*1 SD 84 DUDLEY, Claimant Bruce E. Appellant, HUIZENGA, Huizenga

James d/b/a

Trucking, Employer and

Appellee, Companies, Insurance

Wausau Appellee.

Insurer and 22487.

No. Dakota. Court South

Supreme Feb. 2003. on Briefs

Considered

Decided *2 Radke, Falls, Da-

Brian L. South Sioux kota, appellant. Attorney for claimant and Evans, Davenport, Eric C. Schulte Falls, Smith, Da- South & Sioux Hurwitz kota, Attorneys appellees. KONENKAMP, Justice. compensation In this workers’ 1.] [¶ attorney missed the claimant’s proceeding, disclosing expert deadline for stipulated the disclosure provided He witnesses. La- Department of eight weeks late. The motion to granted bor and, since experts, strike the claimant’s remand, had no case without Department the claimant denied evidence, granted also petition an order dated November employer. for the Be- summary judgment ruling part that Dudley “failed to compensation laws and cause our workers’ permanent disability establish total under *3 administrative in rules are remedial nature adopted by Department.” the new test liberally be construed to and should Between April and June it purposes, achieve their we conclude that 2000, activity no in Dudley’s occurred file. impose an of discretion not to a was abuse His former withdrew in April striking before the claim- lesser sanction 1996, Radke, attorney, and a new Brian L. expert ant’s witnesses. We reverse and began him representing sometime thereaf- proceedings. remand for further employer ter. Counsel for the asked Rad- Background toke submit a settlement demand in April 23, 1989, respond. but he did not The October Bruce E. em- [¶ 2.] On ployer moved to Dudley pros- a dismiss for failure to injury sustained work-related ecute Department the case. The sent a employment. the course of his As he directly Dudley letter highway asking drove a semi-truck on a near for his San Texas, Antonio, response, and Radke submitted dropped someone a materials rock opposing the motion. In an bridge passed from a when he underneath. order dated 29, 2000, August Department through granted The rock broke windshield motion, face, ruling that “all and struck him on the left side of his claims which open following and remained fracturing cutting several teeth his November order, to, including, but brought compensa- He a workers’ not limited face. [Dudley’s] request for Cozine against employer, Huizinga tion claim his benefits and treatment,’ carrier, for ‘certain of Trucking, its insurance claimant’s dental and Wau- hereby are with Companies. sought prejudice.” sau He dismissed As per- Insurance claim partial disability permanent manent benefits for and loss total disability, Department “in eye post-traumatic of use of his left and for ruled that headaches, reopen order to the issue damage, permanent nerve and other head (odd-lot doctrine) injuries. disability, total petition In an amended dated based on 26, 1991, condition, a change in medical Dudley alleged permanent June accor- 62-7-33, dance disability [Dudley] and with SDCL total under SDCL 62-4- must 6(23) eyes. prove said medical changed for loss of use of both condition at some time following the November 12, 1992, [¶ 3.] On March the Depart- 1992 order.” ment “[Dudley] ruled that is entitled to reimbursement for all dental bills associat- In January Dudley peti- injured ed with treatment of teeth reopen 62-7-33, [his] on tioned to under SDCL 23, 1989, October and that is entitled alleging experienced [he] that he had a sub- permanent disability and total benefits change stantial in his condition because of provisions for life under the of SDCL 62- his psychologist weekly “need to see a on a 4-6(23) employer and SDCL 62-4-7.” The years basis for seven due to this condi- appealed. The circuit court parties reversed the tion.” The agreed joint to a pre- disability permanent award and remanded liminary report, the Department and en- the claim to the prehearing orders tered a order requiring both develop specific a test “to determine the by sides to abide scheduling various [Dudley’s] extent of ‘loss of use of eyes’ discovery his Concerning deadlines. expert disability....” witnesses, and the extent of [his] On the order stated: (d) reports quested that have not Any expert hearing a to address the matter. Without a already exchanged hearing, Department grant- been will be ex- ed both the motion to strike changed possible. as soon as Claimant and the mo- summary tion for judgment. Then the reports by and opinions will submit his again case came circuit court. 15, 2001, May Employer/Insurer by 2001. Dudley appealed [¶ 9.] While the De- partment’s summary judgment of Septem- Although Dudley produced medi- ber submitted notice 14, 2001, May cal records on he faded to challenging of review the wording of the any expert reports opinions by submit Department’s year aof earlier that Thus, May there was no Dudley’s prior dismissed petition for fail- opinion evidence of record to show that *4 prosecute. ure to The circuit court af- Dudley a experienced had substantial summary firmed the judgment, but re- change psychological in his condition. versed the Department’s prior order to the Dudley now contends that there was no extent that permitted it of a reopening specific provision exchange for the of a list permanent disability total claim on based a expert prehearing witnesses in the or- change in condition after the November Nonetheless, Dudley did disclose his der. 12, 1992 order. The court ruled that the Ostrander, expert, by May vocational Rick finality issues did not achieve until the 15, 2001, though provide he did not Os- Department’s August 2000 order of report required by pre- trander’s as dismissal. hearing order. Dudley appeals now on the fol- 5, 2001, employer’s On June (1) lowing questions: ‘Whether the De- attorney contacted counsel partment of Labor erred when it deter- independent schedule an medical exam for mined there was a deadline for naming June 2001. The counsel ex- (2) expert witnesses.” the De- “Whether feasible, if plained that the date was not partment of Labor erred imposed when it would need an employer extension of allowing the sanction of not Dudley to comply expert time to with the disclosure present treating the medical records of his imposed by deadline be- (8) practitioners.” “Whether the circuit appointment cause the next available court it Depart- erred when reversed the August would not be until sometime in ruling ment of Labor’s that Dud- allowed In response, Dudley’s attorney sent ley reopen permanent the issue of total day, a letter the next stating that he had (odd-lot doctrine) disability proved if he he Dudley. been unable to contact But the experienced change in medical condition Dudley letter further advised that would some Department’s time after the Novem- “strongly oppose any amendment to the ber 1992 order.” We deem Issue 1 to result, scheduling order.” As a the em- be without merit and therefore decline to ployer summary moved for judgment. it. address 11, 2001, Dudley [¶ 8.] On filed an A. Dismissal as Sanction for Untime- witnesses, of expert naming

