No. 12850
I N THE SUPREME COURT OF THE STATE O M N A A
F OTN
1975
LARRY W. BURGESS,
P e t i t i o n e r and Respondent,
T N SOFTICH, ADMINISTRATOR, LABOR
OY
STANDARDS DIVISION, M N A A DEPARTMENT
OTN
O LABOR AND INDUSTRY,
F
Respondent and A p p e l l a n t .
Appeal from: D i s t r i c t Court of t h e E i g h t e e n t h J u d i c i a l D i s t r i c t ,
Honorable W. W. L e s s l e y , J u d g e p r e s i d i n g .
Counsel o f Record:
For Appellant :
P e t e r 0 . M a l t e s e a r g u e d , H e l e n a , Montana
F o r Respondent :
Berg, Angel, A n d r i o l o and Morgan, Bozeman, Montana
Gregory 0 . Morgan a r g u e d , Bozeman, Montana
Submitted: J a n u a r y 9 , 1975
Decided: MAY 1 4 !:
95
'P .' 1 ,+ jib
Filed :
Mr. J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e Court.
This i s an a p p e a l from a judgment e n t e r e d i n t h e d i s t r i c t
c o u r t , county of G a l l a t i n , g r a n t i n g a w r i t of mandate d i r e c t i n g
t h e a d m i n i s t r a t o r of t h e Labor Standards D i v i s i o n , Montana Department
of Labor and I n d u s t r y t o g i v e p e t i t i o n e r L a r r y W. Burgess a f u l l
h e a r i n g on a c l a i m f o r unpaid wages a s provided by s e c t i o n 41-
1302, R.C.M. 1947.
P e t i t i o n e r was employed a s a s e n i o r p r o c e s s e n g i n e e r a t
Development Technology, I n c . , Bozeman, Montana, from May 1 5 , 1972,
t o October 1 0 , 1973. O October 1 0 , 1973, p e t i t i o n e r ' s employment
n
was t e r m i n a t e d and p u r s u a n t t o t h e terms of h i s employment was
given t h r e e months s e v e r a n c e pay. P e t i t i o n e r contends t h a t under
t h e terms of h i s employment he was t o be p a i d a t t h e r a t e of $1,500
p e r month, b u t t h e employer, Development Technology, I n c . , r e f u s e d
t o r e c o g n i z e t h i s and p a i d him s e v e r a n c e pay a t t h e r a t e of $1,166
p e r month. P e t i t i o n e r i s a t t e m p t i n g t o c o l l e c t t h e $1,000 which
remains unpaid a s severance pay a t t h e claimed r a t e of $1,500 per
month.
O December 1 3 , 1973, p e t i t i o n e r a s s i g n e d h i s c l a i m f o r
n
unpaid wages t o t h e Montana Department of Labor and I n d u s t r y ,
Labor Standards D i v i s i o n , p u r s u a n t t o s e c t i o n 41, 1314.2, R.C.M.
1947.
O A p r i l 11, 1974, an a g e n t o f t h e Labor Standards D i v i s i o n
n
informed p e t i t i o n e r t h a t no h e a r i n g would be h e l d a s r e q u e s t e d ;
t h a t t h e a g e n c y ' s manpower and f i n a n c i a l r e s o u r c e s o b l i g a t e s t h e
agency t o b e s e l e c t i v e i n i t s c a s e l o a d . F u r t h e r t h a t i t was
d i s c r e t i o n a r y w i t h t h e department whether o r n o t t o hold an admin-
i s t r a t i v e hearing.
O A p r i l 22, 1974, p e t i t i o n e r f i l e d i n t h e d i s t r i c t c o u r t
n
a p e t i t i o n f o r an a l t e r n a t i v e w r i t of mandamus compelling t h e de-
partment t o hold a f u l l a d m i n i s t r a t i v e h e a r i n g pursuant t o t h e
Montana A d m i n i s t r a t i v e Procedure Act, T i t l e 82, Chap. 42, Revised
Codes of Montana 1947, and t h e Montana A d m i n i s t r a t i v e Code t o
determine t h e v a l i d i t y of p e t i t i o n e r ' s claim, o r t o show c a u s e
why t h e department should n o t do so.
