Zhang v. State

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Electronically Filed
Supreme Court
SCWC-11-0001106
08-AUG-2016
07:49 AM
SCWC-11-0001106
IN THE SUPREME COURT OF THE STATE OF HAWAIʻI
JULIANA J. ZHANG,
Petitioner/Claimant-Appellant,
vs.
STATE OF HAWAI‘I, DEPARTMENT OF LAND AND NATURAL RESOURCES,
Respondent/Employer-Appellee, Self-Insured.
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-11-0001106; CASE NO. AB-2003-365 (2-94-41072))
MEMORANDUM OPINION
(By: Recktenwald, C.J., Nakayama, McKenna, and Pollack, JJ.,
and Circuit Judge Browning, in place of Wilson, J., recused)
I. Introduction
This case addresses decisions made by the Labor and
Industrial Relations Board (“LIRAB”) regarding workers’
compensation benefits for a mental stress injury suffered by a
former employee of the State of Hawai‘i Department of Land &
Natural Resources (“DLNR”). Specifically, Juliana J. Zhang
(“Zhang”) asserts that the LIRAB erred in determining that
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(1) she is not entitled to retroactive temporary total
disability benefits from May 5, 2004 to the present due to
deficiencies in her physicians’ certifications of disability,
and (2) she was not terminated from employment solely due to her
filing of this workers’ compensation claim, which would
constitute a violation of Hawai‘i Revised Statutes (“HRS”) § 386-
142 (1993).1
As to the first issue, we hold that, based on Panoke v.
Reef Development of Hawaii, Inc., 136 Hawai‘i 448, 363 P.3d 296
(2015), the LIRAB erred in denying Zhang’s temporary total
disability benefits after May 5, 2004 based solely on
deficiencies in the certifications of disability submitted by
Zhang’s physician. As to the second issue, although it appears
Zhang correctly asserts that she was authorized to continue
1
HRS § 386-142 provided then and now as follows:
It shall be unlawful for any employer to suspend or
discharge any employee solely because the employee suffers
any work injury which is compensable under this chapter and
which arises out of and in the course of employment with
the employer unless it is shown to the satisfaction of the
director that the employee will no longer be capable of
performing the employee’s work as a result of the work
injury and that the employer has no other available work
which the employee is capable of performing. Any employee
who is suspended or discharged because of such work injury
shall be given first preference of reemployment by the
employer in any position which the employee is capable of
performing and which becomes available after the suspension
or discharge and during the period thereafter until the
employee secures new employment. This section shall not
apply to the United States or to employers subject to part
III of chapter 378.
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working in the United States at the time of her July 27, 1994
termination by DLNR, the LIRAB did not err in ruling that Zhang
was not terminated solely due to her filing of a workers’
compensation claim, in violation of HRS § 386-142. As argued by
DLNR, res judicata principles preclude the finding sought by
Zhang because the circuit court found in her prior lawsuit that
Zhang had been terminated from employment because of DLNR’s
belief that Zhang had failed to submit documents necessary for
the extension of her work authorization. The judgment
incorporating this finding was not appealed, giving it
preclusive effect, which prohibits a finding that Zhang was
terminated solely due to her filing of this workers’
compensation claim.
We therefore vacate in part the Intermediate Court of
Appeals’ (“ICA”) October 24, 2014 Judgment on Appeal and the
LIRAB’s December 6, 2011 Decision and Order, and remand the case
to the LIRAB for further proceedings consistent with this
opinion.
II. Background
A. Background
Zhang is an electrical engineer originally from the
People’s Republic of China, who fled to the United States in
1990 with her former husband. Zhang entered the United States
as the spouse of a Chinese student permitted to work pursuant to
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Executive Order 12711 of 1990, which granted Chinese nationals
who were in the United States after June 5, 1989 employment
authorization through January 1, 1994. See Exec. Order No.
12711 § 3, 55 Fed. Reg. 13897 (April 11, 1990).
On June 24, 1992, Zhang began working for DLNR on a
renewable annual contract basis, checking engineering aspects of
water project proposals. Upon beginning employment, she filled
out the requisite United States (“U.S.”) Department of Justice,
Immigration and Naturalization Service (“INS”) Form I-9 to
verify her employment eligibility. Pursuant to the INS’s
“Handbook for Employers” in effect at the time, an employer was
required to verify an incoming employee’s employment
authorization by having a new employee submit either a document
from List A, which would establish both identity and employment
eligibility (such as a U.S. passport), or one document from List
B to establish identity (such as a state driver’s license) and
one document from List C to establish employment eligibility
(such as a U.S. Social Security Number Card (“Social Security
Card”) other than one reflecting “not valid for employment”).
Zhang submitted a Hawai‘i Driver’s License valid until May
16, 1995 and a standard Social Security Card, which did not
contain a statement that it was not valid for employment. In
the Form I-9, she also completed a box attesting that she was an
“alien authorized to work until 01/01/94” under a specific alien
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or admission number as provided by Executive Order 12711 of
1990. Effective October 19, 1992, however, Executive Order
12711 was superseded by the Chinese Student Protection Act of
1992, Pub. L. No. 102-404, 106 Stat. 1969 (“CSPA”). The CSPA
allowed Chinese nationals in the United States subject to
Executive Order 12711 to apply for an adjustment to legal
permanent resident status. CSPA § 2(a)(1) also specifically
provided that upon application for adjustment of status, the
Chinese national would be “deemed approved.” CSPA, Pub. L. No.
102-404, § 2, 106 Stat. at 1969.
Around March of 1993, a permanent position became available
at DLNR, and Zhang’s direct supervisors apparently encouraged
her to apply. Also, apparently pursuant to Zhang’s request, in
May of 1993, DLNR drafted an H-1B petition to have Zhang
classified as a temporary non-immigrant in a specialty
occupation for a three year employment period. It appears,
however, that although DLNR thought this petition had been
submitted, it had not.
