Argued
January 16, 2019
On
Petition for Review of an Order of the Compensation Review
Board (CRB-110-17)
Benjamin E. Douglas for petitioner.
Karl
A. Racine, Attorney General for the District of Columbia,
Loren L. AliKhan, Solicitor General, and Stacy L. Anderson,
Acting Deputy Solicitor General, filed a statement in lieu of
brief in support of respondent.
William H. Schladt for intervenor.
Before
Fisher and Easterly, Associate Judges, and Washington, Senior
Judge.
OPINION
WASHINGTON, SENIOR JUDGE.
Workers'
compensation claimant Darryl Kelly petitions for review of a
decision holding that he cannot recover attorney's fees
from his former employer, the Potomac Electric Power Company
("Pepco"), because the conditions precedent to an
award of attorney's fees under D.C. Code § 32-1530
were not satisfied. For the reasons discussed below, we
affirm.
I.
Factual Background & Procedural Posture
Kelly
was employed by Pepco as an underground linesman helper. He
was injured on the job on December 14, 2015, and his injury
was aggravated on the job on May 20, 2016. Kelly filed a
workers' compensation claim, and Pepco accepted the claim
and began paying him compensation.
On
December 27, 2016, Kelly, represented by counsel, applied for
an informal conference with the Officer of Workers'
Compensation ("OWC") of the District of Columbia
Department of Employment Services ("DOES"), in
order to resolve a controversy that had developed over the
amount of compensation to which Kelly was entitled. OWC
scheduled the informal conference for February 9, 2017. On
January 26, Pepco and its insurer, represented by counsel,
applied for a formal hearing before the Administrative
Hearings Division ("AHD") of DOES. Following this
request, Kelly wrote a letter to the chief administrative law
judge ("ALJ") of DOES, dated February 3, in which
he asserted that Pepco should not be able to circumvent the
informal conference mechanism by applying for a formal
hearing after an informal conference had already been
scheduled. Pepco responded the same day with its own letter
to the chief ALJ, arguing that it was not obligated to
participate in the informal conference and was well within
its rights to request a formal hearing. On February 16, the
chief ALJ issued a letter to Kelly stating that, while he
"agree[d]" with Kelly that "the statute favors
the informal conference mechanism as a way to avoid
litigation costs," under the applicable regulations,
"participation in the informal conference 'shall be
voluntary'" and "'all informal procedures
shall terminate when an application for formal hearing is
filed,' which [he] consider[ed] controlling in this
situation." He concluded that, because Pepco had applied
for a formal hearing, AHD now had jurisdiction over the
matter and would schedule a formal hearing. Thus, no informal
conference occurred.
The
formal hearing was held before an ALJ on May 15, 2017. On
July 14, the ALJ issued an order awarding additional
compensation to Kelly. Neither party petitioned the
Compensation Review Board ("CRB") of DOES for
review of the compensation order, and Pepco paid Kelly
pursuant to the compensation order. However, Kelly then
applied for attorney's fees from Pepco, pursuant to D.C.
Code § 32-1530, and the ALJ issued a summary order
denying the application on August 28. On review of the
attorney's fees order, the CRB vacated and remanded,
stating that, because the order contained no substantive
content, it could not determine whether the order was
arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with the law.
On
remand, the ALJ issued an October 20, 2017 order concluding
that Kelly was not entitled to attorney's fees because:
(1) the arguments raised by Kelly in support of his
attorney's fees application had been considered and
rejected by the chief ALJ, and were thus barred by the
doctrine of res judicata; and (2) the conditions precedent to
obtaining attorney's fees from the employer under §
32-1530(b) were not met in this case - specifically, the
employer did not reject a Memorandum of Informal Conference
from OWC, as no informal conference was held.
In a
decision and order issued on December 15, 2017, the CRB
affirmed the ALJ's order, rejecting the res judicata
rationale, but finding that the ALJ's interpretation of
D.C. Code § 32-1530 was correct under this court's
jurisprudence and the CRB's past holdings. Kelly then
petitioned this court for review of the CRB's decision
and order.
II.
Standard of Review
"Our
review of administrative agency decisions is limited."