O t h e same day, A p r i l 22, t h e d i s t r i c t c o u r t i s s u e d t h e
n
w r i t and s e t t h e h e a r i n g f o r May 20, 1974. Twice t h e h e a r i n g was
c o n t i n u e d , u n t i l June 3 , 1974. The department f i l e d i t s motion
t o quash May 31, 1974, (1) a l l e g i n g no c l e a r l e g a l d u t y , and (2)
a n o t h e r p l a i n , speedy and adequate remedy a t law was a v a i l a b l e
to petitioner. P e t i t i o n e r f i l e d a b r i e f i n support of t h e w r i t ,
and t h e department f i l e d a b r i e f i n support of i t s motion t o quash,
p r i o r t o h e a r i n g on June 3 , 1974.
O June 3 , 1974, t h e c o u r t heard t h e motion t o quash;
n
continued t h e h e a r i n g on p e t i t i o n e r ' s w r i t of mandate pending
d e c i s i o n on t h e motion t o quash, and ordered f u r t h e r b r i e f s . On
June 21, 1974, t h e c o u r t denied t h e department's motion t o quash.
By memorandum t h e c o u r t h e l d : t h a t s e c t i o n 41-1302, R.C.M. 1947,
raises t h e q u e s t i o n of t h e department's s t a t u t o r y d u t y ; f u r t h e r ,
t h a t t h e department has adopted t h e r e l e v a n t s e c t i o n s of t h e Montana
A d m i n i s t r a t i v e Act; t h a t i n t e g r a t i n g s e c t i o n 41-1314.2, R.C.M.
1947, on assignment of wage c l a i m s , makes t h e s i t u a t i o n c l e a r e r ;
and then concluded:
h hat a c t by t h e respondent [ t h e department] i s a
c l e a r l e g a l duty under t h e law. The d i s c r e t i o n ap-
pears a f t e r t h e hearing, not before. II
The d i s t r i c t c o u r t e n t e r e d judgment g r a n t i n g t h e w r i t of
mandate on June 28, 1974. From t h a t judgment t h e department a p p e a l s ,
p r e s e n t i n g two i s s u e s f o r review:
1. The Labor Standards D i v i s i o n has no c l e a r l e g a l
duty t o provide Larry W. Burgess w i t h an a d m i n i s t r a t i v e h e a r i n g .
2. A a l t e r n a t i v e , p l a i n , speedy and adequate remedy
n
i n t h e o r d i n a r y c o u r s e of t h e law e x i s t s .
Appellant department c i t e s a u t h o r i t y s u p p o r t i n g t h e r u l e
t h a t f o r mandamus t o l i e t h e r e must be a c l e a r l e g a l duty and
mandamus w i l l n o t l i e t o c o n t r o l d i s c r e t i o n ; a l l p a r t i e s and t h i s
Court a g r e e .
Montana's Wage Payment Act, T i t l e 41, Chap. 1 3 , R.C.M.
1947, governs t h e payment of wages earned by employees by employers.
S e c t i o n 41-1302, R.C.M. 1947, p r o v i d e s :
"It s h a l l be t h e d u t y of t h e commissioner of l a b o r
t o i n q u i r e d i l i g e n t l y f o r any v i o l a t i o n s of t h i s
a c t , and t o i n s t i t u t e a c t i o n s f o r t h e c o l l e c t i o n of
unpaid wages and f o r t h e p e n a l t i e s provided f o r
hekein, in such c a s e s a s h e may deem p r o p e r , and t o
e n f o r c e g e n e r a l l y t h e p r o v i s i o n s of t h i s a c t . "
(Emphasis o u r s ) .
