IN THE SUPREME COURT OF THE STATE OF MONTANA
STATE OF MONTANA, ex el., DIVISION OF
WORKERS' COMPENSATION,
Relator,
-v-
DISTRICT COURT OF THE THIRTEENTH JUDICIAL
DISTRICT, and HONORABLE ROBERT W. HOLMSTROM,
NATHANIAL B. BLAYLOCK, et al., GC'T2.2 1390
Plaintiffs/Appellants,
and
DAVID L. CALDWELL,
Ed 3;:zifi
CLERKOFSUPREME COURT
Plaintiff/Appellant, STATE OF MONTANA
-v-
THE DIVISION OF WORKERS' COMPENSATION,
THE DEPARTMENT OF LABOR AND INDUSTRY,
and THE STATE OF MONTANA,
Defendants/Respondents.
APPEAL FROM: Original Proceeding, Supervisory Control (89-259)
District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Robert W. Holmstrom, Judge presiding.
(89-298)
COUNSEL OF RECORD:
For Appellant Class:
Robert C. Kelleher, Sr. and Lee R. Kerr; Kelleher
Law Offices; Billings, Montana
For Appellant Caldwell:
Timothy J. Whalen; Whalen & Whalen; Billings,
Montana
For Respondent and Relator:
John H. Maynard, Tort Claims Division; Helena,
Montana
Chris D. Tweeten; Hughes, Kellner, Sullivan & Alke;
Helena, Montana
Submitted: June 28, 1990
a
Decided: October 22, 1990
Filed:
Justice R.C. McDonough delivered the Opinion of the Court.
This is an original proceeding of supervisory control
consolidated with an appeal from a summary judgment entered in
favor of the defendants by the District Court for the Thirteenth
Judicial District, Yellowstone County, on the grounds that the
defendants are entitled to quasi-judicial immunity. The District
Court also ruled that the 42 U.S.C. 5 1983 claims of unnamed
plaintiffs in this class action suit are not barred by a federal
court dismissal of these claims under the doctrine of res judicata.
We reverse the District Court's order and remand the case for
further proceedings. The following issues are the subject of
this appeal:
(1) Is the State of Montana and its Division of Workerst
Compensation protected by quasi-judicial immunity for their
negligence in renewing the privilege of an employer to self-insure
its workers1 compensation risk without requiring the self-insuring
employer to post security to guarantee payment of benefits?
(2) Does 42 U.S.C. 51983 provide a remedy under the due
process clause for gross negligence?
(3) Does the doctrine of res judicata act to bar named
plaintiffs in the federal action from bringing their 51983 action
in the state courts?
The cause of action arises from the bankruptcy of Great
Western Sugar Co. (GW), a Delaware corporation. GW employed
Montana workers in its sugar beet processing factory near Billings,
and self-insured its Workers1 compensation risk under Plan I of the
Montana Workers1 Compensation Act, d 39-71-2101, MCA, et seq.
(1985).
From 1981 to 1985, Andrew Kiely and James Murphy were the
Division of Workers1 Compensation (Division) employees who approved
Plan I self-insurance applications. Plaintiffs1 claim that Kiely
and Murphy failed to act on GW1s 1984 application for renewal.
Plaintiffs further allege that GW officials were well aware GW was
losing its solvency and yet failed to provide the security required
by 1 39-71-2106, MCA (1985). In early 1985, GW filed a petition
for bankruptcy. Plaintiffs allege that prior to the filing, GW
failed to make timely payment of benefits due claimants under the
Workers' Compensation Act, and that GW ceased making any such
payments after the bankruptcy filing. In their answer, the
defendants admit that they were negligent in failing to conduct an
adequate review of GW1s financial condition in 1984, but deny that
their negligence proximately caused the loss of plaintiffs1
benefits. The suit was consolidated into a class action, the
plaintiff class consisting of those former employees of GW who lost
workers1 compensation benefits as a result of GW1s bankruptcy.
