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, 009, 010, 011,
012, 013, 015, 019, 021.
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WCB ADMIN. ORDER 3-2001




ORDER OF ADOPTION

          1. On August 24, 2001, after reviewing written comments received in response to its notice of triennial rule review, 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 hearing, review, and Own Motion proceedings, as well as adopt procedural rules concerning the scheduling and convening of Board meetings. Copies of the notice were distributed to the Oregonian, the Associated Press, and to the Capitol Press Room on September 4, 2001. The notice was published in the Secretary of State’s October 2001 Administrative Rule Bulletin.

          On September 4, 2001, 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 July/August 2001 issue of the Board’s News & Case Notes, which was posted on the Board’s web-site on September 7, 2001. This notice was also published in the August 2001 and September 2001 issues of the Workers’ Compensation Section Newsletter, which were distributed to all Section members of the Oregon State Bar in early September and October 2001. On September 6, 2001, 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 November 2, 2001 at Salem, Oregon. The record of the public hearing was closed at 5:00 p.m. on November 2, 2001.

          2. Three individuals offered testimony at the scheduled hearing. Before the hearing, 17 written comments were received from practitioners, Administrative Law Judges, and Board personnel. 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. Order of Adoption for Rules (Exhibits A through R). The Board has thoroughly reviewed and considered all comments pertaining to its proposed permanent rules. A written summary of the comments is also included in the record.

          As explained in the Board’s August 22, 2001 Statement of Need, these rules are proposed after reviewing written comments received in response to the Board’s notice of triennial rule review. The proposed amendments and rules (which are contained in Exhibits A through R, attached and incorporated by this reference), are designed to implement necessary changes discovered during the triennial rule review process. After completing its review and consideration of the comments presented in response to the proposed rules, the Board has reached the following conclusions.

OAR 438-005-0040. The current version of section (8) of the rule provides a definition for the Evaluation Unit of the Workers’ Compensation Division. Because that Unit was eliminated effective June 30, 2001, the current version of section (8) is deleted. As a result of this deletion, the definition of "Hearings Division" is now renumbered as section (8). 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.

The current version of section (10) is amended to include an "assigned claims agent" for a noncomplying employer under ORS 656.054 within the definition of "insurer" for purposes of the Board’s administrative rules. In addition, as a result of the removal of the definition of "Evaluations," the definition of "insurer" will now appear in section (9) of the rule. 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.

The following amendments to the current version of section (11) of the rule were initially proposed. First, in order to conform to the language of ORS 656.054, the rule is amended to include within the definition of "party" an "assigned claims agent" in cases under ORS 656.054. Second, the rule is amended to include within the definition of "party" "an employer’s or insurer’s claim processing agent." Third, as a result of the removal of the definition of "Evaluations," the definition of "party" will now appear in section (10) of the rule.

Comments were received regarding the second proposed amendment summarized above. These comments contended that the proposed language to include an insurer’s or employer’s processing agent in the definition of a "party" is inconsistent with the definition of "party" in ORS 656.005(21).

After considering these comments, the Board finds that it is reasonable, necessary, and proper to amend the proposed rule in the manner suggested by the aforementioned comments. As explained in the Statement of Need, the Board’s purpose in changing the rule was to ensure that an employer’s or insurer’s claim processing agent will be treated as a "party" for purposes of the Board’s administrative rules. Nonetheless, ORS 656.005(21) states that "’[p]arty’ means a claimant for compensation, the employer of the injured worker at the time of injury and the insurer, if any, of such employer." Thus, the definition in the rule appears to expand that of the statute, which is not permissible. Cook v. Workers’ Compensation Dept., 306 Or 134 (1988) (administrative agency may not, by its rules, amend, alter, enlarge or limit the terms of a statute). Consequently, the phrase "and an employer’s or insurer’s claim processing agent" has been deleted from OAR 438-005-0040(10). Accordingly, for the reasons expressed in its Statement of Need, as well as those expressed above, the Board adopts the proposed rule, as modified above, as a permanent rule, contained in Exhibit A and incorporated herein by this reference.