It also appears that Zhang learned about passage of the
CSPA because on June 30, 1993, she submitted a Form I-485 to the
INS to apply for an adjustment of her status to that of a legal
permanent resident. Although pursuant to the CSPA, she
apparently may have been “deemed approved” upon submission of
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her adjustment application, on October 8, 1993, she called the
INS to inquire about the status of this application, and was
informed it was still pending. From that date to December 15,
1993, Zhang visited the Honolulu INS office twice to follow up,
but the INS said there had been no change in status. On
December 15, 1993, Zhang wrote to the INS to inquire about the
status of her application. On January 28, 1994, the INS
responded that her application was still pending. As noted
above, however, the CSPA provided that upon submission of her
application for adjustment of status, Zhang’s adjustment of
status to legal permanent resident had been “deemed approved.”
According to Zhang, she had not received any negative
feedback or evaluations, but it appears that by early 1994, DLNR
had some concerns regarding her work. DLNR Deputy Director Rae
Loui (“Loui”) met with Zhang on March 18, 1994 to discuss her
work hours, and on March 28, 1994, sent Zhang a memorandum, the
purpose of which was “to make clear your work hours, name of
supervisor, and our expectations.” The memorandum informed
Zhang that: (1) her work hours, per her request, were 8:30 a.m.
to 5:15 p.m., with two 15 minute coffee breaks and one 45 minute
lunch break; (2) because her previous supervisor was on loan to
another organization, her direct supervisor was David Higa and
that Higa’s supervisor was Ed Sakoda; (3) she was to keep
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personal calls to a minimum and was not allowed to sell stamps
during work hours; and (4) she would need to clock in her time
four times per day. This memorandum was apparently triggered by
complaints from Zhang’s co-workers.
Zhang’s union, the Hawai‘i Government Employees Association
(“HGEA”), filed a step 1 grievance on her behalf on April 25,
1994, then a step 2 grievance on May 27, 1994, alleging that the
requirements placed on Zhang were discriminatory, arbitrary, and
capricious, and demanding a rescission and expungement of the
memorandum as well as a stop to “this type of discrimination in
the workplace.”
On May 25, 1994, Zhang’s supervisor allegedly told her he
would be giving her both verbal and written warnings if he heard
any more complaints about her.
On June 22, 1994, Zhang orally reported a worker’s
compensation mental stress type injury to DLNR, and went to see
physician Dr. Nola Mirikitani (“Dr. Mirikitani”) for the first
time. Dr. Mirikitani diagnosed Zhang with major depression,
certified her as disabled as of June 22, 1994, and noted that
Zhang would be able to return to regular work on July 6, 1994.
In the WC-2 Physicians’ Report Dr. Mirikitani prepared, she
noted a date of injury/illness of “03/?/94,” noted that the work
injury was the only cause of Zhang’s condition, certified Zhang
as disabled as of June 22, 1994, indicated a need for further
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medical rehabilitation, and noted that Zhang would be able to
return to regular work on July 6, 1994.
On June 27, 1994, Zhang faxed an HGEA Unit 13 step 1 labor
grievance form to DLNR’s Higa concerning the May 25, 1994
incident, asserting Higa had made the statement in retaliation
for the previous grievance Zhang had brought, and requested that
the statement be rescinded. Zhang returned to work on June 28,
1994, despite Dr. Mirikitani’s July 1, 1994 WC-2 stating that
Zhang could return to work on July 6th. Zhang obtained workers’
compensation forms on that day; Dr. Miritani’s office faxed in a
work excuse for June 22nd to the 28th.
On June 28, 1994, DLNR Chair Keith Ahue (“DLNR Chair Ahue”)
wrote to HGEA, agreeing to rescind the March 28, 1994 memo
changing Zhang’s work schedule, and ruling in favor of HGEA’s
previous grievance that alleged unfair changes to Zhang’s work
schedule. On June 30, 1994, Loui wrote a “courtesy reminder” to
Zhang, stating that her limited term employment would end on
September 30, 1994. Soon thereafter, HGEA filed a step 1
grievance regarding this letter, alleging that the “courtesy
reminder” was “disciplinary, and in retaliation for her having
filed other grievances in the past.” On June 30, 1994, Higa
sent a letter to Zhang via certified mail, stating that her June
27, 1994 grievance would not be considered because it had been
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made more than twenty days after the alleged May 25, 1994
incident, in contravention of the grievance procedure in the
Unit 13 Contract Agreement (“CBA”), which required that a
grievance be submitted within twenty working days.2
On July 1, 1994, Zhang sought treatment from Dr. Mirikitani
for a second time. Zhang said she had been back at work for
three days without problems until the day before, when she
received a letter that her position would not be renewed in the
fall due to budget cuts. She had called in sick that day, said
she was unable to function and that she had an attorney. She
said she still felt tired, although her headaches were not as
bad. She also spent a great deal of time worrying about a
change in date for her return to work slip. Dr. Mirikitani
continued Zhang on anti-depressant medication, and noted she
could return to work on July 8, 1994.
On July 1, 1994, DLNR prepared a WC-1 Employer’s Report of
Industrial Injury, noting that Zhang had sustained a stress-
related injury allegedly as “a result of mental stress and
pressure caused by work supervisors and brought about by a
hostile work environment[,]” checked “Yes” to “Is Liability
2
The twenty working day deadline expired on Friday, June 24, 1994,
the working day before her grievance.
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Denied,” but noted “Pending Investigation” as to “If Liability
Denied—Why?”3
Zhang saw Dr. Mirikitani again on July 8, 1994. Dr.
Mirikitani changed Zhang’s medication, and noted that Zhang
should minimize contact with others and could return to work in
one week. Also on that day, Zhang prepared a WC-5 Employee’s
Claim for Workers’ Compensation Benefits, describing her work
injury as headache, fatigue, dizziness, failure to concentrate
due to mental stress, subsequent insomnia, loss of appetite, and
weight loss.
On July 5, 1994, DLNR personnel officer Melvin Young
(“Young”) reviewed Zhang’s files to ascertain her employment
eligibility status. Although Young later represented that this
review was a part of a routine review to reverify the employment
eligibility and work authorization of DLNR’s alien employees,
Young later admitted that only Zhang’s records had been
reviewed. Then on July 18, 1994, Young wrote to Zhang, stating
that her employment authorization had only been granted until
January 1, 1994, and asking that she contact the INS, to submit
3
On July 8, 1997, this court held in Mitchell v. DOE, 85 Hawai‘i
250, 942 P.2d 514 (1997), that a stress-related injury caused by a
disciplinary action within the course of employment is compensable under
workers’ compensation law. Pursuant to Act 224 of 1998, the Legislature
added HRS § 386-3(c), generally excluding mental stress resulting solely from
good faith disciplinary actions from the workers’ compensation scheme. 1998
Haw. Sess. Laws Act 224, § 2 at 768.
