Midthun v. NORTH DAKOTA WORKFORCE SAFETY AND INSURANCE

MARING, Justice,

concurring and dissenting.

[¶ 24] I concur with Parts I and II of the majority opinion and with the conclusion in Part III that N.D.C.C. § 65-05-10(2) does grant WSI discretion to waive the five-year cap on partial disability benefits. However, I dissent because the majority’s analysis of WSI’s interpretation of N.D.C.C. § 65-05-10(2) cannot end there.

[¶ 25] WSI has interpreted N.D.C.C. § 65-05-10(2) as granting it absolute discretion to waive or not to waive the five-year cap on partial disability benefits. In Lass v. N.D. Workmen’s Comp. Bureau, 415 N.W.2d 796, 798 (N.D.1987), the Bureau, now known as WSI, argued it had absolute discretion on the subject of reopening a claim even when there had been a change in the claimant’s medical condition. Our Court held the Bureau’s interpretation of the statute was contrary to the language of the statute and the circumstances surrounding its adoption. Id. at 799.

[¶ 26] ‘We construe statutes as a whole to give each provision meaning and effect.” Ash v. Traynor, 2000 ND 75, ¶ 6, 609 N.W.2d 96. “The purpose of the Workers Compensation Act is to provide sure and certain relief for workers injured in their employment, and we construe the Act with the view of extending its benefit provisions to all who can fairly be brought within them.” Id. at ¶ 8. “The Act is remedial, and we construe it to afford relief and to avoid forfeiture.” Id.

[¶27] The interpretation of N.D.C.C. § 65-05-10(2) by WSI must be “reasonable.” 6 Jacob A. Stein, et ah, Administrative Law § 51.01[1], at 51-69 (2008). Whether WSI’s interpretation of the statute is reasonable is based upon an examination of the legislation and its history. Id.

[¶ 28] The purpose of N.D.C.C. § 65-05-10(2) is to provide continued partial disability benefits to injured workers who fit the intent of the legislation. Section 65-05-10, N.D.C.C., was amended in 1991 to provide a five-year cap on partial disability benefits. 1991 N.D. Sess. Laws ch. 714, § 47(7). Two bills, S.B. 2246 and 2206, were introduced by the North Dakota Workers Compensation Bureau. Both bills provided for a cap on partial disability benefits after five years. Senate Bill 2246 was never adopted. Instead, the legislature adopted S.B. 2206.1 Senate Bill 2206 was the legislature’s attempt to significantly cut costs. See Hearing on S.B. 2246 Before the Joint Senate Judiciary and House Industry, Business and Labor, 55th N.D. Legis. Sess. (Feb. 4, 1991) (testimony of David L. Kemnitz). In 1991, the Bureau was projecting that employers would experience a forty percent increase in costs. See Hearing on S.B. 2246 Before the Joint Senate Judiciary and House Industry, Business and Labor, 55th N.D. Legis. Sess. (April 2-5, 1991, minutes). Senate Bill 2206 considered various proposals to cut costs, including ending partial disability claims after five years. Id. *579Changing the entitlement to partial disability benefits to five years was estimated to save approximately $100,000. See Hearing on S.B. 2246 Before the Senate Judiciary, 55th N.D. Legis. Sess. (Feb. 4, 1991) (fiscal note). The overall estimated fiscal impact of S.B. 2206 was a savings of over $8 million and, therefore, the amendment to 65-05-10 was a small part of the bill and not much discussion can be found. See id. An exception to the five-year cap included in S.B. 2206 provided: “The bureau may waive the five-year limit on the duration of partial disability benefits in cases of catastrophic injury.” 1991 N.D. Sess. Laws ch. 714, § 47(7). On February 4, 1991, Pat Mayer, the Assistant Claims and Rehabilitation Manager of the Workers Compensation Bureau testified in favor of S.B. 2246 before the Joint Senate Judiciary and House Industry, Business and Labor Committees. With regard to the purpose for the five-year cap on partial disability benefits, Mayer stated:

“Section 1....
This section also seeks to limit the receipt of partial disability benefits to a period of five years, except in cases of catastrophic injury. The vast majority of workers are able to recover their earnings capacity within that time frame.

Hearing on S.B. 2246 Before the Senate Judiciary and House Industry, Business and Labor Comms., 55th N.D. Legis. Sess. (Feb. 4,1991) (testimony of Pat Mayer, Assistant Claims and Rehabilitation Manager of the Workers Compensation Bureau) (emphasis added). The implication is that most injured workers who receive partial disability benefits would be earning at the same rate as they had when they were injured within five years and would no longer be entitled to partial disability benefits at that point anyway.