As a result of the removal of the definition of "Evaluations," the definition of "self-insured employer" will now appear in section (11) of the rule. The language in that section remains the same. 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 438-005-0055. In Senate Bill 485 (SB 485), the legislature adopted a statutory amendment to ORS 656.325(1)(b), which permits a worker to request an examination to be conducted by a physician selected by the Director from the list described in ORS 656.268(7)(d) if the worker: (1) has made a timely request for hearing on a compensability denial as required by ORS 656.319(1)(a); (2) the denial is based on one or more reports of a "carrier-requested" examination conducted pursuant to ORS 656.325(1)(a); and (3) the worker’s attending physician does not concur with the report or reports of the examining physician(s). In addition, in light of ORS 656.262(15) (requests for hearings from "non-cooperation" denials) and SAIF v. Dubose, 166 Or App 642 (2000), rev allowed 331 Or 692 (2001), the Board proposed amendments to OAR 438-005-0055 (Notice of Claim Denial and Hearings Rights) to provide for another version of the "hearing notice" rule for "non-cooperation" denials under ORS 656.262(15).

Consistent with the amended statutory provisions, the Board has proposed amendments to OAR 438-005-0055. This rule is contained in Exhibit B, attached and incorporated by this reference. After completing its review and consideration of the comments presented in response to the proposed amended rules, the Board has reached the following conclusions.

OAR 438-005-0055(1): The amendments to OAR 438-005-0055(1) are designed to implement the statutory amendments enacted by SB 485 regarding a worker’s right to request an examination to be conducted by a physician selected by the Director under amended ORS 656.325(1)(b). (1) The amendments notify the worker of his/her statutory right to make such a request of the Director (as well as the statutory provision that the costs of the examination and report will be borne by the carrier). This rule applies to all claim denials, except those under ORS 656.262(15).

A comment was received notifying the Board that the telephone number listed for the Benefits Section in the notice of denial is incorrect. The correct telephone number is (503) 947-7585.

In addition, a comment objected to the requirement that all claim denials, except those under ORS 656.262(15), contain this new, second paragraph regarding notification to the worker of his/her statutory right to make a request of the Director for appointment of a physician when certain circumstances are met. This comment contends that this new paragraph is "not needed in most cases because most denials do not involve insurer medical examinations." This comment also contended that the required statutory citations "will be meaningless and confusing to most workers." This comment suggested that the proposed rule be amended to eliminate the statutory references and to require the new paragraph only when it is relevant to the denial.

After considering these comments, the Board has decided to leave unchanged the proposed language in OAR 438-005-0055(1), with the exception of correcting the telephone number for the Benefits Section. Inclusion of such a notice provides full information to the parties. Inclusion of this new, second paragraph in all denials will avoid any oversight that might result in issuing the "wrong" type of denial. In addition, the first paragraph of the appeal rights refers to the claimant’s right to an attorney at no cost, and the second paragraph gives telephone numbers for the Benefits Section. Therefore, informational resources are provided that can assist a claimant if he/she is confused by the statutory citations.

Consequently, for the reasons expressed in its Statement of Need, and those discussed herein, the Board finds that the proposed rule (as amended to include the correct telephone number for the Benefits Section) is reasonable, necessary, and proper. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B and incorporated herein by this reference.

OAR 438-005-0055(2): This rule is added to apply to "non-cooperation" denials under ORS 656.262(15). As noted in the comment to OAR 438-005-0055(1), the rule listed an incorrect telephone number for the Benefits Section in the denial notice. That same telephone number was used in OAR 438-005-0055(2). Therefore, the Board has amended OAR 438-005-0055(2) to include the correct telephone number for the Benefits Section. 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 (as amended to include the include the correct telephone number for the Benefits Section) is reasonable, necessary, and proper. Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B and incorporated herein by this reference.

OAR 438-006-0062(1). This rule is amended to reflect the renumbering of ORS 656.726(5) from former ORS 656.726(4). 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 C and incorporated herein by this reference.

