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NOTICE This opinion is subject to further editing and
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Nos. 93-0947, 93-0948 & 93-0949
STATE OF WISCONSIN : IN SUPREME COURT
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Harnischfeger Corporation, Plaintiff-Respondent-Cross
Petitioner, v. Labor and Industry Review Commission, Defendant-Co-Appellant-Petitioner, Guenther Gieske, Defendant-Appellant-Petitioner. |
FILED OCT
24, 1995 Marilyn L. Graves Clerk of Supreme Court Madison, WI |
Harnischfeger Corporation,
Plaintiff-Respondent-Cross
Petitioner,
v.
Labor and Industry Review Commission,
Defendant-Co-Appellant-Petitioner,
Edward Bohn,
Defendant-Appellant-Petitioner.
Harnischfeger Corporation,
Plaintiff-Respondent-Cross
Petitioner,
v.
Labor and Industry Review Commission,
Defendant-Co-Appellant-Petitioner,
Emmerich Drawitsch,
Defendant-Appellant-Petitioner.
REVIEW of a decision of the Court of
Appeals. Reversed.
DONALD
W. STEINMETZ, J. This is a review of a decision of the court
of appeals affirming an order of the circuit court for Milwaukee county,
Richard G. Harvey, Jr., Reserve Judge, which concluded that the Labor and
Industry Relations Commission's ("LIRC") interpretation of Wis. Stat.
§ 102.555(8)(1993-94)[1]
directly contravenes the plain language of the statute and was therefore not to
be granted deference. We conclude that
LIRC's interpretation does not contravene the plain language of the statute
because § 102.555(8) is ambiguous.
Since LIRC's interpretation is otherwise reasonable, it should have been
accorded the appropriate deference. As
such, we reverse the decision of the court of appeals.
Guenther
Gieske, Edward Bohn and Emmerich Drawitsch all suffered hearing loss during the
course of their employment with Harnischfeger Corporation. It is undisputed, however, that each had
prior, though less severe, hearing loss before they began their employment with
Harnischfeger.
LIRC
determines compensation awards for hearing loss by looking to the various
subsections of Wis. Stat. § 102.555.
Specifically germane to this case is subsection (8) which discusses the
treatment of hearing loss occurring prior to employment. It reads:
102.555 Occupational
deafness; definitions.
....
(8) An
employer is liable for the entire occupational deafness to which his or her
employment has contributed; but if previous deafness is established by a
hearing test or other competent evidence, whether or not the employe was
exposed to noise within the 2 months preceding such test, the employer is not
liable for previous loss so established nor is the employer liable for any loss
for which compensation has previously been paid or awarded.
LIRC has historically taken the position
that the same definition which is applied to the phrase "occupational
deafness" in this subsection should also be applied to the phrase
"previous deafness."
Wisconsin Statutes § 102.555(1), the applicable definitional
subsection, defines "occupational deafness" as "loss of
hearing," but does not specifically define "previous
deafness." For further guidance,
LIRC appropriately looked to the administrative code for an interpretation of
"loss of hearing." The
Department of Industry, Labor and Human Relations ("DILHR"), through
proper administrative rule-making procedures, determined 40 years ago that loss
of hearing is not compensable under Wisconsin's Worker's Compensation Act until
a person has suffered a loss exceeding 30 decibels.[2] See Wis. Admin. Code § Ind
80.25. LIRC
applied this definition to both "occupational deafness" and
"previous deafness" in determining the compensation awards of Gieske,
Bohn and Drawitsch. Harnischfeger
petitioned, under Wis. Stat. § 102.333, for judicial review of LIRC's
decisions. The circuit court found that
LIRC's methodology held employers responsible for all hearing loss between 0
and 30 decibels even if such loss was not caused by employment. Although the trial court recognized that
deference to LIRC was otherwise appropriate, it held that LIRC's interpretation
contravened the clear meaning of the statute.
As such, it did not accept LIRC's interpretation, but instead applied
Harnischfeger's proposed formula in
determining the awards. The
court of appeals affirmed the circuit court's holding that LIRC's formula was
invalid since it directly contravened the words of the statute, but disagreed
with its methodology. See Harnischfeger
Corp. v. LIRC, 184 Wis. 2d 227, 230, 517 N.W.2d 193, 195 (Ct. App.
1994). It went on to determine the
employees' awards under an entirely different formula. See id.
In
order to understand why this seemingly straightforward exercise of agency
discretion so concerned the courts below, it is necessary to briefly discuss
how LIRC's methodology works in practice.
