BEFORE THE WORKERS' COMPENSATION BOARD OF
THE STATE OF OREGON

In the Matter of the Adoption of
Rules and Permanent Amendments to
the Rules of Practice and Procedure
for Contested Cases Under the Workers’
Compensation Law, Relating to
OAR 438, Divisions 005, 006, 007, and 022
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WCB ADMIN. ORDER 1-2003



ORDER OF ADOPTION

          1. On November 13, 2002, the Workers’ Compensation Board filed a Notice of Proposed Rulemaking Hearing with the Secretary of State, giving notice of its intent to adopt permanent rules of practice and procedure regarding "pre-hearing" procedures (such as continuances, postponements, discovery, subpoenas, change of Administrative Law Judge, expedited hearings), hearing procedures (such as ex parte communication, offer of proof, Own Motion Recommendation), and rulemaking procedures. (Divisions 005, 006, 007, 0022). Copies of the notice were distributed to the Oregonian, the Associated Press, and to the Capitol Press Room on November 29, 2002. The notice was published in the Secretary of State’s December 2002 Administrative Rule Bulletin.

          On November 29, 2002, copies of the notice, as well as the proposed rules, were also mailed to all interested parties whose names appear on the Board’s mailing list. Notice of the hearing was published in the November/December 2002 issue of the Board’s News & Case Notes, which was posted on the Board’s web-site in early January 2003. This notice was also published in the November 2002 and December 2002 issues of the Workers’ Compensation Section Newsletter, which were distributed to all Section members of the Oregon State Bar in early December 2002 and January 2003. On November 29, 2002, notice of this hearing was also posted on the Board’s web-site at: http://www.cbs.state.or.us/external/wcb/wcbrule/rules.htm.

          Thereafter, in accordance with the notice, a public hearing was conducted by Roger C. Pearson, Managing Attorney, on January 31, 2003 at Salem, Oregon. The record of the public hearing was closed at 5:00 p.m. on January 31, 2003.

          2. Two individuals offered testimony at the scheduled hearing. In addition, four written comments were received from practitioners, insurers, and the Workers’ Compensation Section of the Oregon State Bar.(1) Copies of the transcript of the public hearing and of all written comments received are available for public inspection and copying at the offices of the Board, 2601 25th St. SE, Suite 150, Salem, Oregon 97302, during normal working hours from 8:00 a.m. to 5:00 p.m., Monday through Friday.

          3. Procedural Background. Before proceeding with a summary of each rule, the following information is provided to give the historical/contextual background of these rules.

          In 1997, the Workers’ Compensation Board decided to establish a code of conduct for its Administrative Law Judges (ALJs), concluding that the existence of such a code would help promote and preserve the public trust and confidence in its Hearings Division as an independent, impartial arbiter of disputes arising under the Workers’ Compensation Act and the Oregon Safe Employment Act. The Board formed a committee comprised of ALJs and Board members to draft the code (the code committee). In drafting the code, the code committee borrowed substantially from the Oregon Judicial Code of Conduct (which was adopted by the Supreme Court in 1996), with modifications where necessary to fit the specific nature of ALJ duties. The Board sent an earlier draft of the code to all ALJs for comment. After considering these comments, the Board adopted the "Code of Conduct for Workers’ Compensation Board Administrative Law Judges" (effective April 6, 1998) ("ALJ Code of Conduct").

          As explained in the Board’s November 13, 2002 Statement of Need for the rules presented in Exhibits A through Q, in a June 6, 2001 public meeting regarding comments received during its triennial rule review, the Board decided to refer several proposed rule revisions received from parties and practitioners to the Presiding ALJ and Managing Attorney for assignment to an ALJ committee for further study, appraisal and recommendation.(2) Subsequently, an ALJ committee was appointed. During its review, the committee discovered additional concerns beyond the proposed rule revisions. After completing its review, which included consideration of proposals made as a result of the Board’s triennial rule review process regarding the referred matters, the advisory committee submitted its proposal, which proposed amendments to OAR 438-005-0015, 438-005-0016, 438-005-0040, 438-006-0031, 438-006-0036, 438-006-0075, 438-006-0081, 438-006-0091, 438-006-0095, 438-007-0015, 438-007-0018, 438-007-0020, and 438-007-0024. In addition, the Presiding ALJ recommended proposed amendments to OAR 438-006-0075 and the Managing Attorney recommended proposed addition of OAR 438-007-0027.

          After reviewing the committee report, the Board compiled the proposed rules in a "Statement of Need," which explained the Board’s reasoning behind the proposed rule changes. On November 13, 2002, the Board filed a Notice of Proposed Rulemaking Hearing with the Secretary of State, which indicated the time and place for the January 31, 2003 proposed rulemaking hearing.

          4. Order of Adoption for Rules (Exhibits A through Q). The Board has thoroughly reviewed and considered all comments pertaining to its proposed permanent rules. After completing its deliberations, the Board concludes that the proposed amendments and rules (which are contained in Exhibits A through Q, attached and incorporated by this reference), are designed to implement necessary changes to the Board’s administrative rules arising from the aforementioned process. The Board bases its conclusions on the following reasoning.

