Opinion ID: 2099170
Heading Depth: 1
Heading Rank: 3

Heading: Should the labor rate survey be used as the sole determinant of the prevailing auto body labor rate?

Text: DBR and PCI first contend that it was error for the hearing justice to choose not to defer to DBR's interpretation of § 27-29-4.4 viz., that the labor rate survey is only one factor for insurers to consider in setting the prevailing labor rate. It is their contention that the hearing justice should have deferred to DBR's decision as being a reasonable interpretation that was supported by legally competent evidence. We are in essential agreement with that contention. In rendering its decision, DBR stated that it was readily apparent    that [§ 27-29-4.4] is not `unambiguous' and that a great deal of statutory construction was required in order for the Department to properly implement the statute under Insurance Regulation 108. DBR proceeded to state the reasons that had prompted it to conclude that the statute was ambiguous. Those reasons were (1) the fact that, in Rhode Island there is no line of insurance called `motor vehicle liability insurance;' and (2) the fact that the statute used the terms survey and questionnaire to refer to the same document. [5] DBR then engaged in a lengthy analysis, employing the rules of statutory construction, in order to ascertain the intent and purpose of the General Assembly when it enacted § 27-29-4.4. See Cummings v. Shorey, 761 A.2d 680, 684 (R.I. 2000) (If statutory provisions appear unclear or ambiguous,    we shall examine the entire statute to ascertain the intent and purpose of the Legislature.). In conducting its statutory analysis, DBR carefully parsed the language of the statute in an attempt to give meaning to every provision within the statute. See State v. Bryant, 670 A.2d 776, 779 (R.I. 1996) (It is also a canon of statutory construction that the Legislature is presumed to have intended each word or provision of a statute to express a significant meaning, and the court will give effect to every word, clause, or sentence, whenever possible.); see also Retirement Board of Employees' Retirement System of Rhode Island v. DiPrete, 845 A.2d 270, 279 (R.I. 2004) (We presume that the General Assembly intended to attach significance to every word, sentence and provision of a statute.). DBR also considered a number of other practical concerns that resulted from the fact that only approximately one-third of auto body shops had responded to the insurers' surveys. Having completed its analysis, DBR concluded that the General Assembly had intended that the labor rate survey was to serve as only one factor in determining the prevailing labor rate. DBR further stated that an interpretation that the insurer must pay whatever is reported by the shops is not supported by the statutory language. It is our view that DBR's conclusion was reasonable. We note that, in rendering her decision, the hearing justice stated that she was not bound by decisions of law reached by an administrative agency, such as DBR. The hearing justice noted her disagreement with DBR's determination that the statute was ambiguous, and she then focused much of her written decision on three specific words or phrases, [6] which DBR believed resulted in statutory ambiguity. The hearing justice concluded that, since (in her view) those specific phrases were not ambiguous, the statute as a whole was not ambiguous; she further stated that the statute's words should be given what she characterized as their plain and obvious meaning. The hearing justice thus concluded that every insurer governed by § 27-29-4.4 must conduct a labor rate survey as provided in the statute and use that survey as the sole determinant of the prevailing auto body labor rate. (Emphasis added.) It is our opinion that, in rendering her decision, the hearing justice failed to recognize the well-recognized doctrine of administrative law that deference will be accorded to an administrative agency when it interprets a statute whose administration and enforcement have been entrusted to the agency    even when the agency's interpretation is not the only permissible interpretation that could be applied. Pawtucket Power Associates Limited Partnership v. City of Pawtucket, 622 A.2d 452, 456-57 (R.I.1993); see Unistrut Corp. v. State Department of Labor and Training, 922 A.2d 93, 99 (R.I.2007) ([W]hen the administration of a statute has been entrusted to a governmental agency, deference is due to that agency's interpretation of an ambiguous statute unless such interpretation is clearly erroneous or unauthorized.); Gallison v. Bristol School Committee, 493 A.2d 164, 166 (R.I.1985) ([W]here the provisions of a statute are unclear or subject to more than one reasonable interpretation, the construction given by the agency charged with its enforcement is entitled to weight and deference as long as that construction is not clearly erroneous or unauthorized.); see also Labor Ready Northeast, Inc. v. McConaghy, 849 A.2d 340, 344-45 (R.I. 2004); In re Lallo, 768 A.2d 921, 926 (R.I. 2001). The hearing justice's review of DBR's interpretation of § 27-29-4.4 should have been limited to determining whether such interpretation was clearly erroneous or unauthorized. See Gallison, 493 A.2d at 166; see also Labor Ready Northeast, Inc., 849 A.2d at 344-45; In re Lallo, 768 A.2d at 926. In our opinion, it was quite reasonable for DBR to have concluded that the statute is ambiguoussince it is clear to us (as it was to the agency) that the language of the statute is susceptible of more than one meaning. We further conclude that the interpretation of § 27-29-4.4 reached by DBR (after a complex analysis in which it applied pertinent canons of statutory construction) was neither clearly erroneous nor unauthorized, and we agree with DBR that the labor rate survey should not be the sole determinant in the setting of the prevailing labor rate. In other words, it is our opinion that the hearing justice erred in failing to defer to DBR's reasonable interpretation of § 27-29-4.4, even if she would have resolved the statutory issue differently had the interpretive role been solely hers in a nisi prius context. [7] See Pawtucket Power Associates, 622 A.2d at 456-57; see generally North Providence School Committee v. North Providence Federation of Teachers, Local 920, AFT, 945 A.2d 339, 345 n. 10 (R.I.2008).