Puget Sound Liberals Weekly Newsletter #196
Enhancing Freedom, Opportunity and Cooperation in
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Contents * Featured Articles Calendars of Events Communication with Our Members Opportunities Petitions 2009 Election Endorsements Washington
Democrats Endorsements Commentaries from Our Members Dow Constantine: Hutchison’s Conservative Positions* Bill
Alford: Spread the Word about Susan Hutchison* Dick Burkhart: Reduce U.S. Military in Afghanistan* Liberals and Democrats Links to the Beef State and Local Links
to the Beef David Spring: No Limit on BIAW Funds Recovery** Ostrich Officials Should Be Replaced Featured Advocacy Group: Bold Progressives Nation and World Links to the Beef Natural Gas Augments Wind and Solar Power Healthy San Francisco Provides Uninsured a Medical Care
Home and Primary Physician* Our Liberal Spirit Questioning Conventional Wisdom Our
Political Priorities ·
Fair Clean
Elections and Open Government ·
Fair Taxes and
Competent Spending ·
Investment for
Productivity ·
Quality
Health, Education, Jobs, Income ·
Environmental
Protection and Energy Independence ·
Security and
Equal Rights ·
Justice and
Peace Everywhere ·
International
Cooperation and Leadership Conservatives oppose all of these Let’s
End Our National Nightmare
Let’s
Restore Our American Dream More on Conservative opposition to our
American Dream Washington State’s 5 Major Needs · Federal Funding for Health and Education · Substituting
a Progressive Income Tax · Replacing
Conservative Legislators Quote of the Week Conventional Wisdom
is often unquestioned.
Calendar of Events
Saturday, October 24 at 4:30 - 6 PM at Odd Fellows
Hall, Eastsound, Orcus Island - International Day of Climate Action
Sing-Along, coordinated by 350.org. For other Day
of Climate Action events.
Tuesday, October 27 at 5:30 PM at The Westin (1900 Fifth Avenue, Seattle) - Washington State Democrats 16th Annual Warren G. Magnuson Dinner &
Awards Ceremony with special guest Gov. John
Kitzhaber. $100. To buy tickets.
Thursday, October 29 at 5:30 PM at Town Hall Seattle
(1119 Eighth Avenue, Seattle) - 2nd
Annual Puget Sound Sage Vision for Justice Dinner. $70.
Communication
with Our Members
Distinguishing Our Role
With our emphasis on educating Liberals,
our website and newsletter addresses major issues, including especially the
major obstacles to realizing our Liberal values and priorities. By contrast, blogs focus upon allowing people
to communicate their opinions. These opinions only occasionally
address major issues such as clean elections, income tax reform and BIAW
abuses. And they address them only
superficially compared to our commentaries.
This is not to criticize the value of communication. It is only to distinguish between
communication and sustained in-depth education.
Similarly, Fuse is not educational. It focuses upon enabling people to petition
for various causes, particularly Washington state causes. Many of the causes that Fuse chooses to
promote are different than the ones that I would choose based upon my Liberal
values and priorities. Unfortunately,
Fuse doesn’t offer any explicit statement of their values and priorities. Our newsletter also contains petitions for
people to sign, but most of these petitions are prepared by groups concerned
with national, instead of Washington State causes.
Also notice that our newspapers have not
given any more attention to the BIAW abuses than have the bloggers. Even though I understand they have been
notified that BIAW will need to pay the money which they received illegally,
they have not reported on them. I think
we will lose very little if the Seattle Times discontinues it printed paper, or
even if both papers quit altogether.
They have both failed to do continuing investigations of our major
issues. Dave Thomas
Opportunities
Useful
Websites: contacts, maps, community organizing tools, and more.
Petitions
Congratulate
President Obama for winning Nobel Peace Prize.
Congratulate
President Obama for winning Nobel Peace Prize and ask him to act to bring
peace.
Congratulate
Obama for winning Nobel Peace Prize and ask him to strengthen clean energy
bill.
Congratulate
President Obama for visiting New Orleans and tell him to implement 5
principles.
Tell
your senators to vote for a strong bill to restrict greenhouse gas emissions.