OAR 438-005-0011. This rule states the effective date and the applicability of the Board’s rules, which proposed making the rules effective May 1, 2003. Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that the proposed rule is reasonable, necessary, and proper. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit A and incorporated herein by this reference.

OAR 438-005-0015. The current version of this rule adopts by reference selected provisions of the "Attorney General’s Model Rules of Procedure." In response to the Board’s triennial rule review, a proposal suggested adopting OAR 137-003-0625, which is the Department of Justice Model Rules of Procedure rule entitled "Ex Parte Communications with Hearing Officer." The current version of OAR 438-005-0015 adopts OAR 137-003-0055, which is the Department of Justice Model Rules of Procedure rule entitled "Ex Parte Communications." After referring this matter to the ALJ committee, they noted that the Board has adopted, as a "Policy & Procedure," a "Code of Conduct for Workers’ Compensation Board Administrative Law Judges" (effective April 6, 1998) ("ALJ Code of Conduct").

The committee observed that OAR 137-003-0055 defines ex parte communications as communications "concerning a fact in issue in the proceeding . . .," whereas the "ALJ Code of Conduct" prohibits ex parte communications "about any matters or issues on the merits in any adversary proceeding . . ." As such, the committee reasoned that the "ALJ Code of Conduct" imposes a broader prohibition on ex parte conduct than does either OAR 137-003-0055 or 137-003-0625 (OAR 137-003-0625(1)(c) defines an ex parte communication as a communication "[t]hat relates to a legal or factual issue in the contested case proceeding").

In light of such circumstances, the committee recommended that the Board not adopt OAR 137-003-0625 and that it delete the reference to OAR 137-003-0055 in OAR 438-005-0015. Instead, based on the above reasoning, the committee suggested that the Board formally adopt a rule implementing the ex parte communications prohibitions and procedures now in the "ALJ Code of Conduct." See OAR 438-006-0099 (Exhibit K).

The committee also suggested another change to OAR 438-005-0015. The current version of OAR 438-005-0015 adopts, by reference, OAR 137-001-0005 through 137-001-0085, which deal with the model rules for rulemaking and have no application to contested case hearings under Workers’ Compensation Law. Therefore, the committee recommended and the Board proposed to delete the rule’s reference to OAR 137-001-0005 through 137-001-0085 and adopt the model rules for rulemaking in a separate division or rule. See Division 022 (Rulemaking Procedures) (Exhibit Q).

Finally, pursuant to the committee’s recommendation, the Board proposed to amend the rule to refer to the particular version of the "Attorney General’s Model Rules of Procedure" that is adopted. Because OAR 137-004-0010 (the only model rule referenced in OAR 438-005-0015) was last amended effective January 27, 1986 (JD Admin. Order 2-1986), the Board proposed designating the version of that rule being adopted as "effective January 27, 1986."

After considering the record developed on this matter, the Board finds it is reasonable, necessary, and proper to amend the rule in the manner proposed. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B and incorporated herein by this reference.

OAR 438-005-0016. Consistent with its reasoning expressed regarding OAR 438-005-0015, the Board proposed to repeal this particular rule (which concerns "Notice of Rulemaking") and to create a separate division dealing with rulemaking matters, including notice of rulemaking. See OAR 438 Division 022.

Having received no objection to the proposed rule, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that the proposed rule is reasonable, necessary, and proper. Accordingly, the Board adopts the proposed rule as a permanent rule, contained in Exhibit C and Q and incorporated herein by this reference.

OAR 438-005-0040. As part of its triennial rule review process, the Board received proposals regarding OAR 438-006-0081 (Postponement of Hearings) and OAR 438-006-0091 (Continuances), which requested a uniform definition of the term "due diligence," a term used in both of those rules. After referring the matter to the ALJ committee, they recommended that OAR 438-005-0040 (General Definitions) be amended to include an affirmative definition of "due diligence."

Thereafter, the Supreme Court addressed the definition of "due diligence" in the context of interpreting OAR 438-006-0091(3), the Board’s "continuance" rule. See SAIF v. Kurcin, 334 Or 399 (2002). In light of such circumstances, the Board applied the Court’s definition of "due diligence" in the proposed rules amendment. In doing so, the amendment is designed to provide clarification and consistency in the application of the term when issues arise regarding continuance and postponement motions under OAR 438-006-0081 and 438-006-0091.

In placing this definition in alphabetical order, this rule would be added at OAR 438-005-0040(8). This requires renumbering the existing definitions found at OAR 438-005-0040(8) to 438-005-0040(11) to OAR 438-005-0040(9) to 438-005-0040(12).

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule is reasonable, necessary, and proper. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit D and incorporated herein by this reference.

OAR 438-006-0031. The ALJ committee noted that, whereas OAR 438-006-0031 provides for continuance of a hearing if a new issue is raised during a hearing and if the adverse party shows surprise and prejudice, OAR 438-006-0091 (the "continuance" rule) provides for a continuance "[u]pon a showing of due diligence if necessary . . . for any party to respond to an issue raised for the first time at a hearing[.]" Thus, the committee reasoned that: (1) not all grounds for continuance are contained in the continuance rule; and (2) the stated grounds for continuing a hearing when a new issue is raised differ between OAR 438-006-0031 and 438-006-0091.

