Court Opinion

ID: 4035066
Source: CourtListenerOpinion
Date Created: 2016-09-20 04:38:24.477194+00
Date Added: 2024-06-11T13:16:39.315566
License: Public Domain

No. 15-0397 -         Pioneer Pipe, Inc. v. Stephen Swain, Prayman Construction, and J&J
                      General Maintenance, Inc.
                                                                   FILED
                                                             September 19, 2016
                                                                    released at 3:00 p.m.
                                                                  RORY L. PERRY, II CLERK
                                                                SUPREME COURT OF APPEALS
Davis, Justice, dissenting:                                          OF WEST VIRGINIA

               This was a very simple case in which the majority opinion has confused the law

and facts, by injecting irrelevant issues to reach a result that denies the Petitioner (hereinafter

referred to as “Pioneer Pipe”), and all other employers in future cases, fundamental due

process. In this case, the majority has determined that the Insurance Commissioner can,

without authorization, create and impose a policy that denied Pioneer Pipe its statutory due

process right to challenge the decision to not apportion charges for the claimant’s hearing

loss claim among all of his former employers. For the reasons set out below, I dissent.

                       The Majority Opinion Violated Pioneer Pipe’s

                           Constitutional Right to Due Process

               I will begin by making a few basic constitutional observations that the majority

opinion has pretended do not exist. It has long been recognized that “a corporation is a

‘person’ within the meaning of the . . . due process of law clause[.]” Grosjean v. Am. Press

Co., 297 U.S. 233, 244, 56 S. Ct. 444, 447, 80 L. Ed. 660 (1936). See Coleman & Williams,

Ltd. v. Wisconsin Dep’t of Workforce Dev., 401 F. Supp. 2d 938, 943 (E.D. Wis. 2005)

(“With respect to the Due Process Clause, the Court has long considered the property

interests of corporations to be entitled to constitutional protection.”); Trapper Brown Constr.

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Co., Inc. v. Electromech, Inc., 358 F. Supp. 105, 106 (D.N.H. 1973) (“Plaintiff corporation

may claim the protection of the Fourteenth Amendment[.]”). It has been noted that “[t]o

prove both its substantive and procedural due process claims, [a corporation] must prove that

it was deprived of a constitutionally protected property . . . interest.” SDDS, Inc. v. State of

S.D., 843 F. Supp. 546, 553 (D.S.D. 1994), rev’d on other grounds, 47 F.3d 263 (8th Cir.

1995).

               To establish a procedural due process claim, a corporation must establish three

elements: (1) a constitutionally protected interest; (2) a deprivation of that interest within the

meaning of the due process clause; and (3) the government did not afford it adequate

procedural rights prior to depriving the corporation of its protected interest. See Med. Corp.,

Inc. v. City of Lima, 296 F.3d 404, 409 (6th Cir. 2002). Moreover, in order “[t]o prevail on

a substantive due process claim, a plaintiff must demonstrate that an arbitrary and capricious

act deprived them of a protected property interest.” County Concrete Corp. v. Town of

Roxbury, 442 F.3d 159, 165 (3d Cir. 2006). The Supreme Court has made clear that property

interests are not created by the constitution, itself, but rather by “existing rules or

understandings that stem from an independent source such as state law-rules or

understandings that secure certain benefits and that support claims of entitlement to those

benefits.” Board of Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 2709, 33 L. Ed. 2d
548 (1972).

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              In the instant proceeding, Pioneer Pipe was granted a statutory right that

protected its property from being arbitrarily and capriciously taken by the Insurance

Commissioner. Through the enactment of W. Va. Code § 23-4-6b(g) (2009) (Repl. Vol.

2010), the Legislature outlined the procedure by which multiple employers of an employee

could be held liable under the workers’ compensation statutes for the employee’s hearing

loss. The statutory provision states:

                     An application for benefits alleging a noise-induced
              hearing loss shall set forth the name of the employer or
              employers and the time worked for each. The Insurance
              Commissioner may allocate to and divide any charges resulting
              from the claim among the employers with whom the claimant
              sustained exposure to hazardous noise for as much as sixty days
              during the period of three years immediately preceding the date
              of last exposure. The allocation is based upon the time of
              exposure with each employer. In determining the allocation, the
              Insurance Commissioner shall consider all the time of
              employment by each employer during which the claimant was
              exposed and not just the time within the three-year period under
              the same allocation as is applied in occupational
              pneumoconiosis cases.