Tell
your senators to vote for restricting offshore fish farms in the Gulf of
Mexico.
Tell
Secretary Vilsack the time is now to beef up the USDA's E. coli testing
program.
Tell congress to
support health care reform which meets President Obama’s criteria.
Tell all senators to support
health care reform which includes a public insurance option.
Tell Harry Reid that the Senate health
care reform bill must include a public option.
Tell
your congress members to support a strong consumer protection agency.
Tell the president of CNN to get
rid of Lou Dobbs and his hate messages.
Lots more
petitions initiated by Change.org.
Commentaries
From Our Members
Dow Constantine:
Susan Hutchison’s Conservative positions
Dear David,
sadly for Susan Hutchison, the truth is out!
A video,
filmed in the last year, has surfaced. It shows Hutchison giving a gushing,
unqualified endorsement of a book of right-wing policy positions. It vilifies
light rail as "socialistic", dismisses the scientific consensus
around global warming and the impacts of climate change, and prescribes the
elimination of green building standards for public buildings, among other
positions widely out of step with the common sense, moderate voters of King
County.
This book, A
Policy Guide for Washington State, was produced by the right-wing think
tank the Washington Policy Center. The Washington Policy Center is funded by a
handful of wealthy donors including (surprise!) the foundation Susan runs.
These new revelations about Hutchison’s actual views sharply contradict new
positions she has adopted within the past few weeks. Why is Susan Hutchison flip-flopping with
such abandon? The answer is simple:
Hutchison does not share the values of King County voters. She is trying to
conceal her true beliefs to get elected. She opposes basic environmental
protections and has personally contributed to the BIAW, the most extreme
anti-environmental group in the state.
This
race is tied. Without your help, the 1 million-plus voters of King County will
not learn the truth until it is too late.
Please make a donation of $100 today so we can
show the voters the truth about Susan Hutchison. Dow Constantine
Bill Alford: Spread
the Word about Susan Hutchison’s Christian Conservatism
Susan - our Palin - is effectively running a
Rossi like stealth campaign viz. no candor with voters/reporters and stay
mum about documented extremist affiliations.
Shocking! Susan may well be our next King County Executive!
Such would be a big WIN for the evangelical & business right-wing who
will go about setting King County priorities.
Stop what you are doing and stop King County Palin's
from taking office. Send this message far & wide! Hutchison leads in the polls
because "low information" voters of King County don't
know much about Susan. Read up, chat, contact reporters, blog, wave
street signs, call-in to radio shows. Mail-in voting begins in
just days! Bill Alford
Dick Burkhart: Reduce U.S. Military in
Afghanistan
Many observers of daily life in Afghanistan now agree
that “The presence of foreign troops is the most important element driving the
resurgence of the Taliban”. After all, who would like to be occupied by
soldiers so clueless that they end up massacring wedding parties?
The US needs to down-size its provocative military
presence. At the same time it must sponsor creative civilian personnel to work
in Afghanistan, to learn about its people and culture, and to find ways to
support their desire for a more secure, prosperous, and democratic country.
Instead of going it alone, look for help in this endeavor from neighboring
countries, such as India, Pakistan, and Iran.
In other words, be a team player and take the time to
learn. Work simultaneously toward regional peace and rebuilding a badly torn
society and economy. The military solution is not a solution because it fails
address the underlying trauma. It only breeds resentment and resistance. Dick
Burkhart
Liberals
and Democrats
Government Watch
Also go to Whitehouse.gov.
Nobel Peace Prize
President
Obama receives the Nobel Peace Prize.
For
more. Read
text of the announcement. Conservatives
and commercial media pundits are saying that Obama doesn’t deserve the prize,
with Conservatives even recommending that he should refuse it. They don’t give credit to him for what he has
achieved. Using the bully pulpit, he has
influenced people around the world to show respect for America for being a
cooperative partner to deal with global problems. He has decided not to place anti-missile
defenses in Eastern Europe, where they threaten Russia. Iran has agreed to allow international
inspection of its nuclear energy processing plants. He has initiated an even-handed attempt to
reach an Israeli-Palestinian settlement.
He is supporting American efforts to reduce greenhouse gas
emissions.
