Court Opinion

ID: 867238
Source: CourtListenerOpinion
Date Created: 2013-05-11 22:42:35.622404+00
Date Added: 2024-06-11T15:37:05.292007
License: Public Domain

SUPREME COURT OF ARIZONA
                                 En Banc

JESUS GUTIERREZ,                       )   Arizona Supreme Court
                                       )   No. CV-10-0285-PR
                         Petitioner,   )
                                       )   Court of Appeals
                   v.                  )   Division One
                                       )   No. 1 CA-IC 09-0040
THE INDUSTRIAL COMMISSION OF           )
ARIZONA,                               )   ICA Claim
                                       )   No. 20071-150489
                         Respondent,   )
                                       )   Carrier Claim
MASTERSON & CLARK FRAMING, INC.        )   No. 0712694
                                       )
               Respondent Employer,    )
                                       )
SCF ARIZONA,                           )   O P I N I O N
                                       )
              Respondent Carrier.      )
_________________________________      )

     Special Action from the Industrial Commission of Arizona
    The Honorable Stephen W. Pogson, Administrative Law Judge

                             AFFIRMED
________________________________________________________________
          Opinion of the Court of Appeals, Division One
              226 Ariz. 1, 243 P.3d 604 (App. 2010)

                             AFFIRMED
________________________________________________________________
CECIL A. EDWARDS, JR., ATTORNEY AT LAW                   Phoenix
     By   Cecil A. Edwards, Jr.
Attorneys for Jesus Gutierrez

INDUSTRIAL COMMISSION OF ARIZONA                                 Phoenix
     By   Andrew F. Wade, Chief Counsel
Attorneys for Industrial Commission of Arizona

STATE COMPENSATION FUND                                          Phoenix
     By   James B. Stabler, Chief Counsel
          Mark A. Kendall
          Deborah E. Mittelman
Attorneys for Masterson & Clark Framing, Inc.
and SCF Arizona
TOBY ZIMBALIST ATTORNEY AT LAW                           Phoenix
     By   Toby Zimbalist
Attorneys for Amicus Curiae
Arizona Association of Lawyers for Injured Workers
________________________________________________________________

B E R C H, Chief Justice

¶1               An    Arizona        administrative          rule      provides      that    a

physician         should      rate     an     injured       worker’s      impairment       using

standards set forth in the “most recent edition” of the American

Medical      Association          Guides       to     the    Evaluation       of    Permanent

Impairment        (AMA       Guides).         Ariz.    Admin.      Code    (A.A.C.)    R20-5-

113(B).      We must determine whether “most recent edition” refers

to    the    edition          that     was     most     recent     when      the    Rule     was

promulgated (the Fifth Edition) or the latest edition existing

when the claimant’s impairment was rated (in this case, the

Sixth Edition).              For the reasons set forth below, we hold that

A.A.C.      R20-5-113(B)             refers     to     the     edition       most    recently

published before the claimant’s impairment is rated and that

this reference does not constitute an improper delegation of

legislative authority.

                             I.   FACTUAL AND PROCEDURAL BACKGROUND

¶2               Jesus Gutierrez injured his back in 2007 while working

for    Masterson         &     Clark     Framing.            His     claim    for    workers’

compensation           benefits       was     accepted       and   he     received    medical

treatment.            The treating physician later released Gutierrez to

return      to    work     with      physical       restrictions.          Concluding      that

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Gutierrez was not permanently impaired, the insurance carrier

closed the claim.            Gutierrez requested a hearing to challenge

the “no impairment” determination.

¶3          At the Industrial Commission of Arizona (ICA) hearings,

the   Administrative         Law    Judge   (ALJ)    heard    testimony   from   two

physicians:         Gutierrez’s        treating     orthopedic    surgeon      and    a

doctor presented by the carrier.                 Relying on the Fifth Edition

of the AMA Guides, Gutierrez’s expert testified that Gutierrez

suffered    from      a    resolved     lumbar      radiculopathy.        He    rated

Gutierrez’s     injury       as    a   five    percent    permanent     impairment.

Relying    on   the       Sixth    Edition,    which     provides    no   permanent

impairment rating for a resolved radiculopathy, the carrier’s

expert     opined         that     Gutierrez     had     no   ratable     permanent

impairment.

