DC Dep't of Corrections v. DC Dep't of Employment Services

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 20-AA-525
DISTRICT OF COLUMBIA DEPARTMENT OF CORRECTIONS, et al., PETITIONERS,
v.
DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, RESPONDENT,
and
ALMA ATKINS, INTERVENOR.
Petition for Review of an Order of the
District of Columbia Compensation Review Board
(CRB-33-20)
(Argued February 16, 2022 Decided September 1, 2022)
Lucy E. Pittman, with whom Karl A. Racine, Attorney General for the District
of Columbia, Loren L. AliKhan, Solicitor General at the time the brief was filed,
Caroline S. Van Zile, Principal Deputy Solicitor General, and Ashwin P. Phatak,
Deputy Solicitor General, were on the brief, for petitioners.
Tonya A. Robinson, General Counsel for the Department of Employment
Services, filed a statement in lieu of brief.
Harold L. Levi for intervenor.
Before BLACKBURNE-RIGSBY, Chief Judge, MCLEESE, Associate Judge, and
MCLEAN, Associate Judge, Superior Court of the District of Columbia. *
*
Sitting by designation pursuant to D.C. Code § 11-707(a).
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MCLEESE, Associate Judge: Petitioners, the Office of Risk Management
(ORM) and the Department of Corrections, challenge an order of the Compensation
Review Board (CRB) reinstating benefits that intervenor Alma Atkins had been
receiving through the Public Sector Workers’ Compensation Program. We affirm
the order of the CRB.
I.
Unless otherwise noted, the following facts appear to be uncontested. Ms.
Atkins was an employee of the Department of Corrections. After being injured while
working, she began receiving temporary workers’ compensation benefits in 1993.
In 2018, ORM — which administers the Program — informed Ms. Atkins that her
benefits were being terminated. The stated factual basis for the termination was an
independent medical examination by Dr. Paul Griffiths, who concluded that Ms.
Atkins’s work-related injuries had reached maximum medical improvement, that in
fact Ms. Atkins’s work-related injuries had resolved, and that Ms. Atkins’s current
medical conditions were not work-related.
Ms. Atkins appealed to the Office of Administrative Hearings (OAH), where
an Administrative Law Judge (ALJ) reversed the termination of benefits.
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The ALJ analyzed Ms. Atkins’s appeal under the following burden of proof:
(1) The employer first has the burden of producing current
and probative evidence that claimant’s condition has
sufficiently changed to warrant a modification or
termination of benefits. If the employer fails to present
this evidence then the claim fails and the injured worker’s
benefits continue unmodified or terminated. (2) If the
employer meets its initial burden, then the claimant has the
burden of producing reliable and relevant evidence that
conditions have not changed to warrant a modification or
termination of benefits. (3) If this burden is met, then the
evidence is weighed to determine whether employer met
its burden of proving by a preponderance of the evidence
that claimant’s benefits should be modified or terminated.
That burden of proof was approved by this court in Ross v. D.C. Dep’t of Emp.
Servs., 125 A.3d 698, 701 (D.C. 2015).
The ALJ disagreed with ORM’s contention that the ALJ was required instead
to apply a new burden of proof specified in regulations promulgated by ORM in
2017. See 7 D.C.M.R. § 159.2 (if Program seeks to modify or terminate benefits,
Program bears initial burden of presenting “substantial evidence that the Program
had reason to believe” that modification or termination was warranted; burden then
shifts to claimant to show by preponderance of evidence nature and extent of
disability and that claimant is entitled to ongoing benefits). As the ALJ explained,
the CRB had previously held that ORM’s burden-of-proof regulation was invalid.
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The ALJ concluded that ORM failed to carry its initial burden of proof under
the applicable framework. The ALJ explained that Dr. Griffith’s opinion that Ms.
Atkins’s disability was no longer causally connected to her 1993 injury was based
on a single examination in 2018 and a limited review of Ms. Atkins’s medical
records. The ALJ therefore concluded that ORM had not produced “current and
probative” evidence supporting termination of benefits. The ALJ further stated that
even if ORM had met its initial burden, the ALJ would have accepted the evidence
from Ms. Atkins and her treating physician over the opinion of Dr. Griffiths, and
therefore would have found that a modification was not warranted. Finally, the ALJ
declined to decide whether Ms. Atkins’s injury had reached maximum medical
improvement and therefore had become permanent rather than temporary. In the
ALJ’s view, that question was not relevant given that ORM had failed to carry its
initial burden of proof. The CRB affirmed, agreeing with the ALJ’s conclusions.
II.
ORM first argues that if Ms. Atkins’s disability has changed from temporary
to permanent, that by itself warrants termination of Ms. Atkins’s temporary benefits.
