Alaska Airlines, Inc. v. Darrow
403 P.3d 1116
Alaska2017Background
- In 1996 Pamela Darrow injured her knee at work; Alaska Airlines paid temporary disability and four permanent partial impairment (PPI) awards totaling $40,500 (last paid 2005). Darrow later had multiple surgeries and was eventually classified as permanently and totally disabled (PTD) and began receiving SSDI (first month June 2011; SSA disability onset Dec. 2010).
- In a 2013 claim Darrow sought PTD and an adjusted compensation rate; parties later stipulated an adjusted average weekly wage of $1,390 under AS 23.30.220(a)(10) for PTD calculation (but Alaska Airlines argued a lower 1996 wage applied for SSDI-offset purposes).
- Alaska Airlines petitioned the Board to offset PTD by (1) SSDI under AS 23.30.225(b) and (2) previously paid PPI under AS 23.30.180 (and relied on 8 AAC 45.134(c) treating PPI as recoverable PPD).
- The Board applied a Miller-based method for the SSDI offset (but misapplied the adjusted-wage cap), allowed recoupment of PPI (inflation‑adjusted) pursuant to the Board regulation, and limited recoupment withholding to 20% of PTD installments.
- The Commission reversed the SSDI offset calculation (using the AS 23.30.220(a)(10) adjusted wage for the offset) but affirmed that the employer could recoup PPI — though it treated recoupment as an overpayment recoverable under AS 23.30.155(j) rather than via AS 23.30.180(a); it declined to rule on the regulation’s validity. The employer appealed and Darrow cross‑appealed to the Alaska Supreme Court.
Issues
| Issue | Plaintiff's Argument (Darrow) | Defendant's Argument (Alaska Airlines) | Held |
|---|---|---|---|
| Proper base wage for SSDI offset under AS 23.30.225(b) when PTD is computed using AS 23.30.220(a)(10) adjusted wages | Use the PTD adjusted wage ($1,390) agreed under AS 23.30.220(a)(10); using that wage avoids an unfair reduction in combined SSDI+PTD benefits | Use the historic wage at time of injury (1996 wage) to maximize the employer offset and reduce employer liability | Affirmed Commission: the "average weekly wages at time of injury" in AS 23.30.225(b) can be calculated under any subsection of AS 23.30.220, including (a)(10); SSDI offset must use the PTD adjusted wage agreed under (a)(10) |
| Whether AS 23.30.180(a) authorizes offset of PTD by previously paid PPI | PPI differs from PPD; AS 23.30.180(a) authorizes reduction only for previously paid permanent partial disability (PPD), not PPI; thus employer may not recoup PPI | Statute and legislative intent avoid double payment; PPI paid earlier should be treated as an advance on PTD and therefore recoverable | Reversed Commission on this point: AS 23.30.180(a) authorizes recovery of previously paid PPD (disability-based), not PPI (impairment-based); PPI is not recoverable under that statute as written |
| Validity of 8 AAC 45.134(c) (regulation equating PPI with PPD for AS 23.30.180 purposes) | Regulation conflicts with statute by treating impairment awards as disability awards and thus is invalid | Board regulation implements statute to avoid double recovery; regulation is reasonable | Regulation 8 AAC 45.134(c) is invalid because it substantively rewrites AS 23.30.180(a) (substituting impairment for disability) and is therefore inconsistent with the statute |
Key Cases Cited
- Underwater Construction, Inc. v. Shirley, 884 P.2d 150 (Alaska 1994) (construed "average weekly wages" in AS 23.30.225(b) in relation to AS 23.30.220)
- Louie v. BP Expl. (Alaska), Inc., 327 P.3d 204 (Alaska 2014) (statutory construction principles and discussion of wage adjustments affecting benefit levels)
- Humphrey v. Lowe’s Home Improvement Warehouse, Inc., 337 P.3d 1174 (Alaska 2014) (standards of review for Appeals Commission decisions)
- Rydwell v. Anchorage School District, 864 P.2d 526 (Alaska 1993) (distinguishing impairment from disability; use of AMA Guides for impairment)
- Muller v. BP Expl. (Alaska) Inc., 923 P.2d 783 (Alaska 1996) (agency regulation cannot justify statutory interpretation beyond statute's language)