OAR 438-007-0005(3). A comment was submitted regarding this subsection of the rule. Because the Board did not propose an amendment of this subsection, the Board declines to take any rulemaking action at this time.

OAR 438-007-0005(5). The Board initially proposed to repeal this rule (which provided that an Administrative Law Judge (ALJ) may appoint a medical or vocational expert to examine a claimant and file a report) in order to comply with ORS 656.283(7) (which prescribes evidentiary limitations regarding the development of a hearing record concerning an Order on Reconsideration) and Board case law holding that it is an abuse of discretion for an ALJ to appoint a medical expert to cure a basic failure of proof.

Comments were received opposing the repeal of this subsection. These comments raised the following concerns: (1) potential conflicts with the Court’s holding in Koskela v. Willamette Industries, Inc., 331 Or 362 (2000); (2) possible conflicts with an ALJ’s statutory authority; (3) possibly contrary to "substantial justice" requirement; and (4) any potential abuse of discretion rulings by ALJs under the current version of the rule may be addressed on Board review.

As addressed in the Statement of Need, this rule was adopted before the adoption of ORS 656.283(7), which prescribes evidentiary limitations regarding the development of a hearing record concerning an Order on Reconsideration. In addition, the Board has previously ruled that it is an abuse of discretion for an ALJ to appoint a medical expert to cure a basic failure of proof. See Richard A. Stalling, 44 Van Natta 1706 (1992); John M. Ames, 44 Van Natta 684, on recon 44 Van Natta 916 (1992). Given these parameters, and in light of the comments received objecting to the deletion of OAR 438-007-0005(5), the Board finds that it is appropriate to retain the rule. In making this decision, the Board notes that it retains review authority if an issue should arise regarding whether an ALJ abused his/her discretion in appointing a medical or vocational expert. Accordingly, the Board finds that repeal of OAR 438-007-0005(5) is not appropriate. Consequently, the Board retains OAR 438-007-0005(5) as a permanent rule, contained in Exhibit D and incorporated herein by this reference.

OAR 438-007-0018(3). The proposed amendment of this rule provides that cumulative or irrelevant documents shall be deleted "at the hearing," as well as before the hearing.

Comments were received opposing this amendment. A comment expressed concern that this amendment would encourage parties to wait until the hearing to delete cumulative or irrelevant documents from the record, whereas such activity is best performed before the hearing. Another comment contended that such activity should occur before hearing, not at hearing while witnesses might be waiting.

After considering these comments, the Board has decided to leave unchanged the proposed language. The Board has the authority to make rules regarding practice and procedure in connection with hearing and review proceedings. ORS 656.726(5). Such rules include the exchange and admission of exhibits at hearing and necessarily include granting authority to ALJs to apply such rules. The submitted comments show concern that by providing for the deletion of cumulative or irrelevant documents from the record at hearing, the Board is encouraging the parties to wait until hearing to perform these activities. That is not the intent of this amendment. To the contrary, the Board’s intent is for the parties to delete cumulative or irrelevant documents from the record before hearing. In addition, ALJs have the authority to direct the parties to perform these activities before the hearing. Nevertheless, if subsequent events occur or for some other reason cumulative or irrelevant documents are not deleted from the record before hearing, administrative/judicial economy is promoted by providing for the deletion of such documents at hearing, rather than leaving the record cluttered with cumulative or irrelevant documents for subsequent levels of review. The amendment of the rule merely clarifies these expressed intentions.

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 E and incorporated herein by this reference.

OAR 438-007-0040. In order to accommodate technological changes regarding the storage of documents in an electronic manner; e.g., imaging, the Board proposes to adopt this rule, which prescribes the procedures regarding the certification and admission of electronic documents by a party. Section (1) of this rule provides that, "[i]f any party" in the regular course of business has kept records that it has had electronically reproduced in the regular course of business, the original may be destroyed in the regular course of business. In addition, the second sentence of this section provides that "[s]uch reproduction, when satisfactorily identified, is as admissible in evidence as the original itself whether the original is in existence or not." OAR 438-007-0040(1). Section (2) of this rule provides that, "[i]f a party introduces into evidence a reproduction described in subsection (1), the exhibit list described in OAR 438-007-0018 will include the following certification: ‘The attached exhibits contain reproductions as described in OAR 438-007-0040. I hereby certify that the reproductions were created in the regular course of a party’s business or activity.’"