To unify and consolidate continuance matters, the committee recommended that the grounds for a "continuance" that are contained in the current version of OAR 438-006-0031 (which deals with the topic of "Specification of Issues") be transferred to the rule that specifically deals with the topic of "Continuances" (OAR 438-006-0091). Rather than broadening the grounds for a continuance beyond those currently contained in both OAR 438-006-0031 and OAR 438-006-0091, the amendment simply places all grounds for a continuance in the "continuance" rule (OAR 438-006-0091).

Consistent with the committee’s recommendation, the Board proposed amending the last sentence of OAR 438-006-0031 to provide that in situations where the evidence during the hearing supports an issue or issues not previously raised, the ALJ may allow the issue(s) to be raised during the hearing upon motion of an adverse party "pursuant to OAR 438-006-0091." Concurrently, the Board proposed amendment of OAR 438-006-0091 to include as a basis for continuance: "* * * upon motion of an adverse party, if that party is surprised and prejudiced by a new issue raised during a hearing." See OAR 438-006-0091(5), Exhibit I.

For the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule is reasonable, necessary, and proper. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit E and incorporated herein by this reference.

OAR 438-006-0036. The ALJ committee noted that whereas OAR 438-006-0036 provides for continuance of a hearing if a new issue is raised during a hearing and if the adverse party shows surprise and prejudice, OAR 438-006-0091 provides for a continuance "[u]pon a showing of due diligence if necessary . . . for any party to respond to an issue raised for the first time at a hearing[.]" For the reasons discussed regarding OAR 438-006-0031, the Board proposed amendments to OAR 438-006-0036.

For the reasons expressed in its Statement of Need, and those previously discussed, the Board finds that the proposed rule is reasonable, necessary, and proper. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit F and incorporated herein by this reference.

OAR 438-006-0075. The Presiding ALJ submitted a written proposal regarding this rule, which allows the claimant to file a motion, with a supporting affidavit, seeking an expedited remedy when a carrier has terminated temporary disability compensation under certain circumstances.

The Presiding ALJ noted that the current rule requirement that an order be issued immediately after the conclusion of the hearing does not allow the ALJ a reasonable amount of time for file review and deliberation, matters that are essential to quality decision making. Consequently, the Board proposed amending the rule to allow 10 days after the close of the hearing for an ALJ to issue an order.

A comment noted that, if the record is left open following the hearing, the ALJ’s order may still fall due before the record is complete. The comment suggested that the proposed rule be amended to require that the order be entered within "10 days after the close of the record," rather than "10 days after the close of the hearing."

After further considering this matter, the Board has decided to change the proposed amended rule by replacing the term "hearing" with "record."

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule, as amended, is reasonable, necessary, and proper. Accordingly, the Board adopts this amended proposed rule as a permanent rule, contained in Exhibit G and incorporated herein by this reference.

OAR 438-006-0081. After considering this "postponement" rule in light of comments received during the triennial rule review, the ALJ committee recommended, and the Board proposed amendment of OAR 438-006-0081 to deal consistently with expert witnesses, to consolidate provisions relating to "due diligence," to better organize the rule, and to give the examples of what does and does not constitute due diligence in terms of action or inaction of the party requesting postponement.

Specifically, the Board proposed amendments to section (2) to clarify that the section deals with unavailability of a party, lay witness, or representative. The Board further proposed to: (1) include references to both "medical" and "vocational" experts when referring to an expert witness in this rule; (2) move all references to medical or vocational expert witnesses to section (5); (3) move the reference to "due diligence" in section (4) to section (5); (4) add the following sentence to section (5): "A party need not subpoena a medical or vocational expert witness to establish due diligence under this section;" and (5) exclude as a basis for postponement the scheduling of a proceeding before a different agency more than three days after the mailing of notice of a Workers’ Compensation hearing.(3)

After consideration of comments to this rule, the Board finds that reorganization of the rule is reasonable. The current version of OAR 438-006-0081 begins with a general statement that: "A scheduled hearing shall not be postponed except by order of an Administrative Law Judge upon a finding of extraordinary circumstances beyond the control of the party or parties requesting postponement." It proceeds to list situations that do not constitute "extraordinary circumstances." Although included in this list, section (5) actually deals with different issues; i.e., an example of circumstances that can constitute "due diligence" in the context of a party’s inability to produce a medical or vocational expert witness at hearing or by deposition/interrogatories prior to hearing and a statement that a party need not subpoena a medical or vocational expert witness to establish due diligence under this section. Thus, because section (5) deals with different issues, the Board concludes that it should not be included in a list of situations that do not constitute "extraordinary circumstances."

The Board finds that renumbering OAR 438-006-0081 in the following manner will provide clarification. First, number the first two opening sentences as section (1). Second, renumber current sections (1) through (4), which list situations that do not constitute "extraordinary circumstances" as subsections (a) through (d). Finally, renumber section (5) as section (2).

