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Saif Corp. v. Leland5/19/1999
e request of the worker, employer or insurer, ostensibly consists of a contested case hearing process pursuant to the Administrative Procedures Act (APA). ORS 183.310 et seq. By the terms of ORS 656.327(2), that process is to culminate in an order by the Director, limited to the questions of whether the first-stage administrative order is supported by substantial evidence and is free of legal error. "The 'Director's' actions at the second stage are actually divided into two parts. As with the first stage, neither of those parts is actually performed by the Director. The second stage begins with a proceeding before an administrative law Judge (ALJ); if sought, the ALJ's 'proposed order' is then reviewable by the administrator of the Workers' Compensation Division. At the second stage, argument and some testimony may be presented but 'new medical evidence or issues' may not be. As to those matters, both the ALJ's and the administrator's decisions are based on the information in the record generated by and before the MRU."
Employer argues that the Director performed a de facto de novo review prohibited by ORS 656.327(2). It first supports that contention by arguing that the Director misstated the issue in this case as " hether the Medical Review Unit (MRU) order of April 3, 1997 correctly determined that the L5-S1 disk surgery performed by Jeffery Bert, M.D., on January 28, 1997, was inappropriate for claimant's compensable condition." We agree with employer that the better way to frame the issue was whether substantial evidence supported the MRU's finding that the disk surgery was not appropriate. However, the question is not whether the Director's statement of the issue was correct; it is whether the type of review the Director actually performed was correct.
Employer further argues that, because the Director and ALJ included the postoperative report and other postoperative information from Bert in their orders as findings of fact, and that information was not discussed in the MRU order, they made additional findings of fact, thus either misunderstanding or misapplying the substantial evidence review. Employer cites 1000 Friends of Oregon v. Marion County, 116 Or App 584, 842 P2d 441 (1992), for the proposition that this court may not make new findings of fact when conducting a substantial evidence review. We disagree.
Unlike an appellate court reviewing an agency finding, the Director is required by ORS 656.327(2) to prepare a full record capable of judicial review. However, more importantly, the Director did not make additional medical findings that are prohibited under ORS 656.327(2). All of the alleged new findings made by the Director that were disputed by employer were based on evidence available to the MRU in the original record. Claimant counters that it was unreasonable for the MRU to have ignored it and not impermissible for the ALJ and Director to consider it. We agree with claimant. The issue reviewed by the Director was whether substantial evidence supported the MRU's decision that surgery on the L5-S1 disk was not appropriate. The MRU relied on reports that assumed that claimant had no ruptured disk. All but one of the consulting physicians made his evaluation before the results of the surgery at L5-S1 were available. None of them considered the fact that Bert found a large ruptured disk at L5-S1 during the surgery. The MRU ignored that evidence and Bert's assertion that claimant experienced relief following the surgery. Considering those germane facts already in the record is not finding additional facts; it is merely considering all the relevant facts in the record pursuant to a substantial evidence review. No reasonable person would have failed to consider the results of
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