A comment was received contending that no rule is necessary regarding "electronic documents" because the Board already has rules that provide for discovery of all types of documents. The comment also stated that the rule is "unworkable, not subject to verification and creates loopholes so large as to be meaningless."

Another comment objected to the second sentence of section (1), contending that this sentence was capable of two interpretations: (1) as requiring that proper foundation for the reproduction be established before it could be admitted as the original; or (2) as allowing a document that did not exist at the time of the event at issue to be admitted as the original. The testimony suggested that the rule be redrafted to avoid this second interpretation.

The Workers’ Compensation Division (WCD) submitted a comment suggesting that subsection (2) be amended to "require only a stamp or statement that provides substantively that the person/organization providing the reproduction certifies that the document(s) are true and correct copies of the original, reproduced in the regular course of business." WCD also suggested that subsection (2) "require the signature (or certification) of someone representing the person/organization offering the reproductions into evidence." WCD contended that these proposed changes would aid it "in providing reproductions to the Hearings Division when requested to do so."

After considering these comments, the Board has decided to change the proposed language in OAR 438-007-0040(1) and to leave unchanged the proposed language in OAR 438-007-0040(2). First, the Board disagrees with the general comment that there is no need for a rule dealing with electronic documents. As addressed in the Statement of Need, a number of organizations are storing documents in an electronic manner and the Board considers it necessary to provide procedures regarding certification and admission of such documents. The rule provides for satisfactory identification of such "reproductions," which satisfies the need for verification. Finally, if future problems arise, the Board can consider rule amendments at a later date.

Regarding the comment about OAR 438-007-0040(1), the first sentence of the rule provides for the following sequence of events in order that the original may be destroyed in the regular course of business: (1) an act or transaction; (2) a recording of the act or transaction kept in the regular course of the party’s business; and (3) the recording in item (2) is reproduced by the party in the regular course of the party’s business. Thus, the comment’s concern that a document that did not exist at the time of the event at issue could be admitted as the original is already dealt with in the first sentence of the rule; i.e., if there is no initiating act or transaction, the prerequisite initial event is absent and the remainder of the rule does not apply. However, to make it clear as to what point in time the possible non-existence of the original document refers, the Board adds the following phrase to the end of the second sentence in this subsection: "at the time a party introduces into evidence such reproduction."

Finally, by its terms, the purpose of OAR 438-007-0040 is to provide the means for a "party" to submit into evidence electronic documents that the "party" keeps in the regular course of business. Therefore, the requirements of this rule apply only to the "parties" to a case. As amended, OAR 438-005-0040(10) provides that a "party" means "a claimant, an employer, including a noncomplying employer, an assigned claims agent in cases under ORS 656.054, and an insurer." See ORS 656.005(21). Thus, it is appropriate to require a certification from the party introducing such reproduction evidence that the "reproductions were created in the regular course of a party’s business or activity." OAR 438-007-0040(2). In other words, the party introducing such evidence would be in a position to know whether the reproductions were created in the regular course of its business or activity and, if that were the case, the party would be able to certify to that. On the other hand, because WCD is not a "party," by its terms, OAR 438-007-0040 does not apply to WCD. Nor does it apply generally to a "person/organization providing the reproduction."

WCD’s submissions to the Hearings Division regarding copies of the reconsideration record are governed by OAR 436-030-0155(5). OAR 438-007-0040 does not affect these submissions. Finally, OAR 438-007-0040(1) requires that the proffered reproduction be "satisfactorily identified" in order to qualify for admission in evidence as the original. This requirement addresses any concern regarding identification of the proffered reproduction.