Respondent, p e t i t i o r i n d i s t r i c t c o u r t , f a i l s i n h i s
~
I1
argument t h a t a c t i o n s " i n c l u d e " a d m i n i s t r a t i v e h e a r i n g s " a s used
t o imply d i s c r e t i o n i n s e c t i o n 41-1302, R.C.M. 1947. Of t h e
h e r e t o f o r e quoted p o r t i o n of s e c t i o n 41-1302, t h e f i r s t p a r t p l a c e s
II
a mandatory d u t y on t h e commissioner of l a b o r t o inquire d i l i -
g e n t l y " , t h e second p a r t t o i n s t i t u t e " a c t i o n s " i n such c a s e s a s
he may deem p r o p e r , and t h e t h i r d p a r t i s mandatory a s t o e n f o r c i n g
the act. The language of t h i s s e c t i o n i s c l e a r and unambiguous.
I t needs no i n t e r p r e t i v e h e l p from t h i s Court.
The o n l y i n t e r p r e t a t i o n r e q u i r e d concerns t h e scope of
"inquire diligently". S e c t i o n 41-1314.1, R.C.M. 1947, g i v e s t h e
department powers of i n v e s t i g a t i o n t o determine v i o l a t i o n s o f t h e
act, i n c l u d i n g power t o a d m i n i s t e r o a t h s , examine w i t n e s s e s under
o a t h , i s s u e subpoenas, and t a k e d e p o s i t i o n s and a f f i d a v i t s i n any
proceeding b e f o r e t h e department. This s e c t i o n i s compatible w i t h
holding a hearing and/or i n v e s t i g a t i o n . Standing a l o n e i t does n o t
r e s o l v e t h e i s s u e h e r e , a s contended by a p p e l l a n t .
The t r i a l c o u r t and respondent d i s c u s s s e c t i o n 41-1314.2,
R.C.M. 1947, y e t a p p e l l a n t dismissed i t v e r y c a s u a l l y i n i t s r e p l y
b r i e f by t h e a s s e r t i o n t h a t i t o n l y a p p l i e s a f t e r t h e commissioner
makes a "determination". T h i s s e c t i o n i s a u t h o r i t y t o t a k e wage
assignments and s t a t e s i n p a r t :
II
Whenever t h e commissioner determines t h a t one o r more
employees have c l a i m s f o r unpaid wages, he s h a l l , upon
t h e w r i t t e n r e q u e s t of t h e employee, t a k e an assignment
of t h e c l a i m i n t r u s t f o r such employee, and may m a i n t a i n
any proceeding a p p r o p r i a t e t o e n f o r c e t h e c l a i m , i n c l u d i n g
liquidated damages pursuant to this act. With
the written consent of the assignor, the commissioner
may settle or adjust any claim assigned pursuant to
this section. " (Emphasis ours).
Section 41-1314.2 is one that grants additional authority
to the commissioner as it relates to taking assignment of claims in
trust. The words "and may maintain any proceeding appropriate to
enforce the claim" are words of authority to proceed as a trustee
of the employee's claim and not to be construed as granting any
discretionary status as it relates to enforcement of the claim or
the law generally. It does, however, establish that a determination
shall be made and thereafter on request the commissioner shall take
I1
the assignment of the claim in trustr'and proceed in a proper manner.
the
One of the sections of/~ontanaWage Payment Act, passed
in 1974, section 41-1314.4, does provide more legislative intent and
(though not binding in the instant case as to content), read with
section 41-1314.2, R.C.M. 1947, quoted above, adds additional author-
ity for the commissioner to enforce claims in this language:
"41-1314.4. Court enforcement of commissioner's de-
termination. A determination by the commissioner of
labor and industry made after a hearing as provided in
Title 41, chapters 13 and 23, R.C.M. 1947, may be en-
forced by application by the commissioner to a district
court for an order or judgment enforcing the determina-
tion, if the time provided to initiate judicial review
by the employer has passed. The commissioner shall apply
to the district court where the employer has its princi-
pal place of business, or in the first judicial district
of the state. A proceeding under this section is not
a review of the validity of the commissioner's determin-
ation." (Emphasis ours).