The procedural history of this case is extensive. It began
in the united States District Court for the ~istrictof Montana,
Billings Division, where plaintiffs1 5 1983 claims were dismissed.
Plaintiffs1 appeal to the Ninth Circuit was affirmed. It is now
before this Court on appeal from a final judgment entered in the
District Court for the Thirteenth Judicial District, Yellowstone
County, pursuant to Rule 54 (b), M.R.Civ.P. The District Court
dismissed the state law claims of all members of the plaintiff
class solely on the grounds of quasi-judicial immunity and our
decision in Koppen v. Board of Medical Examiners (1988), 233 Mont.
214, 759 P.2d 173, and also dismissed the claims under 42 U.S.C.
1 1983 of the ten members of the plaintiff class who were named as
plaintiffs in the earlier federal case as being res iudicata. It
further held that the Fifth Amended Complaint states a claim for
relief under 42 U.S.C. 5 1983. The defendants moved for
reconsideration of that portion of the Court's order denying
summary judgment as to the unnamed members of the federal plaintiff
class, arguing that as a matter of federal law in the federal
action, dismissal barred all potential plaintiffs despite the
federal courttsfailure to certify the case as a class action. The
District Court held that there is no privity existing between the
two groups of plaintiffs and therefore unnamed plaintiffs are not
barred by the res judicata effect of the federal decision.
This portion of the appeal is now before us pursuant to a writ
of supervisory control issued August 30, 1989 accepting
jurisdiction to determine whether the court below erred in refusing
to dismiss the 5 1983 claims of the remaining members of the
plaintiff class who were not named plaintiffs in the federal
action. The plaintiffs appealed the District Court's grant of
summary judgment. The defendantstwrit and plaintiffst appeal were
thereafter consolidated for oral argument.
First, we will address the issue of whether the State and the
~ivision are protected by quasi-judicial immunity for their
admitted negligence in renewing the privilege of an employer to
self-insure its workersf compensation risk without requiring the
self-insuring employer to post security to guarantee payment of
benefits. Our determination will actually be considerably narrower
than the issue presented to us and in addition does not reach any
consideration of causation. Central to this determination is the
nature of the functions to be performed by the Division in this
case. For immunity to apply the function of the Division must be
quasi-judicial rather than administrative or ministerial. Our
review of past cases points out that the distinction between these
functions is anything but clear:
Experience teaches that few, if any, ministerial officers
are not called upon to exercise some judgment or
discretion in the performance of their official duties.
...
As distinguishing between acts quasi-judicial and
acts ministerial in their character, the following
definitions we think correctly state the law: "Quasi-
judicial functions are those which lie midway between the
judicial and ministerial ones. The lines separating them
from such . . .
are necessarily indistinct; but, in
general terms, when the law, in words or by implication,
commits to any officer the duty of looking into facts,
and acting upon them, not in a way which it specifically
directs, but after a discretion in its nature judicial,
the function is termed quasi-judicial. ..
.
"A ministerial act may perhaps be defined to be one
which a person performs in a given state of facts, in a
prescribed manner, in obedience to the mandate of legal
authority, without regard to or the exercise of his own
judgment upon the propriety of the act done. ...
". . .
In the same line, a ministerial act has also
been defined as an act performed in a prescribed legal
manner, in obedience to the law or the mandate of legal
authority, without regard to, or the exercise of, the
judgment of the individual upon the propriety of the acts
being done. ...I1 [Citations omitted.]
