Title: Koskela v. Willamette Industries, Inc.
Citation: N/A
Docket Number: S46351
State: Oregon
Issuer: Oregon Supreme Court
Date: December 14, 2000

Filed:  December 14, 2000
IN THE SUPREME COURT OF THE STATE OF OREGON

In the Matter of the Compensation ofGeorge D. Koskela, Claimant.
GEORGE D. KOSKELA,
		Petitioner on Review,
	v.
WILLAMETTE INDUSTRIES, INC.,
	Respondent on Review.
(WCB 95-08576; CA A97325; SC S46351)

	En Banc	
	On review from the Court of Appeals.*
	Argued and submitted January 6, 2000.
	David W. Hittle, Burt, Swanson, Lathen, Alexander, and
McCann, Salem, argued the cause and filed the brief for
petitioner on review.
	David L. Johnstone, VavRosky, MacColl, Olson, Bush &amp;
Pfeifer, P.C., Portland, argued the cause and filed the brief for
respondent on review.
	Julene M. Quinn, Salem, filed a brief on behalf of amici
curiae SAIF Corporation and South Hills Health Care Center.	
	Phil Goldsmith, Portland, filed a brief on behalf of amici
curiae Oregon Trial Lawyers Association, Legal Aid Services of
Oregon, Oregon Advocacy Center, Oregon Law Center, and Oregon
AFL-CIO.  With him on the brief was Lake James H. Perriguey.
	LEESON, J.
	The decision of the Court of Appeals is reversed.  The order
of the Workers' Compensation Board is reversed.  The case is
remanded to the Workers' Compensation Board for further
proceedings.
	*Judicial Review from the Workers' Compensation Board. 
	159 Or App 229, 978 P2d 1018 (1999).
	LEESON, J.
	The underlying issue in this workers' compensation
proceeding is whether claimant is permanently totally disabled. (1)
The Workers' Compensation Board (Board) held that claimant is
only permanently partially disabled.  The Board rejected
claimant's assertion that the post-1995 process for determining
whether a worker should receive an award of permanent total
disability (PTD) benefits facially is invalid under the Due
Process Clause of the Fourteenth Amendment to the United States
Constitution. (2) In a split, en banc decision, the Court of
Appeals affirmed.  Koskela v. Willamette Industries, Inc., 159 Or
App 229, 978 P2d 1018 (1999).  We allowed claimant's petition for
review, and, for the reasons that follow, we reverse the decision
of the Court of Appeals and the order of the Board.  We remand
the case to the Board for further proceedings. 
	The facts relevant to claimant's challenge are not in
dispute.  Claimant began working for Willamette Industries in
1965.  In 1986 and 1989, claimant suffered compensable injuries
to his jaw while he was working as a scrubber.  Claimant already
had an extensive history of medical problems with his
temporomandibular joint (TMJ).  In June 1994, after multiple
surgeries, claimant's treating physician declared claimant
medically stationary, (3)but he noted that claimant continued to
experience facial swelling and pain when engaged in physical
activities.
	The declaration that claimant was medically stationary
triggered the claim closure process conducted by the Department
of Consumer and Business Services (DCBS) for determining the
extent of claimant's permanent disability.  See former ORS
656.268(2)(a) (1993) renumbered as ORS 656.268(1)(a) (1999)
(claim closure begins after claimant "has become medically
stationary").  As part of the claim closure process, claimant
underwent three medical examinations that his self-insured
employer had ordered.  ORS 656.325(1)(a).  Employer's medical
examiners conducted physical examinations of claimant and
reviewed a "surveillance videotape" that employer had made,
showing, among other things, claimant mowing his lawn, chopping
wood, fishing, and driving his truck.  The medical examiners
concluded that claimant was capable of performing at least
sedentary work.  Claimant's physician also reviewed the videotape
and agreed that claimant was capable of performing the physical
activities depicted on it, but he questioned whether claimant
could perform such activities on a regular basis.  In October
1994, after reviewing the medical reports from employer's medical
examiners and claimant's treating physician, DCBS issued a
determination order that awarded claimant 14 percent permanent
partial disability (PPD) benefits.  See ORS 656.268(2) and (5)
(1993) (describing DCBS review).
	Claimant sought reconsideration, and the matter was
assigned to the appellate review unit (ARU) of DCBS.  ORS
656.268(5), (6)(a) (1993).  When claimant sought reconsideration,
ORS 656.283(7) (1993) provided, in part: 
		"Nothing in this section shall be construed to
prevent or limit the right of a worker, insurer or
self-insured employer to present evidence at hearing
and to establish by a preponderance of the evidence
that the standards * * * for evaluation of the worker's
permanent disability were incorrectly applied in the
reconsideration order pursuant to ORS 656.268."
The Court of Appeals had construed that wording as permitting a
party to introduce evidence at hearing that it had not introduced
previously at reconsideration.  Safeway Stores, Inc. v. Smith,
122 Or App 160, 163, 857 P2d 187 (1993).
	In the reconsideration proceeding, claimant bore the
burden of proving the extent of his disability.  ORS 656.266. 
Claimant sought to prove that he was permanently totally
disabled.  To prove that he should receive PTD benefits, claimant
had to demonstrate: (1) "permanent total disability status," that
is, that his disability permanently prevented him from regularly
performing work at a gainful and suitable occupation, (2) that he
was willing to seek regular gainful employment, and (3) that he
had made reasonable efforts to obtain such employment.  See ORS
656.206(3) (describing claimant's burden).
	In July 1995, the ARU issued an order on
reconsideration rejecting claimant's contention that he was
permanently totally disabled, but increasing his permanent
disability rating from 14 percent to 29 percent PPD.  Claimant
requested a hearing before an administrative law judge (ALJ). 
Former ORS 656.268(6)(b) (1993) renumbered as ORS 656.268(6)(g)
(1999); ORS 656.283(1) (1993).
	At outset of the hearing, on October 16, 1995, claimant
stated that he planned to introduce testimonial evidence from
himself, his family physician, a vocational expert, and lay
witnesses who knew him.  That testimony would regard the extent
of his permanent disability, whether suitable sedentary
employment was available, his willingness to work, and his
efforts to find suitable work.  However, on June 7, 1995, while
