Thinking About the Wyoming Workers’ Compensation System

Last week I surveyed readers about the Wyoming workers’ compensation system asking in a very open-ended way what might be done to improve it. In response, I got this gem of a response from widely-respected and long time “Dean” of Wyoming workers’ compensation (yes, I know I am embarrassing him, and it is kind of fun) George Santini. George said,

One of the major unresolved issues in Wyoming Compensation law is the potential due process violations inherent in the WSCD having multiple roles as the claims administrator, premium setter/collector; rules-maker and active litigant.

Of these the most troubling to me that as a state agency the WSCD should be neutral in how it handles claims and not actively pro-employer or pro-employee entity. Internally the WSCD has structured itself so the claims analysts are required to communicate directly with the employer in their decision making process. Then if there is an objection , the WSCD supports the employer in any contested case proceedings. This strikes me as a conflict of interest which seems to raise fundamental concerns over the impartiality of the process.

The excellent comment immediately caused me to put on my administrative law professor hat and recall the classic 1975 Supreme Court case Withrow v. Larkin. In that case a physician in a license suspension case challenged the involved agency’s “split enforcement” scheme. Because the same Wisconsin state officials had both investigated and adjudicated his case, the physician argued the adjudication was biased. The Supreme Court’s response has always struck me as inadequate:

The contention that the combination of investigative and adjudicative functions necessarily creates an unconstitutional risk of bias in administrative adjudication has a much more difficult burden of persuasion to carry. It must overcome a presumption of honesty and integrity in those serving as adjudicators; and it must convince that, under a realistic appraisal of psychological tendencies and human weakness, conferring investigative and adjudicative powers on the same individuals poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented.

The problem with this flight of fancy (as I believe it to be) is that it is directly at odds with my own experience. I worked for 10 years as an attorney with the National Labor Relations Board and was involved in several cases in which I was first an investigator and then a prosecutor; and some cases in which I was an investigator, prosecutor and, in a different phase of the case, an adjudicator. Did the views I developed while exercising some agency powers influence my actions while exercising other powers? Of course they did. Did I possess honesty and integrity? I like to think so. Was there a risk of bias and prejudgment in cases nonetheless? Obviously.

To bring this back to Wyoming’s situation, how can WSCD serve all of its roles without raising, as George puts it, “fundamental concerns over the impartiality of the process”? Well, I don’t think it can, but what is to be done? The Wyoming Supreme Court has perhaps already taken a similar “presumption of honesty and integrity” line in connection with the Division (I’m not aware of lines of cases here — perhaps someone could leave some cites in the comments).

Two things occur to me preliminarily. First, I would consider making a study of the case law in other monopolistic jurisdictions. The issue of the Government controlling all phases of the workers’ compensation process must have arisen in the past. I suspect Ohio would be an especially good jurisdiction to investigate. Second, lawyers have to be willing to routinely raise due process arguments of this kind. Even if one cannot win in court, over time one may win in the court of public opinion. That is the lesson of Thurgood Marshall. After all, the notion that governmental powers should normally be separated has been conventional since Montesquieu. To raise that argument is to defend the rule of law. If a judge wants to sanction us for annoyingly always raising rule of law arguments, so be it.

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