Appellant argues this language only makes the process more discre-
11
tionary, and that the Commissioner may enforce his determination;
he need not do so." (Emphasis ours).
This argument suffers from the same problem as that argued
as to section 41-1314.2 heretofore:---the failure to realize that
this is a section primarily granting authority and not discretion.
Section 41-1314.4 grants considerable authority to the commissioner
in fact, it speaks to the authority the commissioner has in regard to
judicial enforcement of his determinations including the fact that
the commissioner's determination is not reviewable under the
authority of the section. It speaks of a determination after hearing.
Xeading the two sections together, we find a determination must be
made and for judicial enforcement there must be a hearing.
At this point appellant department's argument that the
corrunissioner can make an effective "diligent inquiry" to reach a
II
de~erminationby investigation" only without a hearing, loses a
great deal of its persuasion, if only because the determination
cdnnot be judicially enforced without a hearing under the language
o i section 41.1314.4, R.C.M. 1947.
Appellant's argument that no duty to hold a hearing exists
under any circumstances because of administrative problems or if a
case arose where the commissioner clearly lacked jurisdiction or
utter chaos and atronomical waste of state resources may result
is not germane to the problem here and simply begs the question at
hand.
Further, the trial court and respondent have relied in
part on the Montana Administrative Procedure Act, Title 82, Chap.
42, R.C.M. 1947 and the Montana Administrative Code. The Montana
Administrative Procedure Act was passed in 1972 to implement Article
VI, Section 7, 1972 Montana Constitution and provide the framework
regarding functions, powers, and duties of executive agencies and
to compile and publish the Montana Administrative Code. Each agency
was responsible for providing its portion of the Code within the
format prescribed.
Section 82-4209, R.C.M. 1947, of the Administrative Proced-
ure Act provides that in a contested case, all parties shall be
afforded an opportunity for hearing after reasonable notice. -
A
contested case under section 82-4202(3), means any proceeding before
an agency in which a determination of legal rights, duties, or privil-
eges of a party is required by law to be made after an opportunity for
a hearing.
Section 82-4202, R.C.M. provides:
" ~ e f i n i t i o n s . For purposes of t h i s a c t :
" (1) 'Agency' means any board, bureau,
commission, department, a u t h o r i t y o r o f f i c e r
of t h e s t a t e government a u t h o r i z e d by law t o
make r u l e s and t o determine c o n t e s t e d c a s e s * * *.
1
"(3) Contested c a s e ' means any proceeding
b e f o r e an agency i n which a determination of l e g a l
r i g h t s , d u t i e s o r p r i v i l e g e s of a p a r t y i s r e q u i r e d
by-law t o be made a f t e r an o p p o r t u n i t y f o r h e a r i n g .
, , *I I
, k
-.
1
. (Emphasis o u r s ) .
Section 82-4209, R..C.M. 1947, p r o v i d e s :
II
Notice-hearing-record. (1) I n a c o n t e s t e d c a s e ,
a l l p a r t i e s s h a l l be a f f o r d e d an o p p o r t u n i t y f o r
h e a r i n g a f t e r r e a s o n a b l e n o t i c e . 11
The Montana Department of Labor and I n d u s t r y under i t s
o r g a n i z a t i o n a l r u l e of t h e A d m i n i s t r a t i v e Code, 24-2.1-0100 (2) (b) ,
has charged i t s Labor Standards D i v i s i o n w i t h t h e "duty of enforcing
a l l t h e laws of Montana r e l a t i n g t o hours of l a b o r , c o n d i t i o n s of
l a b o r , p r o s e c u t i o n of employers who d e f a u l t i n payment of wages,
p r o t e c t i o n of employees >k * *," The Labor Standards D i v i s i o n adopted
model procedural r u l e s proposed by t h e a t t o r n e y g e n e r a l a t 24-3.14(2)-
P1410, Montana A d m i n i s t r a t i v e Code, a s contained i n T i t l e 1, Sub-
c h a p t e r 2, Rules of Procedure 1-1.6(2)-P640 through 1-1.6(2)-P6320,
Xontana A d m i n i s t r a t i v e Code.
