*1 376 (DOROTHY
DON EDGAR BURRIS M. (Clаimants), ET BARNHART, AL., Appellant, Claimant and EMPLOYMENT RELATIONS DIVISION/ DEPARTMENT OF LABOR & INDUSTRY, Respondents.
Defendants and
No. 91-243.
Submitted on Briefs October
1991.
April 15,
Decided
1992.
St.Rep.
49
326.
For Appellant: Edgar Burris, Don Attorney Law, Billings. Respondent: Neal, For Claren Department of Industry, Labor and Helena.
JUSTICE McDONOUGH delivered the Opinion of the Court. Edgar Don appeals Burris judgment of the Workers’ Compensation Court which held that Department of Labor and Industry had authority regulate attorney fees and that Burris did any injury show affirm. under his constitutional claims. We appeal issues on are whether the Department of Labor and Industry has the authority to regulate attorney fees under 39-71- § 613, (1987), MCA 39-71-613, whether (1987), MCA is uncon- stitutional.
Attorney Edgar Don Burris entered attorney into agree- retainer ments with respect to separate three July 17, clients between 1989 аnd January 31, 1990. All agreements three provided that Burris be retained on a contingency fee basis. Burris submitted the attorney provided retainer forms by the Department of Industry Labor and (ERD) the Employment Relations Division required by the statute. However, titled, he included 8mattachment “Attorneys Fee Contract RE: Compensation.” Workers’ The contract provided fees of $250.00 pеr hour or a contingency twenty-five of percent for cases that do not go before the Compensation Court, Workers’ thirty-three or one-third percent for cases that go before the Compensation Workers’ Court. The provided fees in Burris’ attached higher contract were than those by allowed law. The ERD subsequently ap- denied the proval аttorney retainer forms.
Burris appealed ERD’s decision and a hearing followed which resulted in affirmance of ERD’sdecision. Burris appealed next to the Compensation Court. The Court affirmed the decision of the Hearings Bureau of Department (the Industry Labor and Department). appeal This follows. 378 regulated by fees can be is controlled statute
Whеther question is a of law. The standard of review utilized and therefore reviewing this Court when decisions the Workers’ is: Court law, this free only questions an raises court is
When issue Doig Comp. its v. Fund reach own conclusions ... State Ins. 50, 61, 12, 13, citing 809 Solheim v. Tom Davis 248 Mont. P.2d 265, 272, 1037-1038. In Ranch Mont. if reviewing conclusions of law we will determine the lower court’s Steer, agency’s interpretation the law is correсt. See also or Revenue, (1990), 245 Mont. Dept. 39-71-613, MCA, Compensation Court that § The Workers’ found authority an to submit require granted provided by Department, employment, on a form a contract found stating agreement. of the fee The court further terms any fees in authority regulate had compensation case. (1987), provides: Section on behalf a claimant reрresents or acts When claim, the attor- any party any *3 the on ney department employment, shall to a contract submit specifically the terms provided by department, stating form the a attorney the and the claimant. arrangement the fee between (2) the Department [now The the division administrator of attorney’s Industry] regulate the amount of the Labor and shall any regulating In the amount case. fee fee, consider: department of the the shall (a) gained to the efforts of the the claimant due the benefits attorney;
(b) case; attorney spend to on the required time the was the (c) case; and complexity the (d) may department matter the consider any other relevant appropriate. section, this a rule provision If a an violates section, fixing attorney's or an order
adopted under this section, any fee which he right he forfeit the under this shall added.) (Emphasis collect. have or been entitled to may collected Wight Judge our decision Compensation relied on The Workers’ 98, 664 P.2d303, (1983), Mont. Company, Inc. 204 Hughes Livestock authority regu- had determination that the the its late fees. There said: we spirit legislature,
The concern of of Workers’ Com- repairing one a pensation law are and the same: that the cost of injuries or lost shall replacing earning capacity worker’s his be industry, burden that It is worker. viewpoint Compensation from that that the Workers’ Court or determine Division of attorneys should the reasonableness fees regulating and exercise discretion in the same.