According to LIRC, an employee is not compensated for the first 30
decibels of loss of hearing. For every decibel loss above 30, however, an
employee is considered to have 1.6 percent occupational deafness.[3] The percentages increase at a rate of 1.6
percent per decibel up to a maximum of a 93 decibel loss. At this point the person is considered to
have reached 100 percent occupational deafness. See Wis. Admin. Code § Ind 80.25. For example, an employee who starts work
with a 25 decibel loss and leaves work with a 40 decibel loss is compensated
for the entire loss over 30 by his employer, 10 decibels, which equates to 16
percent occupational deafness. This is
regardless of whether the employee's original 25 decibel loss was caused by
prior employment, other causes or a natural defect.
Under
LIRC's scheme, however, employers do receive a credit if an employee begins
work with hearing loss greater than 30 decibels. Therefore, if the employee started with a loss of 35 decibels,
the employer would receive a 5 decibel credit.
Thus, the employee's compensable hearing loss percentage would be 16
percent for the 40 decibel loss minus 8 percent for the prior 35 decibel loss
for a sum of 8 percent or a 5 decibel loss.
The
circuit court, the court of appeals and Harnischfeger contend that this
interpretation makes an employer liable for all of an employee's deafness and
not just the "occupational deafness" to which it has contributed. They assert that the employer in the last
example (35 beginning decibel loss, 40 ending decibel loss) is actually being
held liable for the entire 40 decibels of loss, even though only a 5 decibel
loss was caused by employment. However,
this is clearly incorrect. If the
employer was actually responsible for the entire loss, a 40 decibel loss should
translate into occupational deafness of 31 percent (40/130) representing the
percentage of hearing lost by the individual on a scale of 0-130, the
theoretical range of human hearing. The
employer under LIRC's method, however, is actually liable for much less--1.6 x
5 decibels which equates to only eight percent occupational deafness.
Whether
or not a court agrees or disagrees with LIRC's methodology, however, is not the
issue in this case. Instead, the
central question is what standard of review the courts of this state should
apply when called upon to evaluate an agency's interpretation of a
statute. The guiding principle is that
statutory interpretation is a question of law which courts decide de novo. See Kania v. Airborne Freight
Corp., 99 Wis. 2d 746, 758, 300 N.W.2d 63, 68 (1981). Furthermore, a court is not bound by an
agency's interpretation of a statute. See
State ex rel. Parker v. Sullivan, 184 Wis. 2d 668, 699, 517 N.W.2d
449, 460 (1994). As important, however,
is the principle that courts should defer to an administrative agency's
interpretation of a statute in certain situations. This court has applied three distinct levels of deference to
agency interpretations: great weight,
due weight and de novo review.[4] See Jicha v. DILHR, 169
Wis. 2d 284, 290, 485 N.W.2d 256,
258-59 (1992). Great weight deference
is appropriate once a court has concluded that: (1) the agency was charged by
the legislature with the duty of administering the statute; (2) that the
interpretation of the agency is one of long-standing; (3) that the agency
employed its expertise or specialized knowledge in forming the interpretation;
and (4) that the agency's interpretation will provide uniformity and
consistency in the application of the statute.
See Lisney v. LIRC, 171 Wis. 2d 499, 505, 493 N.W.2d 14,
16 (1992).
To
the extent the circuit court and the court of appeals found that some level of deference was applicable to LIRC's
interpretations, they were correct.
Although neither lower court so stated, it is clear under the standards
set forth in Lisney that LIRC's interpretation was entitled to great
weight deference. LIRC and its
predecessors have long been charged with the duty of administering Chapter 102
and have exercised their expertise in analyzing and interpreting its various
sections for over 80 years. See,
e.g., Pendzich v. Industrial Comm., 11 Wis. 2d 531, 532-33,
105 N.W.2d 781, 782-83 (1960); Discher v. Industrial Comm., 10
Wis. 2d 637, 640, 103 N.W.2d 519, 520-21 (1960); Janiszewski v.
Industrial Comm., 9 Wis. 2d 171, 176-77, 100 N.W.2d 347, 348-49
(1960); General Castings Corp. v. LIRC, 152 Wis. 2d 631, 633, 449
N.W.2d 619, 620 (Ct. App. 1989); A.O. Smith Corp. v. Oglesby, 108
Wis. 2d 583, 584-85, 323 N.W.2d 143, 144 (Ct. App. 1982). Furthermore, both Wis. Stat. § 102.555
and the administrative rules which interpreted § 102.555 had--prior to LIRC's
decisions in this proceeding--been the subject of active and careful
consideration by both the legislature and DILHR. See, e.g., A.O. Smith Corp., 108 Wis.2d at
584-85. Finally, LIRC has consistently
interpreted § 102.555(8) so as to provide uniformity in the application of
Chapter 102.
