New England Survey Systems, Inc. v. Department of Industrial Accidents

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15-P-331 Appeals Court
NEW ENGLAND SURVEY SYSTEMS, INC. vs. DEPARTMENT OF INDUSTRIAL
ACCIDENTS.
No. 15-P-331.
Suffolk. December 8, 2015. - June 30, 2016.
Present: Grainger, Hanlon, & Agnes, JJ.
Workers' Compensation Act, Failure to obtain insurance,
Cancellation of insurance. Department of Industrial
Accidents. Statute, Construction. Due Process of Law,
Administrative hearing. Administrative Law, Judicial
review.
Civil action commenced in the Superior Court Department on
April 26, 2013.
The case was heard by Frances A. McIntyre, J., on a motion
for judgment on the pleadings.
Timothy K. Cutler for the plaintiff.
Douglas S. Martland, Assistant Attorney General, for
Department of Industrial Accidents.
AGNES, J. The Workers' Compensation Act, G. L. c. 152
(act), provides that whenever the Commissioner of the Department
of Industrial Accidents (the department) determines that an
2
employer has not provided the insurance required by law,1 "a stop
work order shall be served on said employer, requiring the
cessation of all business operations at the place of employment
or job site." G. L. c. 152, § 25C(1), as amended through St.
1989, c. 341, § 82. The stop work order takes effect upon
service on the employer, and remains in effect until the
employer satisfies the commissioner that it has obtained the
required insurance and paid the $100 per day civil penalty for
each day it was in violation of the law, beginning with the date
of service of the order. § 25C(1) of the act. Section 25C also
provides for additional civil and criminal penalties against
employers who do not obtain the insurance required by law. See
G. L. c. 152, § 25C(5)-(6), (9)-(11). Subsection (10) of § 25C
sets forth one of the additional civil penalties that an
employer who fails to obtain the insurance required by the act
may face. It reads as follows:
"(10) In addition to being subject to the civil penalties
herein provided, an employer who fails to provide for
insurance or self insurance as required by this chapter or
knowingly misclassifies employees, to avoid higher premium
rates, will be immediately debarred from bidding or
participating in any state or municipal funded contracts
for a period of three years and shall when applicable be
subject to penalties provided for in section fourteen"
(emphasis supplied).2
1
See G. L. c. 152, § 25A.
2
Subsection (10) was added to § 25C as part of the
Legislature's 1991 reforms of the act. St. 1991, c. 398, § 45B.
3
The issue before us, which is one of first impression, is
whether the phrase "to avoid higher premium rates," as it
appears in subsection (10), modifies the two preceding clauses
("who fails to provide for insurance or self insurance as
required by this chapter or knowingly misclassifies employees")
or modifies only the immediately preceding clause ("knowingly
misclassifies employees").
The plaintiff, New England Survey Systems, Inc. (NESS),
contends that the placement of the comma after the word
"employees" means that the phrase "to avoid higher premium
rates," modifies the two preceding clauses with the effect that
an employer like NESS -- against whom a stop work order issued
due to its failure to have the insurance required by law, but
who was not shown to have acted with the intent to avoid higher
insurance premiums -- is not subject to automatic debarment. In
essence, NESS claims that prior to implementing the penalty of
debarment, the department was required to prove that NESS's
admitted failure to provide insurance was motivated by a desire
to avoid higher premium rates. The department, on the other
hand, asserts that under § 25C(10), debarment occurs whenever a
stop work order issues against an employer who failed to obtain
or provide the required insurance, regardless of the employer's
intent or motivation. While we agree with NESS that the penalty
4
of debarment for three years is a severe sanction, we do not
agree with its reading of subsection (10). Instead, we conclude
that the words used by the Legislature express its intention
that the debarment provision contained in subsection (10)
applies when an employer fails to obtain or provide workers'
compensation insurance, without the need to establish that this
was the result of the employer's intent to avoid higher
insurance premiums. Accordingly, we affirm the ruling made by
the Superior Court judge which, in turn, is consistent with the
interpretation followed by the department.3
Background. Stop work order and debarment. On December
28, 2012, an investigator with the department was working in the
Brookline area and came upon NESS's place of business. The
investigator queried the Workers' Compensation Rating and
Inspection Bureau's computer system and discovered that NESS had
a canceled workers' compensation insurance policy. The
3
Based on the view we take that G. L. c. 152, § 25C(10),
requires the penalty of debarment for three years to take effect
in the event a stop work order issues, it is unnecessary to
consider the evidence offered by NESS that its workers'
compensation insurance policy lapsed when its insurance broker
failed to notify NESS that it was time to renew the policy, and
other evidence about the economic consequences that debarment
will have on its business and its employees. It should be noted
that an insurer providing voluntary workers' compensation
insurance is required to serve notice upon the insured in
accordance with G. L. c. 175, § 187C, before it may cancel the
policy. See Pillman's Case, 69 Mass. App. Ct. 178, 181 & n.6
(2007).
