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Case Summary – West Virginia Supreme Court of Appeals Affirms Workers’ Compensation Board of Review’s Ruling – Insurance Commissioner has Discretionary Authority to Not Allocate Damages to Multiple Employers Under the West Virginia Workers’ Compensation Statute

On September 19, 2016, the West Virginia Supreme Court of Appeals (“the Court”), by a four to one (4-1) decision, affirmed an April 3, 2015 Order from the West Virginia Workers’ Compensation Board of Review, which affirmed an Administrative Law Judge’s ruling that Pioneer Pipe was the sole chargeable employer responsible for paying Stephen Swain’s hearing loss claim in Pioneer Pipe, Inc. v. Stephen Swain, et al., No. 15-0397 (W.Va. Sup. Ct. 2016).  Justice Workman filed a Concurring Opinion and Justice Davis filed a Dissenting Opinion in this case.  Chief Justice Ketchum delivered the Opinion of the Court.


Stephen Swain worked as a heavy-equipment operator out of a union hall for 33 years.  Throughout his career, Mr. Swain was routinely exposed to extremely loud noises for many different employers.  His last day of both exposure and employment occurred on March 21, 2013 when he was working for Pioneer Pipe, Inc. (“Pioneer”).  Mr. Swain was only employed by Pioneer for a total of 40 hours.  On May 1, 2013, Mr. Swain was diagnosed with bilateral sensorineural hearing loss, which was attributed to industrial noise exposure from his employment.  Subsequently, Mr. Swain filed claims for workers’ compensation benefits for his occupational hearing loss.  By way of background, in 2006, West Virginia shifted from a public workers’ compensation fund to a private insurer-based workers’ compensation system overseen by the state’s Insurance Commissioner.


This claim went before an Administrative Law Judge with the Workers’ Compensation Office of Judges (“ALJ”).  The ALJ identified Pioneer and two other employers as being potentially chargeable for Mr. Swain’s hearing loss claim. The statute empowers the Insurance Commissioner to allocate and divide charges amongst multiple employers within the last three-years of the claimant’s exposure to hazardous noises.  W.Va. Code § 23-4-6b(g).  However, the Insurance Commissioner issued a policy stating that it will not allocate occupational hearing loss claims to different employers; the sole chargeable employer for any hearing loss claim will be that employer with whom the claimant was last exposed to hazardous noise in the course of his employment.


In his November 6, 2014 ruling, the ALJ followed the Insurance Commissioner’s policy and found Pioneer to be the sole chargeable employer because Pioneer was Mr. Swain’s last employer during his last exposure to hazardous noises.  Pioneer appealed the decision to the Workers’ Compensation Board of Review, which affirmed the ALJ’s ruling in an April 3, 2015 Order.  Pioneer then filed its appeal with the Court.


The Court, acknowledging that this appeal was based upon the interpretation of a statute, applied a de novo standard of review.  The central issue in this appeal is whether or not the word may is discretionary or mandatory under W.Va. Code § 23-4-6b(g).  In relevant part, the statute states:


The Insurance Commissioner may allocate to and divide any charges resulting from the [hearing loss] claim among the employers with whom the claimant sustained exposure to hazardous noise for as much as sixty days during the period of three years immediately preceding the date of last exposure.  The allocation is based upon the time of exposure with each employer.  W.Va. Code § 23-4-6b(g).


Pioneer argued that under the statute, the Insurance Commissioner is mandated to allocate and divide for a hearing loss claim where there are multiple employers falling within the three-year time period.  Additionally, Pioneer also contended that the statute required a claimant to have worked for an employer for at least sixty days during the three-year period preceding the date of last exposure.


The Court rejected both of these arguments advanced by Pioneer.  First, the Court discussed the principles of statutory construction and interpretation and rejected Pioneer’s argument that the Insurance Commissioner was mandated to allocate and divide the charges in the present situation.  The Court stated that under enabling legislation, an administrative agency and its officials are given some deference as to its issuing regulations thereunder.  And, while acknowledging the deference granted, those agencies and officials cannot issue a regulation which is inconsistent with the statutory authority.  Here, the Court believed that the statute’s use of the word “may” clearly and unambiguously empowered the Insurance Commissioner with discretion to either allocate hearing loss claims amongst multiple employers, or charge only one employer.  The Court further stated that the Insurance Commissioner’s actions are discretionary and do not run afoul to the enabling legislation.  Next, the Court rejected Pioneer’s assertion that the statute requires a claimant to have worked for an employer for at least sixty days during the three-year period preceding the date of last exposure.  In its brief discussion, the Court essentially found that the portion of the statute regarding sixty days of exposure was only applicable if the Insurance Commissioner would have been allocating and dividing the charges amongst multiple employers, which, in this case, the Insurance Commissioner was not.  Accordingly, the Court found that the Insurance Commissioner’s actions were discretionary and within the powers of the statute, and affirmed the decision of the Workers’ Compensation Board of Review.  The Court sympathized with Pioneer’s assertion that this matter reached an unfair result; however, the Court believed that the complaints and arguments of Pioneer were more appropriate for the Insurance Commissioner and the Legislature.