State ex rel. Lee v. Montana Livestock Sanitary Board (1959), 135
Mont. 202, 206, 339 P.2d 487, 489-490. In granting the defendants
summary judgment, the District Court relied on this Court's
decision in Ko~oen, where we held that the Board of Medical
Examiners was immune from suit for allegedly failing to respond to
complaints about a doctor's fitness to practice medicine and to
limit or revoke his license to practice medicine under the common-
law theory of quasi-judicial immunity. In Koppen we pointed to the
discretion of the Board to weigh information, the fact that it
could not revoke or suspend a licence without giving notice and
an opportunity for hearing, that such a hearing would be governed
by the Montana Administrative Procedure Act and that the decision
reached would be subject to judicial review, as factors in
determining that the acts performed by the Board came within the
statutory definition of ''quasi-judicial function1' found at 5 2-
15-102 (lo), MCA:
"Quasi-judicial function1' means an adjudicatory
function exercised by an agency, involving the exercise
of judgment and discretion in makins determinations in
controversies. ... (Emphasis added.)
Section 2-15-102(10), MCA. See Koppen, 759 P.2d at 176.
The case before us is distinguishable from Ko~pen. In Ko~pen,
the Board allegedly failed to respond to complaints, adversarial
in nature, that it received regarding a physician's fitness to
practice medicine and to take remedial action. Koopen, 759 P.2d
at 174. We noted that the action or inaction by the Board in
Koppen was its decision not to revoke or limit the physician's
licence or initiate such action when faced with complaints
concernins his professional conduct. Koppen, 759 P.2d at 176.
There was no allegation that the Board failed to even consider the
complaints.
Here, we first note that there is no controversy from the
outset as in Koppen. The facts merely involve the filing of an
application rather than an adversarial setting involving a dispute
or controversy. We conclude that immunity does not attach because
the Division is not expressly designated a quasi-judicial board,
see 5 2-15-124, MCA, see generally Title 2, Chapter 15, MCA, nor
was it performing a quasi-judicial function as will be discussed
below. The following statutes are relevant to our determination
of the nature of the Division's function in this case:
XXX-XX-XXXX (1985): Requires Plan I employers to furnish
satisfactorv proof to the division of their solvency and
financial ability to pay the compensation and benefits
in this chapter. ..
XXX-XX-XXXX (1985): Employer "shall file proof of his
solvencv within the time and in the form as may be
prescribed by the rules or orders of the division."
XXX-XX-XXXX (1985): Every Plan I employer "shall, at
least 30 days before the expiration of each fiscal year,
renew his application to be permitted to continue to make
such payments as aforesaid directly to his employees for
the next ensuing fiscal year ...II
XXX-XX-XXXX (1985): "The division mav require any
employer who elects to be bound by compensation Plan I
to provide a security deposit. . . .The division is
liable for the value and safekeeping of all such deposits
or securities and shall, at any time, upon demand of a
bondsman or the depositor, account for the same and the
earnings thereof."
XXX-XX-XXXX (1985): I1Upon the failure of the employer
to pay any compensation provided for in this chapter upon
the terms and in the amounts and at the times when the
same becomes due and payable, the division shall, upon
demand of the person to whom compensation is due, apply
any deposits made with the division to the payment of the
same, and the division shall take the proper steps to
convert any securities on deposit with the division or
sufficient thereof into cash and to pay the same upon the
liabilities of the employer accruing under the terms of
this chapter, and the division shall, when necessary,
collect and enforce the collection of the liability of
all sureties upon any bonds which may be given by the
employer to insure the payment of his liability. ...
II
(Emphasis added.)
The following administrative rules, corresponding to these
statutes, are also pertinent to our determination:
24.29.702 ELECTION TO BE BOUND BY COMPENSATION PLAN
NO. 1 -- ELIGIBILITY (1) Any employer ... may elect
to be bound as a self-insurer under plan no. 1, if in
accordance with 39-71-2102, MCA, the employer . . .
submits, on forms provided by the division, satisfactory
proof of solvency and financial ability to pay ...
if, in accordance with 39-71-2103, MCA, the division
and
finds the employer ... to have the necessary finances.
