Title: Shubert v. Blue Chips
Citation: N/A
Docket Number: S45040
State: Oregon
Issuer: Oregon Supreme Court
Date: August 24, 2000

Filed:  August 24, 2000
IN THE SUPREME COURT OF THE STATE OF OREGON

In the Matter of the Compensation ofMilan F. Shubert, Claimant.
MILAN F. SHUBERT,
	Petitioner on Review,
	v.
BLUE CHIPSand SAIF CORPORATION,
	Respondents on Review.
(WCB 94-08858; CA A89283; SC S45040)

	On review from the Court of Appeals.*
	Argued and submitted March 5, 1999.
	Meagan A. Flynn, Portland, argued the cause for petitioner
on review.  With her on the brief were Robert W. Pardington and
Pozzi, Wilson, Atchison, LLP, Portland.
	Julene M. Quinn, Salem, argued the cause and filed the brief
for respondents on review.
	Before Carson, Chief Justice, and Gillette, Van Hoomissen,
and Durham, Justices.**
	GILLETTE, J.
	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 with instructions
to remand the case to the Director of the Department of Consumer
and Business Services for further proceedings.
	*Judicial review from the Workers' Compensation Board.
	 151 Or App 710, 951 P2d 172 (1997).
    **Kulongoski, Leeson, and Riggs, JJ., did not participate in
the consideration or decision of this case.
		GILLETTE, J.
		In this workers' compensation case, claimant seeks
review of a Court of Appeals decision affirming the denial of his
claim for an additional award of permanent partial disability
(PPD) for a shoulder condition.  The denial was based on a
temporary administrative rule that assigned a value of zero to
any disability attributable to certain surgical procedures that
claimant had undergone.  Claimant asserts that the rule is
inconsistent with ORS 656.726(4)(f)(C), (1) the statute under which
it was adopted.  The Court of Appeals held that claimant's
argument was not well taken.  Shubert v. Blue Chips, 151 Or App
710, 951 P2d 172 (1997).  For the reasons that follow, we reverse
the decision of the Court of Appeals.
		The following facts are supported by substantial
evidence in the record.  See ORS 183.482(8)(c) (setting out
"substantial evidence" standard).  Claimant injured his shoulder
in a 1987 industrial accident and received workers' compensation
benefits, including a PPD award.  Several years later, claimant
underwent a procedure called a "Bristow" surgery to repair his
shoulder.  After that surgery, claimant's original PPD award was
adjusted upward to 17 percent.
		Claimant continued to have problems with his shoulder. 
Eventually, claimant's treating physician determined that those
continuing problems were being caused by a screw that had been
inserted in claimant's shoulder during the Bristow surgery.  The
doctor recommended additional surgery to remove the screw. 
Claimant followed that recommendation and simultaneously filed an
aggravation claim, which was closed by a July 30, 1991,
determination order.  That order did not award claimant any
additional PPD.
		Claimant sought reconsideration of the determination
order and, in particular, its failure to award additional PPD. 
Claimant argued that he never had been compensated for the
residual impairment attributable to the Bristow and screw removal
surgeries, and that the Director of the Department of Consumer
and Business Services (the Director and the Department,
respectively) should adopt a temporary rule evaluating that
residual impairment under ORS 656.726(4)(f)(C). (2)  That statute
provides:
		"When, upon reconsideration of a determination
order or notice of closure * * * it is found that the
worker's disability is not addressed by the standards
adopted pursuant to this paragraph, * * * the director
shall stay further proceedings on the reconsideration
of the claim and shall adopt temporary rules amending
the standards to accommodate the worker's impairment."
Claimant enclosed a medical report by a Dr. Brenneke with his
reconsideration request.  The report assigned a residual
impairment value of 10 percent to the two surgeries, without
identifying or describing the nature of the impairment.  Claimant
also enclosed a letter from his treating physician concurring in
Brenneke's report.  However, without addressing claimant's
request for a temporary rule, the Department affirmed its
previous "no PPD" order.
		A workers' compensation administrative law judge (ALJ)
affirmed the Department's order, holding that a temporary rule
was not required.  However, on further review, the Workers'
Compensation Board (Board) concluded that, under ORS
656.726(4)(f)(C), a temporary rule was required.  Based on
Brenneke's report, the Board stated in its opinion that "claimant
ha[d] suffered permanent impairment as a result of the surgical
repair of a compensable subluxing shoulder condition" and that
the "surgical procedure and resulting impairment [had not] been