¶4          Based on the latter testimony, the ALJ found that the

insurance carrier did not err in closing Gutierrez’s claim.                          On

special action review, the court of appeals affirmed.                     Gutierrez

v. Indus. Comm’n, 226 Ariz. 1, 243 P.3d 604 (App. 2010).                              We

granted     Gutierrez’s            petition       for    review      because         the

interpretation of A.A.C. R20-5-113(B) is a recurring issue of

statewide importance.             See Ariz. Rev. Stat. (A.R.S.) § 12-120.24

(2003) (supreme court review); see also Ariz. Const. art. 6, §

5, cl. 3 (conferring jurisdiction).

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                                II.    DISCUSSION

     A.     Interpreting “most recent edition”

¶5          The administrative rule at issue, A.A.C. R20-5-113(B),

provides as follows:

     When a physician discharges a claimant from treatment,
     the physician [s]hall determine whether the claimant
     has sustained any impairment of function resulting
     from the industrial injury. The physician should rate
     the percentage of impairment using the standards for
     the evaluation of permanent impairment as published by
     the most recent edition of the American Medical
     Association in Guides to the Evaluation of Permanent
     Impairment, if applicable.

We interpret the provisions de novo, “apply[ing] the same rules

in construing both statutes and rules.”               Smith v. Ariz. Citizens

Clean Elections Comm’n, 212 Ariz. 407, 412 ¶ 18, 132 P.3d 1187,

1192 (2006).

¶6          The question presented is which edition of the AMA

Guides    the    Rule   means   by    its    reference    to   the   “most   recent

edition.”        The term “most recent” is commonly understood as

giving perpetual duration to a statute or rule that relies on

changing facts and new developments or would otherwise require

frequent updating.        Cf. City of Phoenix v. Superior Court (Ariz.

State Hosp.), 139 Ariz. 175, 178, 677 P.2d 1283, 1286 (1984)

(preferring      interpretation       that    gives   a   statute    “a   fair   and

sensible meaning”).        This suggests that an evolving standard was

intended.       Indeed, if the ICA had meant “most recent edition” to

apply only to the Fifth Edition, it likely would simply have

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identified that edition by number.                      We therefore read A.A.C.

R20-5-113(B) as referring to standards in the edition of the AMA

Guides most recently published before the claimant’s impairment

is rated.

¶7            This interpretation comports with the use of the phrase

“most recent” in other rules and statutes.                       Several statutes and

rules require submission or retention of “most recent” documents

such as financial statements or receipts.                          See, e.g., A.R.S.

§ 3-609(A) (2002) (requiring submission of financial statements

for   the     “most      recent    complete       fiscal     year”);    A.A.C.      R20-5-

203(A)(3) (requiring submission of the “most recent certified

annual      financial      statement”);       A.A.C.       R20-2-707(E)        (requiring

retention of receipts for the “three most recent deliveries of

. . . motor fuel”).               It would frustrate the purpose of those

provisions        to    require        submission    or    retention      of    outdated

documents        (those    existing       when    the     rule    or   statute      became

effective) despite the passage of time and the existence of more

current     documents.           The    operation    of    several     other     statutes

depends     on    data    from    the     “most    recent”    census.        See,    e.g.,

A.R.S. § 1-215(31) (2002 & Supp. 2010) (defining “population”

based    on   the      “most   recent      United    States      decennial      census”);

A.R.S. §§ 5-110(I) (2002); 9-132 (2008); 11-254.02(A) (2001);

12-284.03 (2003 & Supp. 2010); 13-3826 (2010); 42-16153(A) (2006

& Supp. 2010); 48-3620(E) (2004 & Supp. 2010).                         The legislature

                                           - 5 -
undoubtedly did not intend to require reliance on stale census

data     despite       the      completion         of        new     decennial       censuses.

Provisions that use the term “most recent” therefore anticipate

and incorporate changes and developments, even those that occur

after the effective date of a statute or rule.

