State Ex Rel. Workforce Safety & Insurance v. Questar Energy Services, Inc.
2017 N.D. LEXIS 255
| N.D. | 2017Background
- Questar Energy Services obtained WSI coverage in July 2012 and was audited for July 1, 2013–June 30, 2014; WSI reclassified Questar’s employees after the 2014 audit, increasing premium rates.
- Questar requested reconsideration and a rehearing; an ALJ was assigned after WSI issued an administrative order confirming the reclassification.
- At the administrative hearing the ALJ heard competing testimony about employee duties (sampling/analysis primarily from pickup trucks/mobile units vs. work at well sites implicating well operations).
- The ALJ reversed WSI, applying a preponderance-of-the-evidence standard and concluding employees fit Rate Classification Code 6208 (Oil and Gas Instrument Logging) rather than Code 1320 (Oil or Gas Operations).
- WSI appealed to district court and then to the Supreme Court, arguing the ALJ applied the wrong standard, improperly excluded the July 2015 amendments to the Rate Classification Manual, and misclassified employees.
- The Supreme Court upheld the ALJ: treating the classification as a mixed question of law and fact, refusing to apply the 2015 amendments retroactively, and affirming classification under Code 6208.
Issues
| Issue | Plaintiff's Argument (WSI) | Defendant's Argument (Questar) | Held |
|---|---|---|---|
| Standard of review for WSI classification | Classification is a question of law; review should focus on whether WSI’s legal conclusion is supported by its factual findings (defer to WSI legal determination) | Classification is factual (or mixed); ALJ may apply preponderance standard to facts | Classification is a mixed question of law and fact; underlying facts reviewed for preponderance, legal conclusion reviewed de novo |
| Use of July 2015 Rate Classification Manual amendments | 2015 language merely clarifies earlier code and should inform the 2013–14 audit | 2015 amendments materially changed Code 6208 and cannot be applied retroactively | 2015 additions were modifications (not mere clarifications); amendments not applied to the audit period |
| Proper classification of Questar employees | Employees perform duties within Code 1320 (oil/gas operations) | Employees provide on-site consulting/analysis from mobile units after drilling, fitting Code 6208 | ALJ’s factual findings supported Code 6208; court affirms classification under that code |
Key Cases Cited
- Workforce Safety & Ins. v. Auck, 785 N.W.2d 186 (N.D. 2010) (standard for appellate review of ALJ factual findings and legal conclusions)
- Indus. Contractors, Inc. v. Taylor, 899 N.W.2d 680 (N.D. 2017) (deference principles for ALJ findings and review of legal conclusions)
- Workforce Safety & Ins. v. Larry’s On Site Welding, 845 N.W.2d 310 (N.D. 2014) (classification and mixed question analysis)
- Matter of BKU Enterprises, Inc., 513 N.W.2d 382 (N.D. 1994) (whether worker is independent contractor or employee is a mixed question of law and fact)
- Power Fuels, Inc. v. Elkin, 283 N.W.2d 214 (N.D. 1979) (appellate standard limiting independent factfinding by courts)