[¶ 29] In 1997, N.D.C.C. § 65-05-10(2) was amended by HB 1264, which was introduced by the Workers Compensation Bureau. 1997 N.D. Sess. Laws, ch. 542, § 5. Under the amendment, the Bureau was allowed to waive the five-year cap in a second circumstance “when the injured worker is working and has long-term restrictions verified by clear and convincing objective medical and vocational evidence that limits the injured worker to working less than twenty-eight hours per week because of the compensable work injury.” On February 3, 1997, David L. Thiele, an attorney for the Workers Compensation Bureau, testified before the House Industry, Business and Labor committee in favor of HB 1264. Thiele testified: “Section 65-05-10(2) (page 8) allows the bureau to waive the five-year cap on partial disability benefits in cases where the injured worker has permanent restrictions to less than 28 hours per week.” Hearing on HB 1264 Before the House Industry, Business and Labor Comm., 55th N.D. Legis. Sess. (Feb. 3, 1997) (testimony of David L. Thiele, attorney for the Workers Compensation Bureau). Thiele testified similarly before the Senate Industry, Business and Labor Committee on March 12,1997. The Legislative Summary of HB 1264 states, in relevant part: *580Hearing on HB 1264 Before the Senate Industry, Business and Labor Comm., 55th N.D. Legis. Sess. (March 12, 1997). The history of N.D.C.C. § 65-05-10(2) indicates that the legislation was intended to provide a mechanism for injured workers who had significant permanent work restrictions still in place after five years of partial disability benefits to continue to receive those benefits rather than having them quit working altogether. It is better for both the worker and society to have the injured worker working part time than not at all. The purpose of the 1997 amendment to N.D.C.C. § 65-05-10(2) was to benefit injured workers.

*579Currently an injured worker is limited to five years of partial disability benefits (excludes catastrophic)[.] The bill allows the bureau to waive the five year cap for those injured workers who have a permanent restriction to less than 28 hours work per week[.] This will encourage such injured workers to continue to be productive working member [sic] of the community and will remove any negative incentive to not seek or obtain employment where there are restrictions in place limiting the hours the injured employee may work [.] (Emphasis added.)

*580[¶ 30] Midthun was injured in 1999 but before the effective date of the 1999 amendments to N.D.C.C. § 65-05-10. Therefore, the version of N.D.C.C. § 65-05-10 in effect in 1997 is applicable. See Rodenbiker v. Workforce Safety and Ins., 2007 ND 169, ¶ 16, 740 N.W.2d 831 (stating unless otherwise provided statutes in effect on the date of an injury govern WSI benefits).

[¶ 31] In order to receive partial disability benefits under N.D.C.C. § 65-05-10(2) (1997), an injured employee has to suffer a disability that resulted in a decrease of earning capacity. 1997 N.D. Sess. Laws ch. 542, § 5. The disability benefit is calculated at sixty-six and two-thirds percent of the difference between the injured employee’s average weekly wages before the injury and the employee’s wage earning capacity after the injury in the same or another employment. Id.; N.D.C.C. § 65-05-10 (1997). The amount of the partial disability benefit may not exceed the net pre-injury weekly wage. Id.

[¶ 32] “This Court has said that partial disability ‘contemplates at least three factors: First, there should be a physical disability; second, the disability should be partial, or in other words, the employee should be able to work subject to the disability; and third, there should be an actual loss of earning capacity that is causally related to the disability.’ ” Rodenbiker, 2007 ND 169, ¶ 18, 740 N.W.2d 831 (quoting Risch v. N.D. Workers Comp. Bureau, 447 N.W.2d 308, 309 (N.D.1989)). An “employee’s earnings capacity may be established by expert vocational evidence of a capacity to earn in the statewide job pool where the worker lives.” N.D.C.C. § 65-05-10(3) (1997). “Actual postinjury earnings are presumptive evidence of earnings capacity where the job employs the employee to full work capacity in terms of hours worked per week, and where the job is in a field related to the employee’s transferable skills.” Id.