The model procedural r u l e s adopted by t h e Labor Standards
D i v i s i o n comment f u r t h e r on t h e d e f i n i t i o n o f "contested c a s e "
d e f i n e d i n s e c t i o n 82-4202(3), R.C.M. 1947, a t 1-1.6(2)-P607Oy (2)
(a) , Montana A d m i n i s t r a t i v e Code :
lI
Contested e a s e s provide an o p p o r t u n i t y f o r a person
t o o b t a i n a h e a r i n g b e f o r e an agency t o c o n t e s t t h e
agency's intended a c t i o n a g a i n s t him o r a c t i o n which
d i r e c t l y a f f e c t s him." (Emphasis o u r s ) .
Subdivision (3) of 1-1,6(2)-P6070, g e n e r a l l y s t a t e s t h a t among t h e
e s s e n t i a l requirements of a c o n t e s t e d c a s e a r e a f a i r h e a r i n g , t h e
r i g h t t o j u d i c i a l review upon a proper r e c o r d , and a l l of t h e elements
of due process.
A p p e l l a n t department does n o t comment on t h e a p p l i c a t i o n
o f t h e s e Montana code s e c t i o n s and Montana A d m i n i s t r a t i v e Code
s e c t i o q s o t h e r t h a n t o a s s e r t t h a t t h e r e i s no a p p l i c a t i o n h e r e because
If
a c o n t e s t e d c a s e " i m p l i e s a h e a r i n g which t h e commissioner i s n o t
by law r e q u i r e d t o provide a wage c l a i m a n t . This argument overlooks
t h e f a c t t h a t t h e s e c t i o n s of t h e A d m i n i s t r a t i v e Code which make
i t c l e a r t h a t a h e a r i n g must be g r a n t e d i n t h i s c a s e where t h e board
r u l e d a g a i n s t t h e p e t i t i o n e r o r i t s a c t i o n d i r e c t l y a f f e c t s him,
were v o l u n t a r i l y adopted by t h e department a s t h e law r e g u l a t i n g
procedure b e f o r e i t .
A p p e l l a n t f u r t h e r a l l e g e s t h a t respondent h a s an a l t e r -
n a t i v e , p l a i n , speedy and adequate remedy i n t h e o r d i n a r y c o u r s e
a t l a w s o mandamus must f a i l i n any e v e n t . It c i t e s s e c t i o n 93-
9103, R.C.M. 1947, and numerous Montana c a s e s i n s u p p o r t . The
a l t e r n a t i v e , p l a i n , speedy and adequate remedy proposed by a p p e l l a n t
i s an a l t e r n a t e method of wage c o l l e c t i o n under t h e s t a t u t e t h a t
does n o t i n v o l v e t h e Labor Department.
I t a p p e a r s t h a t a p p e l l a n t h a s misconstrued s e c t i o n 93-9103,
R.C.M. 1947. To deny mandamus under s e c t i o n 93-9103, t h e r e must b e
a p l a i n , speedy and a d q u a t e remedy i n t h e o r d i n a r y c o u r s e of law,
t h a t can be pursued by t h e p e t i t i o n e r t o compel t h e performance
o f a n a c t which t h e law h a s imposed a s a d u t y , i . e . an a l t e r n a t e
t o s u p e r s e d e mandamus t h a t i s competent t o a f f o r d t h e r e l i e f on t h e
very s u b j e c t m a t t e r of p e t i t i o n e r ' s a p p l i c a t i o n f o r a w r i t of mandate.