claimant's case was pending before the ARU, a legislative
amendment to ORS 656.283(7) took effect.  See Or Laws 1995, ch
332, § 69 (providing for effective date of amendment to ORS
656.283(7)).  That amendment modified the sentence in ORS
656.283(7), set out above, regarding the rights of the parties to
introduce evidence at hearing.  The amendment also added a
sentence, which we discuss in more detail later in this opinion,
that prohibits the introduction of new evidence at hearing and
limits the issues that may be considered at hearing to those that
have been raised at reconsideration.  Relying on the new
statutory restrictions, the ALJ refused to admit any additional
evidence or testimony in support of claimant's contention that he
should receive an award of PTD benefits.
	In response to the ALJ's ruling, claimant argued that
the 1995 amendments to the claim closure process violated the Due
Process Clause of the Fourteenth Amendment, because they deprived
him of an oral evidentiary hearing, including the right to
appear, to present live testimony, and to cross-examine adverse
witnesses in meeting his burden of proof and persuasion regarding
an award of PTD benefits.  The ALJ rejected that argument.  She
then held that, based on the written record that had been
compiled during the reconsideration process, claimant had failed
to meet his burden of showing that he is permanently and totally
disabled.  That record contained no evidence about whether
suitable sedentary work was available to claimant, no evidence
that claimant had searched for work, and no showing that, were it
not for his compensable TMJ condition, claimant would be willing
to work.  Accordingly, the ALJ affirmed the ARU's order on
reconsideration that had awarded claimant 29 percent PPD
benefits.  As noted, the Board affirmed.
	Before the Court of Appeals, claimant contended that
the 1995 amendments to ORS Chapter 656 violate the Due Process
Clause, because they provide no opportunity for a worker who is
seeking PTD benefits thoroughly to present evidence on all the
elements on which the worker bears the burden of proof and
persuasion, and they deny the worker the opportunity to rebut
adverse evidence or to cross-examine adverse witnesses.  The
Court of Appeals' majority weighed claimant's private interest in
PTD benefits; the risk of an erroneous deprivation of that
interest through the procedures provided for determining the
extent of permanent disability and the value, if any, of added or
substitute procedural safeguards; and the government's interest,
including the fiscal and administrative burdens of additional or
substitute procedures.  Koskela, 159 Or App at 235; see Mathews
v. Eldridge, 424 US 319, 335, 96 S Ct 893, 47 L Ed 2d 18 (1976)
(identifying three-factor test in due process challenges,
hereafter "Mathews factors").  It then held that "due process
principles do not entitle a claimant [seeking PTD benefits] to
present evidence through in-hearing testimony rather than through
written reports and sworn affidavits."  Koskela, 159 Or App at
251.
	Judge Edmonds concurred.  He argued that, because ORS
656.283(7) authorizes the ALJ to "conduct the hearing in any
manner that will achieve substantial justice[,]" claimant's
facial due process challenge must fail, but that claimants still
could bring an "as applied" challenge if an ALJ denied a worker
the opportunity for oral presentation of evidence when due
process required such an opportunity.  Id. at 251-52 (quoting ORS
656.283(7)).
	Judges De Muniz and Wollheim dissented.  They argued,
among other things, that determining whether a worker should be
awarded PTD benefits necessarily includes an assessment of the
worker's credibility and veracity, which requires an ALJ to
observe credibility and veracity first hand, and on the record. 
Id. at 255 (De Muniz, J., dissenting), and at 260 (Wollheim, J.,
dissenting). 
	We review for errors of law.  ORS 656.298(7).  However,
before addressing claimant's due process challenge to ORS
656.283(7), we must consider a threshold issue that employer
argues disposes of this matter.  The Due Process Clause of the
Fourteenth Amendment applies to state action that deprives a
person of a protected property interest. (4) Cleveland Bd. of Educ.
v. Loudermill, 470 US 532, 538, 105 S Ct 1487, 84 L Ed 2d 494
(1985).  Property includes state-created benefits to which a
person has become entitled.  Board of Regents v. Roth, 408 US
564, 577, 92 S Ct 2701, 33 L Ed 2d 548 (1972).  A person who has
established an entitlement to a state-created benefit has a
property interest in the continued receipt of that benefit.  See,
e.g., Mathews, 424 US at 332 (property interest in continued
receipt of Social Security disability benefits); Goldberg v.
Kelly, 397 US 254, 261-62, 90 S Ct 1011, 25 L Ed 2d 287 (1970)
(property interest in continued receipt of welfare benefits). 
Before the Board and the Court of Appeals, employer did not
challenge whether claimant had a protected property interest in
disability benefits.  However, after the case had been submitted
to the Court of Appeals, the United States Supreme Court issued
an opinion that, in employer's view, calls into question whether
claimant has a protected property interest in disability
benefits.  American Mfrs. Mut. Ins. Co. v. Sullivan, 526 US 40,
119 S Ct 977, 143 L Ed 2d 130 (1999).  The Court of Appeals did
not address that issue, because it determined that ORS 656.283(7)
does not violate due process.  See Koskela, 159 Or App at 234 n 3
("Given our rejection of the due process challenge, we need not
consider Sullivan's implications for this case.").  
	Before this court, employer asserts that Sullivan
provides the proper basis for resolving this case, because
Sullivan held that a workers' compensation claimant does not have
a property interest in disability benefits.  In employer's view,
there is no due process constraint on the legislature of the kind
that claimant asserts.
	In Sullivan, the Court held that, under Pennsylvania's
workers' compensation act, claimants do not have a property
interest in payments for medical treatments for which they are
eligible but to which they are not yet entitled.  Sullivan, 526
US at 61. (5) The Court explained that, under Pennsylvania law,
workers' compensation claimants seeking payment for medical
treatments must "clear two hurdles."  Id. at 60-61.  First,
claimants "must prove that an employer is liable for a work-related injury[.]"  Id. at 61.  Second, claimants "must establish