amended list ly Disclosure Anderson, Knutson, Douglas Dr. Alan Hagedorn, Dudley’s Gene chiropractor, Dudley’s attorney failed In response, and Ostrander. comply prehearing with a order mandat moved to strike the designated claimant’s ing timely disclosure of his wit experts on the ground sanction, their names opinions. nesses and their As a timely Dudley were not granted submitted. re- the ALJ struck the witnesses and judgment. ery. rule, 47:03:01:16, See summary SDCL 15-6- The first ARSD 37(b)(2)(B). provides: This was the most drastic action available. See SDCL 15 - 6- If a party party’s or the attorney fails to 37(b)(2)(C). Discovery designed rules are obey order, a scheduling prehearing or if “to compel production evidence and no appearance is made on behalf of the stifle, promote, rather than the truth party at a scheduling prehearing con- Kovarik, finding process.” Magbuhat v. ference, party or if a party’s or the (S.D.1986) (citing Chit participate fails to in good Smith, tenden & Eastman Co. faith, the Division of Labor and Manage- (S.D.1979)). purpose N.W.2d The ment, initiative, upon motion or its own compensation provide of workers’ is to may regard make such orders with employees ability who have lost their just. thereto that it considers earn employment-related because of an ac rule, The 47:03:01:05.02, second ARSD cident, casualty, or disease. Rawls v. provides: ¶ Coleman-Frizzell, Inc., 130, 19, 2002 SD If any party comply fails to with the (citing Sopko v. C & provisions chapter, of this the Division ¶ Co., Inc., 8, 8, R 1998 SD Transfer *5 of Management Labor and may impose 229). 225, N.W.2d upon party sanctions 'such pursuant to Department’s The administra- 15-6-37(b). However, SDCL attorney provisions tive rules contain two on sanc- may fees be imposed only for a violation a party’s noncompliance tions for in discov- of a discovery order.* * 6—37(b) (C) comply SDCL entitled striking "Failure to pleadings parts An order out or 15— provides: with thereof, order” staying proceedings or further until (1) obeyed, by the order is dismissing Sanctions court in or the circuit where de- ac- position deponent thereof, is taken. If a fails to be proceeding any part tion or or or question being sworn or to answer a after rendering judgment by against default the by directed to do so the court in the circuit party; disobedient taken, deposition being in which the is the (D) any foregoing In lieu of of the orders or may contempt failure be considered a of thereto, treating in addition an order as a that court. contempt of obey any court the failure to (2) by Sanctions court in which action is except physi- orders an order to submit to a officer, director, pending. party If a or an examination; cal or mental managing agent party person or of a or a (E) party comply Where a has failed to with 6—30(b)(6) designated under subdivision 15— (a) § an order requiring under 15-6-3 5 him 15-6-31(a) § testify or to on behalf of a examination, produce to another for such party obey provide fails to an order to or (A), (B), paragraphs orders as are listed in permit discovery, including an order made (C) subdivision, 15-6-37(a) 15-6-35, of this party § unless the under or the court pending may failing comply in which the action is make shows that he is unable to regard such orders in to the failure as are produce person such for examination. just, among following: others the any foregoing In lieu of of the orders or in (A) An order that regarding the matters thereto, addition require the court shall the any which the order was made or other party failing obey the order or the designated facts shall be taken to be estab- advising pay him or both to the reasonable purposes lished for the of the action in fees, expenses, including attorney’s by caused party accordance with claim of the ob- failure, unless the court finds order; taining the substantially justified failure was or that other (B) refusing An to allow the disobedi- expenses circumstances make an award of party support oppose designated ent or unjust. defenses, prohibiting claims or him from evidence; introducing designated in matters

