In re Declaratory Ruling re SDCL 62-1-1(6)
Lead Opinion
[¶ 1.] Attorney James Leach petitioned the Department of Labor for a declaratory ruling regarding the application of a statute. The statute governs the “earnings” used to calculate .the “average weekly wage” in workers’ compensation cases. Leach contended that discretionary bonuses .should ;be ..included in the ■ calculation. The Department , ruled that only nomdis-cretionary bonuses should be included, and Leach appealed to circuit court. The court, sua sponte, dismissed the appeal because it concluded that the Department lacked jurisdiction to issue such rulings. Leach now appeals to this Court. We reverse and remand to consider, the appeal on the merits. . ,
Facts and Procedural History
[¶2.] James Leach is a South Dakota attorney who, among other things, represents clients in workers’ compensation cases. Settlement agreements in those cases must be approved by the Department. Leach disagrees with the Department’s interpretation of a statute under
[¶ 3.] The Department accepted the petition and gave public notice of a hearing to consider the question. Appellees, Associated School Boards of South Dakota Workers’ Compensation Trust Fund and First Dakota Indemnity and Dakota Truck Underwriters appeared in opposition to Leach’s interpretation of the statute.
[¶4.] Following the hearing, the Department issued a declaratory ruling that discretionary bonuses may not be included in the calculation. On appeal, the circuit court, sua sponte, dismissed the appeal for lack of jurisdiction. The court ruled that, in the absence of an actual case, the Department was without subject matter jurisdiction to issue declaratory rulings. The court further concluded that because the Department had no jurisdiction, the court had no jurisdiction to consider the appeal. Nevertheless, the court vacated the declaratory ruling in addition to dismissing the appeal. Leach now appeals to this Court, raising the question whether the Department had subject matter jurisdiction to issue the declaratory ruling.
Decision
[¶ 5.] This case was resolved below by the circuit court’s determination that the Department had no jurisdiction to entertain the declaratory ruling, and therefore, the circuit court had no jurisdiction to entertain the appeal. If there was no jurisdiction in the tribunals below, there is likely no jurisdiction to consider this appeal. Therefore, we must first determine the jurisdiction of all three tribunals. See Sioux City Boat Club v. Mulhall,
[¶ 6.] The South Dakota Constitution delegates to the Legislature the au
Jurisdiction of Agencies io Issue Declaratory Rulings
[¶ 7.] The APA contains two statutes authorizing declaratory rulings.
[¶ 8.] A comparison of the two statutes reveals a clear difference in the standing required for persons requesting declaratory rulings from administrative agencies and declaratory rulings from courts. To request a declaratory ruling from a court,
[¶ 9.] . The underlying question, however, remains one of statute: whether
[¶ 10.] The decisions of other courts support our conclusion. In Power Authority of State of New York v. New York State Department of Environmental Conservation,
[¶ 11.] Appellees, however, argue that language expressing a case or.controversy requirement need not be in
[¶ 12.]- Appellees finally argue that our interpretation of
Jurisdiction of Circuit Courts to Hear Appeals
[¶ 13.] The circuit court’s appellate jurisdiction to review agency decisions is governed by
[¶ 14.] Thus, under the disjunctive 1977 amendment, the Legislature authorized parties in agency proceedings to appeal to circuit court if they had either exhausted their remedies within the agency or if they were aggrieved by the agency’s decision in a contested case.