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

OAR 438-009-0001(1) - (3). These sections of the rule provide the definitions for a Claim Disposition Agreement (Section 1), a Disputed Claim Settlement (Section 2), and a Settlement Stipulation (Section 3). Based on statements expressed in Simmons v. Lane Mass Transit District, 171 Or App 268 (2000), the Board initially proposed to amend these sections of the rule to further clarify the identity of each agreement, as well as an ALJ’s and the Board’s authority to approve such agreements.

Several comments were received recommending that the changes to OAR 438-009-0001(3) not be adopted. One comment expressed concern that, under section (3), any oral representation to an ALJ or the Board could abrogate a claimant’s right to go forward at hearing if the claimant later changed his/her mind regarding that oral representation. In other words, the concern was that any statement to an ALJ or the Board could be considered a "settlement stipulation." This comment also considered that the changes to section (3) exceeded the Board’s authority. Two written comments were also received. Both of these comments contended that the proposed language in section (3) is contrary to the court’s decision in Simmons.

In light of these comments, the Board has decided not to adopt the proposed amendments to OAR 438-009-0001(3). As the Statement of Need explained, the purpose of the proposed language in section (3) was to address the reasoning in Simmons; it was not intended as a vehicle for the parties to avoid the "DCS" requirements for the resolution of a "bona fide" dispute over the compensability of a claim. However, the comments received suggest that the proposed language is not being perceived as it was intended. Under, such circumstances, the Board has decided not to adopt the proposed amendments to OAR 438-009-0001(3). (2)

On the other hand, no objections were received regarding the proposed changes to OAR 438-009-0001(1) and (2). 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 modified, as a permanent rule, contained in Exhibit G and incorporated herein by this reference.

OAR 438-009-0005(1). As previously noted, as of June 30, 2001, the Evaluations Unit will be eliminated from the Workers’ Compensation Division. In light of such circumstances, the Board proposes to amend the rule by eliminating the phrase "by Evaluation." 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 H and incorporated herein by this reference.

OAR 438-009-0010(2)(c). To respond to the potential impact of the Simmons decision, the Board proposes amending subsection (2)(c) of the rule to clarify that a disputed claim settlement can resolve "all or part of" a denied claim. 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 I and incorporated herein by this reference.

OAR 438-009-0010(5). The Board proposes to amend this subsection of the rule to require a disputed claim settlement involving an unrepresented claimant to include a written recitation that the unrepresented claimant has been orally advised: "(c) that except with the consent of the worker, reimbursement made to medical service providers from the proceeds of a disputed claim settlement shall not exceed 40 percent of the total present value of the settlement amount; and (d) that reimbursement from the proceeds of a disputed claim settlement made to medical service providers shall not prevent a medical service provider or health insurance provider from recovering the balance of amounts owing for such services directly from the worker."

A comment was received about this rule, supporting the changes listed above that attempt to fully advise claimants before they sign a DCS. However, the comment noted that "greater thought should have been given to limiting the sum that a medical service provider can secure directly from the worker." This comment is interpreted as addressing the statute, rather than the rule. See ORS 656.313(4)(d). Because the Board’s authority is limited to its rules, no action can be taken in response to the comment.

After considering this comment, the Board has decided to leave unchanged the proposed language in OAR 438-009-0010(5). An administrative agency may not, by its rules, amend, alter, enlarge or limit the terms of a statute. Cook v. Workers' Compensation Dept., 306 Or 134 (1988); U. of O. Co-oper. v. Dept. of Rev., 273 Or 539, 550 (1975). The amended rule tracks the language in ORS 656.313(4)(d), which provides, in relevant part, that: (1) except with the consent of the worker, the reimbursement made to medical service providers from a DCS shall not exceed 40 percent of the total present value of the settlement amount; and (2) "[r]eimbursement under this section shall not prevent a medical service provider or health insurance provider from recovering the balance of amounts owing for such services directly from the worker." If the comment objects to the language of ORS 656.313(4)(d), his complaint lies with the legislature, not the Board.

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 I and incorporated herein by this reference.

OAR 438-009-0015(5). This rule is amended to codify the Board’s practice to distribute copies of an approved agreement to the parties’ attorneys, as well as to the parties and the Director. 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 J and incorporated herein by this reference.

