IN THE SUPREME COURT OF THE STATE OF MONTANA

STATE OF MONTANA, ex el., DIVISION OF WORKERS' COMPENSATION, Relator,-vDISTRICT COURT OF THE THIRTEENTH JUDICIAL DISTRICT, and HONORABLE ROBERT W. HOLMSTROM,

NATHANIAL B. BLAYLOCK, et al., 

### GC'T2.21390 Plaintiffs/Appellants, and DAVID L. CALDWELL, 

# Ed 3;:zifi CLERKOFSUPREME COURT Plaintiff/Appellant, STATE OF MONTANA-vTHE DIVISION OF WORKERS' COMPENSATION, THE DEPARTMENT OF LABOR AND INDUSTRY, and THE STATE OF MONTANA, Defendants/Respondents. APPEAL FROM: Original Proceeding, Supervisory Control (89-259) District Court of theThirteenthJudicialDistrict, In and for the County of Yellowstone, TheHonorableRobert W. Holmstrom,Judgepresiding.

(89-298) COUNSEL OF RECORD: For Appellant Class: Robert C. Kelleher, Sr. and Lee R. Kerr; Kelleher Law Offices; Billings, Montana For Appellant Caldwell: Timothy J. Whalen; Whalen & Whalen; Billings, Montana For Respondent and Relator: John H. Maynard, Tort Claims Division; Helena, Montana Chris D. Tweeten;Hughes, Kellner, Sullivan & Alke; Helena, Montana

Submitted: June 28, 1990 a Filed: Decided: October 22, 1990Justice R.C. McDonough delivered the Opinion of the Court.

This is an original proceeding of supervisory control consolidated with an appeal from a summary judgment entered in favor of the defendants by the District Court for the Thirteenth Judicial District, Yellowstone County, on the grounds that the defendants are entitled to quasi-judicial immunity. The District Court also ruled that the 42 U.S.C. 

### 5 1983 claims of unnamed plaintiffs in this class action suit are not barred by a federal courtdismissal of these claimsunder the doctrine of res judicata. We reverse the District Court's order and remand the case for further proceedings. The following issues are the subject of this appeal: (1) Is the State of Montana and its Division of Workerst Compensation protected by quasi-judicial immunity for their negligence in renewing the privilege of an employer to self-insure itsworkers1compensationriskwithout requiring the self-insuring employer to post security to guarantee payment of benefits? (2) Does 42 U.S.C. 51983 provide a remedy under the due process clause for gross negligence? (3) Does the doctrine of res judicata act to bar named plaintiffs in the federal action from bringing their 51983 action in the state courts? The cause of action arises from the bankruptcy of Great Western Sugar Co. (GW), a Delaware corporation. GW employedMontana workers in its sugarbeet processing factorynear Billings, and self-insured itsWorkers1compensationrisk under Plan Iof the Montana Workers1 Compensation Act, d 39-71-2101, MCA, et seq.

(1985). From 1981 to 1985, Andrew Kiely and James Murphy were the DivisionofWorkers1Compensation (Division)employeeswho approved Plan I self-insurance applications. Plaintiffs1claim that Kiely and Murphy failed to act on GW1s1984 application for renewal. Plaintiffs further allege that GW officialswere well aware GW was losing its solvencyandyet failedtoprovide the securityrequired by 1 39-71-2106, MCA (1985). In early 1985, GW filed a petition for bankruptcy. Plaintiffs allege that prior to the filing, GW failed tomake timely payment of benefits due claimants under the Workers' Compensation Act, and that GW ceased making any such payments after the bankruptcy filing. In their answer, the defendants admit that they were negligent in failing to conduct an adequate review of GW1sfinancial condition in 1984,but deny that their negligence proximately caused the loss of plaintiffs1 benefits. The suit was consolidated into a class action, the plaintiff classconsisting of those former employees ofGWwho lost workers1compensation benefits as a result of GW1sbankruptcy. The procedural history of this case is extensive. It began in the united States District Court for the ~istrict of Montana, Billings Division, where plaintiffs1

### 5 1983 claimswere dismissed. Plaintiffs1appeal to the Ninth Circuit was affirmed. It is now before this Court on appeal from a final judgment entered in the

### District Court for the Thirteenth Judicial District, Yellowstone County, pursuant to Rule 54(b)

## , M.R.Civ.P. The District Court dismissed the state law claims of all members of the plaintiff class solely on the grounds of quasi-judicial immunity and our decision in Koppen v. Board of Medical Examiners (1988), 233 

