Elshaug v. North Dakota Workers Compensation Bureau

2000 ND 42, 607 N.W.2d 568, 2000 N.D. LEXIS 43, 2000 WL 291155
CourtNorth Dakota Supreme Court
DecidedMarch 21, 2000
Docket990286
StatusPublished
Cited by7 cases

This text of 2000 ND 42 (Elshaug v. North Dakota Workers Compensation Bureau) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elshaug v. North Dakota Workers Compensation Bureau, 2000 ND 42, 607 N.W.2d 568, 2000 N.D. LEXIS 43, 2000 WL 291155 (N.D. 2000).

Opinions

MARING, Justice.

[¶ 1] The Workers Compensation Bureau appealed from a judgment reversing the Bureau’s orders denying future benefits to Rosella Elshaug and denying reconsideration of its decision. We conclude there were improper ex parte contacts between the Bureau’s outside counsel and the Bureau under N.D.C.C. § 28-32-12.1. We, therefore, affirm that part of the judgment reversing the Bureau’s order denying reconsideration. We, however, reverse that part of the judgment directing the Bureau to award benefits and we remand with directions the Bureau grant Elshaug’s petition for reconsideration and an eviden-tiary rehearing.

I

[¶ 2] Rosella Elshaug was employed in the Ashley Medical Center laundry facility for fourteen and one-half years until she resigned, effective November 22, 1997. Elshaug experienced severe physical reactions to chemical exposures while at work in the laundry on May 12, 1994, and again on November 4, 1996. She filed claims with the Bureau for the incidents. The Bureau accepted liability on both claims and paid medical benefits for her injuries.

[¶ 3] On June 25, 1997, the Bureau issued an order terminating future benefits for the 1996 injury, concluding Elshaug no longer was suffering consequences from that incident. Elshaug, claiming she had not fully recovered from the chemical exposures at work and, as a result, currently suffers flu-like symptoms and severe allergic reactions to many substances, filed a reapplication for continued benefits. The Bureau issued an order on January 28, 1998, denying the reapplication for benefits. Elshaug then filed a request for reconsideration and for a formal hearing.

[¶ 4] A hearing was held on June 11, 1998. Dr. Pedro Mendoza, who is a spe[570]*570cialist in pulmonary disease and occupational medicine, had examined Elshaug at the Bureau’s request. He testified El-shaug was no longer suffering consequences from the chemical exposures at work. He stated that, in his view, El-shaug’s current allergies and severe flu-like symptoms are not caused by nor related to the prior work incidents. Contrary views were expressed by Dr. Jacqueline Krohn, and Dr. David L. Morris, both of whom examined and treated Elshaug for multiple chemical sensitivities. These doctors concluded that Elshaug’s present allergic reactions to many substances and flu-like symptoms are caused by the 1994 and 1996 chemical exposures at work.

[¶ 5] On August 5, 1998, the administrative law judge (ALJ) issued recommended findings of fact, conclusions of law, and order, concluding Elshaug’s current medical conditions are not causally related to the prior work incidents and recommending the Bureau, terminate Elshaug’s benefits. On August 21, 1998, the Bureau’s Director pf Claims and Rehabilitation, Jeff R. Bitz, adopted the findings, conclusions, and recommendation of the ALJ and entered an order denying Elshaug future benefits. On September 16, 1998, Elshaug petitioned for reconsideration. In support of the petition, she filed additional medical reports by Dr. Krohn and Dr. Morris. On October 16, 1998, the Bureau entered an order denying Elshaug’s petition for reconsideration. Elshaug appealed to the district court, which reversed both of the Bureau’s orders and directed the Bureau to provide Elshaug the benefits to which she is entitled. The Bureau appealed.

II

[¶ 6] The dispositive issue on this appeal involves improper ex parte communications between the Bureau and its outside counsel. After the ALJ had issued recommended findings and conclusions in this case, but before the Bureau had issued an order adopting or rejecting those findings and conclusions, the Bureau’s outside counsel, Leo Wilking, sent a letter to the Bureau’s in-house counsel, Julie Leer, stating in part:

I believe that ALJ Wahl’s reasoning is sound and that the Bureau should adopt the recommended findings, conclusions and order as submitted.
This is a significant victory for the Bureau, as an adverse decision would have resulted in the payment of significant disability benefits (claimant has not worked since November 22, 1997) and a very difficult vocational rehabilitation challenge to find employment for this former laundry worker in Ashley, North Dakota.

The Bureau subsequently entered its order of August 21, 1998, adopting the ALJ’s recommended findings, conclusion and order.

[¶ 7] When Elshaug petitioned the Bureau for reconsideration of its order, Attorney Leer contacted Attorney Wilking and they discussed the petition. They agreed the medical opinions by Dr. Krohn and Dr. Morris attached to the petition for reconsideration “did not differ to a significant degree from the written medical reports which were submitted” by them at the June 11,1998 hearing. Attorney Wilk-ing then drafted an “Order Denying Petition for Reconsideration” which was subsequently signed by Bitz.

[¶ 8] When the ex parte communications between the Bureau’s outside and in-house attorneys occurred, N.D.C.C. § 28-32-12.1(3) provided:

Unless required for the disposition of ex parte matters specifically authorized by statute, no party to an adjudicative proceeding, no person who has a direct or indirect interest in the outcome of the proceeding, no person allowed to participate in the proceeding, and no person who presided at a previous stage in the proceeding may communicate directly or indirectly in connection with any issue in that proceeding, while the proceeding is pending, with any agency head or hear[571]*571ing officer in the proceeding without notice and opportunity for all parties to participate in the communication.1

In Scott v. North Dakota Workers Compensation Bureau, 1998 ND 221, ¶ 10, 587 N.W.2d 158, we explained the intent of this statute:

The clear intent of the statute is to prohibit ex parte contacts between the decision maker and persons who participated in the hearing or otherwise have an interest in the case.

Quoting from the Federal Court of Claims in Camero v. United States, 179 Ct.Cl. 520, 375 F.2d 777, 780-81 (1967) (citations omitted), we emphasized there are strong policy reasons for prohibiting ex parte communications between the attorney who represented the agency at an adversarial hearing and the agency decision maker:

[O]ne of the fundamental premises inherent in the concept of an adversary hearing, particularly if it is of the evi-dentiary type, is that neither adversary be permitted to engage in an ex parte communication concerning the merits of the case with those responsible for the decision.... It is difficult to imagine a more serious incursion on fairness than to permit the representative of one of the parties to privately communicate his recommendations to the decision makers. To allow such activity would be to render the hearing virtually meaningless.

Scott at ¶ 12.

[¶ 9] The ex parte communications in this case are no less egregious than the ex parte communication in Scott. The first ex parte communication between the Bureau’s lawyers occurred after the ALJ had issued recommended findings and conclusions but before the Bureau had made a decision whether to adopt or reject those recommendations. The Bureau’s outside counsel urged the Bureau to accept the recommendation of the ALJ to deny the claim.

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Elshaug v. North Dakota Workers Compensation Bureau
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Bluebook (online)
2000 ND 42, 607 N.W.2d 568, 2000 N.D. LEXIS 43, 2000 WL 291155, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elshaug-v-north-dakota-workers-compensation-bureau-nd-2000.