OAR 438-010-0000. This rule (which addresses applicability of the Director’s permanent disability standards) is repealed as duplicative of the Director’s administrative rule, OAR 436-030-0003, which comprehensively addresses the applicability of the Director’s permanent disability standards. 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 K and incorporated herein by this reference.

OAR 438-011-0035. This rule codifies the Board’s existing practice of listing in their orders all members who reviewed the record. 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 L and incorporated herein by this reference.

OAR 438-012-0050(1)(c). This rule codifies the Board’s existing practice of deferring ruling on an Own Motion matter until resolution of any "pre-Director" medical treatment disputes that are being processed through a MCO dispute resolution process, in addition to resolution of any Director’s medical review under ORS 656.245, 656.260 or 656.327. (3) 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 M and incorporated herein by this reference.

OAR 438-013-0010(1)(c). To address the court’s holding in SAIF v. Dubose, 166 Or App 642 (2000) rev allowed 331 Or 692 (2001), the Board proposes to amend this rule to clarify that a request for hearing shall be referred to the Board’s Expedited Claim Service if the hearing request is for an expedited hearing to appeal a denial under ORS 656.262(15). 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 N and incorporated herein by this reference.

OAR 438, Division 15. A comment was received suggesting adoption of a rule relating to penalty-related attorney fees under ORS 656.382(1). This comment suggested that such a rule would avoid potential conflict with ORS 656.262(11)(a), which provides, in part, that the Director "shall have exclusive jurisdiction over proceedings regarding solely the assessment and payment of the additional amount described in this subsection." Because the Board did not propose a rule addressing this subject, it would be premature to adopt such a rule at this time. Moreover, well-established case law is sufficient to determine availability of a penalty-related attorney fee under ORS 656.382(1) and a penalty that is split between the claimant and his/her attorney in lieu of an attorney fee under ORS 656.262(11)(a). See Corona v. Pacific Resource Recycling, 125 Or App 47, 51 fn 1 (1993) ("The same misconduct cannot result in the assessment of both a penalty and a fee. Therefore, when the only misconduct asserted would, if proved, support a penalty, no fees can be assessed, and the sole issue is entitlement to a penalty [under ORS 656.262(11)(a)]."); Oliver v. Norstar, Inc., 116 Or App 333, 336 (1992) (misconduct that is subject to a penalty cannot also be the basis for an attorney fee under ORS 656.382(1); Donald L. Holcomb, 50 Van Natta 753, on recon, 50 Van Natta 874, aff’d mem Jeld-Wen, Inc. v. Holcomb 157 Or App 600 (1998) (request for hearing properly dismissed for lack of jurisdiction where amounts due at the time of the request for hearing were paid before the record closed and only remaining issue was penalties); Robert Geddes, 47 Van Natta 2388 (1995) (when the sole issue is a penalty and related attorney fee, the Director has exclusive jurisdiction); compare Marsha E. Westenberg, 49 Van Natta 2178 (1997) (Hearings Division and Board retain jurisdiction where the claimant raises entitlement to temporary disability as well as penalties); Leonard W. Kirklin, 48 Van Natta 1571 (1996) (Hearings Division and Board retain jurisdiction to consider penalties when penalty issue is accompanied by an enforcement action).

OAR 438-015-0010(1). This rule pertains to the authorization of attorney fees for a claimant’s attorney for legal services provided under ORS Chapter 656. As amended, the rule explicitly provides that attorney services must pertain to matters subject to the jurisdiction of the Board and its Hearings Division. 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 O and incorporated herein by this reference.

OAR 438-015-0015. This rule provides that no charge for legal services for representation of claimants is valid unless the charge is authorized under several enumerated statutes or Board rules. As amended, the rule explicitly provides that these services must pertain to matters subject to the jurisdiction of the Board and its Hearings Division. 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 P and incorporated herein by this reference.

OAR 438-019-0000(1) & (2). These "mediation" rules provide definitions for the terms "mediation" and "mediator." As amended, the rules identify the "mediator" in the same manner throughout the rules; i.e., "an independent neutral third person." 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 Q and incorporated herein by this reference.

