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AFL-CIO v. Superintendent of Ins.
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1998 ME 257
Docket:	Pen-97-659
Argued:	October 7, 1998	
Decided:	December 4, 1998

Panel:CLIFFORD, RUDMAN, DANA, SAUFLEY, and CALKINS, JJ.


MAINE AFL-CIO v. SUPERINTENDENT OF INSURANCE


DANA, J.

	[¶1]  The Maine AFL-CIO appeals from a judgment entered in the
Superior Court (Penobscot County, Alexander, J.) dismissing for lack of
ripeness its appeal challenging a rule promulgated by the Bureau of
Insurance (Bureau) governing "pilot projects" for workers' compensation
insurance pursuant to 39-A M.R.S.A. § 403 (Supp. 1998).  We affirm the
judgment of the Superior Court.
	[¶2]  Maine employers have three options in providing workers'
compensation coverage for employees.{1}  An employer may purchase
workers' compensation insurance, § 403(1); establish an authorized self-
insurance program, § 403(3); or devise a "workers' compensation health
benefits pilot project," § 403(2).  A pilot project, also referred to as a "24-
Hour Coverage Plan," provides employers and employees the opportunity to
design and implement an insurance program that combines benefits for
work-related and nonwork-related conditions.  The Superintendent of
Insurance (Superintendent) has the responsibility of adopting rules
governing pilot projects.  39-A M.R.S.A. § 403(2)(A) (Supp. 1998).
	[¶3]  At issue here is whether a pilot project that incorporates
workers' compensation indemnity payments with general health coverage
may reduce indemnity payments if the overall benefits "are equal to or
greater than" the benefits otherwise available under the Workers'
Compensation Act.  Section 403(2)(A) provides that the Superintendent
"may approve a proposal only if it confers medical benefits, or medical and
indemnity benefits depending on the pilot project proposal, upon injured
employees that are equal to or greater than the benefits available under this
Title."  39-A M.R.S.A. § 403(2)(A) (Supp. 1998) (emphasis added).  The AFL-
CIO argues that pilot projects that include indemnity coverage and medical
coverage cannot, under any circumstance, reduce the statutory minimum
indemnity benefits under the Workers' Compensation Act.
	[¶4]  After a Bureau of Insurance Rulemaking Hearing, the
Superintendent rejected the AFL-CIO's position.  The Bureau promulgated
Amendments to Bureau of Insurance Rule 690, which defines "alternative
benefit design" as "an integrated or coordinated 24-hour medical coverage
plan which provides for medical or disability benefits that differ from the
minimum benefits otherwise required under the Workers' Compensation
Act . . . ."  Amendments to Bureau of Insurance Rule 690, 24-Hour Coverage
Pilot Projects § 3(K) (1996).  Further, Rule 690 provides that "[n]o
alternative benefit design may be approved unless the Superintendent
determines, after consultation with the Workers' Compensation Board, that
(i) the overall level of benefits, taking into account both amount and
duration, remains equal to or greater than the level of benefits otherwise
required under the Workers' Compensation Act . . . ."  Id. § 8(E) (emphasis
added).  Therefore, Rule 690 contemplates a pilot project that could reduce
the statutory minimum indemnity benefits required by the Workers'
Compensation Act, so long as the overall benefits of the pilot project are
equal to or greater than benefits pursuant to the Workers' Compensation
Act.  To date, no pilot project has been proposed to the Superintendent for
review. 
	[¶5]  The AFL-CIO appealed the Bureau's promulgation of Rule 690,
arguing, inter alia, that it is inconsistent with section 403.  The Superior
Court (Penobscot County, Alexander, J.) dismissed the AFL-CIO's claims,
finding that the issues were not yet ripe for judicial decision-making