### Mont. 214, 759 P.2d 173, and also dismissed the claims under 42 U.S.C. 1 

### 1983 of the tenmembers of theplaintiff class who were named as plaintiffs in the earlier federal case as being res iudicata. It 

### further held that the Fifth Amended Complaint states a claim for relief under 42 U.S.C. 5 

### 1983. The defendants moved for reconsideration of that portion of the Court's order denying summary judgmentas totheunnamedmembers of the federal plaintiff class, arguing that as a matter of federal law in the federal action, dismissal barred all potential plaintiffs despite the federal courttsfailuretocertify thecase as a classaction. The District Court held that there is no privity existing between the two groups of plaintiffs and therefore unnamed plaintiffs are not barred by the res judicata effect of the federal decision. Thisportion of theappeal isnow before uspursuant to a writ of supervisory control issued August 30, 1989 accepting jurisdictiontodeterminewhether the courtbelowerred in refusing to dismiss the 

### 5 1983 claims of the remaining members of the plaintiff class who were not named plaintiffs in the federal action. The plaintiffs appealed the District Court's grant of summary judgment. Thedefendantstwrit andplaintiffstappeal were thereafter consolidated for oral argument.First,we will address the issue of whether the State and the ~ivisionare protected by quasi-judicial immunity for their admitted negligence in renewing the privilege of an employer to self-insure its workersf compensation risk without requiring the self-insuring employer to post security to guarantee payment of benefits. Our determinationwill actuallybe considerablynarrower than the issue presented to us and in addition does not reach any consideration of causation. Central to this determination is the nature of the functions to be performed by the Division in this

case. For immunity to apply the function of the Division must be quasi-judicial rather than administrative or ministerial. Our review of past casespoints out that the distinction between these functions is anything but clear: Experienceteaches that few, if any,ministerial officers are not called upon to exercise some judgment or discretion in the performance of their official duties.



# ... As distinguishing between acts quasi-judicial and acts ministerial in their character, the following definitions we think correctly state the law: "Quasijudicial functionsarethose which liemidwaybetween the judicialandministerial ones. The lines separating them from such 

# . . . are necessarily indistinct; but, in general terms,when the law, in words or by implication, commits to any officer the duty of looking into facts, and acting upon them,not in a way which it specifically directs, but after a discretion in its nature judicial, the function is termed quasi-judicial. 

# . . . "Aministerial act may perhaps be defined tobe one which a person performs in a given state of facts, in a prescribed manner, in obedience to themandate of legal authority, without regard to or the exercise of his own judgment upon the propriety of the act done. 

# . . . 

# ".

. . In the same line, aministerial act has also been defined as an act performed in a prescribed legal manner, in obedience to the law or the mandate of legal

### authority, without regard to, or the exercise of, the judgment of the individual upon thepropriety of theacts being done. 

# . . .I1 

### [Citationsomitted.] State ex rel. Lee v. Montana Livestock Sanitary Board (1959), 135 Mont. 202, 206, 339 P.2d 487, 489-490. Ingranting the defendants summary judgment, the District Court relied on this Court's decision in Ko~oen,where we held that the Board of Medical Examinerswas immune from suit for allegedly failing to respond to complaints about a doctor's fitness to practice medicine and to limit or revokehis license topractice medicine under the commonlawtheory of quasi-judicial immunity. InKoppenwepointed to the discretion of the Board to weigh information, the fact that it could not revoke or suspend a licence without giving notice and

an opportunity for hearing, that such a hearing would be governed by theMontana Administrative Procedure Act and that thedecision reached would be subject to judicial review, as factors in determining that the acts performed by the Board came within the statutory definition of ''quasi-judicial function1'found at 5 

### 2- 15-102(lo), 

### MCA: "Quasi-judicial function1'means an adjudicatory function exercised by an agency, involving the exercise of judgment and discretion in makins determinations 