S t a t e ex r e l . F e d e r a l Land Bank v. Hays, 86 Mont. 58, 282 P. 32;
S t a t e ex r e l . Brink v. McCracken, 9 1 Mont. 157, 6 P.2d 869. There-
f o r e t h e a l t e r n a t i v e suggested by a p p e l l a n t , n o t b e i n g w i t h i n t h e
contemplation of t h e d o c t r i n e of mandamus, must f a i l .
W conclude t h a t i n c a s e s wherein t h e d e p a r t m e n t ' s pre-
e
l i m i n a r y i n q u i r y i s a g a i n s t t h e wage c l a i m a n t t h e r e i s a c l e a r , l e g a l
d u t y , upon r e q u e s t , t o g r a n t a h e a r i n g .
The judgment of the district court is affirmed. The
cause is remanded to the district court for determination of
attorney fees and costs.
-
Justice
We Concur:
...................................
Chief Justice
u
- ................................
Justices.
.......................
Mr. Chief Justice James T. IJarrison dissenting:
I dissent.
I do not feel that the laws with relation to payment of
wages and protection of discharged employees should be interpreted
to require the Commissioner of Labor to hold a hearing upon demand.
If a claim asserted by a discharged employee, upon investigation
by the Commissioner, appears to be without merit I would not burden
the Commissioner by requiring him to hold a hearing to determine
what he already knows - the claim lacks merit.
Nothing is taken away from an employee, if he is not
satisfied with the Commissioner's view he can institute a suit
under the statutes and if he is successful he will recDver his
wages, costs, penalty and attorney fees. #
,
Chief Justice.
M r . J u s t i c e Castles dissenting:
I dissent. The language of s e c t i o n 41-1302, R.C.M.
1947, i s c l e a r t h a t t h e a u t h o r i t y and d i s c r e t i o n o f t h e Labor
Standards Division i s such t h a t no one can demand a formal
II
hearing. The duty of t h e commissioner i s t o inquire diligently".
That i s a l l .
For analogous wording i n a s t a t u t e , s e c t i o n 16-3101,
R. C.M. 1947, r e q u i r e s a county a t t o r n e y t o " d i l i g e n t l y prosecute1'.
Yet, we a l l r e c o g n i z e t h a t t h o s e words man t h a t he s h a l l e x e r c i s e
his discretion. Here, we have t h e words " i n q u i r e d i l i g e n t l y " .
Obviously, i t seems t o me, an i n v e s t i g a t i o n and i n s p e c t i o n would
suffice.
t h e remedy a t law f o r enforcement of l a b o r
claims and wage c o l l e c t i o n under s e c t i o n 93-9103, R.C.M. 1947,
i s adequate, and t h u s mandamus would n o t b e proper. Perhaps a
w r i t of c e r t i o r a r i , b u t c e r t a i n l y n o t a w r i t of mandamus. State
ex r e l . Thompson v. Babcock, 147 Mont. 46, 490 P.2d 808.
S e c t i o n 41-1314.2, R.C.M. 1947, a u t h o r i z e s , i n e f f e c t ,
a power of a t t o r n e y t o t h e commissioner of l a b o r . This a l o n e
d i c t a t e s t h a t t h e a c t i o n s of t h e commissioner a r e d i s c r e t i o n a l .
Also, t h e d i s c u s s i o n of t h e e f f e c t of t h e Montana Adminis-
t r a t i v e Procedure Act on t h e meaning of s t a t u t e s p r e v i o u s l y enacted
i s r e t r o a c t i v e reasoning. I do n o t a g r e e .
I would r e v e r s e t h e d i s t r i c t c o u r t and deny t h e p e t i t i o n
f o r a w r i t of mandamus. --.