24.29.702A SOLVENCY AND ABILITY TO PAY (1) Proof
of solvency and financial ability to pay compensation,
benefits and liabilities is required. Employers ...
must demonstrate financial stability by providing audited
financial statements that upon analysis indicate
sufficient security, as determined by the division, to
protect the interests of injured workers. These shall
consist of analysis of financial conditions, current and
historical, including, but not limited to, the following
factors: quick ratio, current ratio, current liabilities
to net worth, current liabilities to inventory, total
liabilities to net worth, fixed assets to net worth,
collection period, inventory turnover, assets to sales,
sales to net working capital, accounts payable to sales,
return on sales, return on assets, return on net worth,
contingent liabilities, comparison to industry standards,
income from ongoing operations and corporate bond rating.
Only an employer . . . meeting financial standards
acceptable to the division shall be granted permission
to be bound as a plan no. 1 self-insurer. ...
24.29.702B WHEN SECURITY REQUIRED (1) Security
must be deposited with the division by the employer . .
. on order of the division under the following
conditions:
(a) Every employer ... must deposit security with
the division. The deposit requirement may be waived in
whole or in part by the division for individual employers
... only who provide substantive evidence that the full
amount of the deposit is not needed. This evidence shall
consider criteria for solvency and ability to pay as set
forth in ARM 24.29.702A.
(b) The employer ... no longer has the solvency
or ability to pay compensation, benefits, and liabilities
as determined under standards applied in ARM 24.29.70211.
(c) The employer ... does not have sufficient
securities on deposit with the division under section 39-
71-2107, MCA, to meet current liabilities, in addition
to all other liabilities. . ..
24.29.702 ARM. The statutory scheme for approval of plan no. 1
insurers further distinguishes this case from Kop~en. The statutes
governing the Board of Medical Examiners provide that "the board
mav make an investigation whenever it is brousht to its attention
that there is reason to suspectw that a particular doctor is unfit
to practice medicine or is guilty of unprofessional conduct. See
§§ 37-3-323 and 37-3-322, MCA. Here, the statutory scheme mandates
that the Division at least review a self-insurer's financial
condition. Admittedly the statutes and administrative rules grant
the Division discretion in renewing G W m sapplication as a plan No.
1 self-insurer. However, in this case the Division never exercised
this discretion to determine GWms eligibility to self-insure its
risk under plan no. 1. Rather, there was an admitted complete
failure by the Division to undertake any of the review necessary
to make such a determination. Thus, the negligence occurred at a
stage where the Division's function was entirely ministerial:
Official action, the result of performing a certain
specific duty arising from designated facts, is a
ministerial act. ... Another way of expressing the
same thought is that a duty is to be regarded as
ministerial when it is a duty that has been positively
imposed by law, and its performance required at a time
and in a manner, or upon conditions which are
specifically designated; the duty to perform under the
conditions specified not being dependent upon the
officergs judgment or discretion. . . . And that a
necessity may exist for the ascertainment, from personal
knowledge or from information derived from other sources,
of those facts or conditions, upon the existence or
fulfillment of which, the performance of the act becomes
a clear and specific duty, does not operate to convert
the act into one judicial in its nature. (Emphasis
added. )
Meinecke v. McFarland (1949), 122 Mont. 515, 522, 206 P.2d 1012,
1015. [Citations omitted.] The discretion afforded by the
statutes and rules in this case was never exercised, rather, the
Division breached its underlying duty, mandated by the statutory
scheme for plan no. 1 insurance, to investigate G W g s eligibility
to self-insure. Such act was purely ministerial, Meinecke, supra,
and cannot be a basis for invoking quasi-judicial immunity:
Accordingly, to be entitled to immunity the state must
make a showing that such a policy decision, consciously
balancing risks and advantages, took place. The fact
that an employee normally engages in ggdiscretionary
activitygg irrelevant if, in a given case, the employee
is
did not render a considered decision. ...
