MARLY ZIECKLER vs. AMPRIDE, DICKINSON COUNTY MEMORIAL HOSPITAL, MUTUAL SERVICE CASUALTY INSURANCE CO., C/O BERKLEY RISK, and IOWA INSURANCE GUARANTY ASSOCIATION
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IN THE SUPREME COURT OF IOWA
No. 77 / 05-1958
Filed December 14, 2007
MARLY ZIECKLER,
Appellant,
vs.
AMPRIDE, DICKINSON COUNTY MEMORIAL HOSPITAL, MUTUAL
SERVICE CASUALTY INSURANCE CO., C/O BERKLEY RISK, and
IOWA INSURANCE GUARANTY ASSOCIATION,
Appellees.
Appeal from the Iowa District Court for Polk County, D.J. Stovall,
Judge.
Workers’ compensation claimant appeals from a district court
judgment affirming the workers’ compensation commissioner’s dismissal
of her intra-agency appeal. REVERSED AND REMANDED.
E.W. Wilcke, Spirit Lake, for appellant.
Andrew D. Hall and Lisa R. Perdue of Grefe & Sidney, P.L.C.,
Des Moines, for appellees Ampride and Mutual Service Casualty
Insurance Co.
Iris J. Post of Bradshaw, Fowler, Proctor & Fairgrave, P.C.,
Des Moines, for appellees Dickinson County Memorial Hospital and Iowa
Insurance Guaranty Association.
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HECHT, Justice.
Marly Zieckler was awarded some, but not all, of the workers’
compensation benefits she sought from her employers, Ampride and
Dickinson County Memorial Hospital and their insurers (collectively, the
defendants).
She appealed the arbitration award to the commissioner
who dismissed her appeal pursuant to Iowa Administrative Code rule
876—4.30 (2004).
Zieckler sought judicial review of the agency’s
decision, and the district court affirmed the dismissal of the appeal.
Zieckler now appeals the district court judgment affirming the workers’
compensation commissioner’s dismissal of her intra-agency appeal.
At the time of Zieckler’s appeal, rule 876—4.30 provided:
The appealing party shall bear the initial cost of
transcription on appeal and shall pay the certified shorthand
reporter or service for the transcript . . . . In the event the
cost of the transcript has been initially borne by a
nonappealing party prior to appeal, the appealing party or
parties within 30 days after notice of appeal or cross-appeal
shall reimburse the cost of the transcript to the
nonappealing party and if not so reimbursed the appeal shall
be dismissed.
I. The Agency Proceedings.
The hearing officer, following the arbitration hearing, requested
that the defendants furnish a transcript of the hearing to aid her in
drafting the arbitration award.
transcript and paid for it.
One of the defendants ordered the
Zieckler did not reimburse the defendant
within thirty days of the appeal, as required by rule 876—4.30, and the
defendants moved to dismiss the appeal. Zieckler, who claimed she did
not know the amount of the bill or even who had paid it prior to the filing
of the motion to dismiss, offered to reimburse the defendants, but they
refused to accept payment.
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The commissioner dismissed Zieckler’s appeal, observing that
[n]othing in the rule requires that the party who
initially paid the cost of the transcript make a demand for
payment upon the appealing party or that the appealing
party be given an opportunity to cure any defalcation. The
rule does not contain any exceptions to the directive to
dismiss the appeal or give the commissioner discretion to do
anything other than dismiss the appeal. I conclude that this
rule places an affirmative burden on the appealing party to
inquir[e] regarding the cost and identity of the party who
initially paid the cost of the transcript and to reimburse that
nonappealing party within 30 days. Claimant did not do so
in this case. An appealing party has had a “day in court”
and the case has been decided on the merits.
If an
appealing party desires to have the case reviewed again by
the agency, that party must comply with the rules governing
intra-agency appeals.
On judicial review, the district court affirmed the commissioner’s
dismissal.
On Zieckler’s appeal to this court, she challenges both the
commissioner’s interpretation of administrative code rule 876—4.30 and
the validity of the rule itself.
II. Interpretation of the Rule.
We review a commissioner’s interpretation of agency rules to
determine whether the interpretation is irrational, illogical, or wholly
unjustifiable. Iowa Code § 17A.19(10)(l) (2003). Rule 876—4.30 clearly
states that, if the appealing party does not pay for the transcript within
thirty days, the appeal shall be dismissed.
There is no “play in the
joints” in this rule, as there was in Marovec v. PMX Industries, 693
N.W.2d
779
(Iowa
2005),
which
involved
the
commissioner’s
interpretation of a rule allowing the commissioner some discretion to
dismiss an appeal for failure to file a brief.
In contrast to the rule
involved in Marovec, rule 876—4.30 allows the commissioner no
discretion to impose a sanction less severe than dismissal under the
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circumstances of this case.
We therefore reject Zieckler’s erroneous-
interpretation argument.
III. Validity of the Rule.
As we have noted, Zieckler also assails the validity of rule 876—
4.30.
