Opinion ID: 2640775
Heading Depth: 3
Heading Rank: 4

Heading: Appeals Commission Decisions Have Precedential Value Only for the Appeals Commission and the Board.

Text: The State contends that the Appeals Commission is not the first level of judicial review, but merely a second layer of administrative adjudication; according to the State, the Appeals Commission simply renders the final agency decision for purposes of judicial review. AKPIRG argues that the Appeals Commission is not needed to add finality because the Board's decisions are already final. It asserts that the result of creation of the Appeals Commission is to give administrative adjudication legally precedential effect. AKPIRG's argument misconstrues the concept of final agency action. Nothing requires an appeal to the Appeals Commission; if parties are satisfied with a Board decision, that decision is final as to the parties and binds them, just as a Board decision bound them under prior law. [87] What the 2005 amendment changed is the way in which an administrative decision in a workers' compensation case becomes final for purposes of judicial review. Only final administrative orders are subject to judicial review. [88] The legislature may require compliance with specific procedures for an order to be final for purposes of review. [89] Here, the legislature decided that final agency action for a workers' compensation case now must be an Appeals Commission decision, not a Board decision. [90] However, if a party does not want to appeal the Board decision, it need not do so; the Board decision is then final. [91] AKPIRG argues that the legislature acted improperly in creating the Appeals Commission, staffing it with a majority of non-lawyers, yet giving the decisions of the Appeals Commission the force of legal precedent. [92] It also asserts that the acceptance of the State's argument results in affording legally precedential value to decisions of an executive agency but not the superior court. But examination of administrative law principles shows that the powers explicitly granted to the Appeals Commission are similar to powers already exercised by non-attorneys in quasi-judicial agencies, including the Board. The Board is composed of eighteen members, who are equally divided between representatives of labor and industry. [93] Nothing requires that Board members be attorneys. Until the creation of the Appeals Commission, the Board was the administrative body responsible for interpretation of the Alaska Workers' Compensation Act, both through its quasi-legislative function of promulgating regulations and its quasi-judicial function of adjudicating claims. [94] Administrative agencies can set policy through adjudication, as well as rulemaking. [95] While there has never been a statutory provision that Board decisions have precedential effect, the Board has looked to its prior decisions in deciding individual cases. [96] As a result, the decisions of Board panels had some intra-agency precedential effect. And while we have not had occasion to address this exact issue, some courts have held that administrative agencies, while not strictly subject to the doctrine of stare decisis, nonetheless must act consistently with their prior adjudications or explain why they do not. [97] If administrative agencies did not adhere to some loose form of precedent, their actions could easily appear arbitrary. [98] In fact, cases disapproving administrative action for failing to follow agency precedent have found the agency action arbitrary. [99] In sum, the Board, which may be composed of a majority of non-lawyers, already uses agency adjudication as some form of precedent to establish policy. [100] Non-lawyers in administrative agencies can also interpret statutes by promulgating regulations. [101] In reviewing administrative action, we give deference to an agency's interpretation of a statute when the question involves fundamental policy decisions or administrative expertise. [102] In so doing, we in effect give some power to non-lawyers to interpret the law. There is nothing new in giving non-lawyers some interpretive authority in determining the meaning of a statute through administrative agency action. Alaska Statute 23.30.008 potentially goes beyond these settled legal principles by providing that decisions of the Appeals Commission have the force of legal precedent unless reversed by this court. [103] This provision could be read to encroach on judicial functions if it meant that decisions of the Appeals Commission could serve as precedent for courts or other administrative agencies. Even though courts currently defer to an agency's interpretation of a statute in questions of fundamental policy, the judiciary exercises its independent judgment when there is a question of law that does not involve agency expertise. [104] Courts also retain the authority to set aside an agency's interpretation of the law, even if it involves a fundamental policy question, if the agency interpretation is unreasonable. [105] The State responds to AKPIRG's argument by asserting that Appeals Commission decisions are binding legal precedent only in the sense that commission decisions bind the appeals commission and the compensation board. However, nothing on the face of the statute limits the precedential value of the decisions in this way. The Appeals Commission provides an additional layer of administrative adjudication in workers' compensation claims. It is constitutionally permissible for the legislature to direct that the Board must adhere to Appeals Commission decisions and that the Appeals Commission must give precedential effect to its own decisions. [106] But the legislature cannot constitutionally require the courts to give precedential value to Appeals Commission decisions. The judiciary alone among the branches of government is charged with interpreting the law. [107] To give an administrative agency decision precedential value in a way that binds the courts or even other agencies would undermine the notion of judicial review. Judicial review of legal questions is one of the fundamental principles that underpins the notion that administrative adjudication is constitutional. [108] Any attempt to undermine independent judicial review of agency action cannot be constitutional. To better understand this statutory provision, we explore what the doctrine of precedent entails and the reasons that the legislature may have included this provision in