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule, as amended, is reasonable, necessary, and proper. Accordingly, the Board adopts this amended proposed rule as a permanent rule, contained in Exhibit H and incorporated herein by this reference.

OAR 438-006-0091. The reasons for the proposed amendments to this rule are previously discussed in the sections regarding OAR 438-005-0040, 438-006-0031, 438-006-0036, and 438-006-0081. The ALJ committee recommended, and the Board proposed, amending OAR 438-006-0091 to clarify that the listing of grounds for a continuance in the rule was not all-inclusive; i.e., there may be other grounds for a continuance that were not otherwise described in the rule.

As discussed above regarding amendments to OAR 438-006-0081, section (5) of that rule is renumbered as section (2). Therefore, the Board amends the current references to section (5) in OAR 438-006-0091(2) and (3) to read "OAR 438-006-0081(2)."(4)

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule, as amended, is reasonable, necessary, and proper. Accordingly, the Board adopts this amended proposed rule as a permanent rule, contained in Exhibit I and incorporated herein by this reference.

OAR 438-006-0095. The procedural history for the "ALJ Code of Conduct" has been discussed in the "Procedural Background" section of this order. As part of the Board’s triennial rule review process, a proposal was made to add to OAR 438-006-0095 the recusal and disqualification procedures set out in the "ALJ Code of Conduct," which was referred to the ALJ committee.

In its report, the committee observed that although the provisions of the "ALJ Code of Conduct" are very similar in nature to the provisions of OAR 438-006-0095, there are significant differences. As an example, the committee noted that the "ALJ Code of Conduct" describes situations in which disqualification on the ALJ’s motion is mandatory, whereas OAR 438-006-0095 describes a discretionary process, and a process by which a party may challenge an ALJ’s exercise of such discretion. In addition, as previously discussed regarding OAR 438-005-0015, the committee commented on the relationship between the "ALJ Code of Conduct" and ex parte communications.

In the interests of clarification and consistency, the committee recommended, and the Board proposed, to amend the rule in a manner consistent with the "ALJ Code of Conduct," subject to the following modifications to sections (3) and (4): (1) the Presiding ALJ should have the discretion to conduct or not conduct a hearing on a request to disqualify an ALJ; and (2) a ruling should be in writing, regardless of whether the ALJ is, or is not, disqualified. The Board further proposed that portions of subsection 2-105(C) of the "ALJ Code of Conduct" be adopted into OAR 438-006-0095 with the modification that an ALJ shall disqualify himself or herself if, after disclosure of a basis for potential disqualification, any party wishes the ALJ to be disqualified from the proceeding.

As proposed, the rule provides as follows. Section (1) contains a listing of bases under which an ALJ must disqualify himself or herself, except as provided in section (3). Section (2) contains definitions of terms used in the rule. Section (3) gives the parties the option of retaining an ALJ who would otherwise be disqualified under the rule. Section (4) provides the procedures for a party to request disqualification of an ALJ, first by requesting that the ALJ disqualify himself or herself from a proceeding on any basis set forth in section (1), then, if the ALJ does not disqualify himself or herself, by filing a request for disqualification of the ALJ with the Presiding ALJ, including an affidavit setting out the basis for the requested disqualification. Section (5) contains the procedures by which the Presiding ALJ determines whether the ALJ should be disqualified following a request for disqualification pursuant to section (4), including the possibility of a hearing on the issue and the requirement that the Presiding ALJ issue a written decision concerning the disqualification request.

For the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule is reasonable, necessary, and proper.(5) Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit J and incorporated herein by this reference.

OAR 438-006-0099. As discussed above regarding the amendments to OAR 438-005-0015, the ALJ committee recommended, and the Board proposed, the adoption of a rule implementing the ex parte communications prohibitions and procedures found in the "Code of Conduct for Workers’ Compensation Board Administrative Law Judges" (effective April 6, 1998) ("ALJ Code of Conduct"). Such an action is necessary because the "ALJ Code of Conduct" imposes a broader prohibition on ex parte conduct than does either OAR 137-003-0055 or 137-003-0625, which are Department of Justice Model Rules of Procedure dealing with ex parte communications. In the interests of clarity and consistency, the Board proposed the adoption of this administrative rule.

The committee further recommended, and the Board proposed, using the term "merits of a proceeding" because that is the term used in DR7-110(B) and interpreted by the Oregon Supreme Court. Such language applies the "ALJ Code of Conduct," subsections 2-102(B) through (E). Section (1) of the proposed rule defines "ex parte communication" as

"an oral, written or electronic communication between an assigned Administrative Law Judge and a party, a party’s representative or someone with a substantial interest in the outcome of the proceeding about the merits of a proceeding to which the Administrative Law Judge is assigned and which is not made to all parties to the proceeding."