¶8          Historical          practice      of     the      ICA     also    suggests       that

“most recent edition” means the newest version extant when a

claimant’s impairment is rated.                    The prior version of the Rule,

much like the current one, recommended that impairment be rated

according    to       the     “standards     for     the      evaluation       of    permanent

impairment as published by the American Medical Association in

Guides     to      the        Evaluation       of       Permanent          Impairment,        if

applicable.”          7 Ariz. Admin. Reg. 25 (Jan. 5, 2001).                          Although

the earlier version of the Rule did not include the words “most

recent edition,” parties and courts regularly referred to each

new    edition    as     it    became    available.                See,   e.g.,     Simpson    v.

Indus. Comm’n, 189 Ariz. 340, 341, 942 P.2d 1172, 1173 (App.

1997) (citing the Fourth Edition of the AMA Guides, adopted in

1993, even though the Second Edition was in effect when the

then-current       version       of    the    Rule      was        promulgated      in     1987).

Thus,    even     without       the    addition         of    the     words   “most        recent

edition,” courts and practitioners were interpreting the Rule to

recommend       use    of      the    current       edition         as    though     the    Rule

contained that language.                It appears that the amending language

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simply codified this accepted practice.

¶9            This interpretation also leads to the more sensible

result.       Reference to the current version of the AMA Guides

allows the doctor to consider the latest medical developments

when    determining        impairment.          Gutierrez’s       reading      of    “most

recent edition,” in contrast, would require the physician to

look up A.A.C. R20-5-113(B), determine its effective date, find

which version of the AMA Guides was the “most recent edition”

when    the    Rule     became     effective,         and    possibly    rely       on    an

outdated,      superseded         version       of     the    Guides     when       rating

impairment.         Reading the Rule as referring to the newest edition

of    the   Guides      precludes    this   impractical         result      and     allows

consideration of medical advancements.                       See State v. Estrada,

201 Ariz. 247, 251 ¶ 17, 34 P.3d 356, 360 (2001) (finding a

result absurd “if it is so . . . inconvenient that it cannot be

supposed      to    have   been   within    the       intention    of   persons          with

ordinary      intelligence         and    discretion”)         (internal        citation

omitted).

       B.     Delegation of legislative power

¶10           Gutierrez argues that if A.A.C. R20-5-113(B) refers to

the version of the AMA Guides “most recent” when the claimant’s

impairment         is   rated,    the    Rule        unconstitutionally        delegates

authority to the AMA to set the standards physicians must use to

rate    impairment.          He     contends         that    although    the        Arizona

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Legislature       delegated     to   the   ICA     the   power    to    adopt   rules

regarding the presentation of compensation claims, see A.R.S.

§ 23-921(B) (1995), it could not delegate rulemaking authority

to the AMA or empower the ICA to do so.

¶11          An    improper     delegation    of    legislative        authority   may

occur when a statute (and, by implication, a rule) incorporates

later-developed standards not promulgated by the Legislature or

an Arizona agency.          See State v. Williams, 119 Ariz. 595, 598-

99, 583 P.2d 251, 254-55 (1978) (observing that “[s]ince the

Legislature exercises absolutely no control over Congress or its

agencies,”        “an    incorporation       by    state    statute       of    rules,

regulations, and statutes of federal bodies to be promulgated

subsequent to the enactment of the state statute constitutes an

unlawful delegation of legislative power”).                 If, however, a rule

does not make later-developed standards mandatory, but merely

recommends their use, then such “permissive” incorporation is

not improper.           See Bd. of Trs. of Emps. Ret. Sys. v. Mayor of

Baltimore, 562 A.2d 720, 732 (Md. 1989) (upholding statute that

incorporated an advisory determination because the agency was

free to disregard it); Baughn v. Gorrell & Riley, 224 S.W.2d

436,   439   (Ky.       1949)   (upholding    statute      in    part   because    the

outside standards “guide[d] the public authorities,” but did not

bind them); cf. Indus. Comm’n v. C & D Pipeline, Inc., 125 Ariz.

64, 67-68, 607 P.2d 383, 386-87 (App. 1979) (holding statute

                                       - 8 -
unconstitutional because “[i]t permits no discretion whatsoever”

in    “requiring     public    authorities     to    accept    the   terms      of

employment fixed by [labor unions]”).