addressed by the applicable standards."  Accordingly, the Board
remanded to the Director for the adoption of a temporary rule to
address the residual effects of claimant's shoulder surgery.
		On remand, the Director adopted a temporary rule that
stated, in part:
		"This worker underwent Bristow repair and
malleolar screw removal in the left shoulder. * * *
Bristow repair of a dislocated shoulder improves the
function of the shoulder and reduces the chance of
dislocation.  Removal of the screw fixation device does
not result in recognized loss of shoulder function.  In
this case, the impairment value for these procedures
shall be a value of zero."
		Claimant challenged that temporary rule before the
Hearings Division, arguing that, under ORS 656.726(4)(f)(C), the
Director could not adopt a temporary rule that assigned an
impairment value of zero to the effects of his surgeries.  To do
so, claimant argued, effectively would ignore what claimant
believed already had been decided by the Board -- that the
surgeries had resulted in impairment that must be "accommodated"
under ORS 656.726(4)(f)(C).  However, the ALJ and, later, the
Board, held that it was for the Director to adopt disability
standards under ORS 656.726(4)(f)(C) and that neither the
Hearings Division nor the Board could "correct" the Director's
actions in that regard.  The Board held, moreover, that the
temporary rule was not inconsistent with the statute:
		"Here, pursuant to our remand order, the Director
found that claimant's left shoulder [surgeries were]
not addressed by the standards.  Our order did not
determine whether or not claimant had a rat[e]able
impairment as a result of the surgery, but merely
determined that the surgical procedure was not
addressed by the Director's 'standards' * * *.
		"As a result of our order, the Director
promulgated a temporary rule * * * which addressed the
surgery.  Applying the temporary rule, the Director
found that claimant was not entitled to an impairment
value for the surgical procedure.  This action was
within the Director's authority pursuant to ORS
656.726([4)](f)(C)."
		On claimant's petition for judicial review of the
Board's decision, a divided Court of Appeals affirmed.  The
court's majority agreed with the Board that the Board had no
authority to substitute its own views regarding disability
standards for those of the Director.  Shubert, 151 Or at 714-15. 
It also agreed that the Board had not found that claimant's
surgery had resulted in permanent impairment and that the
Director's rule, assigning the surgeries an impairment rating of
zero, was not inconsistent with the findings that the Board had
made.  Id. at 715-16.  We allowed claimant's petition for review.
		Before this court, claimant argues, as he did below,
that a "zero" impairment rating inherently is contrary to the
policy expressed in ORS 656.726(4)(f)(C).  Taking his cue from
the Court of Appeals' dissent, claimant focuses on the direction
in ORS 656.726(4)(f)(C) that the existing rules be amended to
"accommodate" the impairment at issue.  Claimant explains that a
zero impairment rule cannot be reconciled with the concept of
accommodation, because such a rule essentially denies that any
impairment or, at least, any impairment that also is a
disability, exists. (3)
		Claimant contends that the fact that the Director
adopted a rule to address claimant's condition at all establishes
that that condition is a disability and, therefore, a ratable
impairment.  That is so, claimant argues, because the Director is
authorized to adopt a temporary rule only when the Director finds
that the condition at issue is a disability, i.e., an impairment
that merits a disability award -- and, by inference, a positive
impairment value -- that is not addressed by existing standards.  
Therefore, claimant concludes, a zero impairment rule is
inherently inconsistent with ORS 656.726(4)(f)(C), because it
denies the very fact under which the Director's authority to
adopt a temporary rule under ORS 656.726(4)(f)(C) arose in the
first place.
		We are not persuaded by that logic.  ORS
656.726(4)(f)(C) requires the Director to adopt a temporary rule
when "it is found that a worker's disability is not addressed by
[existing] standards."  But "disability" cannot be "found" in the
way that an ordinary fact would be found.  Rather, disability is
a legal conclusion that arises out of the medical fact of
impairment in combination with pertinent legal criteria.  See
Russell v. SAIF, 281 Or 353, 357 n 4, 574 P2d 653 (1978) (law
concerns disability that results from impairment, a medical
concept); see also ORS 656.726(4)(f)(A) (criteria for evaluation
of disability shall be permanent impairment modified by factors
of age, education, and adaptability).  If the Director concludes