I believe
people abroad will be impressed that Barack Obama won the Nobel Peace Prize and
will be more willing to cooperate with his initiatives. I believe Americans will also be
impressed. It ratifies our election of
him.
Our Obama
Administration has expressed its view that Fox Cable is an arm of the
Republican Party. Some have suggested
that Administration members should appear on Fox Cable anyway to gain access to
its many viewers. But these viewers are
all Conservatives who won’t change their negative views of President Obama.
Stimulating Employment
Manufacturers
want more credit, backed by loan guarantees. After health care reform is passed, the next
focus will be upon stimulating
more jobs. A more aggressive approach is inevitable
because high unemployment over a long period not only is a social and economic
calamity, it also is the biggest obstacle Democrats face in 2010 voting. Rarely
have an administration's economic and political imperatives been so closely
aligned. Our
economy justifies further stimulus-recovery spending. Ten
ways you are benefiting or can benefit from the original stimulus-recovery
package.
President Obama promotes
creation of a Consumer Financial Protection Agency.
Health Care Reform
Through a
serious of equivocations, President Obama has successfully delayed full scale
opposition to health care reform by private health insurers. Now that health care reform is likely to
pass, private
insurers are expressing their opposition; but hopefully too late to be successful. For
more. As private insurers express
their opposition, we can now expect Obama to be much more critical of their
abusive practices. For
more.
On Tuesday, our
Senate Finance Committee voted 14 (including all 13 Democrats and Republican Olympia
Snowe) to 9 (including all the remaining Republicans) to pass their health care
reform bill. For
more. I was surprised that Olympia
Snow voted in support.
Now the two
committee bills will be merged. For
more. I predict the merged bill will
include a public option. If the Republicans
attempt to filibuster the merged bill, Democrats will attempt to get 60
senators to vote for cloture to end the filibuster. I believe cloture will succeed for several
reasons. Olympia Snowe could, but
probably won’t support cloture. All the
Democrats could be persuaded to vote for cloture, even though some of them
oppose the public option. Those who
oppose the public option could then vote against the merged bill, which would
still pass.
Those who
oppose the public option could be persuaded to support cloture, because they
realize the damage to the Democrats if health reform fails. And they could be warned that if they don’t
support cloture, they will lose their committee chairs.
The house
committee bills will be successfully merged and the result will be successfully
merged with the merged senate bill. The
resulting bill may be signed by President Obama before Thanksgiving, or at
least this year. House
considers various alternatives for funding health care reform.
Other
As soon as
health care reform passes, attention can turn to passing a climate control bill
and regulation of financial activities, companies and markets. Senate Environmental Committee chair Barbara
Boxer says a
climate control bill may be passed before the December meeting in Copenhagen.
Various
departments of our Obama Administration are coordinating their efforts to
revitalize our cities’ neighborhoods, schools and housing.
Here’s the Beef
Large
financial companies are lobbying against regulation of derivatives and consumer
protection. For
more. For
more.
African
Americans and Hispanics are organizing in support of health care reform.
President
Obama tells largest GLBT rights group that he will act to stop GLBT
discrimination. For
more (video). For
more. For more.
Republicans
continue to fool themselves by believing they can gain congressional seats in
2010. More.
Ever since
Reagan’s Presidency, Conservatives do not accept anyone else’s right to govern.
The
national Chamber of Commerce has completely allied itself with the Republican
Party.
State
and Local
David Spring: Case Law
Confirming No Time Limit
The Department of Labor and Industries and the Attorney General’s
office have responded to my contention that there is no time limit for recovery of overpayments owed the State by telling stakeholders that the “the
courts have determined that L & I can only go back three years.” But neither the Attorney General nor L &
I has produced or cited a single court case to support their claims. In fact,
as the following legal review of court cases confirms, this claim is simply not
true. In fact, just the opposite is the
case, with courts ruling time and again that there is no time limitation in
recovery of claims owed the State.
The following cases provide quotations from some of the most
respected figures in Washington State legal history. These include current
Supreme Court Justice Debra Stephens, former Supreme Court Justice Al Rosellini
and even former Washington State Attorney General Christine Gregoire – who
twice won cases asserting there is no time limit for recovering over payments
owed to the State. All of these famous legal experts agreed with the assessment
of Senate Judiciary Chairperson Adam Kline that there is no time limit for recovery of overpayments owed the State.