Generally, we review administrative action to determine if it is
“[b]eyond the authority delegated to the agency by any provision of law or
in violation of any provision of law,” Iowa Code § 17A.19(10)(b), or is
unreasonable, arbitrary, capricious, or an abuse of discretion.
Code § 17A.19(10)(h)–(n).
Iowa
“In making the determination whether the
agency’s action is unreasonable, arbitrary, capricious, or an abuse of
discretion, the court ‘[s]hall give appropriate deference to the view of the
agency with respect to particular matters that have been vested by a
provision of law in the discretion of the agency.’ ” Marovec, 693 N.W.2d
at 782 (quoting Iowa Code § 17A.19(11)(c)).
The legislature has vested the commissioner with the authority to
promulgate rules and procedures to implement Iowa Code chapter 85.
Iowa Code § 86.8(1).
Pertinent to this case, the legislature has
authorized intra-agency appeals and directs that they be taken “as
provided by rule.” Iowa Code § 86.24(1).
While courts are required to give deference to the commissioner’s
promulgation of rules, that deference is not without limitation. We are
required to give only “appropriate” deference under section 17A.19(11)(c).
The question presented here is whether “appropriate deference” will save
the agency’s rule that requires the dismissal of an intra-agency appeal as
a sanction for failure within thirty days to reimburse a party who paid for
a transcript of a workers’ compensation hearing. Zieckler contends the
commissioner’s rule 876—4.30 imposes an unreasonable, arbitrary, and
5
capricious penalty because such a failure does not impede the agency’s
processing of an appeal. We agree.
Under Iowa Code chapter 17A, an agency’s authority is limited in
several respects. A court on judicial review may reverse agency action if
substantial rights of the person seeking relief have been prejudiced
because the action is “unreasonable, arbitrary, capricious, or an abuse of
discretion.”
Iowa Code § 17A.19(10)(n).
Section 17A.19(10) identifies
several subsets of unreasonable, arbitrary, and capricious agency action.
One of these subsets is agency action that is “so grossly disproportionate
to the benefits accruing to the public interest from that action that it
must necessarily be deemed to lack any foundation in rational agency
policy.” See id. § 17A.19(10)(k); see also Arthur E. Bonfield, Amendments
to Iowa Administrative Procedure Act, Report on Selected Provisions to
Iowa State Bar Association and Iowa State Government 69 (1998) (noting
paragraphs 17A.19(10)(h)–(m) “provide specific examples of agency action
that any reviewing court should overturn as unreasonable, arbitrary,
capricious, or an abuse of discretion”).
Zieckler has consistently argued before the agency and on judicial
review that the commissioner’s adoption of rule 876—4.30 constitutes
unreasonable,
arbitrary,
and
capricious
agency
action.
The
unmistakable essence of her argument is that the agency’s rule
mandating the imposition of the sanction of dismissal for a failure to
make reimbursement within thirty days for a hearing transcript is
outrageously unreasonable because, as is evidenced by the facts of this
case, such a failure does not impede or delay the processing of an appeal
or cause any other public detriment.
Although Zieckler has not
specifically cited section 17A.19(10)(k) in support of her argument, and
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she does not specifically employ the words “grossly disproportionate” in
her brief on appeal, we believe the substance of her argument adequately
implicates that paragraph’s subset of unreasonable, arbitrary, and
capricious agency action.
We therefore conclude Zieckler’s contention
that the commissioner’s rule 876—4.30 is an unreasonable, arbitrary,
and capricious exercise of agency power gave sufficient notice to the
agency, the district court, and this court of the substance of her
argument: viz., that the negative impact of the rule is so grossly
disproportionate to any resulting benefits accruing to the public, that it
must necessarily be deemed to lack any foundation in rational agency
policy. See Iowa Code § 17A.19(10)(k).
An agency’s action may be reversed under section 17A.19(10)(k)
only if the action is not required by law. Although the commissioner is
required
by
statute
to
adopt
rules
to
implement
the
workers’
compensation system, see id. § 86.8(1), the commissioner is not required
by law to adopt a rule mandating dismissal of an intra-agency appeal as
a sanction for failing within thirty days to reimburse a nonappealing
party for the cost of a hearing transcript.
We therefore conclude the
commissioner’s adoption of a rule such as rule 876—4.30, providing for
mandatory dismissal of an appeal under the circumstances of this case,
is not “required by law,” and may therefore be reversed under section
17A.19(10)(k).
The facts of this case illustrate the obvious disproportionality
between the mandatory dismissal rule’s negative impact on appealing
parties and its benefit to the public. Unlike the rule at issue in Marovec,
rule 876—4.30 is simply a cost-shifting provision that has no effect on
the agency’s ability to process the appeal.
Thus, the public benefit of
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rule 876—4.30 rests solely on the fairness of shifting appeal costs to an
appealing party during the pendency of an intra-agency appeal. Zieckler
was unaware which defendant paid for the transcript or how much was
paid for it. When she learned this information she immediately sought to
reimburse the defendant who initially paid for the transcript.