Providence Hosp. v. District of Columbia Dep't of
Emp't Servs., 855 A.2d 1108, 1111 (D.C. 2004). In
general, we "will not disturb an agency ruling as long
as the decision flows rationally from the facts, and the
facts are supported by substantial evidence in the
record," id. at 1111, and will "affirm an
agency's decision unless it is arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with
law." Travelers Indem. Co. of Ill. v. District of
Columbia Dep't of Emp't Servs., 975 A.2d 823,
826 (D.C. 2009). While our review of the CRB's legal
rulings is de novo, Fluellyn v. District of Columbia
Dep't of Emp't Servs., 54 A.3d 1156, 1160 (D.C.
2012); Providence Hosp., 855 A.2d at 1111, we accord
deference to its reasonable interpretation of the statute it
administers where there is an ambiguity to be resolved.
Pannell-Pringle v. District of Columbia Dep't of
Emp't Servs., 806 A.2d 209, 211 (D.C. 2002);
Johnson v. District of Columbia Dep't of Emp't
Servs., 111 A.3d 9, 11 (D.C. 2015). Indeed, we will
"defer to an agency's interpretation of a statute or
regulation it is charged with implementing if it is
reasonable in light of the language of the statute (or rule),
the legislative history, and judicial precedent."
Travelers, 975 A.2d at 826. Thus, "[u]nless the
agency's interpretation is plainly wrong or inconsistent
with the statute, we will sustain it even if there are other
constructions which may be equally reasonable."
National Geographic Soc'y v. District of Columbia
Dep't of Emp't Servs., 721 A.2d 618, 620 (D.C.
1998). "However, the natural corollary of the agency
deference proposition is that we are not obliged to stand
aside and affirm an administrative determination which
reflects a misconception of the relevant law or a faulty
application of the law," id. (citation,
internal quotation marks, and emphasis omitted), as
"this court is the final authority on issues of
statutory construction." Fluellyn, 54 A.3d at
1160 (citation and internal quotation marks omitted).
III.
The Legal Framework
The
D.C. Workers' Compensation Act ("the Act"),
D.C. Code §§ 32-1501- 1545, creates a comprehensive
scheme for workers to recover wage loss and medical benefits
from their employers for injuries sustained on the job. It is
an exclusive and mandatory regime - one that includes a
"statutory presumption of compensability" - because
"[e]mployees and employers were both thought to gain by
a system in which common law tort remedies were discarded for
assured compensation regardless of negligence or fault."
Ferreira v. District of Columbia Dep't of Emp't
Servs., 531 A.2d 651, 654-55 (D.C. 1987); see
also D.C. Code §§ 32-1503
("Coverage"), -1504 ("Exclusiveness of
liability and remedy"), -1521
("Presumptions"), -1538 ("Insurance
policies"), -1539 ("Failure to secure payment of
compensation"), -1542.04 ("Compliance") (2019
Repl.).
A.
Claim Procedures
D.C.
Code § 32-1520 outlines the procedures an employee must
follow to file a claim of injury, as well as the obligations
of the Mayor (through DOES) to provide notice of the claim to
the employer, investigate the claim, and provide an
opportunity for a hearing on the claim. D.C. Code §
32-1520 (2019 Repl.).[1] The regulations promulgated pursuant to
the Act elaborate upon various aspects of the claims process,
7 DCMR §§ 203-212 (2019), and state that OWC
"may utilize . . . non-adjudicative fact finding
procedures including informal conferences under § 219 of
this chapter to narrow issues, encourage voluntary payment of
claims, and encourage agreement between interested
parties." 7 DCMR § 211.2.