Section (2) of the proposed rule provides that "[e]x parte communications are prohibited." Section (3) of the proposed rule provides:

"Notwithstanding section (2) of this rule, an assigned Administrative Law Judge may communicate ex parte, when necessary for administrative or scheduling purposes, so long as the communication does not involve the merits of a proceeding and the Administrative Law Judge believes that no party’s legal rights or duties will be affected."

Section (4) of the proposed rule provides that an ALJ shall promptly disclose to all parties the substance of any communication prohibited by this rule and allows the parties a reasonable opportunity to respond to a prohibited communication. Section (5) of the proposed rule provides that this rule does not apply to communications made to, or by, an ALJ acting as a mediator.

A public comment suggested that use of the term "ex parte" in section (3) was confusing because section (3) describes communication for administrative or scheduling purposes and, as such, does not include ex parte communication.

After considering this comment, the Board agrees that, to avoid potential confusion, the term "ex parte" should be deleted from section (3) and replaced with the phrase "with a party." In doing so, the Board emphasizes that the purpose of section (3) is to make it clear that an assigned ALJ may communicate with a party for administrative or scheduling purposes, so long as that communication does not involve the "merits of a proceeding;" e.g., scheduling closing argument, requesting an extension for written closing argument, arranging arguments for procedural motions. Such communication, by definition, does not constitute ex parte communication. In addition, although section (3) permits an ALJ to communicate with a party regarding administrative or scheduling matters, it does not require such communication; i.e., administrative and scheduling matters may also be handled by and through the ALJ’s staff.

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule, as amended, is reasonable, necessary, and proper. Accordingly, the Board adopts this amended proposed rule as a permanent rule, contained in Exhibit K and incorporated herein by this reference.

OAR 438-007-0015. As part of its triennial rule review process, the Board received several proposals regarding this "discovery" rule, which were subsequently referred to the ALJ committee. Some "triennial review" proposals suggested amending OAR 438-007-0015 (either section (5) or (7)) to provide that if a portion of a document is excluded from discovery, the entire document would be excluded from discovery.

After considering the matter, the ALJ committee recommended that the rule remain in its current status that leaves such "discovery" disputes to the ALJ to be resolved on a case-by-case basis, subject to review by the Board and courts. The committee reasoned that, while such an approach might give somewhat inconsistent results, it was more preferable than a strict rule which would be extremely difficult to draft, equally difficult to apply, and which might encourage parties to manipulate information so as to include or exclude material from discovery.

In response to another "triennial review" proposal, the committee recommended that section (8) be amended to advise claimants that non-cooperation with respect to discovery rules may result in dismissal of the request for hearing. Consistent with OAR 438-006-0071(1), the committee reasoned that failure to comply with the Board’s discovery rule, particularly following an order of an ALJ, could be unjustified and could delay a hearing by more than 60 days.(6) For the same reasons that the present warnings in OAR 438-007-0015(8) are given, the committee recommended, and the Board proposed, amendment to OAR 438-007-0015(8).

After considering the recommendations from the committee, the Board proposed the following amended version of OAR 438-007-0015(8):

"(8) It is the express policy of the Board to promote the full and complete discovery of all relevant facts and expert opinion bearing on a claim being litigated before the Hearings Division, consistent with the right of each party to due process of law. Failure to comply with this rule, if found to be unreasonable or unjustified, may result in the imposition of penalties and attorney fees, exclusion of evidence, continuance of a hearing (subject to OAR 438-006-0091), and/or dismissal of a request for hearing."

The committee also noted that OAR 438-007-0015(7) could be misinterpreted to remove an ALJ’s discretion to perform an in camera review of documents because there is no provision in section (7) similar to that in OAR 438-007-0015(6), which provides that the assigned ALJ will resolve any disputes regarding the discoverability of documents requested after the initial exchange required by sections (2) through (4). To resolve any potential confusion, the committee recommended, and the Board proposed to: (1) add section (10) to OAR 438-007-0015 that is similar to OAR 438-007-0015(6), but which is applicable to the entire discovery rule; and (2) delete the last sentence in OAR 438-007-0015(6) as redundant to section (10).(7)

A comment to the proposed rule suggested adding a sentence providing that "[d]ocuments and any information protected from discovery under these rules or otherwise pursuant to law shall not, in whole or in part, be subject to discovery." As noted above, a similar "triennial rule review" proposal was referred to the ALJ committee, who did not recommend a rule amendment consistent with the proposal. Instead, the committee recommended, and the Board proposed, the current rule amendment. Under such circumstances, the Board declines to revisit this proposal at this time, particularly when proposed language on the specific subject has not been distributed for public comment.

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule, as amended, is reasonable, necessary, and proper. Accordingly, the Board adopts this amended proposed rule as a permanent rule, contained in Exhibit L and incorporated herein by this reference.

OAR 438-007-0018. For the reasons expressed in its November 13, 2002 Statement of Need, the Board proposed amending OAR 438-007-0018 to delete sections (5) through (7). The Board found no reason to treat the disclosure, exchange and admission of evidence in hearings involving issues arising from a notice of closure differently than evidence in any other hearing.

Having received no objection to these proposed changes, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that the proposed changes to OAR 438-007-0018 are reasonable, necessary, and proper. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit M and incorporated herein by this reference.