5
investigator issued NESS a stop work order pursuant to G. L.
c. 152, § 25C. NESS's president, John Roberge, who maintained
he was unaware that the policy had lapsed, contacted its
insurance provider that day, and the provider reinstated
coverage immediately.4 The department nevertheless maintained
that debarment was automatic and nondiscretionary under
§ 25C(10).
Appeal history. NESS filed an administrative appeal from
the debarment order.5 The department held an appeal hearing on
January 16, 2013, and issued a written decision upholding the
stop work order and debarment penalty on March 29, 2013. NESS
filed a further appeal in the Superior Court under G. L. c. 30A,
§ 14. NESS moved for judgment on the pleadings, and the
department filed an opposition. On July 15, 2014, after
4
Based on the reading of the statute by the department as
well as the Superior Court, and the view we take, the reason why
NESS's policy of insurance was cancelled is not relevant. NESS
does not deny that it lacked insurance coverage between April 9,
2012, and December 28, 2012. Although NESS acted promptly and
obtained workers' compensation insurance coverage the same day
the stop work order was issued, there is no evidence in the
record that its policy provided retroactive coverage for the
more than eight-month period during which NESS's workers'
compensation insurance policy remained lapsed.
5
NESS first filed an appeal of the stop work order,
withdrew the appeal request, and then withdrew the request for
withdrawal. In any case, the appeal proceeded with a hearing,
and a final agency decision issued upholding both the stop work
order and the debarment. Before us, NESS apparently challenges
only the penalty of debarment and not the initial stop work
order.
6
hearing, a Superior Court judge issued a memorandum and order
affirming the department's decision. Judgment entered for the
department on October 20, 2014, and this appeal followed.
Discussion. a. Applicable principles of interpretation.
The interpretation of § 25C(10) is a matter of law, and we
exercise de novo review of the department's interpretation of
that statute. See Protective Life Ins. Co. v. Sullivan, 425
Mass. 615, 618 (1997). The words used by the Legislature in a
statute, viewed in their statutory context and in the light of
the purpose of the legislation, are the best guide to
legislative intent. See Hanlon v. Rollins, 286 Mass. 444, 447
(1934); Hoffman v. Howmedica, Inc., 373 Mass. 32, 37 (1977);
Bronstein v. Prudential Ins. Co. of America, 390 Mass. 701, 704
(1984). This is in keeping with guidance from the Legislature
on how statutes should be interpreted. See G. L. c. 4, § 6,
Third, set out in the margin.6 When statutory language yields a
plain meaning, arguments that its application in a particular
case will cause a hardship or lead to an inequity should be
6
General Laws c. 4, § 6, Third, provides:
"Words and phrases shall be construed according to the
common and approved usage of the language; but technical
words and phrases and such others as may have acquired a
peculiar and appropriate meaning in law shall be construed
and understood according to such meaning."
7
addressed to the Legislature. See Larkin v. Charlestown Sav.