Wight at Compensation hold that We the Workers’ Court is in its correct application of the law. difficult MCA, more issue is whether due denies
process equal of law and protection Specifically, of the law. Burris argues his rights being constitutional are violated because the regulates only the fees of claimants’ and not attorneys, defense impairing right This, his argues, contract. he is in contravention of the statute provides, which “When an represents claimant any or acts behalf of a party other ...” added.) (Emphasis argues Burris that the is unambiguous. statute He maintains the interpretation, “any statute needs no party” attorneys. means defense
The Court fоund that Burris did not set a legal analysis claims, forth factual or support his constitutional nor any injury resulting did he show legislation regulating We agree. fees. argues
Burris first he due process. was denied When a due process involved, claim question is the initial due process is whether so, required stated, is and if Supreme how much? The Court has protected ‘When implicated, right interеsts are kind of some prior hearing paramount.” Regents Board v. Roth given hearing by by U.S. 569-570. Burris Department, Thus, Court and now this Court. process. Burris received due *4 argues
Burris also Department’s regulation the attorneys attorneys compen claimant’s and defense in equal say sation no protection. cases violates Suffice to that there is involved, suspect right nor the clаss is fundamental involved. Thus scrutiny apply. strict test does not analysis. This under the middle tiered
Nor do these issues fall involving the analysis the middle cases employed Court has tiered Meech constitutionally interests of education and welfare. protected West, Mont. v. Hillhaven application ration- the statute and its is question is whether 45,776 ally legitimate government to a intеrest. Meech related 39-71-105, public policy declares the at 502. Section compensation law: behind the (1) compensation objective It is an of the Montana workers’ fault, wage and regard supplement system provide, without suffering injury to a from a work-related medical benefits worker injured not intended to make Wage-loss or disease. benefits arе a worker at a reasonable whole; they are intended to assist worker limitation, wage-loss the benefit employer. cost to the Within as a relationship wages actual lost bear a reasonable should injury or disease. result of a work-related a work-related A removal from the work force due to worker’s worker, the negative impact has a worker’s injury or disease Therefore, it is an general public. family, employer, objective compensation system to return a worker of the workers’ has work-re- possible as after the worker suffered work soon injury or disease. lated MCA, application of Department’s and the
We hold that § related to the attorney’s rationally fee is the statute to a claimant’s net the claimant’s legitimate protecting interest government’s essentially Act is cases. The benefits workers’ protection his dependents, worker and protection thereto, rationally agreements related impaired any interpretation implementation regardless “any party.” Department of the words reasons, foregoing judgment For the sation is affirmed. Court HARRISON, TURNAGE and JUSTICES
CHIEF JUSTICE and GRAYconcur. WEBER dissenting.
JUSTICE TRIEWEILER majority. opinion I dissent to limit Compensation’s efforts The Division of by artifi- injured availability attorneys represent who will any without ability limiting cially claimants’ *5 comparable rights insurers, clearly employers limitation on Equal II, 4, violates the Protection Clause Article Section of the Montana Constitution. agree
I do that when arbitrarily selectively not the State right litigant interferes with the of a to contract and for the attorney services of an that that interference does not mid- deserve scrutiny dle-tiered Equal However, under the Protection Clause. for discussion, purposes of this let’s assume the majority’s that favorite of scrutiny, level the rational anything basis or “almost goes” test applies. The Department of Labor’s against blatant discrimination claimants and their does even pass that minimal level of scrutiny. problem majority’s
The with the it upon conclusion that is based acceptance blind of the of Labor’s bald assertion that agreements these limitations on fee between claimants and their attorneys are injured for the benefit of workеrs. A brief review history regulation recent in the area of attorney fee discloses that nothing could be further from the truth. Division of Workers’ given statutory was
authority to regulate claimant’s fees Section 39-71- MCA(1975). 613, Pursuant to authority, the Division ofWorkers’ 24.29.3801, ARM, enacted which until 1987 allowed attorneys to enter into fee agreements injured with for workers contingent ranging fees from 25 to 40 pеrcent, depending on whether trial, the case prior trial, following was resolved appeal. or on Attorneys only were allowed to recover fees when benefits were recovered due to the attorney. Attorneys efforts of the were not permitted to recover fee for benefits that had disputed. never been
Furthermore, where benеfits were denied or the amount was disputed, and prevailed, the claimant later the insurer who denied (Sections responsible payment his benefits was for of his fees. 39-71- (1975).) MCA Wight Hughes In Livestock, 204 Mont. we held purpose ofthese statutes to assure that claimants whose benefits wrongfully had been eventually denied would receive net amount they had having benefits been entitled to -under the law without deduct costs and fees incurred to collect those benefits. We held that in order to further that purpose, claimants could recover full 39-71-611, MCA, amount of their so contingent fee under § long as that had approved been Division Compensation. or its Division Workers’
Had Labor from truly protecting sation been concerned about paying protecting fees or the best interests excessive case, still worker, righteously claims in this that would be it recovering a fee unless the Attorneys precluded law. would be However, attorney’s had been recovered due to the effort. benefits necessary attorney’s to recover when the efforts were benefits place, entitled in the first the insurer which thе claimant had been the full amount wrongfully responsible denied them would be who recovery net fees and costs incurred so that the claimant’s lawfully equal the he was entitled. would benefits which *6 Instead, Compensation requested an the Division very Act in the next Compensation amendment to the Workers’ Wight That amendment legislative following session the decision. amount of and limited the became § a could recover from an insurer to an amount based fees that claimant hourly though was even the claimant’s upon an rate. effect would, fee, in attorney may contingent his call for a he contract with fee, cases, recovering from the full amount of that precluded most be of wrongful fee had necessitated thе denial even when the been Compensation’s claim. much Division of Workers’ his So for the However, best interests. the concern the workers’ the Compensation’s concern for Labor’s the Division Workers’ In not end in 1985. it advocated best interests workers did Compensation the Act which were amendments to Workers’ massive ultimately upon lobbying its efforts. Those amendment рassed, based by injured drastically could recovered reduced benefits that be (1987). 39-71-701, -702, -703, -741, MCA In workers. See §§ made it much addition, Division-sponsored same amendments costs, attorney fees and even difficult for claimants to recover more necessary attorney because their benefits it to retain an when was -612, MCA, were 39-71-611 and wrongfully denied. Both were recovered, require attorney fees could be amended to that before benefits was unreasonable. prove that the denial ofhis claimant must time, Compensation was At the same the Division Workers’ and severe through cuts benefits lobbying substantial attorney fees ability the of workers to recover restrictions on ARM, 24.29.3801, insurers, to further restrict amending it proposed rule attornеys. The modified the fees that claimants could provided as follows:
(3) attorney repre- Except provided as subsection compensation plans a on a claim who senting claimant contingent percentage arrangement utilize a fee to establish claimant, may charge following fee fee with a above amounts:
(a) For cases thаt have been settled an order of the without Supreme Court, twenty or Judge (20%) percent payments of the amount of attorney. claimant receives due to the efforts of the (b) hearing For a go cases that before the Workers’ (25%) Supreme Court, sation Judge twenty-five percent compensation payments amount additional claimant receives from an order of the Judge due to the efforts of attorney.