Johnson v. State (1968), 73 Cal.Rptr. 240, 249, n. 8, 447 P.2d 352,
While our analysis here is limited to common-law quasi-
judicial immunity, the Itexercise of judgment and discretiongg
required by S 2-15-102(10), MCA, to invoke such immunity is
analogous to the discretionary function exception to the Federal
Tort Claims Act (FTCA), 28 U.S.C. §2680(a). Under this exception
the FTCA does not waive the immunity of the United States for
claims based upon negligence of government employees exercising or
performing discretionary functions on the part of a federal agency,
regardless of whether the discretion is abused. 28 U.S.C.
§2680(a); see Dalehite v. United States (1953), 346 U.S. 15, 73
S.Ct. 956, 97 L.Ed. 1427; United States v. Varig Airlines (1984),
467 U.S. 797, 104 S.Ct. 2755, 81 L.Ed.2d 660. While suits cannot
be maintained against the United States for acts falling under this
exception, such acts must involve the "permissible exercise of
policy discretionw:
[Tlhe discretionary function exception will not apply
when a federal statute, regulation, or policy
s~ecificallv prescribes a course of action for an
employee to follow. In this event, the employee has no
rightful option but to adhere to the directive. And if
the employee's conduct cannot appropriately be the
product of judgment or choice, then there is no
discretion in the conduct for the discretionary function
exception to protect. (Emphasis added.)
Berkovitz v. United States (1988), 486 U.S. 531, 536, 108 S.Ct.
1945, 1958, 1959, 100 L.Ed.2d 531, 540-541. The facts in Berkovitz
are similar to the facts here. In Berkovitz the plaintiff alleged
that the National Institutes of Health's Division of Biologic
Standards (DBS) negligently failed to require certain tests prior
to issuing a manufacturervs license to produce a polio vaccine.
Prior to issuing a product license, statutory and regulatory
provisions required DBS to receive all data the manufacturer was
required to submit regarding the product, to examine the product,
and to make a determination that the product complies with safety
standards. Berkovitz, 436 U.S. at 542. The plaintiff alleged that
DBS decided to issue a license without having first received the
required test data, thus immunity did not bar his claims:
Rather, the claim charges a failure on the part of the
agency to perform its clear duty under federal law. When
a suit charges an agency with failing to act in accord
with a specific mandatory directive, the discretionary
function exception does not apply.
Berkovitz, 486 U.S. at 544. For similar reasons, the immunity we
recognized in KoDDen is inapplicable in this case. In KoDDen, the
Board exercised a quasi-judicial function in deciding not to take
action in the face of adversarial complaints against a doctor.
Here, there was no discretion exercised by the Division regarding
renewal or non-renewal of GW' s status; rather, there was a complete
failure at the administrative level to conduct the necessary
preliminary review of GW1s financial condition that would enable
the Division to make a decision to not renew. The duties imposed
by the statutory scheme on the Division's employee were purely
investigative, ministerial and administrative. Because the
Division failed to perform its duty to review or examine GW1s
application as prescribed by statute, and because simply performing
this duty does not involve the use of quasi-judicial discretion,
the Division is not protected by quasi-judicial immunity at this
stage. The Division has simply not functioned as such under these
facts.
11. 5 1983 Claims
Plaintiff's constitutional claims are based on 42 U.S.C. 9
12
1983, which provides:
8 1983. Civil action for deprivation of rights
Every person who, under color of any statute, ordinance,
regulation, custom, or usage, of any State or Territory
or the District of Columbia, subjects, or causes to be
subjected, any citizen of the United States or other
person within the jurisdiction thereof tothe deprivation
of any rights, privileges, or immunities secured by the
Constitution and laws, shall be liable to the party
injured in an action at law, suit in equity, or other
proper proceeding for redress. ...
With respect to defendantsf appeal regarding the effect of res
judicata on plaintiffsf claims under 42 U.S.C. 5 1983 and whether
this section provides a remedy under the due process clause for
gross negligence, we note that it is now settled that states and
their agents are not ffpersonsw
for the purposes of § 1983:
. . . it does not follow that if municipalities are
persons then so are States. States are protected by the
Eleventh Amendment while municipalities are not, Monell,
436 U.S., at 690, n. 54, 98 S.Ct., at 2035, n. 54, and
we consequently limited our holding in Monell Ifto local
government units which are not considered part of the
State for Eleventh Amendment purposes," ibid.