that the particular medical treatment at issue is reasonable and
necessary."  Id.  The Court concluded that the claimants in that
case had cleared the first hurdle but not the second one:  "While
they indeed have established their initial eligibility for
medical treatment, they have yet to make good on their claim that
the particular medical treatment that they received was
reasonable and necessary."  Id. (emphasis in original). 
Accordingly, the Court held, the claimants had not established a
property interest in payments for medical treatments that had
"yet to be found reasonable and necessary."  Id.
	According to employer, workers' compensation claimants
in Oregon do not have a protected property interest in permanent
disability benefits until they establish through the claim
closure process that they are entitled to receive such benefits. 
Underlying employer's argument is the assumption that workers
have no property interest in benefits until they meet their
burden of demonstrating the extent of their permanent disability. 
See ORS 656.266 (setting out burden).  That assumption
misapprehends the nature of a worker's property interest and the
purpose of the claim closure process.
	In Oregon, apparently unlike in Pennsylvania, a
claimant needs to clear only one hurdle to establish entitlement
to compensation benefits.  Acceptance of a claim signifies that
the worker has met the burden of proving a compensable injury. 
ORS 656.266; see ORS 656.262(2) ("The compensation due under this
chapter shall be paid * * * to the person entitled thereto * * *
except where the right to compensation is denied" (emphasis
added)).  The claim closure process begins after a claim has been
accepted and a claimant has been declared medically stationary. 
ORS 656.268(1)(a).  The purpose of claim closure is to "determine
the extent of the worker's permanent disability," ORS 656.268(1)
(emphasis added), not, as employer would have it, the worker's
entitlement to compensation.  Because a claimant whose claim has
been accepted is entitled to receive workers' compensation
benefits, that claimant has a protected property interest in
receiving compensation.  See Roth, 408 US at 577 ("To have a
property interest in a benefit, a person clearly must have * * *
a legitimate claim of entitlement to it.").  Sullivan is not a
barrier to reaching claimant's constitutional challenge in this
case.
	To assess claimant's constitutional challenge, it first
is necessary to describe in detail the post-1995 statutory
process for determining the extent of a worker's permanent
disability.  The first step is claim closure.  Under ORS 656.268,
claim closure is authorized when the worker's condition becomes
"medically stationary," as occurred in this case, or when certain
other events occur.  ORS 656.268(1), (2)(a), (4)(a).  DCBS, the
insurer, or the self-insured employer is responsible for claim
closure.  ORS 656.268(1) (1995). (6) 
	An insurer or self-insured employer that closes the
claim must make findings regarding the extent of the worker's
permanent disability by applying standards that are prescribed by
DCBS.  ORS 656.268(4)(b) (1995) renumbered as ORS 656.268(5)(a))
(1999).  Those findings are made solely based on medical and
vocational reports.  The insurer or self-insured employer then
must issue a notice to the worker, to the worker's attorney if
the worker is represented, and to DCBS stating whether the worker
should receive an award of PTD benefits or, if the worker is not
determined to be permanently totally disabled, the percentage of
permanent partial disability benefits the worker should receive. 
Id.  If an insurer or self-insured employer does not elect to
close the claim, then DCBS must determine the extent of the
worker's permanent disability and issue a determination order. 
ORS 656.268(5)(a) (1995). 
	A notice of closure or a determination order must
inform the parties of their right to seek reconsideration of the
finding regarding the extent of an injured worker's permanent
disability and the amount of the disability award.  ORS 656.270;
see also ORS 656.268(4)(b) (1995) renumbered as ORS 656.268(5)(a)
(A) (1999) (requiring notice of closure to inform workers of
right to seek reconsideration within 60 days of the notice of
closure).  The notice or order also must notify the injured
worker of the right to consult with the ombudsman for injured
workers (7)and to be represented by an attorney at reconsideration. 
ORS 656.270.
	If a party is dissatisfied with a notice of closure or
a determination order, then that party may request
reconsideration.  ORS 656.268(5)(b) (1995) renumbered as ORS
656.268(5)(c) (1999).  The reconsideration process may occur only
once on each notice of closure or determination order.  ORS
656.268(6)(a).  A request for reconsideration must include, among
other things, a statement "[w]hether there is disagreement with
the specific impairment findings used to determine permanent
disability at the time of claim closure and if so, an explanation
* * * of the specific areas of disagreement[.]"  OAR 436-030-0125(6). (8) The reconsideration process begins when DCBS receives
the request for reconsideration.  OAR 436-030-0115(2).  At
reconsideration, the worker has the burden of proof.  ORS
656.206(3); ORS 656.266.
	Like claim closure, reconsideration is conducted
entirely on a written record. (9) Either party, in writing, may
correct erroneous information in the record and submit medical
evidence that should have been but was not submitted by the
claimant's attending physician at the time of claim closure.  ORS
656.268(6)(a).  The parties also may submit written responses to
the other side's documentary evidence, as well as written
arguments, statements, and sworn affidavits.  OAR 436-030-0115(4). 
	A party that is dissatisfied with an order on
reconsideration may request a hearing under ORS 656.283.  ORS
656.268(6)(f) (1995) renumbered as ORS 656.268(6)(g) (1999); ORS
656.283(1).  The Board refers hearings to an ALJ.  ORS
656.283(4). 
	The 1995 amendments to ORS 656.268 and ORS 656.283(7)
changed the evidence that an ALJ may consider at a hearing on an
order on reconsideration and how the ALJ shall conduct those
hearings. (10) ORS 656.268(7)(g) (1995) renumbered as ORS
656.268(7)(h) (1999), now provides that, after reconsideration,
"no subsequent medical evidence of the worker's impairment is