## in controversies. 

# . . . (Emphasisadded.) Section 2-15-102(10), MCA. See 

### Koppen, 759 P.2d at 176. Thecasebeforeus isdistinguishablefromKo~pen.InKo~pen, the Board allegedly failed to respond to complaints, adversarial in nature, that it received regarding a physician's fitness to practice medicine and to take remedial action. Koopen, 759 P.2dat 174. We noted that the action or inaction by the Board in Koppen was its decision not to revoke or limit the physician's licence or initiate such action when faced with complaints concernins his professional conduct. Koppen, 759 P.2d at 176. Therewas no allegation that the Board failed to even consider the complaints. Here, we first note that there is no controversy from the outset as in Koppen. The facts merely involve the filing of an application rather than an adversarial setting involving a dispute

or controversy. We conclude that immunity does not attachbecause the Division is not expressly designated a quasi-judicial board, 

## see 5 2-15-124, MCA, 

## see generally Title 2, Chapter 15, MCA, nor was it performing a quasi-judicial function as will be discussed below. The following statutes are relevant to our determination of the nature of the Division's function in this case: 339-71-2101 (1985): RequiresPlan Iemployersto furnish satisfactorv proof to the division of their solvency and financial ability to pay the compensation and benefits in this chapter. 

# . . 339-71-2102 (1985): Employer "shall file proof of his solvencv within the time and in the form as may be prescribed by the rules or orders of the division." 339-71-2104 (1985): Every Plan I employer "shall, at least 30daysbefore the expiration of each fiscalyear, renew his applicationtobepermitted to continue tomake suchpayments as aforesaid directly tohis employees for the next ensuing fiscalyear 

# . .. II 339-71-2106 (1985): "The division 

## mav require any employer who elects to be bound by compensation Plan I to provide a security deposit. 

# . . . The division is liable for thevalueand safekeepingof all suchdeposits or securities and shall, at any time, upon demand of a bondsman or the depositor, account for the same and theearnings thereof." 339-71-2108 (1985): I1Uponthe failure of the employer topay any compensationprovided for inthis chapter upon the terms and in the amounts and at the times when the same becomes due and payable, the division shall, upon demand of the person to whom compensation is due, apply anydeposits made with thedivision to thepayment of the same, and the division shall take the proper steps to convert any securities on deposit with the division or sufficient thereof into cashand topay the same upon the liabilities of the employer accruing under the terms of this chapter, and the division shall, when necessary, collect and enforce the collection of the liability of all sureties upon any bonds which may be given by the employer to insure the payment of his liability. 

# . ..II

(Emphasisadded.) The following administrative rules, corresponding to these statutes, are also pertinent to our determination: 24.29.702 ELECTIONTOBE BOUNDBY COMPENSATION PLAN NO. 1

## -- ELIGIBILITY (1) Any employer

# ...may elect to be bound as a self-insurer under plan no. 1, if in accordance with 39-71-2102, MCA, the employer 

## . 

# . . submits,on formsprovided by the division, satisfactory proof of solvencyand financial ability topay 

# ... and if, in accordance with 39-71-2103, MCA, the division finds the employer 

# . . . to have the necessary finances.

24.29.702A SOLVENCYAND ABILITY TO PAY (1) Proof of solvency and financial ability to pay compensation, benefits and liabilities 

### is required. Employers 

# .. . must demonstrate financial stabilitybyproviding audited financial statements that upon analysis indicate sufficient security, as determined by the division, to protect the interests of injured workers. These shall consist of analysis of financial conditions,currentand historical, including, but not limited to, the following factors: quick ratio, currentratio,current liabilities to net worth, current liabilities to inventory, total liabilities to net worth, fixed assets to net worth, collection period, inventory turnover, assets to sales, salestonet working capital,accounts payable to sales, return on sales, return on assets, return on net worth, contingent liabilities, comparisontoindustrystandards, incomefromongoing operationsand corporatebond rating. Only an employer 

# . . . meeting financial standards acceptable to the division shall be granted permissionto be bound as a plan no. 1 self-insurer. 

# . . 

# . 24.29.702B WHEN SECURITY REQUIRED (1) Security must be deposited with the division by the employer 

# . .



# . on order of the division under the following conditions: (a) Every employer

# . . .must deposit security with the division. The deposit requirementmay be waived in whole or inpartby thedivision for individual employers



# . . . onlywhoprovide substantive evidence that the full amountof thedeposit is not needed. This evidence shall consider criteria for solvency and ability topay as set forth inARM 24.29.702A. (b) The employer 

# . .

# . no longer has the solvency orabilitytopay compensation, benefits,and liabilities asdetermined under standardsapplied inARM 24.29.70211. (c) The employer 

# . . . does not have sufficient securitiesondeposit with thedivision under section 39- 71-2107, MCA, to meet current liabilities, in addition to all other liabilities. 