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documents showing extension of her visa and employment
authorization by July 25, 1994. Also on that date, Higa
prepared a job evaluation report for Zhang for the three month
period of April through June 1994, finding her “Not quite
satisfactory” for “Quantity of Work on the Job” and “Work
Attitudes on the Job.”
At a July 22, 1994 meeting with Young, Zhang therefore
submitted (1) a copy of a December 15, 1993 letter from Zhang to
the INS inquiring of the status of her Form I-485 for adjustment
to permanent resident status, and (2) a January 18, 1994
response from the INS indicating that her application was still
pending. Zhang followed up on the July 22, 1994 meeting with a
letter that day, stating that her documents showed there were no
problems regarding her work authorization, asking that Young not
contact the INS directly regarding her status, expressing her
opinion that Young’s July 18, 1994 letter was a continuation of
harassment, and asking that any further inquiries be
memorialized in case her explanation and documentation had not
been sufficient.
Young responded via letter dated July 25, 1994, asserting
that none of Zhang’s documents provided the required information
or related to an approval of her work authorization beyond
January 1, 1994, and informing Zhang that she would be
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terminated if the requested documentation was not received by
July 27, 1994.
According to Zhang, on July 25, 1994 at 4:45 p.m., she was
planning to work late when Higa told her she needed to leave at
5:00 p.m. When asked why, he allegedly said his supervisor,
Eric Hirano, told him to tell her to leave at 5:00 p.m.,
otherwise he would give her a reprimand. When she asked why
only she needed to leave, Higa allegedly went to Hirano’s
office, then returned at 4:57 p.m. and said that everyone must
leave at 5:00 p.m.
Zhang returned to Dr. Mirikitani on July 26, 1994, noting
that she had been working since July 11, but had an argument
with her supervisor the day before, had been criticized for
working late, felt discriminated against, had not been able to
sleep the night before, and had called in sick that day. She
stated she was having difficulty doing work when harassed, and
was worried about paying for her medical expenses. Dr.
Mirikitani diagnosed major depression, noting a “no win
situation for pt.” She counselled Zhang to settle her
grievances. Zhang responded that she was taking steps to do so,
but that the process would take time, and expressed an honest
desire to work. On that day, Dr. Mirikitani prepared a
certificate to return to work noting that Zhang “is able to
return to work on 8/1/94.”
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Also on July 26, 1994, a hearing took place in Loui’s
office attended by Loui, Hirano, and then-HGEA Field Services
Officer Randy Perreira (“Perreira”) regarding the step 1
grievance HGEA had filed on behalf of Zhang with respect to
Loui’s June 30, 1994 letter. During that hearing, Perreira
apparently asserted that the June 30, 1994 letter had been
improperly placed in Zhang’s personnel file in violation of
Article 16 of the CBA.4
Also on July 26, 1994, Zhang wrote to Young, submitting
additional “documentation required according to the INS rules
that verify [Zhang’s] work and immigration status.” Zhang
explained that an INS agent Paul Fereza (“Fereza”) indicated to
her that her check written with her application for extension of
her work authorization qualifies as a receipt, and therefore is
sufficient until authorization is received.
Despite this, Zhang, Hirano, and possibly also Young went
to the INS office on this or the next date to clarify Zhang’s
work authorization status. It appears that DLNR was focused on
4
During the hearing, Loui stated that the letter was only a
“courtesy reminder,” and was not placed in Zhang’s file, and Hirano confirmed
this statement. Given these assurances and a confirming letter from Loui to
HGEA dated July 27, 1994, which also stated that the June 30, 1994 letter had
been sent to provide Zhang with the same ninety day notice provided to
regular employees facing a pending reduction in force or layoff, this charge
was not pressed further. When Zhang reviewed her personnel file after her
termination, however, Loui’s June 30, 1994 “courtesy reminder” letter was in
her personnel file.
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the H-1B it had prepared in May 1993, which apparently had never
been submitted. In a July 28, 1994 memorandum to INS agent
Fereza, Hirano explained that DLNR had no additional information
on Zhang’s H-1B petition for a non-immigrant visa. A notation
on that memorandum indicates that Ferreza called back to say
that the INS was also unable to find any records on an H-1B
petition for Zhang. Young then wrote to Zhang later that day,
stating that DLNR’s review of the documents submitted showed
that Zhang still did not have proper INS employment
authorization after January 1, 1994, and that she was terminated
effective close of business on July 27, 1994 “as stipulated in
our memorandum to you dated July 25, 1994.” Thus, July 27, 1994
was Zhang’s last day of work at DLNR.
On August 2, 1994, HGEA wrote to DLNR Chair Ahue,
expressing dissatisfaction with the handling of the first step
grievance it had filed on behalf of Zhang. According to this
letter, Zhang had been notified by letter dated June 30, 1994
that her employment would be terminated September 30, 1994.
HGEA alleged that DLNR’s decision to not renew Zhang’s
employment was in retaliation for Zhang having filed grievances
against DLNR, and was the culmination of a pattern of
harassment. HGEA demanded her reinstatement.
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On August 4, 1994, Zhang wrote to the State of Hawai‘i
Department of Human Resources Development, State Workers’
Compensation Division, requesting
an immediate hearing regarding the denial of my workers’
compensation benefits by Melvin Young, Personnel Office,
Dept. of Land and Natural Resources. The HGEA supports my
contention that Rae Loui, Deputy Director of DLNR and other
management personnel have cohorted [sic] to put extreme
pressure on me at my work. Since my original WC claim, the
harassment and discrimination has [sic] escalated, to the
point of Melvin Young terminating me on July 27, 1994.
This termination is illegal according to Federal Law, and
will be investigated by the Office of Special Counsel (OSC)
Dept. of Justice in Washington, D.C. which investigates
National Origin discrimination cases, the Hawaii Equal
Employment Opportunity Commission (EEOC), the Hawaii Civil
Rights Commission and HGEA Union #13.