admissible * * * for purposes of making findings of impairment on
the claim closure."  (Emphasis added.)  The ALJ may consider at
hearing only issues that a party raised and preserved at
reconsideration, or that arise out of the reconsideration order
itself.  ORS 656.268(8).  As amended, ORS 656.283(7) provides, in
part:
		"Except as otherwise provided in this section and
rules of procedure established by the board, the
Administrative Law Judge is not bound by common law or
statutory rules of evidence or by technical or formal
rules of procedure, and may conduct the hearing in any
manner that will achieve substantial justice.  Neither
the board nor an Administrative Law Judge may prevent a
party from withholding impeachment evidence until the
opposing party's case in chief has been presented, at
which time the impeachment evidence may be used. * * * 
Evaluation of the worker's disability by the
Administrative Law Judge shall be as of the date of
issuance of the reconsideration order pursuant to ORS
656.268.  Any finding of fact regarding the worker's
impairment must be established by medical evidence that
is supported by objective findings.  The Administrative
Law Judge shall apply to the hearing of the claim such
standards for evaluation of disability as may be
adopted by the director pursuant to ORS 656.726. 
Evidence on an issue regarding a notice of closure that
was not submitted at the reconsideration required by
ORS 656.268 is not admissible at hearing, and issues
that were not raised by a party to the reconsideration
may not be raised at hearing unless the issue arises
out of the reconsideration order itself.  However,
nothing in this section shall be construed to prevent
or limit the right of a worker, insurer or self-insured
employer to present the reconsideration record at
hearing to establish by a preponderance of that
evidence that the standards adopted pursuant to ORS
656.726 for evaluation of the worker's permanent
disability were incorrectly applied in the
reconsideration order pursuant to ORS 656.268. * * *."
(Emphasis added.) 
	Before the 1995 amendments, ORS 656.283(7) had
permitted the ALJ to conduct a hearing "in any manner that will
achieve substantial justice."  The 1995 amendments limited the
ALJ's authority regarding the conduct of hearings on orders on
reconsideration by adding the phrase, "[e]xcept as otherwise
provided in this section * * *."  With respect to hearings on
orders on reconsideration, other amendments to ORS 656.283(7),
emphasized above, specifically limit the evidence that is
admissible to what was presented in writing at reconsideration or
that arises out of the reconsideration order.  
	In other words, the post-1995 statutory scheme
specifically restricts an ALJ's authority regarding the conduct
of hearings on orders on reconsideration regarding the extent of
a worker's permanent disability.  The 1995 amendments to ORS
656.268(7)(h), ORS 656.268(8), and ORS 656.283(7) make clear that
a worker must submit all evidence of the extent of disability in
writing at reconsideration. (11)
	The Court of Appeals' majority held that a written
record is adequate under due process standards for determining
whether a worker should receive an award of PTD benefits. 
Nonetheless, it asserted that, as it previously had held in Rogue
Valley Medical Center v. McClearen, 152 Or App 239, 952 P2d 1048
(1998), the statutory scheme affords parties a limited right to
cross-examine medical and vocational experts at hearing. 
Koskela, 159 Or App at 238. 
	In McClearen, the Court of Appeals had held that, in
cases involving issues of loss of earning capacity, vocational
evidence may be admitted at hearing under ORS 656.287(1), so long
as the insurer or self-insured employer had submitted the reports
to the worker ten days before hearing and made the writer of the
report available for testimony and cross-examination at hearing. 
McClearen, 152 Or App at 245.  In Koskela, the majority cited OAR
438-007-0005(3) for the proposition that the contents of medical,
surgical, and hospital reports are admissible at hearing if the
doctor rendering the medical and surgical reports submits to
cross-examination.  159 Or App at 238.  OAR 438-007-0005(3), in
turn, implements ORS 656.310(2), which provides, in part:
		"The contents of medical, surgical and hospital
reports presented by claimants for compensation shall
constitute prima facie evidence as to the matter
contained therein; so, also, shall such reports
presented by the insurer or self-insured employer,
provided that the doctor rendering medical and surgical
reports consents to submit to cross-examination."
		The 1995 amendments to ORS 656.268 and ORS 656.283(7)
focus on claim closure and reconsideration, which are the
processes for determining the extent of an injured worker's
permanent disability.  Those amendments explicitly limit the
evidence that can be admitted at a hearing on an order on
reconsideration to the written reconsideration record.  Allowing
oral testimony and cross-examination at hearing would introduce
new evidence.  See, e.g., State v. Stevens, 328 Or 116, 133, 970
P2d 215 (1998) (cross-examination introduces new evidence).  To
the extent that ORS 656.287(1) and ORS 656.310(2) would permit
the introduction of evidence at a hearing on the extent of an
injured worker's permanent disability, and permit even limited
cross-examination, they are inconsistent with the specific
evidentiary limitations imposed by the 1995 amendments to ORS
656.268 and ORS 656.283(7).  When statutes are inconsistent, the
legislature has prescribed that the particular provision "is
paramount" to the general provision.  ORS 174.020; see also Smith
v. Multnomah County Board of Commissioners, 318 Or 302, 309, 865
P2d 356 (1994) (in conflict between statutes, special provisions
must prevail over general provisions).  Although the provisions
of ORS 656.287(1) and ORS 656.310(2) remain applicable in other
kinds of hearings provided for in chapter 656, they no longer
apply to hearings on orders on reconsideration.  As we have
explained, the post-1995 statutory scheme for determining the
extent of an injured worker's permanent disability does not
permit the introduction of evidence through oral testimony or
cross-examination at hearing.  Rather, the process consists
entirely of written submissions, from which the decision-maker
determines whether the worker has met the burden of proof and
persuasion with respect to PTD benefits.