Bank, 7 Mass. App. Ct. 178, 183-184 & n.9 (1979).
The Superior Court judge recognized that the interpretation
of § 25C(10) urged by NESS was illogical in that an employer who
is not self-insured and has not provided workers' compensation
insurance coverage, and therefore has paid no insurance premium,
would avoid the penalty of debarment, while an employer who did
have insurance, but misclassified one or more employees in order
to pay a lower insurance premium, would face the penalty of
debarment.7 The natural and logical reading of the words used by
the Legislature in § 25C(10) is that an employer whose employees
are not covered by workers' compensation insurance and who is
not self-insured is subject to automatic debarment. A
consideration of the purpose and intent of the Legislature in
enacting G. L. c. 152, and in particular, the amendments adopted
in 1991, buttresses this interpretation of § 25C(10). See
Lighthouse Masonry, Inc. v. Division of Administrative Law
Appeals, 466 Mass. 692, 701 n.17 (2013).
b. The Workers' Compensation Act and the 1987-1991
reforms. General Laws c. 152, enacted in 1911, was initially an
"elective" law that allowed employers in the Commonwealth to opt
7
The judge's view is shared by the department. See
Protective Life Ins. Co. v. Sullivan, 425 Mass. at 618 ("[W]e
grant substantial deference to an interpretation of a statute by
the administrative agency charged with its administration").
8
into its provisions by securing insurance to cover workplace
injuries incurred by employees. St. 1911, c. 751. Its
provisions were made compulsory for most employers in 1943, see
St. 1943, c. 529, and remain so today.8 Our courts have long
recognized that the act is a "humanitarian measure" designed to
financially protect injured workers by providing remedies more
expansive and predictable than those available via tort at
common law. See LaClair v. Silberline Mfg. Co., 379 Mass. 21,
27 (1979). "It is a remedial statute and should be given a
broad interpretation, viewed in light of its purpose and to
'promote the accomplishment of its beneficent design.'" Neff v.
Commissioner of the Dept. of Industrial Accs., 421 Mass. 70, 73
(1995), quoting from Young v. Duncan, 218 Mass. 346, 349 (1914).
The fundamental aim of public policy in the area of workers'
compensation is to provide relief to injured workers and their
families and remedy the deprivation of wages that results from
their injuries.9
8
"Certain workers are not defined as employees for the
purposes of the . . . [a]ct. See G. L. c. 152, § 1(4). Special
provisions also apply to public employers. See G. L. c. 152, §§
25B, 69-75." Awuah v. Coverall N. America, Inc., 460 Mass. 484,
494 n.21 (2011). NESS makes no argument that it is not required
to provide workers' compensation coverage for its employees.
9
See Nason, Koziol & Wall, Workers' Compensation § 2.12, at
48 (3d ed. 2003) ("Amendments to the Workers' Compensation Act
should be broadly construed to enlarge the rights of employees
and liberalize its interpretation"). The Supreme Judicial Court
has noted that a broad interpretation of the act is of the
9
Section 25C of the act, which provides for the sanctions
levied against the employer in this case, was adopted in 1943,
when the provisions of the act went from optional to compulsory
for most employers. See St. 1943, c. 529, § 7. To enforce the
compulsory insurance requirement, § 25C at first provided for
punishment of an employer by a fine up to $500, or by
imprisonment for up to one year, or both for its failure to
provide the same.10
The act saw substantial changes in 1985, following hearings
conducted by a Governor's Task Force convened to address
problems with the funding, administration, and scope of the
workers' compensation system. See St. 1985, c. 572; St. 1986,
c. 662; St. 1987, c. 691. Changes were made to the department's
infrastructure and funding, along with benefit entitlements and
procedural rules.11 In 1987, the sanction was enhanced
substantially by St. 1987, c. 691, § 10, which gave the
department the power to issue a stop work order requiring a
utmost importance, because the act's exclusivity provision
replaces an employee's ability to seek relief through common-law
tort actions. Walker's Case, 443 Mass. 157, 161 (2004), S.C.,
453 Mass. 358 (2009).
10
See St. 1951, c. 689; St. 1953, c. 330.