the statute. The doctrine of precedent is a common law doctrine under which courts are bound by prior decisions in their consideration of new cases. [109] Precedent is a judge-made rule designed to constrain judicial decisionmaking by requiring that prior decisions with similar relevant facts be followed or, if they are not followed, that the reasons for departing from the prior rule be explained. [110] Two types of stare decisis have been identified: horizontal stare decisis and vertical stare decisis. [111] Horizontal stare decisis binds the issuing court to its own prior decisions. [112] Vertical stare decisis requires that courts of lower rank follow decisions of higher courts. [113] Vertical stare decisis has a stronger effect, in that lower courts generally cannot overrule decisions of higher courts, whereas a court may, given adequate reasons to do so, overrule itself. [114] Precedent goes beyond the related principles of res judicata and collateral estoppel and serves a different purpose. Res judicata, or claim preclusion, and collateral estoppel, or issue preclusion, bind the parties and their privies to factual findings, as well as legal conclusions, that have been the subject of prior litigation. [115] The goal of res judicata and collateral estoppel is finality: both doctrines aim to prevent parties from again and again attempting to reopen a matter that has been resolved by a court of competent jurisdiction. [116] When a decision is precedent, that decision binds other parties in similar, not necessarily identical, circumstances to the legal conclusions of the precedential decision. [117] Precedent serves several purposes. [118] One goal of precedent is to narrow issues that need to be litigated, thus making litigation less costly and time consuming. As we have previously noted, no judicial system could do society's work if it eyed each issue afresh in every case that raised it. [119] Adherence to precedent also ensures that litigants have an understanding of the rules that may be applied to their actions. [120] Finally, and perhaps most importantly, precedent maintain[s] public faith in the judiciary as a source of impersonal and reasoned judgments. [121] We have already determined that the principles of res judicata and collateral estoppel apply in administrative proceedings. We have held that principles of res judicata apply to Board proceedings to foreclose relitigation of the same issues between the same parties. [122] We have also held that administrative agency decisions can have preclusive effect on later court proceedings, so that if a party participates in an administrative adjudication, the administrative adjudication may foreclose the possibility of a later lawsuit on the same factual issues. [123] But when the courts evaluate an agency interpretation of a statute using the reasonable basis test, we do not accept the agency's interpretation as binding and do not use the same analysis to overrule an agency's interpretation of a statute that we use to overrule a legal precedent that we have established. [124] The State argues that Appeals Commission decisions must be given precedential weight in order to achieve the legislature's goal of increasing efficiency and consistency in processing workers' compensation claims. There is little legislative history about the precedential nature of Appeals Commission decisions. The director of the Division of Workers' Compensation testified that the Appeals Commission would increase the speed, efficiency, and predictability of appeals because superior court judges are not experienced in workers' compensation law and because [t]heir decisions do not establish binding legal precedent. [125] Before the creation of the Appeals Commission, the Board was a party to any workers' compensation case filed in the superior court. [126] The Board could elect not to participate in an appeal, but its election not to participate would not affect whether it was bound by a decision on appeal. [127] The potential difficulty for the Board was that one superior court decision did not, and does not, bind other superior courts. [128] As a result, the Board could be left with conflicting legal guidance, which would make it difficult to provide consistent and fair adjudication of workers' compensation claims. Creation of the Appeals Commission resolves this issue. Both the Appeals Commission and the Board have jurisdiction in workers' compensation cases, but without direction from the legislature, the inter-agency precedential value of Appeals Commission decisions would not have been apparent. Furthermore, the process for administrative review of Board decisions differs in one significant way from past practice: the Board is not automatically a party to an Appeals Commission proceeding. [129] If the Board is not a party to an appeal to the Appeals Commission, the Board would not be bound by an Appeals Commission decision under principles of either res judicata or collateral estoppel, unless it chose to intervene in every case that came before the Appeals Commission. [130] The provision that decisions of the Appeals Commission have precedential effect clarifies that its decisions are binding on the Board even when the Board does not intervene in an appeal. In other words, the statute gives vertical stare decisis effect to Appeals Commission decisions. The statute also makes plain that different panels of the Appeals Commission must follow prior decisions of the Appeals Commission; it gives horizontal stare decisis effect to the decisions as well. The statutory provision that Appeals Commission decisions have precedential effect, if construed as applying only to the Board and the Appeals Commission, furthers the goal of achieving consistency in workers' compensation cases. The statutory provision that Appeals Commission decisions have the force of legal precedent unless reversed by this court could encroach on the power of the judiciary to be the final interpreter of the law. Because statutes should be construed to avoid the risk of unconstitutionality, [131] we construe the provision that decisions of the Appeals Commission have the force of legal precedent as meaning that they serve as legal precedent for the Board and the Appeals Commission only. This construction does not detract from the legislation's goals and clarifies the relationships between the Board and the Appeals Commission. It is also consistent with current administrative law principles.