		To summarize:  Under the 1995 amendments to ORS 656.268
and ORS 656.283(7), a worker, insurer, or self-insured employer
who is dissatisfied with a notice of closure or determination
order may request reconsideration by the ARU of DCBS.  The worker
has the burden of proof and persuasion.  If the worker is seeking
PTD benefits at reconsideration, then the worker must prove that
he or she permanently is prevented from regularly performing work
at a gainful and suitable occupation, is willing to seek regular
gainful employment, and has made reasonable efforts to seek such
employment.  Like the process that led to the notice of closure
or the determination order, the reconsideration record consists
solely of written submissions.  The parties may submit written
evidence and affidavits, and the worker may rebut in writing
evidence that the insurer, self-insured employer, or DCBS relied
on in issuing the notice of closure or determination order.  
		A party that is dissatisfied with an order on
reconsideration may request a hearing.  The parties are not
permitted to introduce any other new evidence, such as presenting
oral testimony, cross-examining adverse witnesses, or presenting
rebuttal evidence.  In short, under the 1995 amendments to ORS
656.268 and ORS 656.283(7), the record on which a decision is
made regarding an award of PTD benefits -- or any permanent
disability benefits -- consists solely of the parties' written
submissions.  
		With that understanding of the post-1995 statutory
scheme, we turn to the merits of claimant's constitutional
challenge.  See Loudermill, 470 US at 541 ("[O]nce it is
determined that the Due Process Clause applies, 'the question
remains what process is due.'") (quoting Morrissey v. Brewer, 408
US 471, 481, 92 S Ct 2593, 33 L Ed 2d 484 (1972)). 
		As a matter of procedural due process, it is well 
established that the state may not deprive a person of life,
liberty, or property without "notice and opportunity for hearing
appropriate to the nature of the case."  Mullane v. Central
Hanover Tr. Co., 339 US 306, 313, 70 S Ct 652, 94 L Ed 865
(1950).  An appropriate hearing is one that is provided "at a
meaningful time and in a meaningful manner."  Armstrong v. Manzo,
380 US 545, 552, 85 S Ct 1187, 14 L Ed 2d 62 (1965); see State ex
rel Juv. Dept. v. Geist, 310 Or 176, 189-90, 796 P2d 1193 (1990)
(so stating).  The opportunity to be heard must be tailored to
the capacities and circumstances of those who are to be heard. 
Goldberg, 397 US  at 269.  When important decisions turn on
assessments of credibility and veracity, written submissions are
"wholly unsatisfactory."  Id.  The purpose of due process
requirements is to provide a "safeguard against mistake." 
Mathews, 424 US at 345.
		In this case, claimant does not object to the notice or
to the timing requirements contained in the post-1995 procedures
for establishing the extent of a worker's permanent disability. 
He argues only that the evidentiary restrictions imposed by the
process constitutionally are inadequate, because they prevent a
worker seeking PTD benefits, who bears the burden of proof and
persuasion, from participating meaningfully in the process. 
Whether a process is meaningful under the Due Process Clause
turns on the three Mathews factors.  Mathews, 424 US at 335.  We
address each factor in turn, beginning with the private interest
that will be affected by a determination that a worker should not
receive PTD benefits.  See id. (private interest first factor in
test).
		Without wage-replacement benefits, a permanently
totally disabled worker risks losing his or her economic self-sufficiency.  The United States Supreme Court has recognized that
the loss of a person's livelihood is a severe deprivation. 
Continued employment is such an important interest that it "ought
not be interrupted without substantial justification."  Federal
Deposit Ins. Corp. v. Mallen, 486 US 230, 243, 108 S Ct 1780, 100
L Ed 2d 265 (1988); see also Loudermill, 470 US at 543 ("We have
frequently recognized the severity of depriving a person of the
means of livelihood"; citing cases).  
		The purpose of PTD benefits is to provide permanently
totally disabled workers with the equivalent of continued
employment in the form of lifetime wage replacement, thereby
restoring them to economic self-sufficiency.  ORS 656.012(2)(c);
see Tee v. Albertsons, Inc., 314 Or 633, 640, 842 P2d 374 (1992)
(award of permanent disability benefits "aims to compensate an
injured worker for permanently lost earning capacity, thereby
promoting the goal of returning the worker to economic self-sufficiency" (emphasis added)).  The importance of economic self-sufficiency, both for permanently totally disabled workers and
their dependents, is self-evident.  See ORS 656.012(2)(a)
(Workers' Compensation Law to provide adequate and reasonable
income benefits to injured workers and dependents).  
		The possible length of a wrongful deprivation of
benefits also is an important factor in assessing the private
interest at stake.  Fusari v. Steinberg, 419 US 379, 389, 95 S Ct
533, 42 L Ed 2d 521 (1975).  If the deprivation of benefits is
merely temporary, for example, and prompt and adequate procedures
exist to correct errors in the eligibility determination, then
the private interest is not as great as it is if the
determination is final.  Id.  
		Under the Oregon workers' compensation statutes, the
determination that a worker is not eligible for PTD benefits is
final.  Considering both the importance of economic self-sufficiency and the finality of an adverse determination, we hold
that a permanently totally injured worker's interest in receiving
PTD benefits is great. (12)
		We turn to the second Mathews factor, which is whether
the process adequately safeguards a worker's private interest in
PTD benefits from an erroneous deprivation and the probable
value, if any, of added or substitute procedural safeguards.  See
Mathews, 424 US at 335 (describing second factor).  As we have
explained, ORS 656.206(3) requires a worker seeking PTD benefits
to prove that he or she permanently is incapacitated from
regularly performing work at a gainful and suitable occupation,
is willing to seek regular gainful employment, and has made
reasonable efforts to gain such employment.  The decision-maker
determines whether a worker has satisfied the burden of proof and
persuasion after evaluating the parties' competing evidence.  The