Conversely, our holding here does not cast any doubt on
Monell, and applies only to States or governmental
entities that are considered Itarms of the Statefffor
Eleventh Amendment purposes. ...
....
Obviously state officials literally are persons.
But a suit against a state official in his or her
official capacity is not a suit against the official but
rather is a suit against the official office. Brandon
v. Holt, 469 U.S. 464, 471, 105 S.Ct. 873, 877, 83
L.Ed.2d 878 (1985). As such, it is no different from a
suit against the State itself. ... [citations omitted]
We hold that neither a State nor its officials
acting in their official capacities are "personsft under
§ 1983. ...
Will v. Michigan Department of State Police (1989), 109 S.Ct. 2304,
2311-2312, 105 L.Ed.2d 45. The plaintiffs have no 5 1983 claim
against the defendants in this case.
There being no quasi-judicial immunity afforded to the
Division and there being no valid claims under 42 U.S.C. 5 1983,
the case is remanded for further proceedings on the plaintiffs'
remaining claims.
REVERSED AND REMANDED.
(92 -
We Concur:
Justices
\
Justice John C. Sheehy, specially concurring:
I concur with the result in this case, but not for the reasons
assigned by the majority. The state argues that it is immune here
because its agents were engaged in quasi-judicial functions, i.e.,
issuing, suspending or revoking licenses, permits and certificates,
and evaluating and passing on facts. These functions are
statutorily designated as quasi-judicial. Section 2-15-102 (10),
MCA. The state had a reasonable expectation that Koppen would
control this case, since Koppen had insulated from suit the State
Board of Medical Examiners on a theory of quasi-judicial immunity.
Koppen v. Board of Medical Examiners (1988), 233 Mont. 214, 759
P.2d 173.
A correct result based on legal principles should see the
majority backing off completely from any immunity attributed to
ministerial quasi-judicial acts or non-acts of state public
officials. Then this Court would be applying the true public
policy of this state, that the state is not immune from suit for
the torts of its agents except where the legislature has
specifically provided by law by a 2/3 vote of each house of the
legislature. Art. 11, 5 18, Montana State Constitution.
The legislature has acted to provide judicial immunity,
distinguished from quasi-judicial immunity in 3 2-9-112, MCA. That
statute provides immunity for acts or omissions of the judiciary,
and limits I1judiciary1l courts established under Art. VII of the
to
State Constitution. There is no statutory provision excepting
quasi-judicial acts of agencies from responsibility in tort law.
15
That kind of immunity was gratuitously afforded by this Court in
Koppen and not by act approved by 2/3's of each house of the
legislature.
Because of Koppen, the majority, to achieve a proper result,
are forced to distinguish between agencies decidinq not to act
(Koppen) and agencies simply not acting (this case). Thus, the
majority hold an agency is still immune if it decides to do
nothing, regardless of the merits of taking action, or the
overwhelming duty of the agency to act. Yet, in this case, the
inaction of the state employees to revoke or limit Great Western's
status as a self-insurer was in itself a type of decision.
In Koppen, I concurred with the result not because exercising
a quasi-judicial function merited immunity, but because the claim
of the plaintiffs was too remote from state action or inaction to
incur tort liability. It is easy to apply that logic here. In
Koppen, the inaction of the state was not foreseeable as a
proximate cause of the wrongs later committed by the doctor. In
this case, the inaction of the state employee to assure the
solvency of a self-insurer foreseeably caused the harm to the
plaintiffs. The issuance by the state of a license to a medical
doctor is not a guarantee that the doctor will not malpractice; but
on the other hand, the failure of the state to rein in an insolvent
self-insurer will certainly and foreseeably wreak damage on its
injured employees.
