Supreme Court Upholds Imposition of $1000 Fine for Failure to File First Report
In Denison Municipal Utilities v. Iowa Workers' Compensation Commissioner, 857 NW2d 230 (Iowa 2014), the Iowa Supreme Court upheld a $1000 fine against the employer and EMC Insurance Companies for failing to file a first report of injury. The employer had argued successfully before the district court that it was not required to file a first report in a case where claimant had not missed any work and had made no claims of permanency. The Supreme Court reversed the decision of the district court. The court also concluded that the employer had not made a sufficient showing of good cause to avoid the $1000 assessment.
The action was precipitated when claimant filed an application for alternate medical care and the agency noted that no first report was on file. The employer was given 30 days to file a first report, but did not do so. Before the agency the employer argued that section 86.12 only allows a penalty when the first report is required by section 86.11. The employer also argued that the statute (86.11) did not require a first report since claimant had not missed work and there was no claim of permanency. The employer argued that 86.12 only allowed the $1000 assessment when a first report was required by 86.11. The deputy concluded to the contrary, noting that the commissioner could require information under section 86.10 and by rule.
The court first dealt with a procedural issue and found that the claim should have been styled a request for a writ of certiorari rather than a petition for judicial review, since the commissioner cannot be named as a party in a judicial review action under section 86.29.
The court noted that the workers' compensation statute was to be liberally construed. The court indicated that the statute (86.12) allowed the commissioner to require that information and reports were to be provided the agency, in addition to reports of injuries under section 86.11. Section 86.12 also provided the agency with an enforcement mechanism to compel compliance. 86.12 provides for the filing of reports in three circumstances - where required by 86.11, where required by section 86.13, or where required by agency rule. The court noted that this section was written in the disjunctive and allowed the agency to write rules to mandate reports in addition to the requirements contained in the Code. In this case, rule 876 - 3.1 required the filing of a first report when demanded by the commissioner under 86.12 or when an original notice and petition was filed for which a first report has not been filed. The court noted that the agency's rule was within the power of the agency to enact, and further noted that there were practical reasons for filing a first report after a claim had been filed with the commissioner, such as notice. Failing to file the first report, according to the court, hampered the ability of the agency to determine whether notice of an injury had been accomplished. Furthermore, the requirement for a first report was consistent with the commissioner's broad information gathering and reporting duties. For these reasons, the commissioner was within his power to require the employer to file a first report.
The court rejected the good cause argument of the employer. The court concluded that the only good cause reason presented by the employer was its belief that no first report was required. In the face of a request for filing and the opportunity for a hearing, no good cause was presented. The court therefore found the imposition of the $1,000 assessment justified.
Justices Waterman and Mansfield dissented. The dissent was premised on the fact that section 86.11 did not require a first report because no time was lost and no permanency was involved in the case. The dissenters argued that the agency cannot amend the statute by rule. They argue that the rule, which states that a first report must be filed "when demanded by the commissioner pursuant to Iowa Code Section 86.12" does not allow for the commissioner to demand a first report in other circumstances. Of course, the rule goes on to indicate that a first report is to be filed "when an employer is served with an original notice and petition that alleges an injury for which a first report has not been filed," which would seem to be the circumstance in this case.
Although this case might be seen to have been the part of a direct challenge to the agency by the employer, counsel for the employer argued that the failure to file the report was simply an oversight. The dissenters see this decision as a case of overregulation by the agency rather than a simple request to file a first report. The dissenters acknowledge that the burden in this case was slight, but go on to warn that "the burdens imposed other other rules could be onerous," without citing any specific onerous burden to which employers could be subjected.
The action was precipitated when claimant filed an application for alternate medical care and the agency noted that no first report was on file. The employer was given 30 days to file a first report, but did not do so. Before the agency the employer argued that section 86.12 only allows a penalty when the first report is required by section 86.11. The employer also argued that the statute (86.11) did not require a first report since claimant had not missed work and there was no claim of permanency. The employer argued that 86.12 only allowed the $1000 assessment when a first report was required by 86.11. The deputy concluded to the contrary, noting that the commissioner could require information under section 86.10 and by rule.
The court first dealt with a procedural issue and found that the claim should have been styled a request for a writ of certiorari rather than a petition for judicial review, since the commissioner cannot be named as a party in a judicial review action under section 86.29.
The court noted that the workers' compensation statute was to be liberally construed. The court indicated that the statute (86.12) allowed the commissioner to require that information and reports were to be provided the agency, in addition to reports of injuries under section 86.11. Section 86.12 also provided the agency with an enforcement mechanism to compel compliance. 86.12 provides for the filing of reports in three circumstances - where required by 86.11, where required by section 86.13, or where required by agency rule. The court noted that this section was written in the disjunctive and allowed the agency to write rules to mandate reports in addition to the requirements contained in the Code. In this case, rule 876 - 3.1 required the filing of a first report when demanded by the commissioner under 86.12 or when an original notice and petition was filed for which a first report has not been filed. The court noted that the agency's rule was within the power of the agency to enact, and further noted that there were practical reasons for filing a first report after a claim had been filed with the commissioner, such as notice. Failing to file the first report, according to the court, hampered the ability of the agency to determine whether notice of an injury had been accomplished. Furthermore, the requirement for a first report was consistent with the commissioner's broad information gathering and reporting duties. For these reasons, the commissioner was within his power to require the employer to file a first report.
The court rejected the good cause argument of the employer. The court concluded that the only good cause reason presented by the employer was its belief that no first report was required. In the face of a request for filing and the opportunity for a hearing, no good cause was presented. The court therefore found the imposition of the $1,000 assessment justified.
Justices Waterman and Mansfield dissented. The dissent was premised on the fact that section 86.11 did not require a first report because no time was lost and no permanency was involved in the case. The dissenters argued that the agency cannot amend the statute by rule. They argue that the rule, which states that a first report must be filed "when demanded by the commissioner pursuant to Iowa Code Section 86.12" does not allow for the commissioner to demand a first report in other circumstances. Of course, the rule goes on to indicate that a first report is to be filed "when an employer is served with an original notice and petition that alleges an injury for which a first report has not been filed," which would seem to be the circumstance in this case.
Although this case might be seen to have been the part of a direct challenge to the agency by the employer, counsel for the employer argued that the failure to file the report was simply an oversight. The dissenters see this decision as a case of overregulation by the agency rather than a simple request to file a first report. The dissenters acknowledge that the burden in this case was slight, but go on to warn that "the burdens imposed other other rules could be onerous," without citing any specific onerous burden to which employers could be subjected.
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