[¶ 33] Partial disability differs from total disability. Our Court has held: “Total disability exists when a worker is ‘unable, solely because of his job-related injury, to perform or obtain any substantial amount of labor in his particular line of work, or in any other for which he would be fitted.’ ” Rodenbiker, 2007 ND 169, ¶18, 740 N.W.2d 831 (quoting Jimison v. N.D. Workmen’s Comp. Bureau, 331 N.W.2d 822, 827 (N.D.1983)). Section 65-01-02(26) (1997), N.D.C.C., states:

“Permanent total disability” means an employee is determined incapable of rehabilitation of earnings capacity as determined by the:
a. Nature of injury.
b. Degree of physical impairment.
c. Education.
d. Work history.
e. Vocational rehabilitation potential.

As this Court has explained,

The purpose of partial disability benefits is to assist individuals who can be returned to substantial gainful employment through rehabilitation, but will ex*581perience a decrease in earnings capacity upon return to the workforce. Partial disability benefits are for individuals who can return to substantial gainful employment, but at a lesser amount of income; they are not for injured workers who merely have some capacity to work.

Rodenbiker, at ¶ 25 (citation omitted).

[¶ 34] At the hearing before the Administrative Law Judge, a staff attorney for WSI testified that from 1997 to approximately 2004, WSI generally interpreted N.D.C.C. § 65-05-10(2) such that the five-year cap on partial disability benefits did not apply to an injured worker if the injured worker could only work less than twenty-eight hours per week. The staff attorney testified that he recommended to the claims policy arm of WSI in 2003 that this was an incorrect interpretation of the statute. As a result of his recommendations, WSI changed its practice and now has one person track the five-year duration and, before the end of the five-year period, WSI holds a meeting with the staff attorney, the claims supervisor, the claims analyst, and if necessary, the head of claims and makes a determination with respect to waiver. The staff attorney testified that WSI has determined that the criteria to be used are based on the statutory criteria. He testified the criteria include,

[I]s there clear and convincing evidence below the 28 hours, is the injured worker remaining at work, and then finally whether or not the case has some sort of extraordinary circumstances involved with it, that means the waiver of the five year statute needs to take place in order that benefits be paid consistent with the intention on that statute.

He also testified that this is now the policy of WSI and will be in the policy manual when it is finalized. He acknowledged that the first two criteria track the statute. When asked what is meant by the third criterion, “extraordinary circumstances,” he stated:

[Tjhere are a number of people out there that while being paid temporary partial disability benefits are being paid those benefits in such a manner that the reality of the situation is they would be temporary and total but for a doctor out there keeping them in the work force as a form of therapy. If that is the case, then to not waive the five years is to punish that individual who in reality is a temporary total disability recipient. (Emphasis added.)

[¶ 35] Although WSI claims it has interpreted N.D.C.C. § 65-05-10(2) consistent with the statute, it has not. Based on the record, WSI has interpreted the statute to require the injured worker to establish “total disability.” The purpose of the statute is to benefit injured workers who are partially disabled. Rodenbiker, 2007 ND 169, ¶ 25, 740 N.W.2d 831. WSI’s interpretation is inconsistent with the intent of the legislation and the purpose of chapter 65-05 to provide sure and certain relief to injured workers.

[¶ 36] Further WSI’s interpretation of the statute is unreasonable and not the product of a rational mental process. The legislature did not authorize WSI to require proof of total disability in order for an injured worker to receive continuing partial disability benefits. WSI’s interpretation of the statute clearly contradicts the intent of the legislation.

[¶ 37] The explanation by WSI of its abrupt change from applying the two criteria in the statute to adding a third criterion is “we screwed up.” WSI has also applied its new interpretation of the statute with the third criterion retroactively. The staff attorney for WSI testified that after WSI’s decision in 2003 or 2004 to *582change its interpretation of the statute, it implemented in 2005 a sweep of its data to come up with a list of individuals who should have been under “the post 1991 statute.” Those identified to which the five-year cap should have applied were offered, “to soften the blow,” a stipulation for extended benefits for a period of time if they would agree to accept WSI’s decision to end their benefits as final. I am of the opinion that retroactive application of WSI’s new interpretation is an abuse of discretion.

[¶ 38] WSI’s interpretation of N.D.C.C. § 65-05-10(2) is not in accordance with the law, and I would affirm the judgment of the district court dated April 14, 2008, reversing the final order of WSI dated July 20, 2007.

[¶ 39] Mary Muehlen Maring

. Although S.B. 2206 was the version enacted by the legislature, much of the testimony and materials presented during the hearings of S.B. 2246 overlap with underlying considerations also impacting S.B. 2206.