post-1995 statutory scheme limits the worker to a written record
at every stage of the process in meeting the burden of proof and
persuasion. 
		In Goldberg, the Supreme Court explained that written
submissions are an "unrealistic option" for individuals who lack
the educational attainment necessary to write effectively and who
cannot obtain professional assistance.  397 US at 269.  For
purposes of this analysis, however, we assume without deciding
that all PTD claimants are able to retain counsel and that a
written record would suffice for determining whether a worker
permanently is incapacitated from regularly performing work at a
gainful and suitable occupation.
		However, that is not the only issue in a proceeding of
this kind.  A worker seeking PTD benefits also must prove that he
or she is willing to work and has made reasonable efforts to find
suitable employment.  The worker's credibility directly is at
issue with respect to willingness to work and reasonable efforts
to find suitable employment.  In situations requiring the
decision-maker to apply a broad standard that includes subjective
assessments of, among other things, a person's credibility and
veracity, due process requires "personal contact between the
recipient and the person who decides his case."  Califano v.
Yamasaki, 442 US 682, 697, 99 S Ct 2545, 61 L Ed 2d 176 (1979). 
What is more, when, as here, the decision-maker must resolve
factual disputes involving credibility and veracity, due process
requires an opportunity for at least some kind of an oral
evidentiary hearing.  Goldberg, 397 US at 268.
		As we have explained, the post-1995 statutory scheme
for determining whether a worker should receive an award of PTD
benefits provides no opportunity for a worker to have an oral
evidentiary hearing.  Because two of the three elements that the
worker seeking PTD benefits must prove require a judgment about
the worker's credibility and veracity, and the resolution of
factual disputes, the probable value of at least some opportunity
for the presentation of evidence at an oral hearing is
substantial.  See Mathews, 424 US at 335 (requiring inquiry into
value of additional or substitute procedural safeguards).
		The final Mathews factor is the state's interest and
the cost of added procedural safeguards.  424 US at 335.  The
1995 amendments reflect the state's interest in the development
of a complete record at an early stage of the process, and
preventing the introduction of additional evidence after
reconsideration.  There is no doubt that restricting the record
at hearing to the record that was developed at reconsideration
makes the process more efficient.  However, efficiency is not an
end in itself.  The Supreme Court has explained that   
	"the Constitution recognizes higher values than speed
and efficiency.  Indeed, one might fairly say of the   
* * * Due Process Clause in particular, that [it was]
designed to protect the fragile values of a vulnerable
citizenry from the overbearing concern for efficiency
and efficacy that may characterize praiseworthy
government officials no less, and perhaps more, than
mediocre ones."
Stanley v. Illinois, 405 US 645, 656, 92 S Ct 1208, 31 L Ed 2d
551 (1972) (footnote omitted).  The Oregon legislature also has
recognized that the state has an interest in the fair and
accurate resolution of workers' compensation disputes, because
the purpose of the workers' compensation statutes is to ensure
that insurers and self-insured employers, rather than taxpayers,
will carry the burden of returning permanently injured workers to
an economically self-sufficient status.  See ORS 656.012(2)(a),
(b), (c) (objectives of Workers' Compensation Law are to provide
workers and dependents adequate and reasonable income benefits,
access to fair and just administrative system for delivery of
financial benefits, and to restore workers to economically self-sufficient status).  Efficiency does not trump the basic
constitutional right to a minimally adequate hearing.
		Allowing a worker who is seeking PTD benefits an
opportunity at some stage of the process to have some kind of an
oral evidentiary hearing will not impede significantly the
state's ability to resolve those disputes efficiently. 
Administrative law judges are expert, neutral decision-makers who
can control the extent and length of testimony and can work with
the parties to limit the record to written submissions when doing
so is appropriate.  The additional cost of providing PTD
claimants with the opportunity for at least some kind of oral
evidentiary hearing is minimal given the magnitude of the private
interest that is at stake.
		Having considered the three Mathews factors, we
conclude that the post-1995 statutory scheme for assessing
whether a worker should receive an award of PTD benefits fails to
satisfy procedural due process requirements.  A worker's private
interest in PTD benefits, which are intended to restore
permanently injured workers to economic self-sufficiency through
lifetime wage-replacement benefits, is great.  The worker seeking
PTD benefits has the burden of proof and persuasion.  The
determination that a worker should receive an award of PTD
benefits is final.  That determination requires the decision-maker to resolve factual disputes and to make judgments about the
credibility and veracity of a worker's claim that he or she is
willing to work and has made reasonable efforts to find suitable
gainful employment.  Under the statute, the worker must meet the
burden of proof and persuasion based entirely on a written
record.  At no stage of the process is the worker afforded any
opportunity to have an oral evidentiary hearing.  Because the
worker does not have the opportunity to make a meaningful record
on elements of proof that are necessary for the worker to meet
the burden of proof and persuasion, we hold that the post-1995
statutory process does not provide adequate safeguards against
mistake.  Mathews, 424 US at 345.  Allowing a worker, at some
meaningful stage of the process, an opportunity for at least some
kind of oral evidentiary hearing will not significantly impede
the state's interest in providing a cost-effective process,
because hearings can be conducted in a manner that achieve both
fairness and efficiency. 
		The decision of the Court of Appeals is reversed.  The
order of the Workers' Compensation Board is reversed, and the
case is remanded to the Workers' Compensation Board for further
proceedings.