Zhang further alleged that “Rae Loui, Melvin Young, Eric Hirano,
and David Higa of DLNR have caused [her] extreme stress and
although [she] tried to work through it, it just became
unbearable . . . .”
Zhang saw Dr. Mirikitani again on August 5, 1994. Despite
the initial denial of compensability, Dr. Mirikitani continued
to treat Zhang’s depression as work-related.
On August 10, 1994, Zhang wrote to Young, enclosing a
photocopy of a Department of Justice Employment Authorization
Card issued on that date. Zhang requested immediate
reinstatement, but was not reinstated.
After her termination, Zhang also sought treatment with
psychologist Dr. Rosemarie Adam-Terem (“Dr. Adam-Terem”), who
she first saw on August 17, 1994. Dr. Adam-Terem diagnosed
major depression and generalized anxiety disorder, and
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recommended continued therapy. Thereafter, Zhang continued
treatment with both Drs. Mirikitani and Adam-Terem.
B. 1994 to 2006: Preliminary Decisions of the Director and
Circuit Court Complaint
By decision dated December 15, 1994, the Director of the
Department of Labor and Industrial Relations (“Director”)
determined that Zhang suffered a compensable work-related stress
injury. By supplemental decision dated April 28, 1995, the
Director awarded Zhang temporary total disability benefits from
June 25, 1994.
In the meantime, on August 5, 1994, Zhang had filed charges
of employment discrimination with the U.S. Equal Employment
Opportunity Commission and the Hawai‘i Civil Rights Commission.
On August 31, DLNR responded to the Department of Justice,
asserting that Zhang had not been discriminated against, and
that the sole reason for her termination was her alleged failure
to provide necessary work authorization documentation.
A complaint was then filed on Zhang’s behalf on July 26,
1996 in the Circuit Court of the First Circuit (“circuit
court”), Civil No. 96-3117-07, alleging ancestry and national
origin discrimination and retaliation. A bench trial took place
before the circuit court in June 1998. The circuit court’s July
23, 1998 Findings of Fact, Conclusions of Law and Order and
August 14, 1998 Judgment (“Judgment”), concluded that Zhang’s
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termination was not based on ancestry or national origin
discrimination and retaliation, and was also not based on
retaliation for the filing of grievances. The Judgment was not
appealed.
The circuit court entered the following findings of fact
directly relevant to this appeal:
1. That [Zhang] is a Chinese National who was allowed to
enter and work within the State of Hawaii pursuant to
an “executive order” “work exemption” which was to
expire in January of 1994.
2. That [Zhang] was hired by the State of Hawaii in June
of 1992. [Zhang] was hired as a civil engineer by
the [DLNR] on a temporary basis, renewable on a
yearly basis.
3. That [Zhang] recognized her temporary work status
within the State of Hawaii, and as such, she sought
to extend or eliminate this temporary status by
various means.
4. That one means of extending or eliminating this
temporary work status was by way of an H-1B petition.
The petition required sponsorship and [Zhang] sought
sponsorship from [DLNR].
5. That as a result of [Zhang’s] request for
sponsorship, [] Loui had questions and concerns as to
some of the inquiries contained within the H-1B
petition. As such, [] Loui memorialized her
questions and concerns in Exhibit 9. The questions
and concerns contained within Exhibit 9 were not
generated as a result of [] Loui’s meeting with the
FBI or as a means of finding a “legal way to
discriminate” against [Zhang] “on the basis of
national origin”.
6. That the expiration of [Zhang’s] work status was
noted by [] Hirano a few months after the expiration
date. [] Hirano notified [] Young of this
expiration.
7. That it was [] Hirano and Young’s impression that
sanctions could be imposed for their failure to note
the expiration of [Zhang’s] work authorization in a
timely fashion. As such, [Hirano and Young] sought
to remedy the matter by seeking, what they believed
to be, the necessary documents from [Zhang].
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8. That [Zhang] submitted, what she thought to be, the
necessary documents to [] Young. [ ]
9. That it was [] Young’s position that [Zhang] did not
submit the documents which were necessary for the
extension of her work authorization. As such,
[Zhang] was terminated from her employment with
[DLNR].
. . . .
13. That there is no credible evidence to support a
finding that [Zhang’s] termination from employment []
was based upon her “national origin”. [sic]
. . . .
18. That [Zhang] did file “grievances” against [] Louie
for some of the “acts” [Zhang] was required to do.
The record does not support a finding that [Zhang’s]
termination was a result of the filing of these
grievances.
19. That [Zhang] did file charges of “discrimination” . .
. . However, the timing of the filing of these
charges and termination of [Zhang] does not support a
finding that [Zhang’s] termination was based upon
retaliation for the filing of “discrimination”
charges.
20. That [Zhang] has failed to meet her burden in
presenting the Court with credible evidence that
provides a “link” between her termination and her
allegations that it was based upon “national origin”
and/or for “retaliatory” purposes.
DLNR continued to pay Zhang temporary total disability
benefits and medical costs through 2003. Zhang continued
treatment for depression with Dr. Mirikitani through at least
1997, and with Dr. Adam-Terem through 2003.
Zhang underwent an independent medical examination (“IME”)
with DLNR’s physician, Dr. John Stretzler (“Dr. Stretzler”), on
August 1, 2002. On August 8, 2002, Dr. Stretzler opined that
Zhang did not have a mental disorder, and diagnosed her with a
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pre-existing “Paranoid Personality Disorder with Narcissistic
Traits.” Zhang requested vocational rehabilitation services on
July 12, 2002, underwent testing, and prepared to enroll in
classes at a local community college. As of May 5, 2004, no
vocational rehabilitation plan was formalized.
On August 15, 2002, Zhang was informed that, based upon Dr.