Jurisdiction of this Court to Review a Circuit Court’s Review of an Agency Decision
[¶ 15.] The last issue is whether this Court has jurisdiction to consider Leach’s
[¶ 16.] Aggrieved parties are those that “suffer the denial of some claim of right either of person or property....” Application of N. States Power Co.,
[¶ 17.] The deprivation of Leach’s statutory rights to a declaratory ruling and a circuit court appeal constitute an injury thát provides standing and “aggrieved” party status to appeal. In Ingalls Shipbuilding, Inc. v. Director, Office of Workers’ Compensation Programs, United States Department of Labor,
[¶ 18.] As was the case in Ingalls,
[¶ 19.] We do, however, point out that Leach would not have been aggrieved and we would not have had jurisdiction had the circuit court ruled (either way) on the merits. Had that occurred, Leach would have received his procedural right to a declaratory ruling and circuit, court review. Cf. Ingalls,
[¶ 20.] Under
Notes
.The issue involves the definition of ‘‘earnings” in
. The record suggests that the exclusion of discretionary bonuses may often result in only ■ a minor difference in benefits.
. Insurance Benefits Inc. also appeared.
.
. Numerous State agencies have adopted rules to comply with this statute. The requirements for petitioners vary. Some rules require that the petition must ask for a ruling as to the applicability of the statute or rule to the petitioner. See ARSD 17:10:03:01 (Department of Corrections); ARSD 20:04:01:07 (Commission on Gaming); ARSD 20:06:32:01 (Division of Insurance); ARSD 20:07:02:01 (State Banking Commission); ARSD 20:10:01:34 (Public Utilities Commission); and ARSD 20:48:09:01 (Board of Nursing). The Department of Labor and many other agencies’ rules do not include the "applicable to the petitioner” requirement. See ARSD 47:01:01:04 (Department, of Labor). See also ARSD 20:03:01:05 (Department of Human Rights); ARSD 20:09:02:02 (S.D. Housing Development Authority); ARSD 20:18:04:01 (Gaming Commission on Deadwood Gambling); ARSD 20:39:01:07 (Board of Barber Examiners); ARSD ,20:43:01:01 (Board of Dentistry); ARSD 20:78:02:01 (Board of Medical and Osteopathic Examiners); ARSD 44:62:01:01 (Department of Health); ARSD 67:11:01:01 (Department of Social Services); and ARSD 70:01:01:03 (State Transportation Commission).
. The rule provides in pertinent part:
Petitions may be filed with the secretary of the Department of Labor for the purpose of requesting a declaratory ruling concerning the applicability of a statutory provision or " of a rule or order made by the department. ’ Such petitions shall be in writing and contain all thé‘ pertinent facts necessary to inform the secretary of the nature of- the rulings requested. '
ARSD 47:01:01:04.
. See Declaratory Ruling re:
Appellees contend that these rulings are different from this case because they had a factual, basis in- an existing controversy. This case is no different. The relevant facts are few, but they are identified in the petition: some employees receive discretionary bonuses prior to sustaining a workplace injury. These facts are not analytically different from the assumed or hypothetical facts in the prior declaratory rulings. Moreover, there certainly is an existing controversy. Leach claims that discretionary bonuses have been wrongfully excluded from the average weekly wage calculation in his clients’ cases. Appellees claim that discretionary bonuses are excluded as a matter of law. The petition also reflects that this controversy has been recurring but evading judicial review.
. Like
On petition of any person, any agency may issue a declaratory ruling with respect to the applicability to any person, property, or state of facts of any rule or statute enforceable by it. Each agency shall prescribe by rule the form for such petitions and the procedure for their submission, consideration and disposition.
Power Auth. of the State of N.Y.,
. The relevant language- of the Federal Administrative Procedures Act under consideration provided: “The agency, with like effect as in the case of other orders, and in its sound discretion, may issue a declaratory order to terminate a controversy or remove uncertain- • ty.” 5 U.S:C. § 554.
. See
Any person interested under a deed, will, written contract, or other writing constituting a contract, or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise, may have determined any question of construction or validity arising .under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder.