Moreover, not a single case of the 28 cases found by the search
engine legalwa.org supported the position of the current Attorney General Rob
McKenna that there is a 3 year time limit on recovery of State claims. Thus, it
is factually incorrect to claim that the “courts have decided that there is a
time limit on State claims.” Instead, this is merely an unpublished informal opinion
which the current Attorney General has given to L & I and which L & I
accepted without critical review. This unpublished informal opinion by the
current Attorney General has no force in law and has never been supported by
any court.
The following analysis reviews Washington State Case law regarding
the three statutes which support the conclusion that there is no time limit on
recovery of claims owed the State. In order of importance, these three statutes
are:
RCW 4.16.160 Application of limitations to actions by state,
counties, municipalities.
RCW 51.48.260 states: Liability of persons unintentionally
obtaining erroneous payments.
WAC
296-17-90402 requiring the loss ratios of retro and non-retro programs to be
the same after taking into account retro subsidies.
To examine case law regarding the three statutes, each was entered
separately into the search engine of legalwa.org. This search engine includes
all citable case law from the Court of Appeals and Supreme Court in Washington
State.
RCW 4.16.160 returned 29
cases. 4 were duplicate cases leaving 25 separate cases. All 25 cases were
reviewed. All supported the contention that there is no time limit to recovery
of State claims. Four of the 25 cases applied directly to the issues in
question. These four are cited, discussed and quoted below.
RCW 51.48.260 returned only
two cases. Both supported the contention that there is no time limit. Both
cases are cited, discussed and quoted below.
WAC
296-17-90402 returned 3 results. But all three were in fact duplicates of the
same case. This case also upheld the contention that there is no time limit to
recovery of claims owed the State and is cited, discussed and quoted below.
In conclusion, there are 28 cases cited in legalwa.org which apply
to the question. Only 7 of these cases apply directly to the question and all
seven affirm the content that there is no time limit for recovery of claims
owed the State. Indeed, many Supreme Court Opinions noted that the State, including State agencies, has a legal
“mandate” or legal requirement to collect all debts owed the State.
In addition, none of the 28 cases supported the contention that
there is a 3 year time limitation on recovery of claims owed the State, except
in narrow exceptions which are discussed below. None of the exceptions apply to
the Department of Labor and Industries, the Workers Compensation program or to
claims against Retro agencies. Therefore not only does the State have a right
to collect claims against Retro agencies without regard to any time limit, but the State has a legal duty to collect the
entire amount of these debts plus interest.
SECTION ONE:
CASE LAW REGARDING RCW 4.16.160
According to Senator Adam Kline, who is the Chair of the Senate
Judiciary Committee and an attorney with more than 30 years of legal
experience, Chapter 4.16 is the most important or “controlling statute” because
it defines the Statutes of Limitations for all causes of action. The specific
section which applies to this case is RCW 4.16.160 which states:
RCW 4.16.160 Application of limitations to actions by state,
counties, municipalities.
The
limitations prescribed in this chapter (RCW 4.16) shall apply to actions
brought in the name or for the benefit of any county or other municipality or
quasi-municipality of the state, in the same manner as to actions brought by
private parties: PROVIDED, That, except as provided in RCW 4.16.310, (a statute which applies to defects in
building construction) there shall be no
limitation to actions brought in the name or for the benefit of the state, and no claim of right predicated upon the
lapse of time shall ever be asserted against the state…
The most recent Supreme Court
case deciding an issue related to RCW 4.16.160 was Wash. State Major League
Baseball Stadium Pub. Facil. Dist. v. Huber, Hunt & Nichols-Kiewit Constr.,
Co, et. al., Supreme Court Docket # 81029-0. The Opinion was filed on March
5, 2009. This case concluded that a State agency (in this case the State
Public Facilities District or PFD) was entitled to collect more than $2.46
million dollars in damages involving SAFECO field repairs even though the
normal Statute of Limitations had expired. The Supreme Court ruled that there
was no Statute of Limitations on debts owed a State agency, except in narrow
cases as discussed below which did not apply to the PFD case.