## . 

# . . 24.29.702 ARM. The statutory scheme for approval of plan no. 1 insurers further distinguishesthis case fromKop~en.The statutes governing the Board of Medical Examiners provide that "the board 

## mav make an investigation whenever it is brousht to its attention that there is reason to suspectwthat a particular doctor is unfit to practice medicine or is guilty of unprofessional conduct. See §§ 37-3-323 and 37-3-322,MCA. Here, the statutoryschememandates that the Division at least review a self-insurer's financial condition. Admittedly the statutesand administrative rules grant the Division discretion in renewing GWms application as a plan No. 1self-insurer. However, inthis case the Divisionnever exercised this discretion to determine GWmseligibility to self-insure its risk under plan no. 1. Rather, there was an admitted complete failure by the Division to undertake any of the review necessary to make such a determination. Thus, the negligence occurred at astage where the Division's functionwas entirely ministerial: Official action, the result of performing a certain specific duty arising from designated facts, is a ministerial act. 

# .

# . . Another way of expressing the same thought is that a duty is to be regarded as ministerial when it is a duty that has been positively imposed by law, and its performance required at a time and in a manner, or upon conditions which are specifically designated; the duty to perform under the conditions specified not being dependent upon the officergsjudgment or discretion. 

# . . . And that a necessitymay exist for the ascertainment, frompersonal knowledge or from information derived fromother sources, of those facts or conditions, upon the existence or fulfillment of which, theperformance of the act becomes a clear and specific duty, does not operate to convert the act into one judicial in its nature. (Emphasis added.) Meinecke v. McFarland (1949), 122 Mont. 515, 522, 206 P.2d 1012, 1015. [Citations omitted.] The discretion afforded by the statutes and rules in this case was never exercised, rather, the Division breached its underlying duty, mandated by the statutory scheme for plan no. 1 insurance, to investigate GWgseligibility to self-insure. Such actwaspurelyministerial, Meinecke, supra, and cannot be a basis for invoking quasi-judicial immunity: Accordingly, to be entitled to immunity the state must make a showing that such a policy decision, consciously balancing risks and advantages, took place. The fact that an employee normally engages in ggdiscretionary activitygg is irrelevant if, in a given case,the employee did not render a considered decision. 

# .

# .. Johnsonv. State (1968), 73 Cal.Rptr. 240, 249,n. 8, 447 P.2d 352,

While our analysis here is limited to common-law quasijudicial immunity, the Itexercise of judgment and discretiongg required by S 2-15-102(10), MCA, to invoke such immunity isanalogous to the discretionary function exception to the Federal Tort Claims Act (FTCA), 28 U.S.C. §2680(a). Under this exception the FTCA does not waive the immunity of the United States for claimsbased upon negligence of government employees exercising or performing discretionary functionson thepart of a federal agency, regardless of whether the discretion is abused. 28 U.S.C. §2680(a); 

## see Dalehite v. United States (1953), 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427;United Statesv. Varig Airlines (1984), 467U.S. 797, 104 S.Ct. 2755, 81 L.Ed.2d 660. While suits cannot bemaintained against theUnited States foracts fallingunder this exception, such acts must involve the "permissible exercise of policy discretionw: [Tlhe discretionary function exception will not apply when a federal statute, regulation, or policy s~ecificallvprescribes a course of action for an employee to follow. In this event, the employee has no rightful option but to adhere to the directive. And if the employee's conduct cannot appropriately be the product of judgment or choice, then there is no discretion in the conduct for thediscretionary function exception to protect. (Emphasis added.) Berkovitz v. United States (1988), 486 U.S. 531, 536, 108 S.Ct. 1945, 1958, 1959, 100L.Ed.2d 531, 540-541. The facts in Berkovitz