. Appellees' cases from other jurisdictions are also inapposite. See People’s Counsel of D.C. v. Pub. Serv. Comm’n of D.C.,
. See Yale Broad. Co. et al. v. Fed. Commc’n Comm’n,
. The dissent argues that the disjunctive amendment did not change the statute to permit an appeal under the "exhaustion of administrative remedies” clause of
Small also fails to provide, any relevant limitation on circuit court appellate jurisdiction. The question on appeal;to. this Court in Small only involved the circuit court's original jurisdiction. The plaintiff had filed a "summons and complaint” in circuit court (an original action) "for declaratory judgment pursuant to
. The dissent contends that Leach has not exhausted his administrative remedies. Dissent ¶ 29. The dissent reasons: "A remedy cannot exist in the absence of an injury.... Because there was no injury, there necessarily was no ‘remedy’ for Leach to exhaust.” Id. This reasoning is based on the false premise that without an injury no remedy of any kind can exist. The APA dispels the dissent's premise. As we have previously held,
. The dissent contends that even if the circuit court had jurisdiction under
Concurrence in Part
(concurring in result in part and dissenting in part).
[¶ 23.] I agree with the Court’s conclusion that the Department had jurisdiction to hear Leach’s petition. However, I disagree that Leach had a right to appeal the Department’s ruling. Therefore, I concur in result in the Court’s decision to reverse the circuit court’s vacation of the Department’s ruling. However, remanding to the
[¶24.] 1. The circuit. court lacked appellate jurisdiction.
[¶ 25.] The Court and Leach assert-the circuit court had jurisdiction under the first sentence of
[1126.] We already considered and rejected the notion that the 1977 Amendment was substantive rather than stylistic over 35 years ago iri Homestake Mining Co. v. Board of Environmental Protection,
[¶ 27.] Small presents an additional analytical challenge to the Court’s conclusion that the 1977 Amendment established two avenues for appeal. The Court claims that “under the disjunctive 1977 amendment, the Legislature authorized parties in agency proceedings to appeal to circuit court if they had either exhausted their remedies within the agency or if they were aggrieved by the agency’s decision in a contested case.” See supra ¶ 14. In other words, the Court argues that the aggrieved-party and remedy-exhaustion requirements are each sufficient — instead of necessary — conditions to invoke a right of appeal. However, contrary to the Court’s claim, we have repeatedly held that the remedy-exhaustion requirement is a necessary condition of appeal. Small,
[¶28.]" Portions of the Administrative Procedure Act (APA) and the Declaratory Judgment Act (DJA) also suggest the Legislature did not intend the 1977 Amendment to create a right to appeal in an uncontested case. When engaging in statutory construction, “the intent [of a statute] must be determined from the statute as a whole, as well as other statutes relating to the same' subject.” Maynard v. Heeren,
[¶29.] The requirement that a would-be appellant exhaust administrative remedies reinforces the conclusion that the 1977 Amendment did not ’establish a right to appeal in an uncontested case. A remedy cannot exist in the absence of an injury. See Hyde v. Minn., Dak. & Pac. Ry. Co.,
[¶ 30.] 2. Leach lacked judicial standing to appeal into the courts.