Stretzler’s findings, her temporary total disability benefits
would terminate effective August 29, 2002. By letter dated
November 21, 2002, Zhang requested a hearing to review DLNR’s
“denial of services.” By second supplemental decision dated
July 30, 2003, the Director determined that Zhang’s compensable
work injury “was limited to an Adjustment Disorder that resolved
and Major Depression that is in remission[,]” and denied further
psychological treatment because her need for treatment was not
related to her work injury, but rather, was due to a pre-
existing personality disorder.5
Zhang appealed the July 30, 2003 supplemental decision to
the LIRAB, which, by stipulation of the parties, remanded the
case for a determination of Zhang’s entitlement to vocational
rehabilitation services and temporary total disability benefits.
5
In making these determinations, the Director credited the
testimony and reports of Dr. Stretzler that Zhang’s work injury had resolved
and that her then-current psychological problems resulted from a pre-existing
personality disorder, over those of Zhang’s treating psychologist, Dr. Adam-
Terem.
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Following a hearing on May 5, 2004 on the remanded issues,
the Director issued a third supplemental decision on July 2,
2004, denying vocational rehablitation and additional temporary
total disability benefits based on the July 30, 2003
supplemental decision, which concluded that Zhang’s work injury
had resolved.
Zhang appealed the July 2, 2004 supplemental decision to
the LIRAB, which granted Zhang’s Motion for Temporary Remand on
the HRS § 386-142 claim. A hearing was held on February 1,
2006, and continued and completed on March 21, 2006.
By fourth supplemental decision dated July 6, 2006 (as
amended on July 18, 2006), the Director determined that Zhang
was terminated as a result of her immigration work status, and
not solely due to her workers’ compensation claim.
On July 23, 2006, Zhang, now pro se, appealed the July 6,
2006 supplemental decision (as amended July 18, 2006), and
continued the appeal of issues from prior decisions previously
appealed to the LIRAB.6 On August 24, 2010, Zhang filed a fraud
6
In total, Zhang appealed three of the four supplemental decisions
to the LIRAB, including the Director’s supplemental decisions dated July 30,
2003, July 2, 2004, and July 6, 2006 (as amended July 18, 2006).
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complaint7 under HRS § 386-89(b)8 against the INS and DLNR,
arguing
INS knowingly and intentionally and in cooperation with
DLNR and Eric Hirano, Melvin Young, and DLNR Personnel
office [sic], fabricated the “Warning Notice” based solely
on a fraudulent I-9 Form “review”by [sic] INS, to
intentionally mislead and misrepresent [Zhang’s] work
status in the U.S., and that INS and DLNR knew [Zhang] was
terminated while she was authorized to work in the U.S.
Zhang contended that she entered the United States under
Executive Order 12711, and that the CSPA extended her work
authorization status beyond January 1, 1994 because she had an
I-485 petition pending.
C. Appeal to the LIRAB
The LIRAB held a hearing on December 1, 2010. The issues
relevant to this appeal that were to be determined at the
hearing included: (1) whether Zhang is entitled to temporary
total disability benefits after May 5, 2004, and (2) whether
7
In its SDO, the ICA ruled that “the issue of Zhang’s August 24,
2010 fraud complaint is not properly before us, and the LIRAB did not err by
failing to find that DLNR committed fraud against Zhang” where “it does not
appear that the Director made any ruling on the issue . . . [nor] that LIRAB
was asked to remand the matter to the Director or otherwise take any action
on Zhang’s fraud complaint.” We likewise decline to address this issue for
the first time on appeal. See Kalapodes v. E.E. Black, Ltd., 66 Haw. 561,
565, 669 P.2d 635, 637 (1983) (“This court will not consider issues for the
first time which were not presented to the [LIRAB].”); see also HRS § 386-
87(c) (explaining the LIRAB’s powers of review).
8
HRS § 386-89(b) (1993) provides, “[t]he director may at any time,
either of the director’s own motion or upon the application of any party,
reopen any case on the ground that fraud has been practiced on the director
or on any party and render such decision as is proper under the
circumstances.”
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Zhang was terminated solely due to her filing of a worker’s
compensation claim, in violation of HRS § 386-142.9
The LIRAB issued its Decision and Order on December 6,
2011, reversing in part, modifying in part, and affirming in
part the Director’s supplemental decisions dated July 30, 2003,
July 2, 2004, and July 6, 2006 (amended on July 18, 2006). The
LIRAB concluded that Zhang’s “work injury includes major
depression, in remission, and adjustment disorder, resolved, but
not dysthymia.” The LIRAB also entered the following findings
of fact:
VR
44. [Zhang] initiated vocational rehabilitation . . .
on July 12, 2002.
45. There are no opinions that Claimant did not and
may not suffer permanent partial disability as a result of
the June 20, 1994 work injury.
46. The Board finds, therefore, that [Zhang] is
entitled to further VR services.
TTD
47. There are no medical certifications that [Zhang]
was temporarily and totally disabled as a result of the
June 20, 1994 work injury for the period after May 5, 2004.
48. The Board finds, therefore, no evidence that
[Zhang] was temporarily and totally disabled after May 5,
2004.
49. The Board makes no determination on [Zhang]’s
entitlement to TTD after September 18, 2009 (medical
9
By pretrial order dated February 19, 2009, the issues to be
determined were, inter alia: (1) whether Zhang’s work injury includes major
depression, dysthymia, and/or adjustment disorder; (2) whether Zhang is
entitled to further medical treatment; (3) whether Zhang is entitled to
further VR services; (4) whether Zhang is entitled to TTD benefits after May
5, 2004; (5) whether to remand permanent partial disability for a later
determination; and (6) the HRS § 386-142 claim.
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reports deadline) or [Zhang]’s entitlement to TTD pursuant
to Section 386-25, HRS, given the approval of future VR in
the previous section.
. . . .
Termination
57. The Board finds that the issue of whether
[Zhang]’s termination from employment was solely the result
of her industrial injury of June 20, 1994 has not been
previously adjudicated.
58. The Board finds that [Zhang]’s termination from
employment was not solely the result of her industrial
injury of June 20, 1994.
The LIRAB also made the following conclusions of law:
3. The Board concludes that [Zhang] is entitled to
further vocational rehabilitation services.
4. The Board concludes that [Zhang] was not entitled
to temporary total disability benefits after May 5, 2004
for lack of disability certification. The Board makes no
determination of [Zhang]’s entitlement to TTD benefits
after September 18, 2009, as TTD may be related to re-
enrollment in VR.