are similar to the factshere. In Berkovitz theplaintiff alleged that the National Institutes of Health's Division of Biologic Standards (DBS) negligently failed to require certain tests prior to issuing a manufacturervslicense to produce a polio vaccine. Prior to issuing a product license, statutory and regulatory provisions required DBS to receive all data the manufacturer was required to submit regarding the product, to examine the product,and tomake a determination that the product complies with safety standards. Berkovitz, 436U.S. at 542. Theplaintiff alleged that DBS decided to issue a license without having first received the required test data, thus immunity did not bar his claims: Rather, the claim charges a failure on the part of the agency toperform its cleardutyunder federal law. When a suit charges an agency with failing to act in accord with a specific mandatory directive, the discretionary function exception does not apply. Berkovitz, 486 U.S. at 544. For similar reasons, the immunity we recognized in KoDDen is inapplicable in this case. In KoDDen, the Board exercised a quasi-judicial function in deciding not to take action in the face of adversarial complaints against a doctor. Here, there was no discretion exercised by the Division regarding renewal ornon-renewal of GW's status;rather, therewas a complete failure at the administrative level to conduct the necessary preliminary review of GW1sfinancial condition that would enable the Division to make a decision to not renew. The duties imposed by the statutory scheme on the Division's employee were purely investigative, ministerial and administrative. Because the Division failed to perform its duty to review or examine GW1s applicationasprescribed by statute,andbecause simply performing this duty does not involve the use of quasi-judicial discretion, the Division is not protected by quasi-judicial immunity at this stage. The Divisionhas simply not functioned as such under these facts. 11. 5 1983 Claims Plaintiff's constitutional claims are based on 42 U.S.C. 9

121983,which provides: 8 1983. Civil action for deprivation of rights Every personwho, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof tothedeprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. 

# .. . With respect to defendantsf appeal regarding the effect of res judicata on plaintiffsfclaims under 42 U.S.C. 5 1983 and whether this section provides a remedy under the due process clause for gross negligence, we note that it is now settled that states and their agents are not ffpersonsw for the purposes of § 1983:



# . . 

# . it does not follow that if municipalities are persons then so are States. Statesareprotected by the Eleventh Amendment while municipalitiesare not,Monell, 436 U.S., at 690, n. 54, 98 S.Ct., at 2035, n. 54, and we consequently limited our holding in Monell Iftolocal government units which are not considered part of the State for Eleventh Amendment purposes," ibid. Conversely, our holding here does not cast any doubt on Monell, and applies only to States or governmental entities that are considered Itarmsof the Statefffor Eleventh Amendment purposes. 

# . . .

. .

# . . Obviously state officials literally are persons. But a suit against a state official in his or her official capacity isnot a suit against the official but rather is a suit against the official office. Brandon v. Holt, 469 U.S. 464, 471, 105 S.Ct. 873, 877, 83 L.Ed.2d 878 (1985). As such, it is no different from a suit against the State itself.

# ... [citationsomitted] We hold that neither a State nor its officials acting in their official capacities are "personsft under § 1983. 

# . .. Will v. Michigan Department of State Police (1989)

### , 109 S.Ct. 2304, 2311-2312, 105 L.Ed.2d 45. The plaintiffs have no 5 1983 claimagainst the defendants in this case. There being no quasi-judicial immunity afforded to the Division and there being no valid claims under 42 U.S.C. 5 1983, the case is remanded for further proceedings on the plaintiffs' remaining claims. REVERSED AND REMANDED. 

# (92

- We Concur:

Justices 

# \Justice John C. Sheehy, specially concurring:

I concurwith the result in this case,but not for the reasons assigned by themajority. The state argues that it is immunehere because its agentswere engaged in quasi-judicial functions, i.e., issuing,suspendingorrevoking licenses, permitsand certificates, and evaluating and passing on facts. These functions are statutorily designated as quasi-judicial. Section 2-15-102(10)

### , MCA. The state had a reasonable expectation that Koppen would control this case, since Koppen had insulated from suit the State Board of Medical Examiners on a theory of quasi-judicial immunity. Koppen v. Board of Medical Examiners (1988), 233 Mont. 214, 759 P.2d 173. A correct result based on legal principles should see the majority backing off completely from any immunity attributed to ministerial quasi-judicial acts or non-acts of state public officials. Then this Court would be applying the true public policy of this state, that the state is not immune from suit for the torts of its agents except where the legislature has specifically provided by law by a 2/3 vote of each house of the legislature. Art. 11, 

### 5 18,Montana State Constitution. The legislature has acted to provide judicial immunity, distinguished fromquasi-judicial immunity in 3 2-9-112,MCA. That statuteprovides immunity for acts or omissions of the judiciary, and limits I1judiciary1l to courts established under Art. VII of the State Constitution. There is 

