Maine State Chamber of Commerce v. Workers' Compensation Bd.

Maine Superior

Maine State Chamber of Commerce v. Workers' Compensation Bd.

DecidedAugust 31, 2009

DocketKENcv-08-256and262

StatusUnpublished

This text of Maine State Chamber of Commerce v. Workers' Compensation Bd. (Maine State Chamber of Commerce v. Workers' Compensation Bd.) is published on Counsel Stack Legal Research, covering Superior Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Maine State Chamber of Commerce v. Workers' Compensation Bd., (Me. Super. Ct. 2009).

Pincite

Opinion

STATE OF MAINE SUPERIOR COURT CIVIL ACTION KENNEBEC, ss. DOCKET NOS. CV-08-256 and CV-08-262 , : • \ :.' r I J ..:.j / i' (J, I _~ - r~:, c. AI .'~ '/ > ,~;I '/ l' 0 '/ I

MAINE STATE CHAMBER OF COMMERCE AND WORKERS' COMPENSATION COORDINATING COUNCIL,

Plaintiffs

v.

WORKERS' COMPENSAnON BOARD, STATE OF MAINE

Defendants

And DECISION AND ORDER

MAINE COUNCIL OF SELF INSURERS

Plaintiff

MAINE WORKERS' COMPENSAnON BOARD

Defendant

Before the court is a consolidated motion for judgment on a stipulated

record by the Maine State Chamber of Commerce ("the Chamber"), the Workers'

Compensation Coordinating Council ("the Workers Compensation Council"),

and the Maine Council of Self Insurers. Plaintiffs seek judicial review, pursuant

to 5 M.R.S. § 8058, of a rule promulgated by the Maine Workers' Compensation

Board ("the Board"). 39-A M.R.S. § 213 provides that the Board shall review workers'

compensation cases involving permanent injury and, every two years, calculate a

permanent impairment threshold such that 25% of all injured employees with a

permanent impairment ("PI") will exceed that threshold. § 213 further provides

that the Board shall do so through the use of an independent actuary utilizing

actuarially sound data and methodology. A worker whose PI rating exceeds the

resulting PI Threshold will be entitled to extended benefits.

Initially, the actuary retained by the Board made the determination that

the 2006 PI Threshold should be set at 12.5%. This determination was made

without inclusion of the cases reported to have 0% PI.

The Board then had two of its Hearing Officers review a subset of the 0%

cases that were not included in the actuary's calculus. Of the 611 files reviewed,

the Hearing Officers concluded that 343 lacked sufficient information to

accurately assign any PI rating, and of the 268 that had sufficient information,

183 had a PI rating of 0% and the remaining 85 were something more than 0%.

In light of this data, the Board recalculated its figures and ultimately set

the PI threshold at 11.8%. This calculation included not only the 85 cases that

were determined to have a PI rating of higher than 0%, but also the 183 cases

determined to have a PI rating of 0%.

Plaintiffs seek review of this determination, arguing, inter alia, that the

Board's decision was arbitrary and capricious due to the inclusion of workers

with 0% impairment.

Standard of Review When an agency rule is challenged in a declaratory judgment action, the

standard of review is contained in 5 M.R.S. § 8058. If the rule is procedurally

sound, the court may review the rule substantively "to determine whether the

rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance

with the law." 5 M.R.S. § 8058(1), Conservation Law Foundation, Inc. v. Dept. of

Env. Protection, 2003 ME 62,

on a stipulated record, the Court may determine any factual issues that arise

from the stipulated record, drawing any necessary inferences. Rufus Deering Co.

v. Spike, 2006 WL 295967, *1 (Me. Super., July 25, 2006) citing Boston Five Cents

Sav. Bank v. Dept of Housing, 768 F.2d 5, 11-12 (1st Cir. 1985).

Discussion

1. Timeliness

First, the Board argues that the plaintiffs' action should be dismissed as

untimely filed under 5 M.R.S. § 11002. However, the 40-day time limitation

contained in 5 M.R.S. § 11002 applies to challenges to an agency's adjudicatory

decision. When a plaintiff challenges a formal rule, the challenge is treated as a

declaratory judgment action. 5 M.R.S. § 8058. Accordingly, the statute of

limitations in such actions is six years from the date the cause of action accrues.

Bog Lake Co. v. Town of Northfield, 2008 ME 37,

A rule is defined as "the whole or any part of every regulation, standard,

code, statement of policy, or other agency statement of general applicability." 5

M.R.S. § 8002(9)(A). The PI Threshold was promulgated using formal

rulemaking procedures, and is an agency statement of general applicability,

setting a standard as required under 39-A M.R.S. § 213. Consequently, these actions are timely as within the general six year statute of limitation for civil

actions.

II. Inclusion of 0% Permanent Impairment Cases

The issue is whether the Board's decision to set the 2006 PI Threshold at

11.8% was in accordance with law. 39-A M.R.S. § 213 states that "the board,

using an independent actuarial review based upon actuarially sound data and

methodology, must adjust the [permanent impairment threshold] so that 25% of

all cases with permanent impairment will be expected to exceed the threshold

and 75% of all cases with permanent impairment will be expected to be less than

the threshold."

Plaintiffs argue that that the Board's 2006 PI Threshold of 11.8% was

improper because the 0% cases used in the actuary's calculus did not have a

"permanent impairment" for purposes of § 213. As § 213 requires, the PI

Threshold is required to be calculated such that the top quartile of cases with

permanent impairment are above the threshold. Therefore, by including 0% cases

that do not have a permanent impairment, the PI Threshold is artificially

lowered.

The Board argues that the inclusion of the 0% cases was proper for avo

reasons. First, the Board argues that the actuary found their inclusion to be

reasonable. This reliance is misplaced, however, because the actuary was not in

a position to determine which 0% cases could properly be included in the

calculus. In other words, the actuary's role was to calculate a threshold using

data provided to him by the Board, not to determine which 0% cases reflect a

true "permanent impairment" as a matter of law. Second, the Board argues that some of the 0% cases still show some

permanent injury; notwithstanding a 0% PI rating. This argument, however, is

discredited by the distinction between permanent injury and permanent

impairment.

A permanent impairment is defined under the Maine Workers'

Compensation Act of 1992 as "any anatomic or functional abnormality or loss

existing after the date of maximum medical improvement that results from the

injury." 39-A M.R.S. § 102(16). Pursuant to 39-A M.R.S. § 153(8)(A), the Board is

required to "establish by rule a schedule for determining the existence and degree

of permanent impairment based upon medically or scientifically demonstrable

findings ..." Accordingly, the Board promulgated Me. W.c.B. Rule, ch. 7, § 6,

which adopts the fourth edition of the American Medical Association Guides ("the

Guides") for that purpose. According to the Guides, it is possible for a person to

experience some permanent residual effects (i.e. permanent injuries) without

having any permanent impairment. See, e.g. Guides, 4th ed., DRE Lumbrosacral,

Category 1, at p. 102.

Consequently, the fact that some of the cases may involve some form of

permanent injury does not mean that all of the 0% cases involve permanent

Remedy

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