OAR 438-007-0020. The Board referred two "triennial rule review" proposals regarding the timing and manner of service of subpoenas to the ALJ committee. Relying on ORS 183.315, ORS 183.445, ORS 656.283(8), ORS 656.724(4), and ORS 656.726(2)(c), the committee concluded that ALJs have the authority to issue subpoenas and to have subpoenas served by a Board representative or a sheriff.

Although the above referenced statutes establish who may issue and serve subpoenas, the committee observed that they do not describe the method or timing of service. The committee noted that an Attorney General Model Rule regarding subpoenas (OAR 137-003-0585) contains provisions not applicable to Board hearings and does not specify the means or timing for the service of subpoenas. The committee also noted that ORCP 55 (Subpoena) contains "service" procedures for subpoenas, but also provides for the mailing of subpoenas more than 10 days prior to trial, a deadline that the committee found inappropriate for workers’ compensation hearings, which require only 10 days notice of hearing under ORS 656.283(5).(8)

In light of these considerations, the committee recommended, and the Board proposed, the amendment of the existing rule to incorporate the principles from these assorted statutory provisions into a single "subpoena" rule resembling OAR 438-085-0745 (the Board’s subpoena rule regarding safety cases). The proposed amended rule: (1) addresses the manner and time for service of subpoenas; (2) does not permit service by regular mail because such service cannot be verified; and (3) requires that service, regardless of the method, be made so as to allow the witness a reasonable time to comply with the subpoena.

One of the comments suggested that any changes, such as in section (3), be redrafted to track the civil rules for service, such as those provided in ORCP 9 (Service and Filing of Pleadings and Other Papers). This commenter also found it unclear from the language of the proposed rule whether regular mail service would no longer be sufficient.

As previously explained, service of a subpoena by regular mail is insufficient to satisfy the rule because such service cannot be verified and the enforcement of a subpoena cannot be undertaken unless it can be established that the subpoena was served. Likewise, because ORCP 9 A permits service by several means that do not provide for verification of service (such as service by regular mail), it conflicts with the Board’s intent in proposing the amendments to the "subpoena" rule.

Finally, the committee recommended, and the Board proposed adding section (5) to state that "[w]itness fees and mileage shall be provided at the time the subpoena is served, in the amount provided for in civil actions." A comment was received suggesting that the Board include a reference to a specific ORCP or statute in requiring payment of witness fees and mileage in the amount provided for in civil actions. The Board finds that the "civil action" reference (which has been in the rule since its inception) sufficiently notifies the parties of the payment requirements.

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed amended rule is reasonable, necessary, and proper.(9) Accordingly, the Board adopts this amended proposed rule as a permanent rule, contained in Exhibit N and incorporated herein by this reference.

OAR 438-007-0024. The Board referred a "triennial rule review" proposal regarding an "offer of proof" rule to the ALJ committee. Referring to OAR 438-085-0850 (which permits an ALJ to control the form of the offer of proof in safety cases), the committee stressed the necessity of allowing the ALJ to control the form of the offer of proof.(10) In order to establish a uniform procedure, and to expressly allow the ALJ to control the form of the offer of proof, the committee recommended, and the Board proposed, adoption of an "offer of proof" rule.

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule, as amended, is reasonable, necessary, and proper.(11) Accordingly, the Board adopts this amended proposed rule as a permanent rule, contained in Exhibit O and incorporated herein by this reference.

OAR 438-007-0027. As explained in its Statement of Need, the Board proposes the adoption of this rule to give ALJs the discretion (without notifying or requesting permission from the Own Motion Board) to proceed with a hearing for the purpose of providing an unappealable Own Motion recommendation to the Board regarding matters that arise subsequent to a hearing request that concern issues that are within the Board’s Own Motion jurisdiction under ORS 656.267(3) and/or ORS 656.278. This proposed rule is primarily designed to address the circumstances arising from the amendments to ORS 656.267(3) and ORS 656.278(1)(b), which are discussed in Pamela A. Martin, D’cd, 54 Van Natta 1852 (2002), and Andrew B. Speck, 55 Van Natta 103 (2003).

The adoption of this rule can avoid, or reduce, processing delays in that an ALJ is allowed the discretion (without first seeking a referral from the Own Motion Board) to hold a hearing (or other proceeding that the ALJ deems achieves substantial justice) for the purpose of issuing an unappealable recommendation that is automatically reviewed by the Board regarding the issue in Own Motion jurisdiction. Such a rule permits an ALJ to convene a fact-finding hearing (or other proceeding that the ALJ deems achieves substantial justice) and issue an unappealable recommendation regarding the Own Motion issues to the Board who can expeditiously review and resolve the parties’ dispute, which can save the resources of the parties, as well as the agency.