Decided by a 6 to 3 vote, this case was interesting for two
reasons. First, two of the three dissenting votes were cast by the two Supreme
Court Justices whose elections to the Supreme Court were paid for in large part
by the BIAW (Justices Sanders and James Johnson). They may have been aware that
this issue would set a precedent for a future case involving the BIAW. More
important, the Supreme Court Justice who authored the majority Opinion, Justice
Debra Stephens, included a detailed legal history of RCW 4.16.160 going all the
way back to the Middle Ages. A portion of this history is discussed and quoted
below.
The Washington State PFD had filed a lawsuit in King County
Superior Court against Huber, Hunt, Nichols and Kiewit Construction (hereafter
HK) alleging damages resulting from construction of SAFECO field. HK filed a motion for Summary Judgment to
dismiss the suit claiming that it was barred by a 6 year Statute of Limitations
on breach of contract claims per RCW 4.16.040 (the State had filed their suit
more than 7 years after the completion of the stadium) CP at 1-8, 9, 12. King
County Superior Court agreed with HK and granted their summary judgment motion.
Washington State PFD appealed the Summary Judgment Order to
Division One of the Court of Appeals contending that their actions were “for
the benefit of the State and thus exempt from the six year statute of
limitations under RCW 4.16.160” (Br of Appellants at 19). The appeal was
transferred pursuant to RAP 4.4 from Division One to the Washington State
Supreme Court. The Supreme Court reversed King County Superior Court, agreeing
with the State PFD that there is no time limit to recover debts owed the State.
On pages 5 to 7 of her Opinion, Justice Stephens commented on RCW 4.16.160 by noting: “This provision reflects a facet of sovereign immunity under the old English common law doctrine, “nullum tempus occurrit regi,” meaning “no time runs against the king.” Sigmund D. Schutz, Time to Reconsider Nullum Tempus Occurrit Regi” The Applicability of Statutes of Limitations Against the State of Maine in Civil Actions, 55 Me. L. Rev. 373, 374 (2003). This court in Washington Public Power Supply System v. General Electric Co., 113 Wn.2d 288, 295, 778 P.2d 1047 (1989) (WPPSS) determined that when a municipality brings an action that arises out of the exercise of powers traceable to the State’s sovereign powers delegated to the municipality, the municipality as an agent of the State is bringing the action “for the benefit of the state” within the meaning of RCW 4.16.160, RCW 4.16.160 exempts a municipality from a statute of limitations in this circumstance. WPPS, 133 Wn.2d at 295. “ “The “for the benefit of the state” language in RCW 4.16.160 is properly understood to refer to the character or nature of municipal conduct rather than its effect. WPPSS, 133 Wn.2d at 293. The only inquiry is whether the municipal action arises from an exercise of powers traceable to delegated sovereign state powers or whether such action is proprietary and thus subject to the statute of limitation. Id. at 296. Each case is determined in light of the particular facts involved. Id. In determining whether an action is sovereign or proprietary, we may look to constitutional or statutory provisions indicating the sovereign nature of the power and may also consider traditional notions of powers that are inherent in the sovereign. Id. Relevant to this analysis are the general powers and duties under which the municipality acted, the purpose of those powers, and whether the activity or its purpose is normally associated with private or sovereign acts. Id. The distribution of benefits is irrelevant. Id. The principal test for determining whether a municipal act involves a sovereign or proprietary function is whether the act is for the common good or whether it is for the specific benefit or profit of the corporate entity. Okeson v. City of Seattle, 150 Wn.2d 540, 550, 78 P.3d 1279 (2003); Hagerman v. City of Seattle, 189 Wash. 694, 701, 66 P.2d 1152 (1937). McQuillin’s treatise explains the difference between sovereign and proprietary functions: The purposes of municipal corporations, using the term in its strict meaning, are twofold: the one to assist in the government of the state as an agent of the state, often referred to as an arm of the state, and to promote the public welfare generally; the other to regulate and to administer the local and internal affairs of the territory which is incorporated, for the special benefit and advantage of the urban community embracing within the corporation boundaries. These two functions are usually referred to as the dual powers of municipal corporations. (Eugene McQuillin, The Law of Municipal Corporations § 2.09, at 158 (3d ed. 1999) (footnote omitted). “ On pages 8 and 9, Justice Stephens then explains the difference between a “sovereign act” and a “proprietary function”: “The mere fact that a government project serves a public purpose or grants an economic benefit does not elevate it to the level of a sovereign act. See WPPSS, 113 Wn.2d at 300. Public health and safety are not the basis for distinguishing between governmental and proprietary functions of a municipality. See City of Moses Lake v. United States, 430 F. Supp. 2d 1164, 1177-78 (E.D. Wash. 2006) (holding that the operation of a municipal water system is a proprietary activity and that Moses Lake was not entitled to invoke RCW 4.16.160 to salvage otherwise untimely tort claims); cf. Okeson, 150 Wn.2d at 550-51 (holding that a municipality’s operation of street lights and traffic signals involves a sovereign function).