Once
it is determined under Lisney that great weight deference is
appropriate, we have repeatedly held that an agency's interpretation must then
merely be reasonable for it to be sustained.
See Lisney, 171 Wis. 2d at 506; Sauk County v. WERC,
165 Wis. 2d 406, 413, 477 N.W.2d 267, 270 (1991); Beloit Education Asso. v.
WERC, 73 Wis. 2d 43, 67, 242 N.W.2d 231, 242-43 (1976). This standard of review of LIRC's decisions
is also dictated by statute. See
Wis. Stat. § 102.23(1)(e); Lisney, 171 Wis. 2d at 506. The burden of proof to show that the
agency's interpretation is unreasonable is on the party seeking to overturn the
agency action; it is not on the agency to justify its interpretation. See, e.g., Weibel v. Clark,
87 Wis. 2d 696, 704, 275 N.W.2d 686, 690, cert. denied, 444
U.S. 834 (1979); Racine Education Ass'n. v. Com'r of Ins., 158
Wis. 2d 175, 182, 462 N.W.2d 239, 242 (Ct. App. 1990); City of La
Crosse v. DNR, 120 Wis. 2d 168, 178, 353 N.W.2d 68, 73 (Ct. App.
1984).
An
interpretation is unreasonable if it directly contravenes the words of the
statute, it is clearly contrary to legislative intent or it is without rational
basis. See Parker, 184
Wis. 2d at 700; Lisney, 171 Wis. 2d at 506. It is in applying this test of reasonableness that the trial
court and the court of appeals erred.
Specifically, the lower courts incorrectly determined that LIRC's
interpretation directly contravened the words of the statute.
There
seems to be some confusion among the lower courts, and the parties in this
case, regarding exactly when an agency's interpretation directly contravenes
the clear meaning of a statute. The
threshold question must be whether or not the statute in question is ambiguous. If the statute is ambiguous, an agency's
interpretation cannot, by definition, be found to directly contravene it.[5] It is axiomatic in this state that a
statutory provision is ambiguous if reasonable minds could differ as to its
meaning. See, e.g., Hauboldt
v. Union Carbide Corp., 160 Wis. 2d 662, 684, 467 N.W.2d 508, 517 (1991); Girouard
v. Jackson Circuit Ct., 155 Wis. 2d 148, 155, 454 N.W.2d 792, 795
(1990). Although the mere fact that two
parties interpret a statute differently does not in itself create an ambiguity,
it is clear in this situation that the word in question, "deafness," is
subject to many sensible interpretations.
In fact, each agency or court which has attempted to construe the
statute in question has set forth dramatically different, yet equally
reasonable, interpretations. This, the
ability of a statute to support more than one reasonable interpretation, is the
hallmark of ambiguity. See Girouard, 155 Wis. 2d at
155. It was, therefore, incorrect to
conclude that LIRC's interpretation directly contravened the statute.
It
is equally clear that LIRC's interpretation is not otherwise unreasonable. There is no evidence that its interpretation directly contravenes
legislative intent or that it is not rationally based. DILHR and LIRC have many years of experience
in determining compensation awards for hearing loss cases and in interpreting
the applicable statutes. The
determination by DILHR that employees are only compensated, and employers only
gain credit for, hearing loss greater than 30 decibels is eminently rational
considering the careful development of Wis. Admin. Code § Ind 80.25. This is the very type of conclusion which
requires the specialized knowledge and expertise administrative agencies were
created to provide. Furthermore, LIRC's
practice of attributing the same definition to a word both times it is used in
the same statute follows another basic principle of statutory
construction. See General
Castings Corp. v. Winstead, 156 Wis.2d 752, 759, 457 N.W.2d 557, 561 (Ct.
App. 1990). In light of this evidence,
the reasonableness of LIRC's interpretation cannot be in contention.