## no statutory provision excepting quasi-judicial acts of agencies from responsibility in tort law. 15That kind of immunity was gratuitously afforded by this Court in Koppen and not by act approved by 2/3's of each house of the legislature. Because of Koppen, the majority, to achieve a proper result,

are forced to distinguish between agencies decidinq not to act

(Koppen) and agencies simply not acting (this case). Thus, the majority hold an agency is still immune if it decides to do nothing, regardless of the merits of taking action, or the overwhelming duty of the agency to act. Yet, in this case, the inaction of the state employees to revoke or limit Great Western's status as a self-insurerwas in itself a type of decision. In Koppen, I concurred with the result not because exercising

a quasi-judicial functionmerited immunity, but because the claim of the plaintiffs was too remote from state action or inaction to incur tort liability. It is easy to apply that logic here. In Koppen, the inaction of the state was not foreseeable as a proximate cause of the wrongs later committed by the doctor. In this case, the inaction of the state employee to assure the solvency of a self-insurer foreseeably caused the harm to the plaintiffs. The issuance by the state of a license to a medical doctor isnot a guarantee that thedoctor will notmalpractice;but

on the otherhand, the failureof the state to rein in an insolvent self-insurer will certainly and foreseeably wreak damage on its injured employees. Nonetheless, I welcome the result here, for whatever reason given by the majority. Slowly, oh slowly, this Court is inchingback from the harsh grants of state immunity in Peterson v. Great Falls School District (1989), 237 Mont. 376, 773 P.2d 316; Bieber

v. Broadwater County (1988), 232 Mont. 487, 759 P.2d 145; State ex rel. Eccleston v. Third Judicial District Court (Mont. 1989), 783 P.2d 363, 46 St.Rep. 1929 and Millerv. Fallon County (Mont. 1989), 783 P.2d 419, 46 St.Rep. 2087. See Mitchell v. University of Montana (Mont. 1989), 783 P.2d 1337, 46 St.Rep. 2109; Koch, et al.



### v. Yellowstone County (Mont. 1990), 

### -P.2d147 St.Rep. 1312.

Justice William E. I-iunt,Sr. : I concur in the foregoing specially concurring opinion of Justice Sheehy.

Justice John C. Harrison: L concur in the foregoing specially concurring opinion of Justice Sheehy.Justice Fred J. Weber dissents as follows: Great Western Sugar Company (GW) was a self insurer for workers1compensationpurposes. GW became insolvent and unable to pay its liabilities. The majority opinion describes the unfortunate position of the plaintiff workers who had been unable to collect their workers1 compensation benefits from GW. Having been unable to collect thosebenefits from GW, theplaintiffshave sued the Division of Workers' Compensation and the State of Montana. The State has admitted negligence through the Division of Workers1Compensation in failing to conduct an adequate review of GW1s financial condition. The State does deny that such negligencewas the cause of the loss of plaintiffs1benefits. The majority has concluded that theadmitted failureto examine reports submitted by GW is negligence, that such failurewas ministerial, and as a result the Division and State can be held responsible. I disagree with that conclilsion. I conclude that the majority has disregarded this Court's holding in Koppen v. Board of Medical Examiners (1988), 233 Mont. 214, 759 P.2d 173. I can find no meaningful distinction between thepresent case and Koppen. As a result I concludethatunder the Koppen holding, there is quasi-judicial immunity so far as the Department and the State are concerned. In his special concurrence, Justice Sheehy reached the same conclusion. He points out that the functions of the Department in this case come within those functions which are statutorily designated as quasi-judicial under § 2-50-102(lo), MCA. I agreewith his analysisup to thatpoint. I do not agree with his desire to overrule Koppen. I do conclude that there is no distinction between Koppen and the present case. The majority attempts to distinguish Koppen by suggesting there was no dispute in the present case as there was in Koppen. The majority concludes that immunity does not attach because the Division was not expressly designated a quasi-judicial board nor

was it performing a quasi-judicial function. The majority emphasizesthat the ~ivision never exercised anydiscretionbecause it just failed toundertake any review of thematerials submitted to it. As a result the majority concludes that the negligent failure to review was ministerial. The key majority statement is the following: Because the Division failed toperform its duty toreview or examineGW1s applicationasprescribedby statute,and because simplyperforminsthis duty does not involve the use of quasi-iudicial discretion, the Division is not protected by quasi-iudicial immunity at this stage. The Division has simply not functioned as such under these facts. (Emphasis supplied.) I do not believe that Koppen supports that view. In the opinion in Ko~pen, 233 Mont. at 215, 759 P.2d at 174, themajority stated: According to the complaint, the Board had received complaints about Dr. Kauffmants fitness to practice medicine but failed to respond to them. The complaint characterized this asa failureby the Board to discharge its duty under 5 37-3-202,MCA. 