1. 	An injured worker receives "permanent total disability"
(PTD) benefits if the worker is permanently incapacitated "from
regularly performing work at a gainful and suitable occupation." 
ORS 656.206(1)(a).  PTD benefits consist of payments in the
amount of 66-2/3 percent of the worker's wages, ORS 656.206(2),
and are intended to compensate for the wages the worker loses
permanently as a consequence of a compensable injury.  See Tee v.
Albertsons, Inc., 314 Or 633, 640, 842 P2d 374 (1992) (so
stating). 

2. 	The Fourteenth Amendment provides, in part, that no
state shall "deprive any person of * * * property, without due
process of law[.]"

3. 	ORS 656.005(17) provides:
		"'Medically stationary' means that no further
material improvement would reasonably be expected from
medical treatment, or the passage of time."

4. 	The parties do not dispute that the Board's action in
rejecting claimant's claim for PTD benefits was state action for
purposes of a federal procedural due process challenge.  See
Adickes v. S. H. Kress &amp; Co., 398 US 144, 152 90 S Ct 1598, 26 L
Ed 2d 142 (1970) ("The involvement of a state official * * *
plainly provides the state action essential to show a direct
violation of [the] Fourteenth Amendment[.]").

5. 	The Pennsylvania act provides that:  "'All payments to
providers for treatment * * * shall be made within thirty (30)
days of receipt of such bills and records unless the employer or
insurer disputes the reasonableness or necessity of the
treatment[.]'"  Sullivan, 526 US at 60 (quoting 77 Pa Stat Ann
§ 531(5) (Purdon Supp 1998)) (emphasis in original).