11
See Nason, Koziol & Wall, Workers' Compensation § 2.6 (3d
ed. 2003) (highlighting 1985 reforms). Relevant here, in 1986
the § 25C fine for failure to provide workers' compensation
insurance was tripled, from $500 to $1,500. St. 1986, c. 662,
§ 20.
10
noncomplying employer to immediately cease operations. G. L.
c. 152, § 25C(1)-(4).
The 1985 reforms were not effective in controlling the
costs of workers' compensation insurance premiums, and rates
continued to rise sharply in the years to follow. Nason, Koziol
& Wall, Workers' Compensation § 2.8 (3d ed. 2003). These
ongoing concerns culminated in an even more comprehensive wave
of reform and the passage in 1991 of "An Act Relative to Fair
and Effective Compensation of Injured Workers," St. 1991,
c. 398. The reforms enacted in 1991 "acknowledged the premise
that workplace injuries were a factor in the costs of doing
business, and recognized that this cost factor had to be reduced
in order to stimulate business growth and employment
opportunities within the Commonwealth." Nason, Koziol & Wall,
Workers' Compensation § 2.8, at 35 (3d ed. 2003). During the
years leading up to the 1991 reforms, annual reports of the
Workers' Compensation Advisory Council noted concern over the
number of employers within the Commonwealth operating illegally
without workers' compensation insurance. In fiscal year 1988,
the Advisory Council recommended revising the act's enforcement
provisions to strengthen sanctions against uninsured employers.12
12
Workers' Compensation Advisory Council, Fiscal Year 1988
Annual Report 11-12, http://www.mass.gov/lwd/docs/wcac/annual-
reports/ar-1988-v1.pdf [https://perma.cc/L35X-4C5C].
11
Its 1990 report noted that such "system abuse" increases costs
for law-abiding employers.13 In 1991 testimony before the
Legislature's Joint Commerce and Labor Committee, Joseph
Faherty, chairman of the Advisory Council, attested to the need
for legislative reform to curtail this sort of abuse in order to
cut costs of workers' compensation and keep the State
competitive: "We fear that a failure to implement fair
insurance rates will encourage more business entities to
unlawfully operate without insurance and further erode the
commonwealth's competitive edge. The livelihoods of employers
and employees depend on the ability to bring insurance costs
under control."14,15
As part of the 1991 reforms, the Legislature added
subsection (10) to G. L. c. 152, § 25C, which provides that
noncompliant employers "will be immediately debarred from
13
Workers' Compensation Advisory Council, Fiscal Year 1990
Annual Report 69, http://www.mass.gov/lwd/docs/wcac/annual-
reports/ar-1990.pdf [https://perma.cc/3WY4-GYSL].
14
Workers' Compensation Advisory Council, Fiscal Year 1992
Annual Report Appendix G,
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-1992.pdf
[https://perma.cc/KV9J-QD55].
15
That same year, the Advisory Council also suggested that
the department consider publicizing a list of employers to whom
stop work orders had been issued in an effort to reduce
noncompliance with the act. Workers' Compensation Advisory
Council, Fiscal Year 1991 Annual Report 113,
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-1991.pdf
[https://perma.cc/AG8W-GQNE].
