Jesus Gutierrez v. ica/masterson

• Court: Arizona Supreme Court
• Decided: April 21, 2011
• Status: Published

Opinion

SUPREME COURT OF ARIZONA En Banc

JESUS GUTIERREZ, ) Arizona Supreme Court ) No. CV-10-0285-PR Petitioner, ) ) Court of Appeals v. ) Division One ) No. 1 CA-IC 09-0040 THE INDUSTRIAL COMMISSION OF ) ARIZONA, ) ICA Claim ) No. 20071-150489 Respondent, ) ) Carrier Claim MASTERSON & CLARK FRAMING, INC. ) No. 0712694 ) Respondent Employer, ) ) SCF ARIZONA, ) O P I N I O N ) Respondent Carrier. ) _________________________________ )

Special Action from the Industrial Commission of Arizona The Honorable Stephen W. Pogson, Administrative Law Judge

AFFIRMED ________________________________________________________________ Opinion of the Court of Appeals, Division One 226 Ariz. 1, 243 P.3d 604 (App. 2010)

AFFIRMED ________________________________________________________________ CECIL A. EDWARDS, JR., ATTORNEY AT LAW Phoenix By Cecil A. Edwards, Jr. Attorneys for Jesus Gutierrez

INDUSTRIAL COMMISSION OF ARIZONA Phoenix By Andrew F. Wade, Chief Counsel Attorneys for Industrial Commission of Arizona

STATE COMPENSATION FUND Phoenix By James B. Stabler, Chief Counsel Mark A. Kendall Deborah E. Mittelman Attorneys for Masterson & Clark Framing, Inc. and SCF Arizona TOBY ZIMBALIST ATTORNEY AT LAW Phoenix By Toby Zimbalist Attorneys for Amicus Curiae Arizona Association of Lawyers for Injured Workers ________________________________________________________________

B E R C H, Chief Justice

¶1 An Arizona administrative rule provides that a

physician should rate an injured worker’s impairment using

standards set forth in the “most recent edition” of the American

Medical Association Guides to the Evaluation of Permanent

Impairment (AMA Guides). Ariz. Admin. Code (A.A.C.) R20-5-

113(B). We must determine whether “most recent edition” refers

to the edition that was most recent when the Rule was

promulgated (the Fifth Edition) or the latest edition existing

when the claimant’s impairment was rated (in this case, the

Sixth Edition). For the reasons set forth below, we hold that

A.A.C. R20-5-113(B) refers to the edition most recently

published before the claimant’s impairment is rated and that

this reference does not constitute an improper delegation of

legislative authority.

I. FACTUAL AND PROCEDURAL BACKGROUND

¶2 Jesus Gutierrez injured his back in 2007 while working

for Masterson & Clark Framing. His claim for workers’

compensation benefits was accepted and he received medical

treatment. The treating physician later released Gutierrez to

return to work with physical restrictions. Concluding that

- 2 - Gutierrez was not permanently impaired, the insurance carrier

closed the claim. Gutierrez requested a hearing to challenge

the “no impairment” determination.

¶3 At the Industrial Commission of Arizona (ICA) hearings,

the Administrative Law Judge (ALJ) heard testimony from two

physicians: Gutierrez’s treating orthopedic surgeon and a

doctor presented by the carrier. Relying on the Fifth Edition

of the AMA Guides, Gutierrez’s expert testified that Gutierrez

suffered from a resolved lumbar radiculopathy. He rated

Gutierrez’s injury as a five percent permanent impairment.

Relying on the Sixth Edition, which provides no permanent

impairment rating for a resolved radiculopathy, the carrier’s

expert opined that Gutierrez had no ratable permanent

impairment.

¶4 Based on the latter testimony, the ALJ found that the

insurance carrier did not err in closing Gutierrez’s claim. On

special action review, the court of appeals affirmed. Gutierrez

v. Indus. Comm’n, 226 Ariz. 1, 243 P.3d 604 (App. 2010). We

granted Gutierrez’s petition for review because the

interpretation of A.A.C. R20-5-113(B) is a recurring issue of

statewide importance. See Ariz. Rev. Stat. (A.R.S.) § 12-120.24

(2003) (supreme court review); see also Ariz. Const. art. 6, §

5, cl. 3 (conferring jurisdiction).

- 3 - II. DISCUSSION

A. Interpreting “most recent edition”

¶5 The administrative rule at issue, A.A.C. R20-5-113(B),

provides as follows:

When a physician discharges a claimant from treatment, the physician [s]hall determine whether the claimant has sustained any impairment of function resulting from the industrial injury. The physician should rate the percentage of impairment using the standards for the evaluation of permanent impairment as published by the most recent edition of the American Medical Association in Guides to the Evaluation of Permanent Impairment, if applicable.

We interpret the provisions de novo, “apply[ing] the same rules

in construing both statutes and rules.” Smith v. Ariz. Citizens

Clean Elections Comm’n, 212 Ariz. 407, 412 ¶ 18, 132 P.3d 1187,

1192 (2006).