Nonetheless, I welcome the result here, for whatever reason
given by the majority. Slowly, oh slowly, this Court is inching
back from the harsh grants of state immunity in Peterson v. Great
Falls School District (1989), 237 Mont. 376, 773 P.2d 316; Bieber
v. Broadwater County (1988), 232 Mont. 487, 759 P.2d 145; State ex
rel. Eccleston v. Third Judicial District Court (Mont. 1989), 783
P.2d 363, 46 St.Rep. 1929 and Miller v. Fallon County (Mont. 1989),
783 P.2d 419, 46 St.Rep. 2087. See Mitchell v. University of
Montana (Mont. 1989), 783 P.2d 1337, 46 St.Rep. 2109; Koch, et al.
v. Yellowstone County (Mont. 1990), - P . 2 d 1 47 St.Rep. 1312.
Justice William E. I-iunt,Sr. :
I concur in the foregoing specially concurring opinion of
Justice Sheehy.
Justice John C. Harrison:
L concur in the foregoing specially concurring opinion of
Justice Sheehy.
Justice Fred J. Weber dissents as follows:
Great Western Sugar Company (GW) was a self insurer for
workers1 compensation purposes. GW became insolvent and unable to
pay its liabilities. The majority opinion describes the
unfortunate position of the plaintiff workers who had been unable
to collect their workers1 compensation benefits from GW. Having
been unable to collect those benefits from GW, the plaintiffs have
sued the Division of Workers' Compensation and the State of
Montana. The State has admitted negligence through the Division
of Workers1 Compensation in failing to conduct an adequate review
of G W 1 s financial condition. The State does deny that such
negligence was the cause of the loss of plaintiffs1 benefits. The
majority has concluded that the admitted failure to examine reports
submitted by GW is negligence, that such failure was ministerial,
and as a result the Division and State can be held responsible.
I disagree with that conclilsion.
I conclude that the majority has disregarded this Court's
holding in Koppen v. Board of Medical Examiners (1988), 233 Mont.
214, 759 P.2d 173. I can find no meaningful distinction between
the present case and Koppen. As a result I conclude that under the
Koppen holding, there is quasi-judicial immunity so far as the
Department and the State are concerned.
In his special concurrence, Justice Sheehy reached the same
conclusion. He points out that the functions of the Department in
this case come within those functions which are statutorily
designated as quasi-judicial under § 2-50-102 (lo), MCA. I agree
with his analysis up to that point. I do not agree with his desire
to overrule Koppen. I do conclude that there is no distinction
between Koppen and the present case.
The majority attempts to distinguish Koppen by suggesting
there was no dispute in the present case as there was in Koppen.
The majority concludes that immunity does not attach because the
Division was not expressly designated a quasi-judicial board nor
was it performing a quasi-judicial function. The majority
emphasizes that the ~ivision
never exercised any discretion because
it just failed to undertake any review of the materials submitted
to it. As a result the majority concludes that the negligent
failure to review was ministerial. The key majority statement is
the following:
Because the Division failed to perform its duty to review
or examine G W 1 sapplication as prescribed by statute, and
because simply performins this duty does not involve the
use of quasi-iudicial discretion, the Division is not
protected by quasi-iudicial immunity at this stage. The
Division has simply not functioned as such under these
facts. (Emphasis supplied.)
I do not believe that Koppen supports that view. In the opinion
in Ko~pen,233 Mont. at 215, 759 P.2d at 174, the majority stated:
According to the complaint, the Board had received
complaints about Dr. Kauffmants fitness to practice
medicine but failed to respond to them. The complaint
characterized this as a failure by the Board to discharge
its duty under 5 37-3-202, MCA. . . . (Emphasis added.)
The majority in Koppen, 233 Mont. at 217-18, 759 P.2d at 175,
further stated:
The District Court was correct in concluding that
the Board is entitled to quasi-judicial immunity from
suit. . .. The Board's quasi-judicial immunity is
derived from the common law, which we hold to be
controlling here.