Regulation
219, entitled "informal procedures," outlines the
process by which OWC conducts informal conferences. If an
agreement is reached at an informal conference, OWC must
prepare a final order embodying the agreement. 7 DCMR §
219.16 (2019). If an agreement is not reached at an informal
conference, OWC must prepare a Memorandum of Informal
Conference containing recommendations, and the parties have
fourteen working days to indicate in writing whether they
accept or reject its terms. 7 DCMR § 219.18-.20. Once
the Memorandum is issued, if the parties submit a joint
statement to OWC within fourteen working days accepting its
terms and indicating their intent to be bound by it, and if
neither party applies for a formal hearing within thirty-four
working days, the Memorandum becomes final and OWC must issue
a final order to that effect. 7 DCMR § 219.21-.22;
see Travelers, 975 A.2d at 829 ("[T]he
Memorandum's legal force derives from its acceptance by
the parties."). Participation in the conference is
voluntary, 7 DCMR § 219.2, and, if either party applies
for a formal hearing, informal procedures must terminate. 7
DCMR § 219.23; see National Geographic
Soc'y, 721 A.2d at 622 ("Once an application
for a formal hearing is filed . . . all informal procedures
must be terminated." (citing 7 DCMR § 219.23));
Travelers, 975 A.2d at 829 ("[T]he initial
filing of an application for a formal hearing [is] the point
when the informal procedures 'terminate.'"
(citing 7 DCMR § 219.23)). The regulations also outline
the process by which AHD conducts formal hearings, 7 DCMR
§§ 220-223 (2019), and state that the Memorandum
cannot be admitted as evidence at a hearing. 7 DCMR §
223.3.
B.
Attorney's Fees
Under
the Act, a workers' compensation claimant is presumed to
be entitled to compensation paid by the employer, but is only
allowed to recover attorney's fees from the employer in
the two scenarios described in the Act's attorney's
fees provision, D.C. Code § 32-1530 (2019 Repl.):
First, [under subsection (a)], a claimant may recover
attorney's fees if the employer disputes liability for
the disability and the claimant thereafter uses an
attorney's services to successfully obtain compensation.
. . .
[Second, under subsection (b)], a claimant may recover
attorney's fees if the employer tenders compensation
initially without an award, but later refuses to pay
additional compensation recommended by the agency after an
informal conference, and the claimant uses an attorney to
recover a greater amount via an award of compensation.
Fluellyn, 54 A.3d at 1160 (discussing D.C. Code
§ 32-1530).[2] Subsection (c) further states: "In
all cases, fees for attorneys representing the claimant shall
be approved in the manner herein provided." D.C. Code
§ 32-1530(c). The regulations, in turn, set forth the
content, contours, and logistical requirements of
applications for attorney's fees. 7 DCMR §§
224, 269 (2019).
This
court has interpreted § 32-1530 strictly, and has denied
applications for attorney's fees where the criteria set
forth in the provision are not satisfied. In C & P
Telephone Co. v. District of Columbia Department of
Employment Services, 638 A.2d 690 (D.C. 1994), we noted
that, under the Act, "a person claiming compensation may
be entitled to recover attorney's fees in only two
situations," id. at 693, and held that the
claimant could not recover attorney's fees from the
employer because neither situation obtained in that case: the
employer initially paid medical benefits and thus did not
"decline to pay any compensation," making
subsection (a) inapplicable, id. at 691, 696, and
the employer paid the full amount claimed within fourteen
days of issuance of the Memorandum of Informal Conference,
making subsection (b) inapplicable. Id. at 691-92,
697.
Similarly,
in National Geographic, we stated that "[t]he
statute is clear and unambiguous in setting forth the
circumstances under which a claimant can be awarded
attorney's fees." National Geographic
Soc'y, 721 A.2d at 621. We found that "[t]he
last sentence of [subsection] (b), [which] reads[, ] 'In
all other cases any claim for legal services shall not be
assessed against the employer or carrier, '"
provides "the clearest expression of legislative intent
to limit the circumstances under which the claimant may
recover attorney fees to those outlined explicitly in the
statute." Id. (quoting §
32-1530).[3] We concluded that, because the claimant in
that case applied for a formal hearing when no informal
conference had been held, thereby terminating all informal
procedures, the parties never received a "recommendation
by the Mayor" following an informal conference - meaning
that the employer could not and did not reject such a
recommendation. Id. at 621-22. We held that, because
this criterion of subsection (b) was not met, claimant was
not entitled to fees, noting that "the language of the
statute [] specifies the circumstances under which an award
of attorney's fees is authorized and denies such fees in
all other circumstances." Id. at 622.