(4) (3) The fee schedule set forth in preclude subsection does not arrangements, use such as the use fee system hourly based on at a exceeding time reasonable rate not per hour, charged may $75 but the total fee not exceed the schedule (7). set forth in except provided subseсtion as in subsection arrangement utilized, When such fee ofemployment the contract shall set specifically arrangement, forth the fee such the amount per charged hour.
Hearings were proposed held on the amendment to the Division’s administrative regarding attorney rule opposition fees and virtually However, spite unanimous. response оf that to the *7 proposal, adopted it was by the Division of Compensation. Workers’
Although self-serving representation Labor’s in this is case that the further restriction claimants’ fees was injured workers, for the benefit purpose the real is more evident of public policy accompanied declaration the Division’s 1987 amendments to the Act. That declаra- found, 39-71-105(3), tion is part, which states: (3) Montana’s and occupational disease systems insurance are be primarily self-administering. intended to benefits, Claimants able speedily should be obtain and employers provide coverage should be able to reasonably at con- objectives, stant rates. To meet system designed these must be lawyers to minimize reliаnce upon and the courts to obtain benefits interpret and [Emphasis added.] liabilities. attorney fees words, the limitations on purpose
In other for by the claimant’s in this case was challenged that have been resolving attorneys process simply to eliminate perspec- from a constitutional compensation disputes. problem The attornеys attorneys effected those only is that the class of so were tive similar restrictions on the claimants. There were no represent who attorneys any amount the rights employers pay or insurers their market would bear. Department of Labor or its Division point is this: If the brief honestly concerned about money already dis- having inadequate to take from their fees, gone to
ability they would not have benefits to for they for claimants great lengths opportunity have to erode the wrongfully denied their benefits. fees from insurers who have recover Therefore, that there is no in fact for that history demonstrates basis discriminating as the rational basis for concern and it cannot serve employers as or insurers. against opposed claimants hand, If, purpose for the on the other the real efforts to restrict Compensation’s its Division of Labor’s and compensa- attorneys from the workers’ attorney fees is to eliminate It selectively unfairly. and has then it has done so system, tion Claimants only represent who claimants. eliminated are in the parties compensatiоn dispute a workers’ who are the Therefore, eliminating the claimant’s representation. most need of companies, and leaving insurance attorney, sophisticated while free to hire the best large corporate employers, sometimes previously find, this has they has no rational basis as Court can concept. defined West, 21, 776P.2d 238 Mont.
In Meeсh v.Hillhaven following judging whether standard approval cited with we anything goes” “almost the rational basis or legislation passes class test: constitutionality whether legislation of class
“The test of the reasonable, just practical basis has some the classification equally upon every person within operates whether law ....” class (1976), 170 v.Ille Electric Co.
Mеech, (quoting Reeces 647). 104, 551 P.2d Mont. available from calibre of services question can that the
Who to the are, profession, related every legal profession *8 argued paid amount that can be for those How can it be services? just” arbitrarily quality it limit is “reasonable or services no legal available to those in most need of services when similаr placed parties already sophisti- on limitation is those who are most cated laws.
There is no rational basis for the of Labor’s concerted injured representation, efforts leave workers without other than unjust purpose being and unreasonable able to dictate who does disability regulations and does not which are receive benеfits. challenged part Depart- in this case are of concerted effort ment Labor and the Division place — the burden mismanagement Division’s society members who are least able to bear that burden. reasons, For I these conclude that the Division of Workers’ Compensation’s discriminatory regulation fees found 24.29.3802, ARM, basis, therefore, has no rational violates Equal II, Protection Clause of Article Section of the Montana I judgment Constitution. would reverse the sation Court.
JUSTICE HUNT concurs in the foregoing dissent of JUSTICE TRIEWEILER.