OAR Division 021. After considering a comment supporting the adoption of rules regarding the establishment of standard procedures for the regular Board meetings, the majority of the Board Members determined that, as a policy matter, the adoption of procedural rules concerning its regular meetings is reasonably required in the performance of its duties. Accordingly, the Board proposes the adoption of the following rules:

OAR 438-021-0005. This rule sets forth the purpose for the establishment of rules regarding standard procedures for regular Board meetings. The rule states, in part, that "[t]he purpose of these rules is to establish a standard procedure for regular meetings of the Workers’ Compensation Board."

A comment was received that proposed adding the word "open" between the words "regular" and "meetings" to make more clear the requirement that agency meetings are open to the public.

After considering this comment, the Board finds that it is reasonable, necessary, and proper to amend the proposed rule in the manner suggested by the aforementioned comment. The Board considers that such amendment will clarify that its regular meetings are open to the public in compliance with the Administrative Procedures Act. ORS 192.630, 192.650. Consequently, the word "open" is added to OAR 438-021-0005 as proposed above. Accordingly, for the reasons expressed in its previous Statement of Need, as well as those expressed above, the Board adopts the proposed rule, as modified above, as a permanent rule, contained in Exhibit R and incorporated herein by this reference.

OAR 438-021-0010. This rule sets forth the applicable procedures in scheduling regular Board meetings. 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 R and incorporated herein by this reference.

OAR 438-021-0015. This rule sets forth the duties of the Chairperson, or the Members calling the meeting, regarding the preparation of the agenda and the order of business at Board meetings. 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 R and incorporated herein by this reference.

OAR 438-021-0020. This rule provides that all statutory "consultations" between the Chairperson and the Members shall occur during meetings. 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 R and incorporated herein by this reference.

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

    1. All applicable rulemaking procedures have been followed; and
    2. 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," "E," "F," "G," "H," "I," "J," "K," "L," "M," "N," "O," "P," "Q," and "R" incorporated herein by this reference, as permanent rules of the Workers’ Compensation Board, to become effective January 1, 2002 and to apply to the following cases in the following manner:

          (1) With the exception of OAR 438-005-0055, 438-009-0001, 438-009-0005, 438-009-0010, and 438-009-0015, all rules pertaining to procedures at the hearings level shall apply to all cases pending before the Hearings Division on or after January 1, 2002;

          (2) With the exception of OAR 438-009-0001, 438-009-0005, 438-009-0010, and 438-009-0015, all rules pertaining to Board review procedures shall apply to cases where the request for Board review is filed on or after January 1, 2002;

          (3) All rules pertaining to procedures under the Board’s Own Motion authority shall apply to Own Motion claims in existence on or after January 1, 2002;

          (4) Amendments to OAR 438-005-0055 shall apply to any claim with a date of denial on or after January 1, 2002; and

          (5) Amendments to OAR 438-009-0001, 438-009-0005, 438-009-0010, and 438-009-0015 shall apply to any Claim Disposition Agreement (CDA), Disputed Claim Settlement (DCS), or Settlement Stipulation that is filed with the Hearings Division or the Board on or after January 1, 2002 and where all signatures contained in the CDA, DCS, or Settlement Stipulation are dated on or after January 1, 2002.

          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. The Board has also proposed this rule amendment in a prior Citation of Statutory Authority and Statement of Need that was approved at an August 30, 2001 Board meeting. The rulemaking hearing regarding that proposed amendment, as well as the hearing on this proposed amendment, was jointly held on November 2, 2001.

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          2. Nonetheless, the Board notes that a party is not prohibited from withdrawing a "compensability" issue or a hearing request regarding a denied claim, which can result in an ALJ or the Board issuing an Order of Dismissal (or otherwise commenting on the withdrawn issue).

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          3. The Board has also proposed this rule amendment in a prior Citation of Statutory Authority and Statement of Need that was approved at an August 30, 2001 Board meeting. The rulemaking hearing regarding that proposed amendment, as well as the hearing on this proposed amendment, was jointly held on November 2, 2001.

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