¶6 The question presented is which edition of the AMA

Guides the Rule means by its reference to the “most recent

edition.” The term “most recent” is commonly understood as

giving perpetual duration to a statute or rule that relies on

changing facts and new developments or would otherwise require

frequent updating. Cf. City of Phoenix v. Superior Court (Ariz.

State Hosp.), 139 Ariz. 175, 178, 677 P.2d 1283, 1286 (1984)

(preferring interpretation that gives a statute “a fair and

sensible meaning”). This suggests that an evolving standard was

intended. Indeed, if the ICA had meant “most recent edition” to

apply only to the Fifth Edition, it likely would simply have

- 4 - identified that edition by number. We therefore read A.A.C.

R20-5-113(B) as referring to standards in the edition of the AMA

Guides most recently published before the claimant’s impairment

is rated.

¶7 This interpretation comports with the use of the phrase

“most recent” in other rules and statutes. Several statutes and

rules require submission or retention of “most recent” documents

such as financial statements or receipts. See, e.g., A.R.S.

§ 3-609(A) (2002) (requiring submission of financial statements

for the “most recent complete fiscal year”); A.A.C. R20-5-

203(A)(3) (requiring submission of the “most recent certified

annual financial statement”); A.A.C. R20-2-707(E) (requiring

retention of receipts for the “three most recent deliveries of

. . . motor fuel”). It would frustrate the purpose of those

provisions to require submission or retention of outdated

documents (those existing when the rule or statute became

effective) despite the passage of time and the existence of more

current documents. The operation of several other statutes

depends on data from the “most recent” census. See, e.g.,

A.R.S. § 1-215(31) (2002 & Supp. 2010) (defining “population”

based on the “most recent United States decennial census”);

A.R.S. §§ 5-110(I) (2002); 9-132 (2008); 11-254.02(A) (2001);

12-284.03 (2003 & Supp. 2010); 13-3826 (2010); 42-16153(A) (2006

& Supp. 2010); 48-3620(E) (2004 & Supp. 2010). The legislature

- 5 - undoubtedly did not intend to require reliance on stale census

data despite the completion of new decennial censuses.

Provisions that use the term “most recent” therefore anticipate

and incorporate changes and developments, even those that occur

after the effective date of a statute or rule.

¶8 Historical practice of the ICA also suggests that

“most recent edition” means the newest version extant when a

claimant’s impairment is rated. The prior version of the Rule,

much like the current one, recommended that impairment be rated

according to the “standards for the evaluation of permanent

impairment as published by the American Medical Association in

Guides to the Evaluation of Permanent Impairment, if

applicable.” 7 Ariz. Admin. Reg. 25 (Jan. 5, 2001). Although

the earlier version of the Rule did not include the words “most

recent edition,” parties and courts regularly referred to each

new edition as it became available. See, e.g., Simpson v.

Indus. Comm’n, 189 Ariz. 340, 341, 942 P.2d 1172, 1173 (App.

1997) (citing the Fourth Edition of the AMA Guides, adopted in

1993, even though the Second Edition was in effect when the

then-current version of the Rule was promulgated in 1987).

Thus, even without the addition of the words “most recent

edition,” courts and practitioners were interpreting the Rule to

recommend use of the current edition as though the Rule

contained that language. It appears that the amending language

- 6 - simply codified this accepted practice.

¶9 This interpretation also leads to the more sensible

result. Reference to the current version of the AMA Guides

allows the doctor to consider the latest medical developments

when determining impairment. Gutierrez’s reading of “most

recent edition,” in contrast, would require the physician to

look up A.A.C. R20-5-113(B), determine its effective date, find

which version of the AMA Guides was the “most recent edition”

when the Rule became effective, and possibly rely on an

outdated, superseded version of the Guides when rating

impairment. Reading the Rule as referring to the newest edition

of the Guides precludes this impractical result and allows

consideration of medical advancements. See State v. Estrada,

201 Ariz. 247, 251 ¶ 17, 34 P.3d 356, 360 (2001) (finding a

result absurd “if it is so . . . inconvenient that it cannot be

supposed to have been within the intention of persons with

ordinary intelligence and discretion”) (internal citation

omitted).

B. Delegation of legislative power

¶10 Gutierrez argues that if A.A.C. R20-5-113(B) refers to

the version of the AMA Guides “most recent” when the claimant’s

impairment is rated, the Rule unconstitutionally delegates

authority to the AMA to set the standards physicians must use to

rate impairment. He contends that although the Arizona

- 7 - Legislature delegated to the ICA the power to adopt rules

regarding the presentation of compensation claims, see A.R.S.

§ 23-921(B) (1995), it could not delegate rulemaking authority

to the AMA or empower the ICA to do so.