because no plan had been offered for approval before the Superintendent. 
The AFL-CIO appeals.  
RIPENESS
	[¶6]  The AFL-CIO argues that the Superior Court improperly applied
the doctrine of ripeness to its appeal because 5 M.R.S.A. § 8058(1) requires
mandatory review of all appeals of agency rules.{2}  We disagree.
	[¶7]  	As a matter of judicial discretion, courts will not review an
agency action unless the issue is "ripe" for judicial consideration and action. 
See Maine Public Serv. Co. v. Public Utils. Comm'n, 490 A.2d 1218, 1221-22
(Me. 1985).  The principle underlying the doctrine of ripeness is "to
'prevent the courts, through avoidance of premature adjudication, from
entangling themselves in abstract disagreements over administrative
policies, and also to protect the agencies from judicial interference until an
administrative decision has been formalized and its effects felt in a concrete
way by the challenging parties.'"  New England Tel. & Tel. Co. v. Public Utils.
Comm'n, 448 A.2d 272, 302 (Me. 1982) (quoting Abbott Lab. v. Gardner,
387 U.S. 136, 148-49 (1967)).  Because this principle applies to appeals to
agency rulemaking pursuant to section 8058, we conclude that the Superior
Court did not err when it applied the doctrine of ripeness to the AFL-CIO's
claims.{3} 
	[¶8]  To determine if an issue is ripe for review, the court focuses on
"the fitness of the issue for judicial decision and the hardship to the parties
of withholding court consideration."  Maine Public Serv., 490 A.2d at 1221
(quoting Abbott Lab., 387 U.S. at 149).  An issue is fit for review if the
agency's action "presents a concrete and specific legal issue" that has a
"direct, immediate and continuing impact" on the appealing party.  Maine
Public Serv., 524 A.2d at 1226.  Here, none of the issues raised by the AFL-
CIO to the Superior Court are fit for adjudication.  Rule 690 does not affect
any party unless and until a pilot program is designed and proposed.  Unless
every pilot plan would violate section 403,  we cannot conclude that the
issue is fit for review.  A determination of this issue in its current posture is
premature and is more appropriately left for specific challenges in the
future, after a pilot program has been approved.  See Wagner, 663 A.2d at
567-68.  
	[¶9]  In addition, the AFL-CIO has not demonstrated sufficient
"hardship" to warrant this Court's immediate review of the alleged
inconsistency between Rule 690 and section 403.  See Abbott Lab., 387 U.S.
at 152-53 (finding hardship where party is forced to comply and incur
financial burden or not comply and face civil and criminal penalties);
Lewiston, Greene and Monmouth Tel. Co. v. New England Tel. & Tel. Co.,
299 A.2d 895, 908 (Me. 1973) (order requiring party to undertake various
studies to develop data for Commission imposes an immediate financial
burden).  The AFL-CIO argues that workers are harmed because of the vast
disparity in financial power between workers and management in
attempting to craft pilot projects and to challenge, on appeal, particular
pilot projects.  These alleged hardships are speculative and concern "future
adverse financial consequences" that may or may not result.  See New
England Tel. & Tel. Co., 448 A.2d at 303 (finding party will not suffer "heavy
financial burden" or an "undue burden" where any future financial
consequences are "speculative").  Rule 690 does not have "a direct,
immediate and continuing impact [on the AFL-CIO], causing [it] to suffer
hardship in the absence of immediate review."  See Maine Public Serv. Co.,
490 A.2d at 1222.  Consequently, the issue raised by the AFL-CIO is not ripe
for judicial review.
	[¶10]  Likewise, the AFL-CIO's challenge to Rule 690 based on
potential violations of the Employee Retirement and Income Security Act of
1974 is not ripe for review and does not warrant further discussion.
	The entry is:
					Judgment affirmed.

