Jesus Gutierrez v. ica/masterson ( 2011 )

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
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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).
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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
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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
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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
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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
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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
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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.
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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
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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.
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