12
bidding or participating in any state or municipal funded
contracts for a period of three years[.]" St. 1991, c. 398,
§ 45B. This enforcement mechanism was provided in addition to
the fines, stop work orders, and other penalties that already
existed in § 25C(1)-(8) of the act. The only question before us
is whether the penalty of debarment is automatic in the case of
a failure to comply with § 25C(10). Given the principle that
the act is to be interpreted broadly for the protection of
workers, and in view of the historical development of c. 152,
especially the evidence that the 1985 reforms were not as
successful in reducing the cost of insurance as had been hoped,
we conclude the Legislature intended that the words it used in
St. 1991 in drafting subsection (10) should be given their
natural meaning such that an employer is subject to the penalty
of debarment once a stop work order has issued for failure to
provide insurance coverage.16
16
The Workers' Compensation Advisory Council, in annual
reports between 1996 and 2002, repeatedly noted its concern that
the stop work order penalty and fines were "not sufficiently
punitive to deter employers from violating the mandate [to
provide insurance coverage.]" Workers Compensation Advisory
Council, Fiscal Year 1996 Annual Report 121,
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-1996.pdf
[https://perma.cc/HWC5-C6TJ]; Fiscal Year 1997 Annual Report 7,
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-1997.pdf
[https://perma.cc/AAN7-UGJR]; Fiscal Year 1998 Annual Report 10,
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-1998.pdf
[https://perma.cc/KL4W-TV3H]; Fiscal Year 1999 Annual Report 9,
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-1999.pdf
[https://perma.cc/JF6P-L4F6]; Fiscal Year 2000 Annual Report 10,
13
The legislative history recounted above strongly suggests
that the Legislature added the penalty of debarment to the
statutory sanctions for noncompliance with the insurance
requirements of the act in an effort to compel employers to
comply with their obligations. NESS argues that the placement
of a single comma in the statute is outcome-determinative based
on an interpretive aid known as the "last antecedent" rule.17 We
disagree. First, when the words used by the Legislature have a
plain meaning and achieve a logical and workable result, we do
not turn to extrinsic interpretive aids such as legislative
history, dictionaries, or grammatical guidelines. See, e.g.,
Foss v. Commonwealth, 437 Mass. 584, 587 (2002). Second, when
the intent of the Legislature is not evident based solely on the
words of a statute, extrinsic aids may be helpful but they do
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-2000.pdf
[https://perma.cc/5UTA-TRQ9]; Fiscal Year 2001 Annual Report 9,
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-2001.pdf
[https://perma.cc/GDT6-Q99A]; Fiscal Year 2002 Annual Report 11,
http://www.mass.gov/lwd/docs/wcac/annual-reports/ar-2002.pdf
[https://perma.cc/Y3SK-DZA5].
17
The last antecedent rule provides first that a modifying
clause is confined to the phrase that immediately precedes it
and not to the phrases appearing earlier. Hopkins v. Hopkins,
287 Mass. 542, 547 (1934). However, a comma separating the
modifying clause from its antecedent(s) is some evidence that
the modifier is meant to apply to all the antecedents, instead
of only the immediate antecedent. Bednark v. Catania
Hospitality Group, Inc., 78 Mass. App. Ct. 806, 813 n.17 (2011).
See 2A Singer & Singer, Sutherland Statutory Construction
§ 47:33 (7th ed. rev. 2014).
14
not supply hard and fast rules. The last antecedent rule is not
always a certain guide. See, e.g., Selectmen of Topsfield v.
State Racing Commn., 324 Mass. 309, 312 (1949); Globe Newspaper
Co. v. Boston Retirement Bd., 388 Mass. 427, 432 (1983).18 In
particular, we do not apply the last antecedent rule when "there
is something in the subject matter or dominant purpose [of the
statute] which requires a different interpretation." Hopkins v.
Hopkins, 287 Mass. 542, 547 (1934), and cases cited.
c. Consideration of the act as a whole. "The legislative
intent is to be ascertained from the statute as a whole, giving
to every section, clause and word such force and effect as are
reasonably practical to the end that . . . the statute will
constitute a consistent and harmonious whole, capable of
producing a rational result consonant with common sense and
sound judgment." Vining Disposal Serv. v. Board of Selectmen of
Westford, 416 Mass. 35, 38 (1993), quoting from Haines v. Town
Manager of Mansfield, 320 Mass. 140, 142 (1946).