W. Va. Code § 23-4-6b(g).

              The above statute is not complicated. It is not ambiguous in its application to

this case. The statute provides that an employee filing a claim for hearing loss must list the

names of all employers for whom he or she has worked. The statute then grants the

Insurance Commissioner the authority to apportion or allocate the liability for the hearing

loss between the employers, or make a fact-specific determination that only one employer

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will be held liable. The statute also clearly shows that, for any employer to be charged for

the hearing loss, it must be shown that the employer exposed the employee “to hazardous

noise for as much as sixty days during the period of three years immediately preceding the

date of last exposure.” W. Va. Code § 23-4-6b(g).

              Despite the plain statutory language, the Insurance Commissioner arbitrarily

adopted its own policy. The policy states that it will never “consider” allocation of charges

among employers as is clearly required by the statute. Under the existing policy, the

Insurance Commissioner arbitrarily picks an employer from among those listed by the

employee and imposes all charges on that employer–regardless of the employee’s length of

exposure while working for that employer. As a result of this policy, no employer can

challenge the basis for being singled out as the exclusive chargeable employer. The majority

opinion has determined that since the statute grants the Insurance Commissioner the

discretion to consider allocation on a case-by-case basis, the Insurance Commissioner had

the authority to adopt a policy that would never consider allocation of charges in any multiple

employer hearing loss claim. There is no rule of statutory construction which states that,

when a statute grants a government agency discretion to act, the agency may unilaterally

create a policy that provides that it will never exercise its statutory discretion. Such an

unbridled rule of statutory construction would wreak havoc in all areas of the law where an

agency is given discretion to act.

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              Had the Legislature envisioned such a rule of statutory construction, the

Legislature simply could have drafted the statute to say that, even though multiple employers

may be charged for a hearing loss claim, the Insurance Commissioner “shall” only hold one

employer chargeable in all cases. That is not what the statute says. The Insurance

Commissioner and the majority opinion have interpreted the statute in that manner, through

a new rule of statutory construction that is dangerous and nonsensical.

              A plain reading of the statute illustrates that the Insurance Commissioner must

make an independent determination in each hearing loss claim as to whether to allocate

charges among multiple employers. The reason for this case-by-case determination is that

it protects the due process right of an employer to judicially challenge the decision not to

allocate charges among multiple employers as well as the right to challenge the sixty-day

exposure requirement. These statutory due process rights afford an employer the basis for

challenging the charging decision, on the grounds of an abuse of discretion and as being

arbitrary and capricious. The Insurance Commissioner’s unauthorized policy has stripped

Pioneer Pipe of this statutory right to challenge the decision of chargeability for the subject

hearing loss claim.

              Pioneer Pipe has sustained three injuries because of the unlawful policy

imposed by the Insurance Commissioner. First, Pioneer Pipe has been denied its right to

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have the Insurance Commissioner make an individual determination of allocation on the

merits, so that Pioneer Pipe could appeal the decision on the grounds of an abuse of

discretion. Second, under the current policy, Pioneer Pipe has been wrongfully prohibited

from having other employers share in the “costs” of a hearing loss claim. Third, under the

policy, Pioneer Pipe has been prohibited from showing that it should not be a part of the case

at all, because the claimant worked only forty hours for Pioneer Pipe, not sixty days as

required by the statute.

              In the final analysis, the Insurance Commissioner’s policy of never allowing

allocation should have been stricken as violating Pioneer Pipe’s due process rights. This case

should have then been reversed, and the matter sent back to the Commissioner to comply

with W. Va. Code § 23-4-6b(g) to determine whether Pioneer Pipe is a chargeable employer

and whether allocation should be allowed. If, on remand, the Insurance Commissioner found

that Pioneer Pipe was a chargeable employer and that allocation of charges would not be

permitted, the Insurance Commissioner should have entered an order setting forth the reasons

for its determination. Pioneer Pipe then could have exercised its right to challenge the

Insurance Commissioner’s case specific findings.

              Based upon the foregoing, I dissent.

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