All the
appeal briefs were on file with the commissioner before the payment
issue arose.
Nevertheless, the mandatory nature of rule 876—4.30
prevented any consideration of Zieckler’s particular circumstances. She
lost her right of appeal for a reason having nothing to do with the merits
of her appeal or her willingness to bear the initial costs of the transcript.
The public benefit of a mandatory dismissal under these circumstances
is negligible, while the negative impact on Zieckler is extremely severe.
We do not intend to suggest an agency may never mandate dismissal for
violation of a procedural rule; however, section 17A.19(10)(k) requires
that there be a reasonable proportion between imposition of the ultimate
sanction of dismissal and the party’s transgression.
Rule 876—4.30
lacks any such proportion.1
We conclude the agency’s action in adopting rule 876—4.30 was
(1) not required by law; and (2) unreasonable, arbitrary, and capricious
because its negative impact is so grossly disproportionate to the benefits
accruing to the public interest from the rule. Therefore, rule 876—4.30
lacks adequate foundation in rational agency policy and must be
1It
should be noted that the commissioner recently eliminated the most
unreasonable feature of rule 876—4.30 by amending it to read as follows:
In the event the cost of the transcript has been initially borne by a
nonappealing party prior to appeal, the nonappealing party is entitled to
reimbursement within 30 days after serving on the appealing party proof
of the cost of the transcript. If not so reimbursed, the appeal may be
dismissed.
Iowa Admin. Code r. 876—4.30 (2007) (emphasis added). Accordingly, the infirmity of
the rule that requires us to reverse this case has been eliminated from the rule.
8
invalidated. Accordingly, we reverse the judgment of the district court
and remand to the agency for further proceedings consistent with this
opinion.
REVERSED AND REMANDED.
All justices concur except Larson, J., who dissents.
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#77/05-1958, Zieckler v. Ampride
LARSON, Justice (dissenting).
I dissent. The majority has reached out to decide this case on a
theory that the appellant has not raised at any point in the history of the
case—from her resistance to the motion to dismiss, through her petition
for judicial review, and up to this court.
On appeal to this court, Zieckler complains that
[t]he Commissioner’s actions in dismissing Zieckler’s appeal
were unreasonable, arbitrary and capricious, and deprived
Zieckler of the opportunity to have her appeal decided on the
merits. Moreover, rule 876—I.A.C. 4.30, if interpreted to
require dismissal in this case is an unreasonable exercise of
the agency’s rule-making authority. The Commissioner’s
actions violated Iowa Code § 17A.19, and the dismissal
should be reversed and the appeal reinstated.
Zieckler’s complaint that the commissioner’s action “violated Iowa
Code § 17A.19” is so general that it gives virtually no guidance to a court.
Perhaps Zieckler intends to argue that the commissioner violated some
provision of Iowa Code section 17A.19(10), which lists fourteen grounds
for reversing agency action. Her brief does not specify on which of these
grounds she relies. The majority, however, fills in the gap by expressly
basing its holding on section 17A.19(10)(k), a statute that was not even
cited by Zieckler. Despite the fact Zieckler does not even mention this
section, the majority holds that its application mandates reversal. Under
that section, if the action of the agency is “[n]ot required by law and the
negative impact . . . is . . . grossly disproportionate to the benefits
accruing to the public,” the action lacks a rational basis. This section
helps give meaning to one of the legislature’s stated purposes for the
administrative procedure act, which “is to increase the fairness of
10
agencies in their conduct of contested case proceedings.”
Iowa Code
§ 17A.23.
However, this court’s concern for reaching what it perceives to be a
fair result in a particular case cannot trump well-established principles
of appellate procedure.
One of these principles is that we will not
“assume a partisan role and undertake the appellant’s research and
advocacy.” See Inghram v. Dairyland Mut. Ins. Co., 215 N.W.2d 239, 240
(Iowa 1974); accord In re Det. of Garren, 620 N.W.2d 275, 285 (Iowa
2000); State v. Stoen, 596 N.W.2d 504, 507 (Iowa 1999). The rationale
for such a self-imposed rule is obvious. If a court fills in the gaps in an
appellant’s argument, it skews the judicial review process because it
deprives opposing parties, and the district court, of an opportunity to
meet the argument.
Here, Zieckler does not argue that her right to
appeal is grossly disproportionate to the public’s benefit. She does not
hint at such a theory. In fact, as already noted, she does not even cite
Iowa Code section 17A.19(10)(k), the section on which the majority relies.
If we allow dissatisfied parties such as Zieckler to take a shotgun
approach by claiming simply, as Zieckler does, that the agency’s action
was “unreasonable, arbitrary, and capricious” and leave it to a court to
fill in the gaps, we will open the floodgates to judicial review proceedings.
I would hold Zieckler to the arguments she actually made in her
appeal to this court, not her arguments as supplemented and
embellished by the majority.
I would, therefore, defer to the
commissioner’s rule-making authority and affirm the judgment of the
district court.
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