¶11 An improper delegation of legislative authority may

occur when a statute (and, by implication, a rule) incorporates

later-developed standards not promulgated by the Legislature or

an Arizona agency. See State v. Williams, 119 Ariz. 595, 598-

99, 583 P.2d 251, 254-55 (1978) (observing that “[s]ince the

Legislature exercises absolutely no control over Congress or its

agencies,” “an incorporation by state statute of rules,

regulations, and statutes of federal bodies to be promulgated

subsequent to the enactment of the state statute constitutes an

unlawful delegation of legislative power”). If, however, a rule

does not make later-developed standards mandatory, but merely

recommends their use, then such “permissive” incorporation is

not improper. See Bd. of Trs. of Emps. Ret. Sys. v. Mayor of

Baltimore, 562 A.2d 720, 732 (Md. 1989) (upholding statute that

incorporated an advisory determination because the agency was

free to disregard it); Baughn v. Gorrell & Riley, 224 S.W.2d

436, 439 (Ky. 1949) (upholding statute in part because the

outside standards “guide[d] the public authorities,” but did not

bind them); cf. Indus. Comm’n v. C & D Pipeline, Inc., 125 Ariz.

64, 67-68, 607 P.2d 383, 386-87 (App. 1979) (holding statute

- 8 - unconstitutional because “[i]t permits no discretion whatsoever”

in “requiring public authorities to accept the terms of

employment fixed by [labor unions]”).

¶12 The text of A.A.C. R20-5-113(B) indicates that the use

of the AMA Guides in rating impairment is discretionary. The

Rule provides that, in determining a claimant’s impairment, the

physician “should” use the AMA Guides “if applicable.” Use of

these permissive qualifiers, particularly following use of the

mandatory term “shall” in the preceding sentence, reveals that

the physician is not required to apply the AMA Guides. See City

of Mesa v. Salt River Project Agric. Improvement & Power Dist.,

92 Ariz. 91, 102, 373 P.2d 722, 730 (1962) (refusing to read

dissimilar terms to have the same meaning).

¶13 This Court has previously recognized that the use of

the AMA Guides is discretionary and that impairment may be

established by evidence other than the AMA Guides. 1 In W.A.

Krueger Co. v. Industrial Commission of Arizona, we observed

that “[t]he AMA Guides are not to be blindly applied regardless

of a claimant’s actual physical condition. Rather, their

purpose is to serve as a guideline in rating an impairment and

[they] are valid when the stated percentage ‘truly reflects the

1 These cases interpret the previous version of A.A.C. R20-5- 113(B) (formerly A.A.C. R20-5-113(D)), which was amended to the current form in 2001. Nothing in the 2001 amendment changed whether use of the AMA Guides is mandatory or discretionary. - 9 - claimant’s loss.’” 150 Ariz. 66, 68, 722 P.2d 234, 236 (1986)

(quoting Gomez v. Indus. Comm’n, 148 Ariz. 565, 569, 715 P.2d

22, 26 (1986)); see also Slover Masonry, Inc. v. Indus. Comm’n,

158 Ariz. 131, 136, 761 P.2d 1035, 1040 (1988) (“[W]hen other

evidence requires a different result, a medical expert cannot

bind the ALJ to unreasoning adherence to the AMA Guides.”);

Cavco Indus. v. Indus. Comm’n, 129 Ariz. 429, 432, 631 P.2d

1087, 1090 (1981) (“The AMA Guides apply only where they cover

the specific impairment and where the percentage of impairment

contained therein truly reflects the claimant’s loss.”); Smith

v. Indus. Comm’n, 113 Ariz. 304, 307, 552 P.2d 1198, 1201 (1976)

(observing that “[s]ubjective complaints of pain” are not within

the scope of the AMA Guides, but are still compensable); see

also Madrid v. St. Joseph Hosp., 928 P.2d 250, 259 (N.M. 1996)

(finding no improper delegation of legislative authority in part

because of “the discretionary component of using the AMA

Guide”). Other sources have come to the same conclusion. See

R. Todd Lundmark, Disability Benefits, in Arizona Workers’

Compensation Handbook § 7.2.1.2 (Ray J. Davis et al. eds., 1992)

(noting that “[u]se of the Guides is not required . . . . When

the Guides are inapplicable[,] other appropriate rating criteria

— including a physician’s own clinical judgment and experience —

may be used”).

¶14 Because physicians are not bound to apply the AMA

- 10 - Guides when rating impairment, the reference to later-developed

editions of the AMA Guides in A.A.C. R20-5-113(B) does not

constitute an improper delegation of legislative power.

III. CONCLUSION

¶15 For the reasons set forth above, we affirm ¶¶ 1-15 of

the opinion of the court of appeals 2 and affirm the award and

decision of the ICA.

__________________________________ Rebecca White Berch, Chief Justice

CONCURRING:

_____________________________________ Andrew D. Hurwitz, Vice Chief Justice

_____________________________________ W. Scott Bales, Justice

_____________________________________ A. John Pelander, Justice

_____________________________________ Robert M. Brutinel, Justice

2 Although we affirm the opinion of the court of appeals, we do not adopt the suggestion in ¶ 16 and footnote five that the American Medical Association is, for separation of powers purposes, analogous to a state administrative agency. Further, the Court declined to review the court of appeals’ ruling that use of the Sixth Edition does not violate article 18, section 8, of the Arizona Constitution, and therefore our opinion reflects neither approval nor disapproval of ¶¶ 17-20 of the opinion. - 11 -