. . . .
7. The Board concludes, considering Section 386-142,
Hawaii Revised Statutes, that [Zhang]’s termination from
employment was not solely the result of her industrial
injury of June 20, 1994. There is no evidence to support
this contention.
D. Appeal to the ICA
Zhang, appearing pro se, argued, inter alia,10 that the
LIRAB erred in (1) denying her temporary total disability
10
The first eight points of error concern alleged LIRAB error.
Zhang argued that the LIRAB erred (1) by failing to find that DLNR committed
fraud against Zhang; (2) by denying Zhang TTD payments, medical benefits, and
“other benefits” after May 5, 2004; (3) by crediting the opinion of Dr.
Streltzer and by determining that DLNR presented substantial evidence to
overcome the presumption of work-relatedness regarding dysthymia; (4)
regarding its permanent partial disability benefits decision; (5) by denying
Zhang’s request for a change in her workers’ compensation “average weekly
wage;” (6) by determining that DLNR did not violate HRS § 386-142; (7) by
denying Zhang “full discovery” regarding her termination; and (8) by failing
to recognize Zhang’s entitlement to vacation and sick leave credits, as well
(continued. . .)
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payments, medical benefits, and “other benefits” after May 5,
2004 based on its finding that there were “no medical treatment
plans after May 5, 2004[,]” and noted an August 9, 2005 Workers’
Compensation Treatment Plan written by Dr. Adam-Terem as an
example; and (2) finding no HRS § 386-142 violation where she
was terminated after the date of her injury and the filing of
her workers’ compensation claim.
DLNR argued, inter alia, that none of the medical reports
after May 5, 2004 properly certified that Zhang’s work-injury
totally disabled her from work, and that HRS § 386-142 does not
apply because Zhang “was terminated due to her failure to
provide requested documents required by the INS and not because
of her work injury.” As to the second issue, DLNR argued that
Zhang failed to provide any evidence to establish that DLNR
discharged her solely because of her work injury, instead
providing evidence to show that DLNR should not have terminated
her due to her immigration status.
The ICA affirmed the LIRAB’s denial of temporary total
disability after May 5, 2004 for lack of disability
certification, ruling that the three medical reports dated after
May 5, 2004 were insufficient under HRS 386-96, which mandates
(. . .continued)
as her rights and benefits as a member of the HGEA. In Zhang’s ninth point
of error, she argued that the award of attorney’s fees to her attorney should
not be included in the ICA appeal. These points of alleged error are not
pursued on certiorari and are therefore not addressed.
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the submission of medical reports for the giving of treatment or
rendering of services to an injured employee. Based on the lack
of adequate disability certification after May 5, 2004 and the
LIRAB’s deference on mixed questions of law and fact, the ICA
concluded that the LIRAB’s findings of fact 47 and 48 were
supported by substantial evidence, and thus, the LIRAB did not
clearly err regarding its temporary total disability decision in
conclusion of law 4.
The ICA also rejected the HRS § 386-142 claim as being
“without merit,” stating, Zhang “provide[d] no further argument,
facts, or authority supporting her assertion that the LIRAB
erred, instead asking this ‘Court to spell out ANY evidence of
any action to terminate Zhang or to question her work
authorization initiated PRIOR to June 20, 1994.’”
III. Standards of Review
Appellate review of a LIRAB decision is governed by HRS §
91-14(g) (1993), which states that:
Upon review of the record the court may affirm the
decision of the agency or remand the case with
instructions for further proceedings; or it may
reverse or modify the decision and order if the
substantial rights of the petitioners may have been
prejudiced because the administrative findings,
conclusions, decisions, or orders are:
(1) In violation of constitutional or statutory
provisions; or
(2) In excess of the statutory authority or
jurisdiction of the agency; or
(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(5) Clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole
record; or
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(6) Arbitrary, or capricious, or characterized by
abuse of discretion or clearly unwarranted
exercise of discretion.
We have previously stated:
[Findings of Fact] are reviewable under the clearly
erroneous standard to determine if the agency
decision was clearly erroneous in view of reliable,
probative, and substantial evidence on the whole
record.
[Conclusions of Law] are freely reviewable to
determine if the agency’s decision was in violation
of constitutional or statutory provisions, in excess
of statutory authority or jurisdiction of agency, or
affected by other error of law.
A [Conclusion of Law] that presents mixed questions
of fact and law is reviewed under the clearly
erroneous standard because the conclusion is
dependent upon the facts and circumstances of the
particular case. When mixed questions of law and
fact are presented, an appellate court must give
deference to the agency’s expertise and experience in
the particular field. The court should not
substitute its own judgment for that of the agency.
Igawa v. Koa House Rest., 97 Hawai‘i 402, 405-06, 38 P.3d 570,
573-74 (2001) (internal quotation marks, citations, and brackets
in original omitted) (quoting In re Water Use Permit
Applications, 94 Hawai‘i 97, 119, 9 P.3d 409, 431 (2000)).
An FOF or a mixed determination of law and fact is
clearly erroneous when (1) the record lacks substantial
evidence to support the finding or determination, or (2)
despite substantial evidence to support the finding or
determination, the appellate court is left with the
definite and firm conviction that a mistake has been made.
We have defined “substantial evidence” as credible evidence
which is of sufficient quality and probative value to
enable a person of reasonable caution to support a
conclusion.
94 Hawai‘i at 119, 9 P.3d at 431 (internal quotation marks and
citations omitted).
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IV. Discussion
Represented by counsel on certiorari,11 Zhang asserts that
the LIRAB erred in determining that (1) she is not entitled to
retroactive temporary total disability benefits from May 5, 2004
to the present due to deficiencies in her physicians’ successive
certifications of disability, and (2) she was not terminated
solely due to her filing of a workers’ compensation claim, in
violation of HRS § 386-142. We address these issues as follows.