The Koppen majority, 233 Mont. at 219, 759 P.2d at 176, further
stated with regard to the Board of Medical Examiners:
The discretion vested in the Board to weiqh the
information relative to Dr. Kauffman rendered it a quasi-
judicial body. This is also evident from the statutes
dictating the procedures to be followed. . .. The task
performed by the Board thus comes within the statutory
definition of "quasi-judicial functionvtfound at 5 2-
15-102(10), MCA. (Emphasis added.)
Following are the key holdings, for our purposes, of Koppen:
The action or inaction by the Board under attack in
this case is its decision not to strip Dr. Kauffman of
his license when faced with complaints concerning his
professional conduct. The Board's decision whether to
initiate administrative proceedinss asainst a doctor is
analogous to a prosecutor's decision whether to initiate
court proceedings against an alleged criminal. We concur
with the reasoning in Butz that the Board's discretion
might be distorted if it is not immune from suit for
damages arising from such a decision. We hold,
therefore, that in the exercise of its quasi-judicial
authority, the Board is entitled to the absolute immunity
afforded executive officials under the rule in the Butz
decision. (Emphasis added.)
Koppen, 233 Mont. at 219, 759 P.2d at 176. In substance Koppen
had contended that the Board of Medical Examiners had received
complaints but failed to respond to them. That negligent failure
to respond is directly comparable to the negligent failure to study
the reports in the present case. I find no factual distinction
between Koppen and the present case. In Koppen the Board of
Medical Examiners failed to do anything. In the present case the
Division failed to do anything. In both cases there was a failure
to perform a mandated duty. If the majority opinion in this case
is correct, then it seems that we have in effect overruled Koppen,
at least in part.
I disagree with the majority analysis which concludes that
while the statutes and rules grant discretion to the Division in
renewing G W t s application, the Division never exercised the
discretion to determine G W t s eligibility to self insure. As a
result the majority concluded that the complete failure by the
Division to undertake anv review thus becomes ministerial. The
majority concludes that the discretion afforded by the statutes and
rules was never exercised and that such failure to exercise was
purely ministerial. I do not believe that conclusion can be
reached, based upon Koppen; and I also disagree with the
fundamentals of that analysis.
In Koppen this Court pointed out that quasi-judicial immunity
is comparable to prosecutorial immunity in that it is not based
upon the statutes of Montana, but upon the common law. Koppen then
referred to the common law of quasi-judicial immunity as set forth
in the Butz United States Supreme Court decision. Koppen then
quoted the following from Butz:
Judges have absolute immunity not because of their
particular location within the Government but because of
the special nature of their responsibilities. This point
is underlined by the fact that prosecutors--themselves
members of the Executive Branch--are also absolutely
immune.
We also believe that agency officials performing certain
functions analogous to those of a prosecutor should be
able to claim absolute immunity with respect to such
acts. The decision to initiate administrative
proceedinss against an individual or corporation is very
much like the prosecutor~sdecision to initiate or move
forward with a criminal prosecution. (Emphasis added.)
Koppen, 233 Mont. at 218-19, 759 P.2d at 176 (quoting Butz v.
Economou (1978), 98 S.Ct. 2894, 2913, 2915). If the majority is
correct in concluding that the failure to exercise discretion was
purely ministerial, then apparently that rationale would apply to
prosecutors as well. Under that rationale, a prosecutor could be
sued for his negligent failure to initiate prosecution. I conclude
that the failure to discharge a duty is not a ministerial act.
I conclude that the failure to respond to complaints on the
part of the Board of Medical Examiners in Koppen is directly
comparable to the failure on the part of the Division of Workers'
Compensation to examine the materials filed with it by GW in the
present case. I would therefore conclude that under Koppen we are
required to hold there is quasi-judicial immunity as to the
defendants named in this case.