In
Providence Hospital, we again stated that "a
claimant [can] recover attorney's fees in only two
situations." Providence Hosp., 855 A.2d at
1111. In that case, an informal conference occurred and a
written recommendation was issued, but the claimant rejected
the recommendation and sought a formal hearing. Id.
at 1110, 1112. We held that "[t]he statute clearly did
not apply because [the employer] never rejected the
Mayor's recommendation" - and thus the claimant
could not recover attorney's fees. Id. at 1113.
We concluded: "The statute is specific in setting forth
the requisite conditions for a claimant to recover
attorney's fees, and leaves no discretion to the agency
or court to decide cases in which all the conditions are not
met." Id. at 1114.
Then,
in Fluellyn, we began by noting the "two
distinct scenarios" under which attorney's fees can
be assessed against an employer, Fluellyn, 54 A.3d
at 1160, and found that the case did not meet the criteria of
either scenario. The employer initially paid compensation to
the claimant, the parties participated in an informal
conference, OWC issued a written recommendation, and the
employer rejected the recommendation and applied for a formal
hearing. Id. at 1158. However, the parties reached a
settlement before the hearing was held, so the employer
withdrew its application for a formal hearing, which was
dismissed without prejudice. Id. Because there was
no formal hearing and thus no ALJ order awarding compensation
to the claimant, the final condition was not met and claimant
was not eligible for attorney's fees under subsection
(b). Id. at 1164-65.
Most
recently, in Turner v. District of Columbia Department of
Employment Services, 210 A.3d 156 (D.C. 2019), we noted
that "attorney's fees are warranted under §
32-1530 in only two limited situations." Id. at
159. In Turner, an informal conference was held and
a Memorandum of Informal Conference was issued, but the
claimant rejected the Memorandum, sought a formal hearing,
and received a compensation award. Id. at 158. We
concluded that, because the claimant rejected the Memorandum,
the claimant "failed to satisfy the 'express
condition' of subsection (b) that the employer must
'refuse to accept [the Mayor's] written
recommendation." Id. at 160 (brackets in
original).[4] Thus, the claimant was not entitled to
receive attorney's fees from the employer under §
1530(b), as "the plain language of the fee award statute
. . . expressly excludes 'all other cases' than those
that meet the criteri[a] of either subsection (a) or
(b)." Id. at 162.[5]
IV.
Discussion
The
parties agree that subsection (a) of § 32-1530 does not
apply, as Pepco initially paid on Kelly's claim and did
not "decline to pay any compensation." The parties
disagree, however, regarding whether subsection (b) applies.
This is a question of statutory interpretation, which we
review de novo, but we will defer to the CRB's reasonable
interpretation of an ambiguous provision of the Act.
Kelly
argues that the facts of this case fit under §
32-1530(b), as Pepco initially paid him compensation without
an award, Pepco then (effectively) refused to pay additional
compensation recommended by DOES, and Kelly then used an
attorney to recover a greater amount via an award of
compensation from an ALJ. He contends that, while an informal
conference did not occur because Pepco applied for a formal
hearing before the conference could take place, this action
on Pepco's part amounted to a rejection of the informal
conference and thus a rejection of any possible written
recommendation from the Mayor. He argues that the statutory
language encompasses not only a situation in which an
employer rejects an actual written recommendation issued by
OWC after a conference, but also encompasses Pepco's
actions, which were tantamount to "refus[ing] to accept
such written recommendation."
Kelly
further asserts that our decision in National
Geographic and the CRB's decision in Anderson v.
Washington Hospital Center, CRB No. 12-078, 2013 WL
494504 (January 23, 2013), stand for the proposition that a
claimant cannot file for a formal hearing before an informal
conference is held and then seek to recover attorney's
fees - but they do not prevent a claimant from recovering
attorney's fees when it is the employer (not the
claimant) who has evaded informal procedures. He also claims
that the intent of the Act is to promote informal procedures
as a means of inexpensive and efficient dispute resolution,
and that the denial of attorney's fees to a claimant in
his position destroys the parties' incentives to use
informal procedures.
"Section
32-1530(b) specifies that a claimant may recover
attorney's fees only where, after making voluntary
payments, the employer has rejected the recommendation of the
agency . . . after an informal conference, and compensation
is thereafter awarded that is greater than the amount of
compensation tendered by the employer."