Of relevance here, § 25C(9)(a) of the act was inserted by
the same amendment that inserted § 25C(10), see St. 1991,
18
See also DiFiore v. American Airlines, Inc., 454 Mass.
486, 495-496 (2009), and cases cited ("[W]e do not adopt a
statutory interpretation derived from an analysis of punctuation
that conflicts with principles of statutory construction"). See
generally Llewellyn, Remarks on the Theory of Appellate Decision
and the Rules or Canons About How Statutes Are to be Construed,
3 Vand. L. Rev. 395 (1949-1950).
15
c. 398, §§ 45A and 45B, and should be interpreted in harmony
with § 25C(10). Section 25C(9)(a) creates a cause of action for
a losing contract bidder against a person who is awarded a
public contract by competitive bid "because of cost advantages
achieved by violating the provisions of section twenty-five A or
section twenty-five C of this chapter or by the deliberate
misclassification of employees for the purpose of avoiding full
payment of workers' compensation insurance premiums" (emphasis
supplied). Subsection (9)(a) thus permits a civil action to be
brought against a person who obtains a public contract
dishonestly by either (1) violating § 25A or § 25C; or (2)
deliberately misclassifying employees in order to avoid full
payment of premiums. This supports the view that the debarment
penalty in § 25C(10) was similarly meant to punish either the
failure to provide insurance or the misclassification of
employees to avoid higher insurance premiums. In both
subsections (9)(a) and (10), only the misclassification prong
requires that the action of the employer was undertaken to
further the goal of avoiding payment of higher premiums.
Citing Awuah v. Coverall N. America, Inc., 460 Mass. 484,
495 (2011), NESS argues, in effect, that the distinction drawn
by the Legislature in § 25C(10) is artificial because an
employer who misclassifies an employee fails to pay the required
premium no less than the employer who fails to pay any insurance
16
premium at all. However, we note that the passage in Awuah
cited by NESS cites to language in G. L. c. 152, § 14(3), which
is consistent with our reading of § 25C(10) of the act. That
language provides, in pertinent part, that an "employer who
knowingly misclassifies employees . . . for the purpose of
avoiding full payment of insurance premiums . . . shall be
punished" (emphasis supplied). G. L. c. 152, § 14(3), inserted
by St. 1991, c. 398, § 38. Moreover, it is not inconsistent
with the court's analysis in Awuah to conclude, as we do in this
case, that in enacting § 25C(10), the Legislature recognized a
distinction between the misclassification of an employee, which
may or may not be done with an intent to lower the employer's
premium rate, and the simple failure to provide any insurance,
even if no misclassification has occurred. In essence, it is a
simple matter to establish whether an employer does or does not
have insurance coverage for its employees. In contrast, where
there is a misclassification of employees (which could be
deliberate, or the result of mistake or inadvertence), in order
to be fair to the employer, punishment should not be imposed
unless it is first determined that the misclassification was
both knowing and done with the intention of avoiding higher
insurance premiums.
In sum, we hold that the penalty of debarment is triggered
automatically in a case such as this, without the need to
17
establish that the employer acted intentionally or wilfully, or
that the employer sought to avoid payment of higher insurance
premium rates. This result is consistent with the act's
purpose, legislative history, closely related provisions, and
its plain language.19
d. Remaining arguments. NESS also contends that G. L.
c. 152, § 25C(10), as applied, violates its constitutional
rights to due process of law under the Constitution of the
United States and the Massachusetts Constitution because it does
not afford the employer an opportunity to present evidence that
the cancellation of its insurance policy was not the result of
intentional conduct. "The fundamental requirement of due
process is notice and the opportunity to be heard 'at a
meaningful time and in a meaningful manner.'" Matter of Angela,
445 Mass. 55, 62 (2005), quoting from Armstrong v. Manzo, 380
U.S. 545, 552 (1965). The record indicates that NESS was not
only aware that it was subject to a fine as a result of the stop
work order, but it was also aware that it was debarred from
bidding on or participating in any State or municipal contract
19
The Legislature has established a separate and distinct
system for the debarment of certain contractors from
participating in bidding on public construction contracts.