When, as in this case, great weight
deference is appropriate and the agency's interpretation is not
otherwise unreasonable, "the court of appeals and this court should
refrain from substituting their interpretation of [a] statute for the
long-standing interpretation of the agency charged with its
administration." Parker,
184 Wis. 2d at 703. "The
agency's conclusion of law will be sustained . . . even if an alternative is equally reasonable." DILHR v. LIRC, 161 Wis. 2d 231,
246, 467 N.W.2d 545, 550 (1991). See
also West Bend Education Ass'n v. WERC, 121 Wis.2d 1, 13-14, 357
N.W.2d 534, 540 (1984). LIRC's
interpretation of Wis. Stat. § 120.555(8) should therefore be
sustained.
By
the Court.—The decision of the court of appeals is reversed.
SUPREME COURT OF WISCONSIN
Case No.: 93-0947, 93-0948, 93-0949
Complete Title
of Case: 93-0947
Harnischfeger Corporation,
Plaintiff-Respondent-Cross
Petitioner,
v.
Labor and Industry Review Commission,
Defendant-Co-Appellant-Petitioner,
Guenther Gieske,
Defendant-Appellant-Petitioner.
------------------------------------------
93-0948
Harnischfeger Corporation,
Plaintiff-Respondent-Cross
Petitioner,
v.
Labor and Industry Review Commission,
Defendant-Co-Appellant-Petitioner,
Edward Bohn,
Defendant-Appellant-Petitioner.
------------------------------------------
93-0949
Harnischfeger Corporation,
Plaintiff-Respondent-Cross
Petitioner,
v.
Labor and Industry Review Commission,
Defendant-Co-Appellant-Petitioner,
Emmerich Drawitsch,
Defendant-Appellant-Petitioner.
____________________________________________________
REVIEW OF A DECISION OF THE COURT OF
APPEALS
Reported at: 184 Wis.2d 227, 517 N.W.2d 193
(Ct. App. 1994)
PUBLISHED
Opinion Filed: October 24, 1995
Submitted on Briefs:
Oral Argument: September 6,
1995
Source of APPEAL
COURT: Circuit
COUNTY: Milwaukee
JUDGE: RICHARD G. HARVEY, JR.
93-0947, 93-0948, 93-0949 Harnischfeger Corp v. LIRC
JUSTICES:
Concurred:
Dissented:
Not Participating:
ATTORNEYS: For the defendants-appellants-petitioners
there were briefs by David L. Weir and Zubrensky, Padden, Horwitz
& Weir, Milwaukee and oral argument by David L. Weir.
For the defendant-co-appellant-petitioner
the cause was argued by Richard Briles Moriarty, assistant attorney
general, with whom on the briefs was James E. Doyle, attorney general.
For the plaintiff-respondent-cross
petitioner there were briefs by Thomas M. Rohe and Otjen, Van Ert,
Stangle, Lieb & Weir, S.C., Milwaukee and oral argument by Thomas M.
Rohe.
Amicus curiae brief was filed by Michael
H. Gillick and Murphy, Gillick, Wicht, & Prachthauser, Milwaukee
for Wisconsin Academy of Trial Lawyers.
Amicus curiae brief was filed by Philip
Lehner and Capwell & Berthelsen, Brookfield, for Wisconsin
Manufacturers and Commerce.
Amicus curiae brief was filed by Joseph
R. Long, II and Relles, Meeker & Borns and Betsy J. Abramson
and Elder Law Center, all of Madison, for Elder Law Center of the
Coalition of Wisconsin Aging Groups.
[2] Although a
human has a theoretical range of 0 to 130 decibels, DILHR decided, after
extensive research and discussion, that hearing loss of less than 30 decibels
was not significant from a "real world" perspective. It also decided that hearing loss greater
than 93 decibels has no practical significance since a 93 decibel loss equates
to a 100 percent loss of hearing. As a
result of these conclusions, DILHR constructed a compensation scheme based upon
a practical loss scale of 31-93 decibels.
[3] Therefore, a person with a decibel loss of
30 has 0 percent occupational deafness, while a person with a decibel loss of
32 has 3.2 percent occupational deafness.
[4] When de novo review is
appropriate under the standards set forth by this court, a court decides the
issue without according the agency's interpretation any weight. If an agency decision is, however, accorded
some deference under the due weight standard, Beloit Education Asso. v. WERC,
73 Wis. 2d 43, 67-68, 242 N.W.2d
231, 242-43 (1976), a court need not defer to an agency's interpretation
which, while reasonable, is not the interpretation which the court considers
best and most reasonable. See Whitefish
Bay v. Wisconsin E. R. Board, 34 Wis. 2d 432, 445, 149 N.W.2d 662, 664
(1967).