6. 	In 1999, the legislature amended ORS 656.268(1) to
require the Director of DCBS to "phase out the claim closure
activities of [DCBS]" by "not later than June 30, 2001."  Or Laws
1999, ch 313, § 16.  After that date, insurers or self-insured
employers will have sole responsibility for claim closure.

7. 	ORS 656.709(1) provides:
		"The office of ombudsman for injured workers is
created in the Department of Consumer and Business
Services.  The ombudsman shall report directly to the
Director of the Department of Consumer and Business
Services.  The ombudsman shall act as an advocate for
injured workers by accepting complaints concerning
matters related to workers' compensation, investigating
them and attempting to resolve them.  The ombudsman
shall also provide information to injured workers to
enable them to protect their rights in the workers'
compensation system."

8. 	If a worker who is not represented by an attorney files
a request for reconsideration, then
	"the department shall assist the worker in developing a
completed request; inform the worker of the right to
consult with the ombudsman or an attorney; and mail a
copy to the insurer.  Notwithstanding any other
provision of this rule, the department may extend any
nonstatutory time frames or request any information
deemed necessary to assure the unrepresented worker's
reconsideration request is complete."
OAR 436-030-0135(2). 

9. 	OAR 436-030-0115(3) provides, in part:
		"For the purpose of these rules, 'reconsideration
proceeding' means the procedure established to
reconsider a Notice of Closure or Determination Order
and does not include personal appearances by any of the
parties to the claim or their representatives, unless
requested by the department.  All information to
correct or clarify the record and any medical evidence
regarding the worker's condition as of the time of
claim closure that should have been but was not
submitted by the physician serving as the attending
physician at the time of claim closure and all
supporting documentation must be presented during the
reconsideration proceeding."
(Emphasis added.)

10. 	Before the 1995 amendments, claimants could request an
oral evidentiary hearing before an ALJ following reconsideration. 
In 1993, this court characterized the hearing before an ALJ as a
contested-case hearing similar to the kind of evidentiary hearing
provided by the Administrative Procedures Act (APA).  See
Colclasure v. Wash. County School Dist. No. 48-J, 317 Or 526,
533, 857 P2d 126 (1993) ("There can be no doubt that the
proceeding before the [ALJ] is a classic contested case.").  As
noted, in 1993, the Court of Appeals had construed ORS 656.283(7)
(1993) as permitting a claimant to introduce new evidence at
hearing that had not been introduced at reconsideration.  Safeway
Stores, 122 Or App at 163. 

11. 	A medical arbiter's report is admissible at hearing
"even if the report is not prepared in time for use in the
reconsideration proceeding."  ORS 656.268(6)(e) (1995) renumbered
as ORS 656.268(6)(f) (1999).

12. 	Even if a worker is awarded PTD benefits, that award is
subject to review every two years, and the award may be reduced
to PPD if the claimant subsequently is found to be capable of
working.  ORS 656.206(5).  In employer's view, the fact that an
award of PTD benefits is not final, because of the two-year
review provision, means that a worker's private interest is not
as great as the state's interest.  That argument misses the point
that, under the workers' compensation scheme, a permanently
injured worker is entitled to disability benefits that are
intended to maintain his or her economic self-sufficiency.