Specifically, ORM argues that such a change permits modification of Ms. Atkins’s
benefits based on a “change of condition,” because the temporary disability has
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ceased, becoming instead a permanent disability (or perhaps no disability at all). See
D.C. Code § 1-623.24(d)(1) (“The Mayor may modify an award of compensation if
the Mayor or his or her designee has reason to believe a change of condition has
occurred.”), (d)(4)(A) (award may be modified if “disability for which compensation
was paid has ceased or lessened”). A recent decision of this court, however,
forecloses ORM’s position. See Frazier v. D.C. Dep’t of Emp. Servs., 229 A.3d 131,
135-37 (D.C. 2020).
The claimant in Frazier had previously received temporary disability benefits,
and then she sought a permanent schedule award. Frazier, 229 A.3d at 134-35; see
D.C. Code § 1-623.07(a) (providing schedule of compensation to public-sector
employees for work-related “permanent disability involving the loss, or loss of use,
of a member or function of the body”). The court held that ORM rather than the
OAH should decide that claim. Frazier, 229 A.3d at 139. As part of the reasoning
supporting that holding, the court held that § 1-623.24(d)(1) was not applicable. Id.
at 136. The court noted that “petitioner’s claim for a permanent-disability schedule
award is not a modification of awarded benefits because that statutory term refers to
a reduction in or termination[] of benefits because of a change to the claimant’s
condition or to a[] corrective compensation decision where there is strong
compelling evidence that the initial decision was in error.” Id. at 136 (brackets,
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citations, and internal quotation marks omitted). The court further explained that
§ 1-623.24(d) applies to
determination[s] that the claimant’s disability has “ceased
or lessened[,]” the “disabling condition is no longer
causally related to the employment[,]” the “claimant’s
condition has changed from a total disability to a partial
disability[,]” the “employee has been released to return to
work[,]” or “the initial decision was in error.” As this case
involves petitioner’s request for a schedule award, the
foregoing provisions are inapplicable.
Id. at 1367 n.5 (internal citation omitted; quoting D.C. Code
§ 1-623.24(d)(4)(A) (E)).
In sum, as we later explained, Frazier “compels” the conclusion that “a
change in disability status from temporary to permanent does not constitute a change
in condition pursuant to § 1-623.24(d).” District of Columbia Pub. Schs. v. D.C.
Dep’t of Emp. Servs., 262 A.3d 213, 227 n.10 (D.C. 2021) (internal quotation marks
omitted).
We express no view about what other provisions, if any, of the Program might
permit modification or termination of temporary benefits solely on the ground that
the underlying injury had reached maximum medical improvement and had thus
become permanent. Rather, we hold more narrowly — as we have previously held
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— that D.C. Code § 1-623.24 does not permit modification or termination of benefits
on that basis.
III.
In the alternative, ORM points to its evidence that Ms. Atkins’s disability had
in fact ceased or lessened, in the sense that her work-related injuries had resolved.
Such evidence, if credited, could be a basis for modifying or terminating benefits,
under the plain language of § 1-623.24(d). The ALJ and the CRB, however,
concluded that ORM had failed to adequately support that factual claim. ORM does
not take issue with the factual analysis of the ALJ and the CRB. Rather, ORM raises
a purely legal issue: that the ALJ and the CRB applied the wrong burden of proof.
We uphold the ruling of the CRB.
Although “our review of legal rulings is de novo, we accord deference to an
agency’s reasonable interpretation of the statute it administers.” Frazier, 229 A.3d
at 139. To be considered reasonable, an agency’s interpretation “must reflect the
careful legal and policy analysis required in making choices among several
competing statutory interpretations, each of which has substantial support[,] and the
record must provide evidence that the agency considered the language, structure, or
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purpose of the statute when selecting an interpretation.” Washington Hosp. Ctr. v.
D.C. Dep’t of Emp. Servs., 789 A.2d 1261, 1264 (D.C. 2002) (internal quotation
marks omitted). An agency interpretation is not unreasonable simply because “a
different interpretation also may be supportable.” Wilson v. D.C. Rental Hous.
Comm’n, 159 A.3d 1211, 1214 (D.C. 2017). An agency may change its
interpretation of a statute “if it believes that a different interpretation is more
consistent with the statutory language and legislative intent, but if it does so, it is
obligated to provide an explanation of the change.” Hensley v. D.C. Dep’t of Emp.
Servs., 49 A.3d 1195, 1204-05 (D.C. 2012). This court will not affirm an agency
rule that is “arbitrary, capricious, or an abuse of discretion.” Wilson, 159 A.3d at
1214. An agency rule will normally be arbitrary and capricious if, among other
things, the agency has “entirely failed to consider an important aspect of the
problem.” Id. (internal quotation marks omitted).