¶12         The text of A.A.C. R20-5-113(B) indicates that the use

of the AMA Guides in rating impairment is discretionary.                       The

Rule provides that, in determining a claimant’s impairment, the

physician “should” use the AMA Guides “if applicable.”                   Use of

these permissive qualifiers, particularly following use of the

mandatory term “shall” in the preceding sentence, reveals that

the physician is not required to apply the AMA Guides.                  See City

of Mesa v. Salt River Project Agric. Improvement & Power Dist.,

92 Ariz. 91, 102, 373 P.2d 722, 730 (1962) (refusing to read

dissimilar terms to have the same meaning).

¶13         This Court has previously recognized that the use of

the   AMA   Guides     is   discretionary    and    that   impairment    may    be

established by evidence other than the AMA Guides. 1                    In W.A.

Krueger Co. v. Industrial Commission of Arizona, we observed

that “[t]he AMA Guides are not to be blindly applied regardless

of    a   claimant’s    actual   physical     condition.       Rather,     their

purpose is to serve as a guideline in rating an impairment and

[they] are valid when the stated percentage ‘truly reflects the

1
     These cases interpret the previous version of A.A.C. R20-5-
113(B) (formerly A.A.C. R20-5-113(D)), which was amended to the
current form in 2001.     Nothing in the 2001 amendment changed
whether use of the AMA Guides is mandatory or discretionary.
                                    - 9 -
claimant’s loss.’”         150 Ariz. 66, 68, 722 P.2d 234, 236 (1986)

(quoting Gomez v. Indus. Comm’n, 148 Ariz. 565, 569, 715 P.2d

22, 26 (1986)); see also Slover Masonry, Inc. v. Indus. Comm’n,

158 Ariz. 131, 136, 761 P.2d 1035, 1040 (1988) (“[W]hen other

evidence requires a different result, a medical expert cannot

bind the ALJ to unreasoning adherence to the AMA Guides.”);

Cavco Indus. v. Indus. Comm’n, 129 Ariz. 429, 432, 631 P.2d

1087, 1090 (1981) (“The AMA Guides apply only where they cover

the specific impairment and where the percentage of impairment

contained therein truly reflects the claimant’s loss.”); Smith

v. Indus. Comm’n, 113 Ariz. 304, 307, 552 P.2d 1198, 1201 (1976)

(observing that “[s]ubjective complaints of pain” are not within

the scope of the AMA Guides, but are still compensable); see

also Madrid v. St. Joseph Hosp., 928 P.2d 250, 259 (N.M. 1996)

(finding no improper delegation of legislative authority in part

because      of   “the   discretionary      component     of      using   the    AMA

Guide”).      Other sources have come to the same conclusion.                    See

R.    Todd   Lundmark,     Disability    Benefits,      in     Arizona    Workers’

Compensation Handbook § 7.2.1.2 (Ray J. Davis et al. eds., 1992)

(noting that “[u]se of the Guides is not required . . . .                       When

the Guides are inapplicable[,] other appropriate rating criteria

— including a physician’s own clinical judgment and experience —

may be used”).

¶14          Because     physicians   are   not   bound      to   apply   the    AMA

                                      - 10 -
Guides when rating impairment, the reference to later-developed

editions   of   the   AMA   Guides    in   A.A.C.   R20-5-113(B)   does   not

constitute an improper delegation of legislative power.

                             III.    CONCLUSION

¶15        For the reasons set forth above, we affirm ¶¶ 1-15 of

the opinion of the court of appeals 2 and affirm the award and

decision of the ICA.

                                     __________________________________
                                     Rebecca White Berch, Chief Justice

CONCURRING:

_____________________________________
Andrew D. Hurwitz, Vice Chief Justice

_____________________________________
W. Scott Bales, Justice

_____________________________________
A. John Pelander, Justice

_____________________________________
Robert M. Brutinel, Justice

2
     Although we affirm the opinion of the court of appeals, we
do not adopt the suggestion in ¶ 16 and footnote five that the
American Medical Association is, for separation of powers
purposes, analogous to a state administrative agency.
     Further, the Court declined to review the court of appeals’
ruling that use of the Sixth Edition does not violate article
18, section 8, of the Arizona Constitution, and therefore our
opinion reflects neither approval nor disapproval of ¶¶ 17-20 of
the opinion.
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