(4), MCA (2003), [2] unconstitutional.

         ¶2b By holding § 39-71-604(3), MCA (2003), unconstitutional, the WCC has apparently caused insurers to revert to the Kline[3] procedure for communicating with health care providers for the purpose of obtaining health care information about claimants.

         ¶2c If § 39-71-604(2), MCA (2003), has been ruled unconstitutional, the problems created are myriad.

         ¶2d The WCC does not have jurisdiction to award Private Attorney General (PAG) attorney fees under the Uniform Declaratory Judgment Act (UDJA), because the WCC is statutorily constrained to awarding attorney fees only as described in §§ 39-71-611, -612, MCA.

         ¶2e Petitioners have failed to satisfy the first prong of the PAG, namely "the strength or societal importance of the public policy vindicated by the legislation."[4]

         ¶2f The only remedy for a violation of Mont. Const., Art. II, § 10, is nondisclosure, and thus the WCC's remedy of declaring § 39-71-604(3), MCA (2003), unconstitutional - in turn forcing insurers to follow a procedure in order to obtain medical information - is not a permissible remedy because it still allows disclosure of the information.

         ¶2g By holding that § 39-71-604(3), MCA (2003), violates the due process rights of claimants, the WCC has violated the equal protection rights of insurers by not also holding that ex parte communications between claimants, their attorneys, and their health care providers violate the due process rights of insurers.

          ¶3 Respondent supports the arguments of Intervenor, and adds arguments which this Court restates as follows:

         ¶3a The WCC does not have subject matter jurisdiction to issue declaratory judgments under the UDJA.

         ¶3b The WCC has not been legislatively granted the authority to declare statutes unconstitutional, and therefore does not have subject matter jurisdiction to do so.

         ¶4 Petitioners respond to the arguments raised by Intervenor and Respondent, summarized as follows:

         ¶4a The WCC has the authority to issue a declaratory judgment concerning the constitutionality of § 39-71-604(3), MCA (2003), pursuant to the power vested in the WCC by § 39-71-203, MCA, and supporting case law.

         ¶4b The WCC is a "court of record," as demonstrated by § 2-4-614, MCA, the standard of review used by the Montana Supreme Court when it hears cases from the WCC on appeal, and the fact that appeals from the WCC go to the Montana Supreme Court and not to a district court.

         ¶4c Montana Supreme Court decisions have expressly rejected the narrow construction of the WCC's jurisdiction that is argued by Respondent.

         ¶4d Respondent and Intervenor cite no authority for their argument that only district courts may declare statutes unconstitutional.

         ¶4e Case law supports the proposition that the exclusive jurisdiction of the WCC in matters relating to workers' compensation issues encompass constitutional and declaratory judgment issues.

         ¶4f Intervenor's argument that the WCC effectively has held § 39-71-604(2), MCA (2003), to be unconstitutional is incorrect, and Petitioners concede that § 39-71-604(2), MCA (2003), is not unconstitutional.

         ¶4g Intervenor's argument that insurance companies cannot obtain due process without § 39-71-604(3), MCA (2003), is incorrect, because there were no due process problems in the 75 years prior to the enactment of this statute, and insurance companies obtain due process by having the ability to withhold payment of claims prior to adjudication by the WCC, using the Kline[5] process for obtaining information from a claimant's treating physician, or by obtaining an independent medical evaluation.

         ¶4h Neither Intervenor nor Respondent set forth any arguments in the motion for reconsideration or Respondent's response which argue that the WCC made an error of law in holding § 39-71-604(3), MCA (2003), unconstitutional.

         ¶4i Section 39-71-2905(1), MCA, applies only to a dispute concerning benefits and thus does not apply to limit Petitioners receiving attorney fees under the PAG doctrine.

         ¶4j Section 39-71-2905(1), MCA, does not prohibit an award of fees against the State because the State concedes in its brief that it is not an "insurer" within the meaning of the statute.

         ¶4k The limitation of attorney fees, pursuant to § 39-71-611, MCA, does not apply to this case because that statute only applies to cases involving denial of claims or termination of benefits later found compensable.

         ¶4l The WCC is a "court of record" and as a court of record within its respective jurisdiction, it may award attorney fees under the UDJA as provided for in § 27-8-313, MCA.

         ¶4m Petitioners met the requirements of the three-part test to receive attorney fees via the PAG doctrine.

         ¶5 This Order will address each argument in turn.

         Intervenor's Argument I.

         In holding § 39-71-604(3), MCA (2003), unconstitutional, the WCC also held § 39-71-604(2), MCA (2003), unconstitutional.

         ¶6 Intervenor claims that, while the Order expressly holds § 39-71-604(3), MCA (2003), to be unconstitutional, the WCC's discussion[6] of the broad definition of "relevant health care information" in § 39-71-604(2), MCA (2003), has caused Intervenor to reach the conclusion that the WCC has held § 39-71-604(2), MCA (2003), unconstitutional as well. Intervenor further asserts that by referring to "statutes" instead of "sub-parts, "[7] the WCC indicates an intention to hold § 39-71-604(2), MCA (2003), unconstitutional. Intervenor also claims that the phrase, "the definition of relevance in the subject statutes is so broad and sweeping as to conceivably allow inquiry into areas wholly irrelevant, "[8] also demonstrates that the WCC has held § 39-71-604(2), MCA (2003), unconstitutional. Intervenor then devotes the majority of its brief to discussing dire scenarios which could occur and chaos that may ensue if § 39-71-604(2), MCA (2003), has been held unconstitutional.

         ¶7 In their response brief, Petitioners concede that § 39-71-604(2), MCA (2003), is not unconstitutional, and argue that Intervenor's assertion that the Order declares § 39-71-604(2), MCA (2003), unconstitutional is incorrect.

         ¶8 Even a cursory review of the Order reveals that this Court did not determine § 39-71-604(2), MCA (2003), to be unconstitutional. The language which Intervenor finds so vexing in ¶ 9 of the Order was a response by the Court to an argument raised by Respondent and Intervenor that § 39-71-604(3), MCA (2003), passes constitutional muster because it only allows the insurer to discuss "relevant" health care information. The WCC pointed out that because the definition of "relevant," found elsewhere in the statute, ...


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