The parties disagree about whether we should defer to ORM or the CRB on
the burden-of-proof issue. The parties also dispute whether ORM had authority to
promulgate a regulation governing the burden of proof in modification proceedings
before the OAH. We do not decide those questions. Even assuming that ORM had
authority to promulgate the regulation and that we should defer to ORM’s
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interpretation of the workers’ compensation statute, we conclude that ORM has not
adequately explained the rationale for the burden of proof reflected in its regulation.
A.
The burden of proof applied by the CRB “clarified the procedure to be
followed when a District agency-employer has accepted a claim for workers’
compensation and paid workers’ compensation benefits, but later moves to terminate
or modify those benefits.” Ross, 125 A.3d at 700-01. We concluded in Ross that
the CRB’s burden-of-proof standard was a reasonable interpretation of the public-
sector workers’ compensation provisions. Id. at 701-03.
ORM subsequently promulgated a regulation specifying a different burden of
proof in proceedings to modify benefits. 7 D.C.M.R. § 159.2. Under that regulation,
if the Program seeks to modify benefits, the Program bears the initial burden of
presenting “substantial evidence that the Program had reason to believe” that
modification or termination was warranted. 7 D.C.M.R. § 159.2(a). If the Program
carries that initial burden, the burden then shifts to the claimant to show by a
preponderance of evidence both (1) the nature and extent of any disability and (2)
that the claimant is entitled to ongoing benefits. 7 D.C.M.R. § 159.2(b).
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In explaining its decision to adopt the regulation, ORM first stated that it was
not bound to follow either the burden of proof established under federal workers’
compensation law or the burden of proof generally applied under the District of
Columbia Administrative Procedures Act. 64 D.C. Reg. 6330 (July 7, 2017). ORM
then gave a single reason in favor of adopting the regulation: the District’s
public-sector workers’ compensation statute contains a provision that “requires the
Program to modify benefits where there is ‘reason to believe’ a change of condition
has occurred.” Id. (quoting D.C. Code § 1-623.24(d)).
As ORM acknowledged at oral argument, that stated reason is not accurate.
Section 1-623.24(d) does not require the Program to modify benefits based on a
reason to believe that modification is warranted; rather, § 1-623.24(d) permits such
modification. See D.C. Code § 1-623.24(d)(1) (“The Mayor may modify an award
of compensation if the Mayor or his or her designee has reason to believe a change
of condition has occurred.”) (emphasis added).
ORM’s sole reason also is an inadequate justification for the regulation’s
allocation of the burden of proof. When approving the CRB’s allocation of the
burden of proof, this court stated that the public-sector workers’ compensation
statute “is silent on the burdens of production and persuasion where an agency-
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employer seeks to terminate a claimant’s workers’ compensation benefits.” Ross,
125 A.3d at 701. ORM agreed in this court that the statute is silent on the issue. It
necessarily follows that the “reason to believe” language in § 1-623.24(d) does not
by itself dictate the proper burden of proof.
In addition, ORM’s explanation for the regulation is seriously incomplete.
Other than to suggest that the principle was not binding, ORM did not address the
“fundamental principle of administrative, statutory and case law that the burden of
proof is on the proponent of the rule or order.” Ross, 125 A.3d at 701 (internal
quotation marks omitted). ORM also did not discuss its decision to establish a
burden of proof different from that applicable to modifications of benefits under
other workers’ compensation statutes in the District, which place the ultimate burden
of proof on the party seeking modification. Id. at 702 (noting that court generally
construes District’s workers’ compensation statutes “to be consistent with each
other, even where the statutes’ language is not identical, in light of their similar
humanitarian purpose”).
Finally, ORM did not address the humanitarian purpose of workers’
compensation statutes, including the public-sector workers’ compensation statute.
Ross, 125 A.3d at 702; see generally, e.g., Off. of Risk Mgmt. v. Jordan, , 843 (D.C.
12
2020) (“[W]orkers’ compensation provisions are typically given a liberal
construction by the court to effectuate their humanitarian purposes.”) (brackets and
internal quotation marks omitted). Under § 159.2, ORM need only present
substantial evidence of a reason to believe that modification is merited before the
burden of proof shifts to the claimant, who is then required to show by a
preponderance of the evidence entitlement to ongoing benefits. 7 D.C.M.R. § 159.2.
Section 159.2 thus sets a relatively low threshold for ORM to shift the burden of
proof to claimants, who must then meet a much higher standard of proof to keep
receiving the benefits they previously were awarded. That approach fits rather
uncomfortably with the humanitarian purpose of workers’ compensation statutes.
In sum, we conclude that ORM’s burden-of-proof regulation is invalid,
because ORM promulgated the regulation based on an inaccurate statement of law
and failed to address important factors bearing on the reasonableness of the
regulation. We therefore uphold the decision of the CRB to instead apply the burden
of proof approved by this court as reasonable in Ross, 125 A.3d at 701-03.
For the foregoing reasons, we affirm the order of the CRB.
So ordered.