Lead Opinion
[¶ 1] North Dakota Workforce Safety and Insurance (“WSI”) appealed a district court judgment reversing WSI’s decision to terminate Judith Midthun’s partial disability benefits. We conclude the district court erred when it found WSI’s discretion to waive the limitation on partial benefits was constrained by N.D.C.C. § 65-05-10(2). We therefore reverse the judgment of the district court and reinstate WSI’s order discontinuing Midthun’s partial disability benefits.
I.
[¶2] Judith Midthun began receiving temporary total disability benefits from WSI on April 24,1999, in connection with a right shoulder injury she sustained while working as a CNA at Mercy Hospital in Valley City. During the summer of 2000, she returned to the workforce, obtaining a position as an optical technician for Duling Optical. She worked approximately 20-23 hours per week in this new position. Due to her return to employment, WSI reduced
[¶ 3] Under N.D.C.C. § 65-05-10(2), the amount of time during which a claimant may receive partial disability benefits is limited to a period of five years. The statute states that WSI “may waive” the five-year limit if the claimant has experienced a catastrophic injury, or has long-term restrictions from the compensable work injury and is working less than twenty-eight hours per week. N.D.C.C. § 65-05-10(2). At an administrative hearing on Midthun’s claim for benefits, Timothy Wahlin, WSI’s staff counsel, testified as to the agency’s prior and current procedures for awarding and discontinuing partial disability benefits. Wahlin stated that WSI had previously operated under the belief that, if a claimant was working less than 28 hours per week, the five-year cap on partial disability benefits did not apply. Wahlin classified this belief as a misinterpretation of the law. For most of the period that Midthun received partial disability benefits, WSI applied this interpretation to her claim; on several occasions claims analysts reviewed her claim and made notations reaching conclusions akin to: “5 year TPD cap does not apply to [Midthun] at this time as she is working under 28 hours.”
[¶ 4] Wahlin testified that WSI later determined the five-year limitation did apply to claimants with long-term restrictions who worked less than 28 hours per week. In approximately 2004, WSI adopted a new procedure whereby the agency reviewed a claimant’s benefits before the five-year period ended, and determined whether or not to award a waiver of the limitation. The review considered whether a claimant met one of the two descriptions laid out in the statute, i.e., catastrophic injury, or long-term restrictions and working under 28 hours per week, and then decided whether there was some form of “extraordinary circumstances” involved which would justify the waiver. Wahlin testified that WSI also began to review its files for those already receiving partial disability benefits to determine whether waivers on the five-year limitation should be granted.
[¶ 5] Among those whose files were reviewed was Midthun. On December 16, 2005, WSI sent her a letter informing her she had received partial disability benefits for a period exceeding the five-year limitation, and that WSI would discontinue her benefits the following month. Midthun requested reconsideration from WSI, and on February 8, 2006, WSI issued an order concluding she was not entitled to further partial disability benefits. Midthun demanded a formal hearing from the agency, which resulted in WSI’s Final Order affirming its decision to deny further partial disability benefits. Midthun appealed the final order in district court, designating as her sole specification of error: “This appeal is taken upon the grounds that the decision by WSI in its July 20, 2007, Final Order is not in accordance with the law.” The district court reversed WSI’s order, finding Midthun met the requirements of N.D.C.C. § 65-05-10(2), and “WSI’s discretion to waive the five-year cap on TPD benefits is constrained by the express terms” of the statute.
II.
[¶ 6] On appeal, WSI contends it properly applied the provisions of N.D.C.C. § 65-05-10(2) by denying Midthun’s waiver, and further argues it had the discretion to decide whether or not to waive the limitation. Midthun argues WSI did not have the discretion to deny her further partial disability benefits, stressing the fact that she met the statutory requirement that she had long-term restrictions
[¶ 7] The Administrative Agencies Practice Act requires a party who appeals from an administrative hearing officer’s decision to file a notice of appeal and specifications of error. N.D.C.C. § 28-32-42(4). A party appealing a hearing officer’s decision must file “reasonably specific” specifications of error detailing which matters are at issue, so as to alert the agency, other parties, and the court of the particular errors claimed. Vetter v. North Dakota Workers Comp. Bureau,
[¶ 8] In this case, Midthun’s specification of error reads simply that, “This appeal is taken upon the grounds that the decision by WSI in its July 20, 2007, Final Order is not in accordance with the law.” We begin by noting that this language treads dangerously close to boilerplate, as it appears Midthun has adopted the phrase directly from the statute denoting occasions when a court will reverse the order of an agency. See N.D.C.C. § 28-32-46(1) (“The order is not in accordance with the law.”). Furthermore, this language concerns only the legal question of WSI’s interpretation of the statute. Although raised as an issue on appeal, whether WSI did waive the limitation in a particular circumstance is a factual issue not mentioned or hinted at in Midthun’s specification of error. See Von Ruden v. North Dakota Workforce Safety and Ins. Fund,
III.