## . . 

# . (Emphasisadded.) The majority in Koppen, 233 Mont. at 217-18, 759 P.2d at 175, further stated: The District Court was correct in concluding that the Board is entitled to quasi-judicial immunity from suit. 

## . 

# . . The Board's quasi-judicial immunity is derived from the common law, which we hold to becontrollinghere. The Koppen majority, 233 Mont. at 219, 759 P.2d at 176, further stated with regard to the Board of Medical Examiners:

The discretion vested in the Board to weiqh the informationrelativetoDr. Kauffman rendered ita quasijudicial body. This is also evident from the statutes dictating the procedures to be followed. 

## . 

# . . The task performed by the Board thus comes within the statutory definition of "quasi-judicial functionvtfound at 5 2- 15-102(10), MCA. (Emphasisadded.) Following are the key holdings, for our purposes, of Koppen: The action or inactionby the Board under attack in this case is its decision not to strip Dr. Kauffman of his license when faced with complaints concerning his professional conduct. The Board's decision whether to initiate administrative proceedinss asainst a doctor is analogousto a prosecutor's decisionwhether to initiate courtproceedings againstan alleged criminal. We concur with the reasoning in Butz that the Board's discretion might be distorted if it is not immune from suit for damages arising from such a decision. We hold, therefore, that in the exercise of its quasi-judicial authority,theBoard isentitled totheabsolute immunity afforded executive officials under the rule in the Butz decision. (Emphasisadded.) Koppen, 233 Mont. at 219, 759 P.2d at 176. In substance Koppen had contended that the Board of Medical Examiners had received complaints but failed to respond to them. That negligent failure to respond isdirectly comparableto thenegligent failureto study the reports in the present case. I find no factual distinction between Koppen and the present case. In Koppen the Board of Medical Examiners failed to do anything. In the present case the Division failed to do anything. In both cases therewas a failure to perform a mandated duty. If the majority opinion in this case is correct,then it seems that we have in effect overruled Koppen,at least in part. I disagree with the majority analysis which concludes that while the statutes and rules grant discretion to the Division in renewing GWts application, the Division never exercised the discretion to determine GWtseligibility to self insure. As a result the majority concluded that the complete failure by the Division to undertake

## anv review thus becomes ministerial. The majority concludesthat thediscretion affordedby the statutesand rules was never exercised and that such failure to exercise was purely ministerial. I do not believe that conclusion can be reached, based upon Koppen; and I also disagree with the fundamentals of that analysis. InKoppen this Courtpointed out that quasi-judicial immunity is comparable to prosecutorial immunity in that it is not based upon the statutesofMontana,but upon the common law. Koppen then referred to the common law of quasi-judicial immunity as set forth in the Butz United States Supreme Court decision. Koppen then quoted the following from Butz: Judges have absolute immunity not because of their particular location within the Governmentbut because of the special natureof theirresponsibilities. Thispoint is underlined by the fact that prosecutors--themselves members of the Executive Branch--are also absolutely immune.

We also believe that agency officialsperforming certain functions analogous to those of a prosecutor should be able to claim absolute immunity with respect to such acts. The decision to initiate administrative proceedinss against an individualor corporation isvery much like the prosecutor~s decision to initiate or move forward with a criminal prosecution. (Emphasisadded.)Koppen, 233 Mont. at 218-19, 759 P.2d at 176 (quoting Butz 

### v. Economou (1978), 98 S.Ct. 2894, 2913, 2915). If the majority is correct in concluding that the failure to exercise discretion was purely ministerial, then apparently that rationale would apply to prosecutors aswell. Under that rationale, a prosecutor could be sued forhisnegligent failure to initiate prosecution. Iconclude that the failure to discharge a duty is not a ministerial act. I conclude that the failure to respond to complaints on the part of the Board of Medical Examiners in Koppen is directly comparable to the failure on the part of the Division of Workers' Compensation to examine the materials filed with it by GW in the present case. Iwould therefore conclude that under Koppen we are required to hold there is quasi-judicial immunity as to the defendants named in this case.