G. L. c. 29, § 29F. See Fordyce v. Hanover, 457 Mass. 248, 261
(2010). The fact that the debarment of contractors is a matter
of discretion under § 29F, a provision addressing an entirely
different problem, has no bearing on the questions before us.
18
for a period of three years. NESS was given an opportunity to
challenge the validity of the stop work order at an evidentiary
hearing. NESS participated in that hearing and submitted
evidence. NESS's reliance on Old Dominion Dairy Prods., Inc. v.
Secretary of Defense, 631 F.2d 953 (D.C. Cir. 1980), is
misplaced because the result in Old Dominion turned on the
government's failure to disclose to a contract bidder in a
timely manner an adverse determination that the bidder lacked
integrity, which resulted in the contractor losing a bid before
it had an opportunity to dispute the adverse determination. In
the present case, the only factual predicate to the imposition
of the penalty of debarment was the validity of the stop work
order, which NESS does not contest.20
20
We do not address an alternative argument, raised by NESS
for the first time on appeal to the Superior Court, that G. L.
c. 152, § 25C(10), is unconstitutional because the remedy of
debarment affects only employers who bid on public contracts,
thus depriving NESS of the equal protection of the laws. See
Albert v. Municipal Ct. of Boston, 388 Mass. 491, 493 (1983) ("A
party is not entitled to raise arguments on appeal that [it]
could have raised, but did not raise, before the administrative
agency"). Cf. Gill v. Board of Registration of Psychologists,
399 Mass. 724, 727 (1987) (in the interest of preserving the
integrity of the administrative and judicial processes, the
court declined to consider issue raised on appeal concerning
administrative board's jurisdiction where the board had not had
the opportunity to address it).
We also note that NESS's reliance on In re Environmental
Source Corp., 431 B.R. 315 (Bankr. D. Mass. 2010) is misplaced.
There, the Bankruptcy Court limited its constitutional analysis
to the preemption issue that arose when a contractor, whose
business involved public sector contracting, failed to pay a
19
e. Chapter 30A review. This court, like the Superior
Court, reviews the department's decision "according to the
standards set forth in G. L. c. 30A, § 14(7), giving 'due weight
to the experience, technical competence, and specialized
knowledge of the agency, as well as to the discretionary
authority conferred upon it.'" Athol Daily News v. Board of
Review of the Div. of Employment & Training, 439 Mass. 171, 174
(2003). We may set aside the department's decision only if it
is unsupported by substantial evidence, is arbitrary or
capricious, constitutes an abuse of discretion, or is not in
accordance with law. G. L. c. 30A, § 14(7)(a)-(g). See, e.g.,
Coverall N. America, Inc. v. Commissioner of the Div. of
Unemployment Assistance, 447 Mass. 852, 857 (2006).
NESS makes no argument that it did not, in fact, fail to
maintain workers' compensation insurance for a period of eight
months. The lack of coverage is undisputed on this record.
Because we hold that the department was not required to prove
prebankruptcy petition debt (namely, its workers' compensation
insurance premium) and was debarred. Debarment prevented the
business from earning income that would allow it to emerge from
bankruptcy. The court reasoned that to apply § 25C(10) in such
a case would violate the supremacy clause of the United States
Constitution, Art. VI, because it interfered with the purpose
and policy of Chapter 11 of the Bankruptcy Code, which
"include[s] the preservation and rehabilitation of financially
distressed businesses." 431 B.R. at 322. Insofar as
Environmental Source Corp. turns on the disproportionate impact
of § 25C(10) on businesses that operate in the public sector,
its reasoning is limited to the circumstances of a debtor in
bankruptcy.
20
anything more than the fact that NESS lacked coverage and that a
stop work order was issued, and NESS does not contend that the
department failed to do so, there is no basis to disturb the
department's decision.
Judgment affirmed.