[¶ 9] Questions of law, including the interpretation of a statute, are fully reviewable on appeal from an administrative decision. Grand Forks Prof'l Baseball, Inc. v. North Dakota Workers Comp. Bureau,
[¶ 10] When construing a statute we look first to the words used in the statute, giving them their plain, ordinary, and commonly understood meaning. N.D.C.C. § 1-02-02 (“Words used in any statute are to be understood in their ordinary sense, unless a contrary intention plainly appears.”); Lee v. North Dakota Workers Comp. Bureau,
[¶ 11] WSI contends it correctly interpreted N.D.C.C. § 65-05-10(2) as providing the agency with discretion over whether or not to waive the five-year limitation on partial disability benefits, and argues the district court erred when it found the agency did not have such discretion. Section 65-05-10(2), N.D.C.C., provides:
Benefits must be paid during the continuance of partial disability, not to exceed a period of five years. The organization may waive the five-year limit on the duration of partial disability benefits in cases of catastrophic injury ... or when the injured worker is working and has long-term restrictions verified by clear and convincing objective medical and vocational evidence that limits the injured worker to working less than twenty-eight hours per week because of the compensable work injury.
The issue in this matter, thus, turns on the meaning and effect of the phrase “may waive,” and whether this language allows WSI discretion to waive the limitation, or whether they must waive when a claimant falls under one of the statutory exceptions.
[¶ 12] This Court has previously held that the use of the word “may” in a statutory scheme is ordinarily understood as “permissive rather than mandatory and operates to confer discretion.” Matter of Adoption of K.S.H.,
[¶ 13] We only construe the word “may” as “must” where the context or subject matter compels that construction. Basin Elec. Power Co-op. v. North Dakota Workers Comp. Bureau,
[¶ 14] Furthermore, when N.D.C.C. § 65-05-10(2) was enacted, the legislature was aware of the distinction between using the terms “may” and “shall.” Section 65-05-10(2), N.D.C.C., was enacted during the 1991 Legislative Session. See 1991 N.D. Laws 2115-16. In 1991, the North Dakota Legislative Drafting Manual stated that the word “shall” is used when a duty is imposed on a person or body; conversely, the Manual stated that “may” is used to “confer a power, privilege, or right.” See North Dakota Legislative Drafting Manual, pp. 116-17,1991 Edition. We have long held the purpose of statutory construction is to ascertain and effectuate legislative intent, and unless it appears that it was the legislative intent to enact a mandatory statute, we will not construe it as such. Novak v. Novak,
[¶ 15] We reverse the judgment of the district court and reinstate WSI’s order discontinuing Judith Midthun’s partial disability benefits.
Concurrence Opinion
concurring in the result.
[¶ 18] As this Court said in Vetter v. North Dakota Workers Comp. Bureau,
[¶ 19] The “specifications of error” in this case contain only boilerplate, with no errors identified with particularity:
This appeal is taken upon the grounds that the decision by WSI in its July 20, 2007, Final Order is not in accordance with the law.
[¶ 20] These specifications of error are similar to those this Court held insufficient in Vetter:
Vetter appealed to the district court, serving the following specification of error with her notice of appeal:
“This appeal is taken upon the grounds that the decision by the Bureau is not in accordance with the law; that certain Findings of Fact made by the Bureau are not supported by a preponderance of the evidence; and that the Conclusions of Law made by the Bureau are not supported by its Findings of Fact.”
Id. at 453.
[¶ 21] The inadequate specifications here contrast with adequate specifications filed in other cases, identifying the specific findings of fact and specific conclusions of
[¶ 22] Under N.D.C.C. § 28-32-42(4) and our clear case law, the district court should have summarily affirmed WSI’s order. I agree with the majority that the judgment of the district court must be reversed, but for the reasons stated here.
