Opinion ID: 2603660
Heading Depth: 1
Heading Rank: 4

Heading: HEARING EXAMINER ÔÇö SECTION 4 ITS HISTORY AND APPLICATION

Text: Chapter I of the Rules of the Office of Administrative Hearings Practices and Procedures in Contested Cases identifies its enabling legislation as W.S. 16-3-102(a)(i) and 16-3-103(b) (Wyoming Administrative Procedure Act), and XX-XX-XXX(a) (contested cases under Wyoming Workers' Compensation Division). W.S. 16-3-102(a)(i) permits an agency to [a]dopt rules of practice setting forth the nature and requirements of all formal and informal procedures available in connection with contested cases;   . W.S. 16-3-103(b) allows for the adoption of emergency rules for a period no longer than 120 days when the emergency rule is signed by the Governor and filed with the Secretary of State. W.S. XX-XX-XXX(a) creates the office of independent hearing examiners and gives examiners the power to conduct contested cases in accord with the remaining portions of W.S. XX-XX-XXX. W.S. XX-XX-XXX(b) and (d) are relevant to this case. W.S. XX-XX-XXX(b) allows an employer or health care provider to argue any objections under a contested case in accord with W.S. 16-3-107 (contested cases). W.S. XX-XX-XXX(d) provides that the hearing examiner may appoint an attorney   . Citing justification within its enabling legislation, the agency adopted Chapter I, Section 4 of the Rules of the Office of Administrative Hearings Practices and Procedures in Contested Cases providing for the appointment of counsel and payment of fees. [3] Under the fee control provisions of Section 4, legal costs in excess of $500 are to be approved in advance, but approval is not necessary for attorney fees which exceed $1,000. The reason strangely given by the hearing officer for limiting Phifer's fees to $1,000 was she had no prior approval for fees in excess of $1,000 which came from an apparently undisclosed policy which supplemented the published rule. Conversely, actual billed costs did not exceed $500. Phifer sought review in the district court in order to have that reviewing court compel the agency to abide by its own fee rule. W.S. 16-3-114(c)(i). Phifer contended the decision of the hearing examiner reducing her fees and costs was arbitrary and capricious because the action was specifically unjustified by the agency rules as written which did not contain the pre-approval provision for fees in excess of $1,000. Underlying our often repeated statement that `[i]n determining whether the action of an agency is arbitrary, capricious, or an abuse of discretion, the court ascertains whether the decision is supported by the record,' Cook, 776 P.2d at 185 ( accord First Nat. Bank of Thermopolis v. Bonham, 559 P.2d 42 (Wyo. 1977) and quoting Holding's Little America v. Board of County Com'rs of Laramie County, 670 P.2d 699, 703-04 (Wyo. 1983)), is the assumption that an agency will abide by the rules it promulgates. The failure of an agency to abide by its rules is per se arbitrary and capricious. An agency action is arbitrary or capricious if it is not based on a consideration of the relevant factors. Tri-State Generation and Transmission Ass'n, Inc. v. Environmental Quality Council, 590 P.2d 1324, 1330-31 (Wyo. 1979). Obviously, rules promulgated by an agency are relevant factors. The decision of the district court can be sustained as a matter of law because the action by the hearing examiner, which was reversed, was contrary to law. In this case, we have a rule, an adaptation of the rule and a social interest cogently presented in the same decision. The conflict is apparent, since the reduction decision did not comport with the agency rule and the apparent office policy was ineffective to justify a non-compensatory fee decision. Reasonable compensation for the attorney is required. In re Petition of Attorney Fees and Partial Reimbursement for Attorney Fees Pursuant to M.S. 176.081, 350 N.W.2d 373 (Minn. 1984); State v. Green, 470 S.W.2d 571 (Mo. 1971). In deciding this appeal, we do not understand the argument of the Division that the district court lacked jurisdiction and statutory authority to consider on appellate review the denial of billed legal fees as requested by the counsel appointed to represent the injured employee. The scope of review for an award of attorney fees is clearly available as a frequently considered subject within the number of fee dispute cases in public law activities. By statute, the initial decision maker in this case was the hearing examiner. To be tested on appeal was whether his decision was factually supported or erroneous as a matter of law. In review, the district court in result found no factual basis presented by the hearing examiner to sustain the decision rendered. Lacking evidence that the billed amount was either unreasonable or unnecessary makes reduction inappropriate, it is recognized that the Division posits its case on an agency right to define a reasonable fee by either an hourly schedule or a capped amount. We concur with the decision of the district court that this effort fails to provide a justification as a matter of law for denial to the attorney of reasonable compensation for services rendered within the amount billed which did not exceed the agency rule. [4] The decision for fee reduction should assess whether excessive hours were billed, whether an improper hourly rate was charged and whether unnecessary costs were incurred. On this record, the hourly rate was below the custom and standard, the case was difficult, the work necessary and the result extremely favorable. No question about counsel's incurrence of the cost is documented. [5] The Division misses the point in present appeal; the issue confined here is not the existence of authority to control amounts to be paid for attorney fees and incurred litigation costs. We only consider whether the agency action in amount reduction without development of factual basis was arbitrary and capricious. This court's appellate resolution constitutes a decision on the law and not a factual analysis when the hearing examiner fails to provide any reasonableness of amount analysis by using an arbitrary rule as supplemented by unwritten adaptation of advance approval. [6] The decision of the district court is affirmed. URBIGKIT, C.J., filed a specially concurring opinion. THOMAS, J., filed a specially concurring opinion, with whom CARDINE, J., joined.