that the condition at issue is not an impairment (or, at least,
not one that is entitled to a positive impairment rating), then
the condition is not a disability and no temporary rule is
required by ORS 656.726(4)(f)(C).  However, the Director
nevertheless might wish to explain his or her thinking in that
regard.  At least in theory, the Director can do so in two ways. 
First, the Director simply might announce that no temporary rule
is required, because he or she has concluded that the condition
at issue is not a disability.  Alternatively, the Director could
adopt a temporary rule that assigns to the condition an
impairment value of zero.  Either way, the Director would be
announcing a legal conclusion that he or she must make to
determine his or her obligations under ORS 656.726(4)(f)(C). 
Either way, the courts then could review the conclusion for legal
error.  We see nothing in either the wording or the logic of the
statute that would preclude the Director from announcing his or
her choice through the temporary rule device.  
		Claimant also argues that the temporary rule is
contrary to ORS 656.726(4)(f)(C), because it purports to assign
an impairment value to a surgical procedure qua procedure, rather
than to the specific impairment that claimant suffered as a
result of that procedure.  Claimant notes that, by its express
terms, ORS 656.726(4)(f)(C) contemplates case-specific
accommodation of the worker's impairment.  Claimant further notes
that the clear purpose of ORS 656.726(4)(f)(C) is to ensure that
claimants with atypical disabilities receive consideration, even
if the existing disability standards do not address their
particular conditions.  Claimant contends that the present rule
addresses the screw removal procedure as a categorical matter
and, therefore, is responsive neither to the express words of the
statute nor to its purpose.  
		We agree with claimant that, if the Director finds that
a worker suffers from an impairment that results in disability
and that that disability is not addressed by existing standards,
then the Director must promulgate a rule that addresses the
worker's particular impairment.  The Director cannot escape that
duty by, for example, making some categorical pronouncement about
the ordinary and expected effects of the event that caused the
impairment.  
		We now apply the foregoing principle to the rule
adopted by the Director in the present case.  The Director's
response to claimant's condition turned on the following two
sentences:  "Bristow repair of a dislocated shoulder improves the
function of the shoulder and reduces the chance of dislocation. 
Removal of the screw fixation device does not result in
recognized loss of shoulder function."  The first sentence is a
general observation about the intent of performing a Bristow
repair; it does not purport to address claimant's particular
circumstance at all.  When considered with that first sentence,
the second sentence also turns out to be an abstract statement: 
Its use of the present tense (repair "does not result" in
recognized loss of shoulder function) demonstrates that the
sentence purports to be a generalized statement concerning the
expected medical outcome of the procedure.  That sentence is not
a response either to the specific surgery that claimant underwent
or to the sequellae of that surgery.
		The Director's failure to address claimant's personal
circumstances, as opposed to the generality of circumstances
attendant upon the two kinds of surgeries, means that the
Director's temporary rule was unresponsive as a matter of law. 
The Director thus has not yet performed the function contemplated
by ORS 656.726(4)(f)(C) with respect to claimant's condition. 
The contrary conclusions of the Court of Appeals and the Board
were in error.
		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 with instructions
to remand the case to the Director of the Department of Consumer
and Business Services for further proceedings.
1. 	At the time that this case began, the statute was
numbered ORS 656.726(3)(f)(C).  In 1999, the legislature
renumbered the statute.  Or Laws 1999, ch 876, § 9.  No change
was made to the text.  We use the present statutory citation for
convenience.

2. 	ORS 656.726(4)(f)(C) modifies and further defines the
authority granted to the Director by ORS 656.726(4)(f) to
"provide standards for disabilities."

3. 	The Court of Appeals' majority declined to address that
particular point, stating that it had not been argued on review. 
Shubert, 151 Or App at 717 n 4.  We disagree.  Claimant argued to
the Board and to the Court of Appeals that a temporary rule
cannot, consistent with ORS 656.726(4)(f)(C), assign an
impairment value of zero to a disability, the existence of which
necessarily has been established as a precondition for adoption
of the rule.