[¶ 23] Dale V. Sandstrom
Concurrence Opinion
concurring and dissenting.
[¶ 24] I concur with Parts I and II of the majority opinion and with the conclusion in Part III that N.D.C.C. § 65-05-10(2) does grant WSI discretion to waive the five-year cap on partial disability benefits. However, I dissent because the majority’s analysis of WSI’s interpretation of N.D.C.C. § 65-05-10(2) cannot end there.
[¶ 25] WSI has interpreted N.D.C.C. § 65-05-10(2) as granting it absolute discretion to waive or not to waive the five-year cap on partial disability benefits. In Lass v. N.D. Workmen’s Comp. Bureau,
[¶ 26] ‘We construe statutes as a whole to give each provision meaning and effect.” Ash v. Traynor,
[¶27] The interpretation of N.D.C.C. § 65-05-10(2) by WSI must be “reasonable.” 6 Jacob A. Stein, et ah, Administrative Law § 51.01[1], at 51-69 (2008). Whether WSI’s interpretation of the statute is reasonable is based upon an examination of the legislation and its history. Id.
[¶ 28] The purpose of N.D.C.C. § 65-05-10(2) is to provide continued partial disability benefits to injured workers who fit the intent of the legislation. Section 65-05-10, N.D.C.C., was amended in 1991 to provide a five-year cap on partial disability benefits. 1991 N.D. Sess. Laws ch. 714, § 47(7). Two bills, S.B. 2246 and 2206, were introduced by the North Dakota Workers Compensation Bureau. Both bills provided for a cap on partial disability benefits after five years. Senate Bill 2246 was never adopted. Instead, the legislature adopted S.B. 2206.
“Section 1....
This section also seeks to limit the receipt of partial disability benefits to a period of five years, except in cases of catastrophic injury. The vast majority of workers are able to recover their earnings capacity within that time frame.
Hearing on S.B. 2246 Before the Senate Judiciary and House Industry, Business and Labor Comms., 55th N.D. Legis. Sess. (Feb. 4,1991) (testimony of Pat Mayer, Assistant Claims and Rehabilitation Manager of the Workers Compensation Bureau) (emphasis added). The implication is that most injured workers who receive partial disability benefits would be earning at the same rate as they had when they were injured within five years and would no longer be entitled to partial disability benefits at that point anyway.
[¶ 29] In 1997, N.D.C.C. § 65-05-10(2) was amended by HB 1264, which was introduced by the Workers Compensation Bureau. 1997 N.D. Sess. Laws, ch. 542, § 5. Under the amendment, the Bureau was allowed to waive the five-year cap in a second circumstance “when the injured worker is working and has long-term restrictions verified by clear and convincing objective medical and vocational evidence that limits the injured worker to working less than twenty-eight hours per week because of the compensable work injury.” On February 3, 1997, David L. Thiele, an attorney for the Workers Compensation Bureau, testified before the House Industry, Business and Labor committee in favor of HB 1264. Thiele testified: “Section 65-05-10(2) (page 8) allows the bureau to waive the five-year cap on partial disability benefits in cases where the injured worker has permanent restrictions to less than 28 hours per week.” Hearing on HB 1264 Before the House Industry, Business and Labor Comm., 55th N.D. Legis. Sess. (Feb. 3, 1997) (testimony of David L. Thiele, attorney for the Workers Compensation Bureau). Thiele testified similarly before the Senate Industry, Business and Labor Committee on March 12,1997. The Legislative Summary of HB 1264 states, in relevant part:
*579 Currently an injured worker is limited to five years of partial disability benefits (excludes catastrophic)[.] The bill allows the bureau to waive the five year cap for those injured workers who have a permanent restriction to less than 28 hours work per week[.] This will encourage such injured workers to continue to be productive working member [sic] of the community and will remove any negative incentive to not seek or obtain employment where there are restrictions in place limiting the hours the injured employee may work [.] (Emphasis added.)
[¶ 31] In order to receive partial disability benefits under N.D.C.C. § 65-05-10(2) (1997), an injured employee has to suffer a disability that resulted in a decrease of earning capacity. 1997 N.D. Sess. Laws ch. 542, § 5. The disability benefit is calculated at sixty-six and two-thirds percent of the difference between the injured employee’s average weekly wages before the injury and the employee’s wage earning capacity after the injury in the same or another employment. Id.; N.D.C.C. § 65-05-10 (1997). The amount of the partial disability benefit may not exceed the net pre-injury weekly wage. Id.