[¶ 31.] Even if the Court was correct in concluding the circuit court had appellate jurisdiction, Leach’s appeal should have been dismissed by the circuit court because it does not present a case or controversy. “It is a fundamental principle of our jurisprudence that courts do not adjudicate issues that are not actually before them in the form of cases.... ” State v. Kvasnicka,
[¶ 32.] The. Court erroneously concludes that the case requirement is satisfied simply because — according to the Court —
[¶ 33.] Leach has not presented a case or controversy for judicial review. “A plaintiff must .satisfy three elements in order to establish standing as an aggrieved person such that a court has subject matter jurisdiction. First,, the plaintiff must establish that he suffered an injury in fact....” Cable v. Union Cty. Bd. of Cty. Comm’rs,
[¶34.] In practical terms, Leach’s appeal to the circuit court is meaningless. Even if the court decides in his favor on the merits, what has he accomplished? Because he asserts no injury — and because there was no adverse party to be bound by the court’s decision — a favorable decision carries no immediate benefit. Additionally, as the Court concedes, remanding Leach’s appeal to the circuit court for a decision on the merits precludes a review of the merits by this Court. See swpra ¶ 19 (“[0]nce Leach is afforded his statutory rights by a circuit court’s review on the merits, this Court will have no jurisdiction to review the circuit court’s decision be
Conclusion
[¶ 35.] The Court jumps ■ through a staggering number of hoops in order to grant Leach an appeal. Subscribing to -the Court’s opinion requires concluding: (1) that the Legislature intended to permit the appeal of a ruling in an, uncontested case but not a rule, despite the lack of material distinction between the two; (2) that the Legislature intended the 1977 Amendment to be only half disjunctive, permitting an appeal in an uncontested case if remedies are exhausted but not permitting an appeal of a contested case without exhausting remedies; (3) that the Legislature intended to require a circuit court to determine hypothetical questions of law on appeal but bar it from doing so directly; (4) that the Legislature intended to vest terminal appellate jurisdiction in uncontested cases with the circuit court instead of this Court; (5) that a remedy can exist where there is no injury; and (6) that
[¶ 36.]. Our previous decisions in Home-stake Mining and Small, as well as other portions of the APA and the DJA, establish . that, the 1977 Amendment did not create a right of appeal in an uncontested case. Even if it had, the absence of an alleged injury ' logically precludes the Court’s conclusion that Leach “exhausted administrative remedies.” The absence of an injury also means that Leach has not presented a case or controversy for review; instead, Leach merely seeks to validate his own legal opinion.' Furthermore, an appeal before the circuit court offers no potential benefit to Leach. - For all of the foregoing reasons, the.circuit court properly dismissed Leach’s appeal. Therefore, I .would reverse the circuit court’s vacation of the Department’s ruling but otherwise affirm the court’s dismissal of Leach’s appeal.
. Although the present case is distinguishable from Homestake insofar as it presents a challenge to an agency's interpretation of a statute rather than its own rule, this distinction is not material. There is no discernable reason to conclude that the Legislature intended to deny appellate jurisdiction when an agency interprets its own rule in an uncontested case but grant jurisdiction when it instead interprets a statute.
.. In his petition; Leach states; "This petition allows the Secretary to correct the erroneous rulings of the Department, so that injured workers in the future can receive the benefits to which they are entitled by law.” (Emphasis added.)
. The Court’s conclusory claim that the APA dispels this "false premise” is unsupported. See supra ¶ 14 n. 14, The Court first repeats its earlier holding that
The Court’s argument based on our decision in Dan Nelson, Automotive, Inc. v. Viken,
. Relying solely on the definition of rule from
. Despite the Court’s suggestion otherwise, the original action in Small was a contested case before an administrative agency (Department . of Social Services). The Smalls attempted to appeal into the circuit court,' but based on a misreading of Homestake Mining, they believed the proper procedure to appeal into the circuit court was by' filing a declaratory-judgment action under
. Leach conceded in his petition to the Department that in every actual case in which the question whether a discretionary bonus is included in the statutory definition of earnings under
. The Court erroneously concludes that this standing argument is based on Article III of the U.S. Constitution. As is evident from this Court’s past decisions cited in this writing, see supra ¶¶ 31-33, the standing requirement is alive and well as a matter of this Court's jurisprudence.
Even so, the Court claims that Kvasnicka, Cable, and Boever are "facially inapposite.” See supra ¶ 14 n. 15. Yet, the applicability of these cases to the present one is obvious. Each of these cases involved ah appellate court refusing to decide an issue presented on appeal for lack of standing. In rejecting this well-established principle, the Court apparently concludes that while this Court can refuse to ‘expend its judicial resources on hypothetical questions, a circuit court serving an appellate function is not similarly permitted to protect its resources.
Even if this writing relied on Article III cases, however, the Court’s reliance on Application of Northern States Power Co.,
. Neither will Leach be prejudiced if denied an appeal. As noted, Leach does not allege any injury. Furthermore,