649 statutes, severity are of the sanction administrative rules must be tem As pered to make them harmoni with a consideration of the together equities. construed Nelson v. State Bd. Id. at 316-17. Less drastic ous and workable. alternatives of (S.D.1991). 621, usually Dentistry, employed impos 464 N.W.2d 624 should be before ing invoke Judges review an ALJ’s decision to severest sanction. must We policy an abuse of discretion balance the of giving parties sanctions under their Co., in “day against policies & Eastman court of pre standard. Chittenden 15-6-37(b), venting delay, avoiding at 316. SDCL undue court con Under “just.” gestion, must be and preserving respect administrative sanctions for court Herman, 37(b); procedures.” see also v. v. See FRCP Onkka Shelton (D.Neb.1997) Corp., (quoting Tyler American Motors 805 F.2d WL 1037762 (8thCir.1986) v. Iowa (citing Trooper Badge State No. 1329-30 Insurance (N.D.Iowa 1994)). 158 F.R.D. Baux Corp. Compagnie Ireland v. des of Guinee, 694, 707, In deciding appropriate sanction to ites de 456 U.S. 102 S.Ct. (1982)). 2106-07, be imposed, the court should consider the 72 L.Ed.2d 492 by purposes be served the sanction. outset, At the we believe Williams, Corp. Resolution Trust leeway has more that the no (D.Kan.1995). F.R.D. An ALJ exercising in disposing of cases and duty keep things moving, has a but discretion than circuit courts have. See moving toward a fair result on the mer and 19. also SDCL 1-26-18 See Johnson its, noted, if possible. As this Court has Holland, Inc., v. Ford New Neb. clearing and the expedi calendars (1998). Considering dispatch secondary tious of cases are con compensa the remedial nature workers’ Chicago Ry. cerns. & N.W. Co. v. Brad tion, discovery sanctions violations *6 bury, 80 S.D. proceedings have at administrative should (1964). 542 comparable least the same restraints as discovery in civil sanctions for violations Factors to consider when operate courts. An ALJ should within the imposing discovery sanctions for violations 37(b), (1) § spirit applying party’s of those cases include: whether the failure to determining appropriate cooperate discovery in attributable to when the sanction was willfulness, faith, party violating prehearing for a á order. bad or the fault of the Co., client; (2) adversary prej & Eastman whether the was See Chittenden 286 all, by cooperate After lati the failure to party’s N.W.2d at 316. an ALJ’s udiced (3) penalizing comply may discovery; tude in failures to in whether there is a need broad, it in a sort of non particular be but is not limitless. for deterrence (4) party the was compliance; whether 14.] Courts are reluctant to [¶ could lead cooperate warned that failure to uphold merely dismissals to sanction er (5) dismissal; drastic and whether less attorneys. rant Buck v. United States imposed can sanctions be before dismissal. Admin., Dep’t Agric. Farmers Home of Mut. Fed. Sav. & Loan Ass’n v. Richards (6th Cir.1992). A 960 F.2d dis (4th Assoc., Inc., Cir. & 872 F.2d only missal should be resorted to when 1989); Reg’l Sys., Inc. v. Inland Refuse comply the “failure to has been due to (6th Co., F.2d Reclamation willfulness, faith, any ... bad or fault of Cir.1988). Co., petitioner.” Chittenden & Eastman (citations omitted). timely dis By failing 286 N.W.2d at 316 violation, Dudley’s their considering discovery experts reports, When close with clearly engaged prejudice pros- counsel sanctionable dismissal failure to considering equities, the conduct. In we ecute. an interlocutory This was not order First, apply although the above factors. but a final Neither appealed one. side Dudley’s attorney comply failed to with the that order within time limit in SDCL expert prehearing opinions, on 1-26-36.1, ap- 1-26-31. Under SDCL an appearance an on did make Dud- pellee’s right to obtain review of a “final ley’s prehearing behalf at the conference decision, ruling pertains any action” appears attorney participat- and it that the decision on the time for has appeal which good ed in also submitted faith. He medi- elapsed. not If SDCL 1-26-30.2. we Cf. compliance cal with partial records otherwise, interpreted the appel- statute Second, order. would not be lees could on challenge appeal any final prejudiced by late disclosure of rulings long ago they no matter how were if ALJ witnesses extended the entered. deadline. disclosure As to the third, factors, fourth fifth the striking Although Dudley [¶ did not 19.] of the and the experts claimant’s dismissal jurisdiction question raise the in re of the sanction case was a harsh for a late review, sponse to the employer’s notice of discovery the record disclosure: does not duty we have a determine whether the reflect warned Dudley whether the ALJ trial jurisdiction court had over a matter cooperate failure to could result in as a right condition to its precedent dismissal or whether the ALJ considered decide the before it. Long issues In light less drastic sanctions. of these Co., Inc., Knight Constr. 262 N.W.2d 207 considerations, excluding expert evidence (S.D.1978); City Sioux Boat Club v. Mul resulting in the dismissal the case was hall, (1962). S.D. N.W.2d 92 an abuse of discretion. Commensurate Appellate jurisdiction can pre never be purposes compensa- of workers’ affirmatively sumed but appear must from tion, a that permits less severe sanction Thus, parties record. even when the the case to on the be heard merits would fail jurisdiction, to challenge this Court justice. better serve will, sponte, sua determine whether the summary, In ALJ had au- circuit jurisdiction. court had Estate of *7 thority impose to for sanctions failure to Putnam, (S.D.1977); 254 N.W.2d 460 disclose; however, timely the sanction im- Products, Shryock v. Concrete Mitchell here, posed Dudley which denied a hearing Inc., 566, (1973); 87 212 S.D. N.W.2d 498 merits, on the harsh and was too constitut- Milling County Tri-State Co. v. Board of ed an abuse of discretion. Accordingly, Pennington Commrs. County, 75 S.D. for the to case is remanded the (1955). 466, Here, 68 N.W.2d 104 with instructions to consider some lesser jurisdiction circuit court did not have sanction, allow evi- consider notice of review dence, action, and to take such other as it issue employer because the order the chal proper, opinion. deems consistent with this lenged was a final and the time for appeal had expired. Employer’s