A comment suggested removing the word "unappealable" from sections (1) and (2)(b), contending that the intention of the rule is unchanged without the use of the word "unappealable" and any potential ambiguity is avoided by removing the word. The Board has decided not to alter the proposed language. An "unappealable recommendation" refers to an Own Motion matter that is referred by the Board to the Hearings Division for a fact-finding hearing. Such a referral does not generate an appealable ALJ "order" regarding the referred Own Motion matters. Instead, unlike an appealable ALJ’s order (from which a party must timely and specifically request Board review), the "unappealable recommendation" is automatically reviewed by the Own Motion Board as part of its decision-making process. Under such circumstances and to further clarify the intention behind this rule, the Board finds it appropriate to use the term "unappealable recommendation."

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule, as amended, is reasonable, necessary, and proper.(12) Accordingly, the Board adopts this amended proposed rule as a permanent rule, contained in Exhibit P and incorporated herein by this reference.

OAR 438-022-0005; 438-022-0010. The reason for these proposed rules has been previously discussed in the sections regarding OAR 438-005-0015 (Adoption of Attorney General’s Model Rules) and OAR 438-005-0016 (Notice of Rulemaking). The Board proposed to amend the rule in the manner recommended by the ALJ committee by creating a separate division dealing with rulemaking matters, including notice of rulemaking. Therefore, the Board proposed creating Division 022 to handle rulemaking procedures, with OAR 438-022-0005 adopting the model rules for rulemaking and OAR 438-022-0010 incorporating the notice of rulemaking provisions previously included under OAR 438-005-0016. Furthermore, because the model rules were last amended effective January 1, 2000 (DOJ Admin. Order 10-1999), the Board proposed adopting the model rules "effective January 1, 2000."

Having received no objection to these proposed changes, the Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that the proposed addition of Division 022 is reasonable, necessary, and proper. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit Q and incorporated herein by this reference.

          4. Under the authority granted by ORS 656.726(5), the Board finds that:

              a. All applicable rulemaking procedures have been followed; and

              b. The rules being adopted are reasonable, necessary and proper.

          PURSUANT TO THE AMERICANS WITH DISABILITIES ACT GUIDELINES, ALTERNATIVE FORMAT COPIES OF THE RULES WILL BE MADE AVAILABLE TO QUALIFIED INDIVIDUALS UPON REQUEST TO THE BOARD.

          Consequently, in accordance with its Notice of Proposed Rulemaking, the Board adopts the attached rules, as set forth in Exhibits "A," "B," "C," "D," "E," "F," "G," "H," "I," "J," "K," "L," "M," "N," "O," "P," and "Q" incorporated herein by this reference, as permanent rules of the Workers’ Compensation Board, to become effective May 1, 2003 and to apply to the following cases in the following manner:

          (1) Amendments to OAR 438-005-0016 and Division 022 apply to all rulemaking on or after May 1, 2003;

          (2) Amendments to OAR 438-005-0015, 438-005-0040, 438-006-0081, 438-006-0091, 438-006-0095, 438-006-0099, 438-007-0018, 438-007-0024, and 438-007-0027 shall apply to all cases pending before the Hearings Division on or after May 1, 2003;

          (3) Amendments to OAR 438-006-0031, 438-006-0036, 438-007-0015, and 438-007-0020 shall apply to cases where the request for hearing is filed on or after May 1, 2003;(13) and

          (4) Amendments to OAR 438-006-0075 shall apply to cases where the motion and affidavit asserting failure to receive temporary disability compensation under that rule is received on or after May 1, 2003.

          The Board further orders that notice of this Order of Adoption, along with a certified copy of the amended rules, be filed with the Secretary of State and that a copy of the aforementioned notice and amended rules be filed with the Legislative Counsel within 10 days after filing with the Secretary of State as required by ORS 183.715.


          1. In addition, a written proposal was received for new rules under Division 012 that would adopt procedures for new and omitted medical condition claims that are in Own Motion status. At the public hearing, an individual speaking on behalf of the insurer that presented this written proposal agreed that, because no Division 012 rules were proposed as part of the Board's November 13, 2002 Statement of Need, it would be appropriate to allow the proposal for Division 012 rules to be part of future proposed rules, which would allow for a public comment period regarding such rules. Because such proposed rules were not included in the Board's November 13, 2002 Statement of Need, the Board does not consider these proposed rules at this time.

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          2. These proposals included requests for adoption of rules related to ex parte contacts/ communication, offers of proof, and subpoenas. The proposals also included suggestions related to: postponements (OAR 438-006-0081) and continuances (OAR 438-006-0091), including "due diligence" definition/requirements regarding postponements and continuances; Attorney General's Model Rules (OAR 438-005-0015); response to hearing request (OAR 438-006-0036); incorporation of Rule 2-105 (pertaining to the recusal and disqualification of an Administrative Law Judge (ALJ)) from the "ALJ Code of Conduct" into OAR 438-006-0095; disclosure/discovery requirements (OAR 438-007-0015); exchange of exhibits (OAR 438-007-0018); and adoption of a standardized practice for service of subpoenas as part of OAR 438-007-0019.