Fluellyn, 54 A.3d at 1161 (internal quotation marks
and brackets omitted). It is undisputed that Pepco made
voluntary payments and that Kelly was ultimately awarded
compensation that was greater than that tendered by Pepco.
The question, then, is whether what occurred here can be
construed as Pepco "reject[ing] the recommendation of
the agency . . . after an informal conference."
A.
The Plain Language of the Attorney's Fees
Provision
Subsection
(b) states that "the Mayor shall recommend in writing a
disposition of the controversy," and it authorizes
attorney's fees "[i]f the employer or carrier
refuse[s] to accept such written recommendation, within 14
days after its receipt by them." It appears that, for
reasons that are not entirely clear, "written
recommendation" is not defined in the Act or the
regulations. Nor does the statute itself refer to the
informal conference; the informal conference and Memorandum
of Informal Conference are discussed in Regulation 219, which
outlines informal procedures. 7 DCMR § 219.18-.22.
Nevertheless, our case law has read the language in §
32-1530(b) - "the Mayor shall recommend in writing a
disposition of the controversy" - to implicate the
informal conference described in Regulation 219, meaning that
the Mayor's "written recommendation" referred
to in the statute is the Memorandum of Informal Conference
described in the regulation. Turner, 210 A.3d at
158-59; Fluellyn, 54 A.3d at 1158, 1161, 1164;
Providence Hosp., 855 A.2d at 1110, 1113-14;
National Geographic Soc'y, 721 A.2d at 621-22;
see also Travelers, 975 A.2d at 829;
Anderson, 2013 WL 494504, at *2-3.[6]
As is
clear from the discussion of our case law above, we have
construed § 32-1530(b) narrowly and have denied
applications for attorney's fees when the conditions
described in that subsection are not fully satisfied. The
language of the statute, read in conjunction with the
regulation, dictates that the employer must reject the
Mayor's written recommendation - the Memorandum of
Informal Conference - in order for the conditions of
subsection (b) to be satisfied.[7] This is particularly so in light
of the fact that the statute requires that the employer
reject the written recommendation "within 14 days after
its receipt," and one can only receive something that
actually exists. Further, the regulation states that this
refusal must be submitted "in writing." 7 DCMR
§ 219.20. Thus, there can be no constructive refusal to
accept a written recommendation, as Kelly urges. Rather,
Pepco must have actually received a written recommendation
from DOES and refused to accept it - in writing - within
fourteen days. That is not what occurred here, and this case
therefore falls into the category of "all other cases
[in which] any claim for legal services shall not be assessed
against the employer or carrier." § 32-1530(b);
see also § 32-1530(c) ("In all cases, fees
for attorneys representing the claimant shall be approved in
the manner herein provided."). Hence, the CRB's
holding that attorney's fees are not authorized in this
case was reasonable in light of the language of the statute
and judicial precedent.[8]
While
Kelly may argue that this outcome is formalistic or even
harsh, we are bound by the plain language of the statute, and
we have held that "the plain language of §
32-1530(b) authorizes an award of attorney's fees only
when the express conditions of the statute are met, including
the employer's rejection of the Mayor's written
recommendation in the case." Providence Hosp.,
855 A.2d at 1114. As we stated in response to a similar
argument regarding the "humanitarian purpose" of
the Act:
In applying the Act, we are aware of the principle that
workers' compensation laws are to be liberally construed
for the benefit of the employee. While that principle allows
doubts to be resolved favorably to the employee, it does not
relieve the courts of the obligation to apply the law as it
is written and in accordance with its plain meaning. The
plain language of [subsection] (b) makes an award of
attorney's fees appropriate, insofar as it is relevant
here, only where a controversy develops over additional
compensation and the employer declines to accept the
Mayor's recommendation for resolution within fourteen
days of its receipt. That did not occur here.
National Geographic Soc'y, 721 A.2d at 622
(citation, internal quotation marks, and footnote omitted).
On a
related note, Kelly's contention that the workers'
compensation regime favors informal resolution of disputes
may well be true, as the chief ALJ acknowledged in his
February 2017 letter to the parties. But we look ...