B. Notice of Review in Circuit Court Reversed and remanded. court, In the circuit MEIERHENRY, Justice, [¶ filed a notice of 21.] review of the Department’s August 2000 order of concurs.

651 Justice, disregard discovery of the GILBERTSON, faith or willful Chief 22.] [¶ Justice, order, SABERS, imposed by the sanctions the ALJ specially. concur and severe. were too ZINTER, Justice, deeming 23.] [¶ did not disqualified, participate. himself 28JGILBERTSON, Justice, Chief [¶ joins special writing. this SABERS, specially). (concurring Justice 1) specially because I concur [¶24.] recent distinguishable from our

this case is Fire, 2003 v. JENCO United

precedent (2003), and Storm 763

SD 666 N.W.2d (2003); Durr,

v. N.W.2d SD 2) in this case applicable statutes of the liberally in favor to be construed are 2003 SD 80 claimant. ROTH, Appellee, Greg Plaintiff (¶ unjustified vi- 25.] Storm involved an a court order which allowed olation of COMPANY, FARNER-BOCKEN months. languish fourteen

case Appellant. Defendant and ¶ 19, Storm, at 6 at N.W.2d 2003 SD Storm, plaintiffs were warned 39. In No. 22384. by the order would that failure to abide Supreme Court Dakota. of South disregard in dismissal but chose to result ¶ 3, Storm, at the order. SD Argued Jan. 2003. at 34. This found Court N.W.2d Decided 2003. order was willful. disregard Storm’s JENCO, allowed plaintiff In and did languish its for 30 months case comply with the court order attempt

not to dismiss.

until the defendant moved ¶

JENCO, 79 at at 2003 SD Further, the court that Jenco’s found prejudice opposing to the

delay resulted ¶ JENCO, 21, 666 79 at

party. SD case, In the none at 768. instant present. factors are Claimant’s these in a good effort

attorney made faith

complicated case move forward prejudice. has no shown

case more unlike important, Even Storm, involves

JENCO this suit relief the worker’s seeking

claimant under statutes statutes. These

compensation liberally in favor of

must be construed Winner, City

claimant. Wilcox (S.D.1989) (additional ci- omitted). showing of bad

tations With no