A. The LIRAB erred in denying Zhang’s TTD benefits after May
5, 2004 based on deficiencies in the certifications of
disability submitted by Zhang’s physician
Zhang received temporary total disability benefits totaling
$226,869.84 for the period of June 25, 1994 to May 5, 2004, but
was denied additional benefits from May 5, 2004 to September 18,
2009 (medical reports deadline). To briefly summarize the
proceedings relevant to this issue, the Director denied
temporary total disability after May 5, 2004 on the basis that
the July 30, 2003 second supplemental decision determined that
Zhang’s compensable work injury “was limited to an Adjustment
Disorder that resolved and Major Depression that is in
remission.” On appeal, the LIRAB affirmed the denial “for lack
of disability certification.” The ICA affirmed the LIRAB on the
same basis.
11
We sadly note the passing of Zhang’s certiorari counsel, Lila
Barbara Kanae, on March 19, 2016.
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Zhang argues, inter alia, that the ICA erred in assuming
“that successive medical certification was required to obtain
TTD[.]”
The issue of the denial of temporary total disability
benefits due to deficiencies in physicians’ certifications of
disability was specifically addressed by this court in Panoke,
136 Hawai‘i 448, 363 P.3d 296, in which this court vacated the
LIRAB’s limitation of temporary total disability benefits,
holding that “the LIRAB may not deny a claimant benefits based
on deficiencies in a physicians’ certifications of disability.”
136 Hawai‘i at 465, 363 P.3d at 313. Rather, the consequence of
a physician’s failure to include required information, such as
“dates of disability,” in a report as required by HRS § 386-96
is a denial of compensation to the physician, not denial of the
employee’s claim for temporary total disability benefits. Id.
“To be sure, the LIRAB must assess the quality of the evidence
that is presented, to determine whether the necessary showing
has been made. However, in doing so it cannot rely on the
physician’s failure to comply with the certification
requirements set forth in those provisions.” 136 Haw. at 466,
363 P.3d at 314.
In this case, the only allegedly valid disability
certification dated after May 5, 2004 is the August 9, 2005
Workers’ Compensation Treatment Plan by Dr. Adam-Terem, Zhang’s
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treating psychologist. The ICA ruled that this report “did not
comport with the HRS § 386-96(a)(2) requirement that it include
the ‘dates of disability’ because it simply constituted a plan
for future treatment and did not specify any range of time the
document was supposed to cover.” DLNR asserts that this report
is not a proper disability certification because it includes
conditions for which DLNR is not responsible, and “Dr. Adam-
Terem made no attempt to separate out what specifically caused
[Zhang]’s inability to work.”
HRS § 386-31(b) establishes an employee’s entitlement to
temporary total disability, and provides that when “a work
injury causes total disability not determined to be permanent in
character, the employer, for the duration of the disability, but
not including the first three calendar days thereof, shall pay
the injured employee” the prescribed benefits. HRS § 386-31(b)
(emphasis added). Based on Panoke, the ICA and the LIRAB
clearly erred as a matter of law in denying Zhang’s temporary
total disability benefits after May 5, 2004 based on
deficiencies in the certifications of disability submitted by
her physician.
Accordingly, we vacate in part the ICA’s October 24, 2014
Judgment on Appeal and the LIRAB’s December 6, 2011 Decision and
Order as to the denial of temporary total disability benefits
after May 5, 2004 due to alleged deficiencies in the
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certifications of disability provided by Zhang’s physician, and
remand the issue to the LIRAB for further proceedings consistent
with this opinion. We decline to address Zhang’s entitlement to
temporary total disability on the other bases referenced in the
LIRAB’s finding of fact 49, such as temporary total disability
after September 18, 2009 (medical reports deadline) or pursuant
to HRS § 386-25 in light of Zhang’s entitlement to future
vocational rehabilitation services, as the LIRAB made no
determination on those issues; thus, they are not properly
before us. See Kalapodes, 66 Haw. at 565, 669 P.2d at 637
(“This court will not consider issues for the first time which
were not presented to the [LIRAB].”); see also HRS § 386-87(c)
(explaining the LIRAB’s powers of review).
B. Although Zhang appears to have been authorized to work, the
LIRAB did not err in determining that Zhang’s termination
for alleged lack of work authorization did not violate
HRS § 386-142
At the outset, we address Zhang’s contention that she
provided sufficient documentation to establish her employment
eligibility. Based on the record and the law, it appears Zhang
is correct. We do not and need not decide this issue, however,
because we conclude that Zhang’s HRS § 386-142 claim is
precluded by res judicata principles.
We do note that Zhang entered the United States in 1990 as
the spouse of a Chinese student permitted to work pursuant to
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Executive Order 12711, which granted Chinese nationals who were
in the United States after June 5, 1989 employment authorization
through January 1, 1994. See Exec. Order No. 12711 § 3, 55 Fed.
Reg. 13897 (April 11, 1990). Executive Order 12711 was
superseded by the passage of the CSPA in 1992. CSPA, Pub. L.
No. 102-404, 106 Stat. 1969. The CSPA allowed Chinese nationals
in the United States subject to Executive Order 12711 to apply
for an adjustment to legal permanent resident status. CSPA §
2(a)(1) provided that upon application for adjustment of status,
the Chinese national would be “deemed approved[.]” CSPA, Pub.
L. No. 102-404, § 2, 106 Stat. at 1969. Thus, Zhang was
permitted to apply for an adjustment to legal permanent resident
status following passage of the CSPA in 1992.
Zhang submitted her Form I-485 to the INS on June 30, 1993.
At the time of her termination, Zhang’s application was still
pending with the INS. As Zhang had submitted her Form I-485
with the required payment, it appears she was therefore deemed
approved pursuant to CSPA § 2(a)(1), as confirmed by the August
10, 1994, Department of Justice Employment Authorization Card
Zhang received and forwarded to DLNR. It appears she therefore
did not need to file for an H-1B petition. As noted in the
circuit court’s findings, DLNR had drafted an H-1B temporary
foreign professional visa application based on Zhang’s request,
but it appears it was never submitted. As also noted in the
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circuit court’s findings, unfortunately, DLNR apparently
believed that the H-1B petition was pending and that Zhang
needed to establish approval of the H-1B petition in order to
establish work authorization after January 1, 1994. Based on
the July 28, 1994 letter from Hirano to the INS and other
letters from Young noting that Zhang had not provided the
appropriate documents, it appears that, at the time of Zhang’s
termination, DLNR did not focus on the effect of Zhang’s pending
Form I-485 application for adjustment of status within the
context of Executive Order 12711 and the CSPA. Based on the
issuance of Zhang’s Employment Authorization Card on August 10,
1994, it appears, however, that pursuant to the CSPA, Zhang was
authorized to work in the United States at the time of her July
27, 1994 termination. We need not, however, and do not decide
this issue because res judicata principles, in any event,
preclude Zhang’s HRS § 386-142 claim.
