Opinion ID: 1140984
Heading Depth: 1
Heading Rank: 1

Heading: applicability of the hawaii administrative procedure act.

Text: The statutory scheme of the Pension and Retirement Systems embodied in HRS §§ 88-1 to 88-230 (1968) (now, as amended, included in HRS §§ 88-1 to 88-190 (Supp. 1969)) is the focal point of these two cases. Briefly, a member of the Employees' Retirement System who feels he has suffered permanent disability or occupational disability which was the natural and proximate result of an accident occurring while in the actual performance of duty    or as the cumulative result of some occupational hazard may apply to and be retired by the Board of Trustees of the system. HRS §§ 88-67, 88-69 (1968) (now included in HRS §§ 88-77, 88-79 (Supp. 1969)). In order to be retired the Medical Board must certify that the member is incapacitated for gainful employment and his incapacity is likely to be permanent. There are therefore two primary conditions for retirement which could involve factual disputes: (1) whether there is permanent incapacity for gainful employment or duty and (2) whether the incapacity or disability is the result of an accident occurring while in the actual performance of duty. HRS §§ 88-67(a) (4), (c) and 88-69(a) (4), (c) (1968) (now included in HRS §§ 88-77(a) (4), (d) and 88-79(a) (4), (d) (Supp. 1969)). The initial resolution of these factual issues is divided between the Medical Board and the Board of Trustees. The Medical Board, as designated by the Board of Trustees under HRS § 88-31 (1968) (now included in HRS § 88-31 (Supp. 1969)), determines the degree of incapacity while the Board of Trustees has the power to determine the causation issue under HRS §§ 88-67 and 88-69 (1968) (now HRS §§ 88-77 and 88-79 (Supp. 1969)). The decision of the Medical Board on the extent of disability may be appealed to the Board of Tustees, however, under HRS § 88-73 (1968) (now, as amended, included in HRS § 88-82 (Supp. 1969)), thus giving the Board of Trustees statutory jurisdiction at that point in the administrative process over both of these issues. However, HRS § 88-73 (1968) (now, as amended, included in HRS § 88-82 (Supp. 1969)) further provides that the Board of Trustees may refer the case to a Medical Review Board whose decision shall be final and binding. The decision of the Medical Review Board is specifically exempted from the due process requirements of the Hawaii Administrative Procedure Act under HRS § 88-73 (1968) (now, as amended, included in HRS § 88-82 (Supp. 1969)). In addition the Board of Trustees has promulgated certain procedural rules which require that the Medical Review Board hear any appeal to the Board of Trustees if the appeal is to be heard at all, thus eliminating any chance of a full trial-type hearing before the Board of Trustees. [1] The appellee Board of Trustees argues that the statutory scheme forcloses any trial-type hearing under the Hawaii Administrative Procedure Act, and, furthermore, that the technical nature of the subject matter precludes an adversary trial-type hearing. The appellants argue that there must be a trial-type hearing at some point in this statutory scheme. They argue that it is statutorily mandated by the Hawaii Administrative Procedure Act and, concomitantly, that procedural due process requires a trial-type hearing. The Hawaii Administrative Procedure Act is applicable only if there is a contested case as defined by HRS § 91-1(5) (1968) which states that: Contested case means a proceeding in which the legal rights, duties, or privileges of specific parties are required by law to be determined after an opportunity for agency hearing. We think the appeal to the Board of Trustees authorized by HRS § 88-73 (1968) (now, as amended, included in HRS 88-82 (Supp. 1969)) envisions a proceeding in which there is a determination of the legal rights of the appellants. That section states in pertinent part that: Any other provision herein to the contrary notwithstanding, an employee who is not satisfied with the decision of the medical board may appeal the decision to the board of trustees   . The board of trustees, after hearing the appeal, may appoint an independent review board of licensed physicians to review the matter and the decision of the medical review board shall be final and binding.    (emphasis added). The appeal to the Board of Trustees is further held immediately prior to judicial review and is therefore an agency hearing under HRS § 91-1(6). We view the opportunity which the Board of Trustees has to refer the case to a Medical Review Board as purely discretionary and not mandated by HRS § 88-73 (1968) (now, as amended, included in HRS § 88-82 (Supp. 1969)). That section says the Board of Trustees may appoint a Medical Review Board to review the matter. Therefore, an applicant may regard a denial of his retirement benefits by the Board of Trustees as a contested case at the point where the Board of Trustees either denies his appeal or it is adjudicated on the merits against the applicant. In construing the statutory scheme for handling applications for service-connected disability retirement benefits, the due process provisions of the Hawaii Administrative Procedure Act embodied in HRS § 91-9 (1968) are applicable in the hearing before the Board of Trustees. [2] These provisions include, among other things, proper notice to the applicant and the opportunity for the applicant to be heard and to present evidence and argument. The right to cross-examination and other evidentiary rules which are necessary to a trial-type adversary proceeding are included in HRS § 91-10 (1968).