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          3. To provide an example of "due diligence," the Board included the example in section (5) to describe the actions (diligence) of the party requesting the postponement and include unavailability of a medical or vocational expert for "direct examination at hearing" or for "cross-examination at hearing" or "by deposition/interrogatories prior to a scheduled hearing." In doing so, the Board emphasizes that "due diligence" is "not limited to" the one example provided. In other words, the rule is not intended to require that a party prove that it is unable to produce the expert at hearing in order to qualify for a postponement of the hearing nor is it intended to require the appearance of a medical or vocational expert instead of a written report from that expert.

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          4. In addition, as discussed above regarding amendments to OAR 438-006-0081(2), the example of "due diligence" presented in OAR 438-006-0081(2) is just that, an example. As discussed above, "due diligence" under OAR 438-006-0081(2) is not limited to the example presented in that section. The same reasoning applies to the references in OAR 438-006-0091(2) and (3) to "a showing of due diligence, as described in OAR 438-006-0081(2)."

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          5. Some public comments have questioned the need for rulemaking procedures regarding the proposed amendments. For the reasons described above and those expressed in the ALJ committee report, the differences between the current version of OAR 438-006-0095 and subsection 2-105 of the "ALJ Code of Conduct" must be resolved. Furthermore, because resolution of such matters pertain to an administrative rule, the rulemaking process (including Board meetings, the receipt of written comments to the triennial rule review, the consideration of the ALJ committee report, the issuance of proposed amendments, a public hearing, and a public meeting to consider the comments) is the proper mechanism for the consideration of public comments.

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          6. The sanction of dismissal of a hearing request is already available under a standard of "unjustified delay" under OAR 438-006-0071(1), which provides that an ALJ may dismiss a hearing request if the party requesting a hearing has "engaged in conduct that has resulted in an unjustified delay in the hearing of more than 60 days." Inclusion of this possible sanction in the rule for discovery is designed to clearly set out the potential consequences of violating the Board's discovery rules.

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          7. The Board's intent in amending this rule is to have the assigned ALJ resolve any discovery issues that may arise in a case. However, situations may occur where a discovery issue arises when the assigned ALJ is not available to resolve the discovery issue; e.g., no ALJ has yet been assigned to the case or the assigned ALJ is ill or has been disqualified from hearing the case. Under such circumstances, section (10) provides that the designee of the Presiding ALJ will resolve the discovery issue.

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          8. In response to a "triennial rule review" proposal, the committee recommended against permitting service by regular mail because such service could not be verified. The committee explained that the enforcement of a subpoena could not be undertaken unless it could be established that the subpoena was served. Noting that there are not a great number of subpoenas issued in workers' compensation cases, the committee reasoned that it would not create an undue hardship to require service in person or by certified or other mail providing proof of receipt, by which means service could be verified.

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          9. Some public comments have questioned the need for rulemaking procedures regarding the proposed amended changes to OAR 438-007-0020. For the reasons described above and those expressed in the ALJ committee report, a comprehensive "subpoena" rule that provides the manner and time for service of subpoenas is necessary. Furthermore, because resolution of such matters pertain to an administrative rule, the rulemaking process (including Board meetings, the receipt of written comments to the triennial rule review, the consideration of the ALJ committee report, the issuance of proposed amendments, a public hearing, and a public meeting to consider the comments) is the proper mechanism for the consideration of public comments and reaching a decision.

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          10. In this regard, the committee gave an example that an ALJ may believe that the offered testimony, which would be very lengthy, is clearly irrelevant. Under such circumstances, the committee suggested that the ALJ might permit the proponent to summarize the testimony, so as to avoid unduly delaying the hearing by putting the entire testimony on the record. Such reasoning represents the Board's intention in adopting this rule.

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          11. The Board notes that the offer of proof is not mandatory, it is discretionary. If an ALJ excludes evidence, the party adversely affected by an ALJ's ruling may make an offer of proof. In addition, this offer of proof will be in a manner determined by the ALJ. If the issue is appealed once the ALJ issues a substantive decision on the merits of the claim, the Board and courts will rule on the matter. Furthermore, offers of proof can provide more efficiency both for the parties and the administrative forum in that remands can be avoided in the event that the ALJ's evidentiary ruling is overturned.

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          12. Because the rule expressly authorizes the ALJ to issue an unappealable "recommendation," and because that recommendation will be automatically reviewed by the Board, ultimate authority under this rule over the Own Motion matter remains with the Own Motion Board. See ORS 656.267(3); ORS 656.278(1)(b).

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          13. The following examples will illustrate the Board's intention in establishing the "applicability" date for these amended rules. Assume that a dispute arises regarding a matter covered by one of these amended rules in a case that involves only one hearing request. If that hearing request was filed before May 1, 2003, the former versions of the rule would be applicable. On the other hand, if the hearing request was filed on or after May 1, 2003, the amended version of the rule would apply.

          In example two, assume that a dispute arises regarding a matter covered by one of these amended rules in a case or cases that involve more than one hearing request. If any one of the hearing requests in that case or consolidated cases were filed before May 1, 2003, the former version of the rule would apply to the entire case or consolidated cases. If all of the hearing requests in the case or consolidated cases were filed on or after May 1, 2003, the amended versions of those rules would be applicable.

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