With respect to the alleged HRS § 386-142 violation, Zhang
asserts that “the sole issue for decision was whether the
immigration/work status issue was not a ruse or cover” for her
termination, and notes that the immigration issues emerged only
after the filing of her workers’ compensation claim. DLNR’s
position is that Zhang “was terminated due to her failure to
provide requested documents required by the INS and not because
of her work injury.”
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DLNR also correctly asserts that Zhang is barred from
raising an HRS § 386-142 claim under res judicata (claim
preclusion) and/or collateral estoppel (issue preclusion), based
upon the circuit court’s decision in Zhang’s employment
discrimination lawsuit against DLNR, which was noted in LIRAB’s
finding of fact 32.12
As noted, the circuit court specifically found that Zhang
had been terminated from her employment because of Young’s
belief that Zhang had failed to submit the documents which were
necessary for the extension of her work authorization. In other
12
Finding of Fact 32 in the LIRAB Decision and Order states:
32. On July 23, 1998, Judge James P. Aiona, Jr.[,]
issued Findings of Fact, Conclusions of Law and Order
following a jury-waived trial. In relevant part, Judge
Aiona concluded that [Zhang’s] termination was not based
upon her “national origin” and that there were no changes
in her employment in retaliation for filing any employment
grievances and/or discriminatory complaints.
The following were among Judge Aiona’s Findings of
Fact:
. . . .
7. That it was [] Hirano and Young’s [sic]
impression that sanctions could be imposed for
their failure to note the expiration of
[Zhang’s] work authorization in a timely
fashion. As such, [Hirano and Young] sought to
remedy the matter by seeking, what they
believed to be, the necessary documents from
[Zhang].
8. That [Zhang] submitted, what she thought to be,
the necessary documents to [] Young. . . .
9. That it was [] Young’s position that [Zhang]
did not submit the documents which were
necessary for the extension of her work
authorization. As such, [Zhang] was terminated
from her employment with [DLNR].
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words, the circuit court found this to be the reason for Zhang’s
termination. The Judgment incorporating this finding was not
appealed. Pursuant to HRS § 386-73 (1993),13 the Director has
original jurisdiction over HRS § 386-142 claims, and the circuit
court did not address this statute. The circuit court, however,
found another cause for Zhang’s termination, namely, Young’s
incorrect but actual belief that Zhang had failed to submit
documents necessary for the extension of her work authorization.
Therefore, Zhang is collaterally estopped from claiming that she
was discharged “solely” because she filed this workers’
compensation claim. The circuit court’s specific finding as to
the reason for Zhang’s discharge has preclusive effect. Bremer
v. Weeks, 104 Hawai‘i 43, 53-54, 85 P.3d 150, 160-61 (2004)
(noting that res judicata and collateral estoppel, respectively,
apply when a claim or issue decided in the original suit is
identical to one presented in the action in question). The
issue of the reason for Zhang’s discharge was addressed in her
13
As it stated at the relevant time, HRS § 386-73 provided:
§ 386-73 Original jurisdiction over
controversies. Unless otherwise provided, the director of
labor and industrial relations shall have original
jurisdiction over all controversies and disputes arising
under this chapter. The decisions of the director shall be
enforceable by the circuit court as provided in section
386-91. There shall be a right of appeal from the
decisions of the director to the appellate board and thence
to the supreme court subject to chapter 602 as provided in
sections 386-87 and 386-88, but in no case shall an appeal
operate as a supersedeas or stay unless the appellate board
or the supreme court so orders.
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circuit court lawsuit. The circuit court found a reason other
than her filing of a workers’ compensation claim. This finding
has collateral estoppel effect, precluding Zhang from asserting
that her filing of a workers’ compensation claim was the “sole”
reason for her termination.14
Even if res judicata principles did not govern, the LIRAB
also concluded that Zhang’s termination was not solely the
result of her June 20, 1994 work-related injury based on a lack
of evidence. The LIRAB’s conclusion was not clearly erroneous.
V. Conclusion
Based on the foregoing, the LIRAB clearly erred in denying
Zhang’s temporary total disability benefits after May 5, 2004
14
It appears another aspect of res judicata not argued by DLNR
could also preclude Zhang from now asserting that Young’s belief as to the
deficiency of her immigration documents was a mere ruse to retaliate against
her for filing this workers’ compensation claim:
The rule against splitting a cause of action is an
aspect of res judicata and precludes the splitting of a
single cause of action or an entire claim either as to the
theory of recovery or the specific relief demanded. The
rationale for the rule is to prevent a multiplicity of
suits and provide a limit to litigation. It exists to avoid
harassment of the defendant, vexatious litigation, and the
costs incident to successive suits on the same cause of
action.
Bolte v. Aits, Inc., 60 Haw. 58, 60, 587 P.2d 810, 812 (1978).
The circuit court found that that Zhang had been terminated from her
employment because of Young’s belief that Zhang had failed to submit the
documents which were necessary for the extension of her work authorization.
Zhang could have asserted in the circuit court lawsuit that this belief was a
“ruse.” The rule against “splitting” could therefore also prohibit Zhang
from making this claim in this workers’ compensation proceeding. Because we
rule on collateral estoppel principles, we do not address or decide this
possible issue.
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due to deficiencies in her physician’s disability certification.
We therefore vacate in part the ICA’s October 24, 2014 Judgment
on Appeal and the LIRAB’s December 6, 2011 Decision and Order,
and remand the case to the LIRAB for further proceedings
consistent with this opinion.
DATED: Honolulu, Hawai‘i, August 8, 2016.
Juliana J. Zhang, /s/ Mark E. Recktenwald
petitioner
/s/ Paula A. Nakayama
James E. Halvorson
for respondent /s/ Sabrina S. McKenna
/s/ Richard W. Pollack
/s/ R. Mark Browning
36