[¶ 32] “This Court has said that partial disability ‘contemplates at least three factors: First, there should be a physical disability; second, the disability should be partial, or in other words, the employee should be able to work subject to the disability; and third, there should be an actual loss of earning capacity that is causally related to the disability.’ ” Rodenbiker,
[¶ 33] Partial disability differs from total disability. Our Court has held: “Total disability exists when a worker is ‘unable, solely because of his job-related injury, to perform or obtain any substantial amount of labor in his particular line of work, or in any other for which he would be fitted.’ ” Rodenbiker,
“Permanent total disability” means an employee is determined incapable of rehabilitation of earnings capacity as determined by the:
a. Nature of injury.
b. Degree of physical impairment.
c. Education.
d. Work history.
e. Vocational rehabilitation potential.
As this Court has explained,
The purpose of partial disability benefits is to assist individuals who can be returned to substantial gainful employment through rehabilitation, but will ex*581 perience a decrease in earnings capacity upon return to the workforce. Partial disability benefits are for individuals who can return to substantial gainful employment, but at a lesser amount of income; they are not for injured workers who merely have some capacity to work.
Rodenbiker, at ¶ 25 (citation omitted).
[¶ 34] At the hearing before the Administrative Law Judge, a staff attorney for WSI testified that from 1997 to approximately 2004, WSI generally interpreted N.D.C.C. § 65-05-10(2) such that the five-year cap on partial disability benefits did not apply to an injured worker if the injured worker could only work less than twenty-eight hours per week. The staff attorney testified that he recommended to the claims policy arm of WSI in 2003 that this was an incorrect interpretation of the statute. As a result of his recommendations, WSI changed its practice and now has one person track the five-year duration and, before the end of the five-year period, WSI holds a meeting with the staff attorney, the claims supervisor, the claims analyst, and if necessary, the head of claims and makes a determination with respect to waiver. The staff attorney testified that WSI has determined that the criteria to be used are based on the statutory criteria. He testified the criteria include,
[I]s there clear and convincing evidence below the 28 hours, is the injured worker remaining at work, and then finally whether or not the case has some sort of extraordinary circumstances involved with it, that means the waiver of the five year statute needs to take place in order that benefits be paid consistent with the intention on that statute.
He also testified that this is now the policy of WSI and will be in the policy manual when it is finalized. He acknowledged that the first two criteria track the statute. When asked what is meant by the third criterion, “extraordinary circumstances,” he stated:
[Tjhere are a number of people out there that while being paid temporary partial disability benefits are being paid those benefits in such a manner that the reality of the situation is they would be temporary and total but for a doctor out there keeping them in the work force as a form of therapy. If that is the case, then to not waive the five years is to punish that individual who in reality is a temporary total disability recipient. (Emphasis added.)
[¶ 35] Although WSI claims it has interpreted N.D.C.C. § 65-05-10(2) consistent with the statute, it has not. Based on the record, WSI has interpreted the statute to require the injured worker to establish “total disability.” The purpose of the statute is to benefit injured workers who are partially disabled. Rodenbiker,
[¶ 36] Further WSI’s interpretation of the statute is unreasonable and not the product of a rational mental process. The legislature did not authorize WSI to require proof of total disability in order for an injured worker to receive continuing partial disability benefits. WSI’s interpretation of the statute clearly contradicts the intent of the legislation.
[¶ 37] The explanation by WSI of its abrupt change from applying the two criteria in the statute to adding a third criterion is “we screwed up.” WSI has also applied its new interpretation of the statute with the third criterion retroactively. The staff attorney for WSI testified that after WSI’s decision in 2003 or 2004 to
[¶ 38] WSI’s interpretation of N.D.C.C. § 65-05-10(2) is not in accordance with the law, and I would affirm the judgment of the district court dated April 14, 2008, reversing the final order of WSI dated July 20, 2007.
Notes
. Although S.B. 2206 was the version enacted by the legislature, much of the testimony and materials presented during the hearings of S.B. 2246 overlap with underlying considerations also impacting S.B. 2206.