Attorneys for plaintiff: Patrick N. McTeague, Esq., (orally) James w. Case, Esq. McTeague, Higbee, McAdam, Case, Watson & Cohen P O Box 5000 Topsham, ME 04086-5000 Attorneys for defendant: Andrew Ketterer, Attorney General Jeffrey Frankel, Asst. Atty. Gen., (orally) 6 State House Station Augusta, ME 04333-0006
FOOTNOTES******************************** {1} . Title 39-A M.R.S.A. § 403 provides: Insurance by assenting employer; requirements as to self-insurers An employer subject to this Act shall secure compensation and other benefits to the employer's employees in one or more of the ways described in this section. . . . 1. Insuring under workers' compensation insurance policy. The employer may comply with this section by insuring and keeping insured the payment of such compensation and other benefits under a workers' compensation insurance policy. . . . 2. Pilot projects. Workers' compensation health benefits pilot projects are authorized under the following provisions. A. The Superintendent of Insurance shall adopt rules to enable employers and employees to enter into agreements to provide the employees with health care benefits covering workplace injury and illness and nonworkplace injury and illness and other health care benefits, or health care and indemnity benefits covering workplace injury and illness and nonworkplace injury and illness and other health care and indemnity benefits, in comprehensive pilot projects. The health care and indemnity benefits may be provided by: organizations authorized to do business under Title 24; insurers or health maintenance organizations authorized to do business under Title 24-A; employee benefit plans; and benefit plans of employers who self-insure under this section. The superintendent shall review all pilot project proposals and may approve a proposal only if it confers medical benefits, or medical and indemnity benefits depending on the pilot project proposal, upon injured employees that are equal to or greater than the benefits available under this Title. Indemnity benefits may only be modified in those pilot projects providing medical and disability benefits for all workplace and nonworkplace diseases and injuries. The superintendent shall revoke approval if the pilot project fails to deliver the benefits contained in the proposal. A pilot project proposal that provides indemnity benefits deviating in any way from the indemnity benefits provided under this Title must include in its application to the superintendent for approval under this section a methodology for identifying both the costs and benefits of the deviations and a methodology for comparing those costs and benefits to the costs and benefits provided under this Title. The superintendent may not approve a pilot project that does not provide, as determined by the superintendent, an adequate basis for making the foregoing cost-benefit comparison between the pilot project and this Title. . . . . 3. Proof of solvency and financial ability to pay; trust. The employer may comply with this section by furnishing satisfactory proof to the Superintendent of Insurance of solvency and financial ability to pay the compensation and benefits . . . . . . . . 39-A M.R.S.A. § 403 (Supp. 1998). {2} . Title 5 M.R.S.A. § 8058 provides in pertinent part: Judicial review of rules 1. Judicial review. Judicial review of an agency rule, or of an agency's refusal or failure to adopt a rule where the adoption of a rule is required by law, may be had by any person who is aggrieved in an action for declaratory judgment in the Superior Court conducted pursuant to Title 14, section 5951, et seq., which provisions shall apply to such actions wherever not inconsistent with this section. Insofar as the court finds that a rule exceeds the rule-making authority of the agency, or is void under section 8057, subsection 1 or 2, it shall declare the rule invalid. In reviewing any other procedural error alleged, the court may invalidate the rule only if it finds the error to be substantial and related to matters of such central relevance to the rule that there is a substantial likelihood that the rule would have been significantly changed if the error had not occurred. If the court finds that the rule is not procedurally invalid and not in excess of the agency's rule-making authority, its substantive review of that rule shall be to determine whether the rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law. The phrase "otherwise not in accordance with the law" shall apply only to the review authorized in the preceding sentence and shall not be construed so as to limit or replace in any way section 8003. In the event that the court finds that an agency has failed to adopt a rule as required by law, the court may issue such orders as are necessary and appropriate to remedy such failure. . . . . 5 M.R.S.A. § 8058(1) (1989). {3} . We have applied the doctrine of ripeness in various contexts. For example, we have applied the doctrine of ripeness to appeals from the Public Utilities Commission, pursuant to 35 M.R.S.A. § 303, recodified as 35-A M.R.S.A. § 1320 (1998), see, e.g, Maine Public Serv. Co. v. Public Utils. Comm'n, 524 A.2d 1222, 1226 (Me. 1987); Maine Public Serv. Co., 490 A.2d at 1221-22; New England Tel. & Tel. Co., 448 A.2d at 302-03; to actions brought pursuant to the Declaratory Judgments Act, 14 M.R.S.A. §§ 5951-63 (1980), Wagner v. Secretary of State, 663 A.2d 564, 567 (Me. 1995); and to appeals pursuant to M.R. Civ. P. Rule 80(B), Schmidt v. Town of Northfield, 534 A.2d 1314, 1317 (Me. 1987). Pursuant to the Administrative Procedures Act, 5 M.R.S.A. § 11001 (1989), the Superior Court may only review "final" agency actions to ensure that the court only considers "ripe" issues. See Wheeler v. Maine Unemployment Ins. Comm'n, 477 A.2d 1141, 1145 (Me. 1984). Accordingly, we apply the ripeness doctrine to appeals pursuant to 5 M.R.S.A. 8058.