“We have found an action to be “for the benefit of the state” under RCW 4.16.160 where it involves a duty and power inherent in the notion of sovereignty or embodied in the state constitution. WPPSS, 113 Wn.2d at 296. For example, in Bellevue School District No. 405 v. Brazier Construction Co., 103 Wn.2d 111, 115-16, 691 P.2d 178 (1984), we held that a school district could bring tort claims for design and construction defects 20 years after completion because in building schools the district was acting in its sovereign capacity. Similarly, we have held that actions arising out of the sovereign power of taxation are not subject to the bar of a statute of limitations. Gustaveson v. Dwyer, 83 Wash. 303, 309-10, 145 P. 458 (1915); Commercial Waterway Dist. No. 1 v. King County, 10 Wn.2d 474, 479-80, 117 P.2d 189 (1941); City of Tacoma v. Hyster Co., 93 Wn.2d 815, 821, 613 P.2d 784 (1980); Allis-Chalmers Corp. v. City of North Bonneville, 113 Wn.2d 108, 112, 775 P.2d 953 (1989). This court in Gustaveson stated: It is apparent from the doctrine of these authorities that a general statute of limitations has no application, whether the tax sought to be collected is to become the property of the state and payable directly into the state treasury, or whether it is to become the property of the particular county or municipality and payable into the municipal treasury to be expended for municipal purposes. In either case the tax has been imposed and collected for the express purpose of carrying on the functions of government… All of the rights of the county here involved are traceable to and rest in the sovereign power of taxation. Gustaveson, 83 Wash. at 309-10. Justice Stephens then cite a whole series of cases from Washington State and many other States supporting the conclusion that “construction and maintenance of facilities for public recreation are sovereign functions. Packard v. Rockford Prof’l Baseball Club, 244 Ill. App. 3d 643, 613 N.E.2d 321, 325-27, 184 Ill. Dec. 294 (1993); Libertarian Party v. State, 199 Wis. 2d 790, 546 N.W.2d 424, 435-36 (1996); Kelly v. Marylanders for Sports Sanity, Inc., 310 Md. 437, 530.” On page 14, Justice Stephens further explains the term “sovereign function”: “It is not necessary that the Washington State Constitution explicitly mandate the construction of professional baseball stadiums in order for this to be a sovereign function. The constitution does not explicitly require the construction of merry-go-rounds at city playgrounds, public libraries, or art museums, yet this court has determined that the construction and maintenance of such facilities for public recreational purposes involve the exercise of a sovereign governmental power. Stuver, 171 Wash. at 82; Heavens v. King County Rural Library Dist., 66 Wn.2d 558, 566, 404 P.2d 453 (1965); Int’l Longshoremen’s & Warehouseman’s Union, 52 Wn.2d at 322-23.3.” On page 17, Justice Stephens concludes: “We hold that the construction of Safeco Field by the PFD involves the exercise of sovereign powers traceable to delegated sovereign powers of the State, and claims based on its construction fall within the “for the benefit of the state” statute of limitations exemption in RCW 4.16.160.”
The second relevant case is Bellevue School District No. 405 v. Brazier Construction Co., 103 Wn.2d 111, 115-16, 691 P.2d 178 (1984). In this case, a claim brought even 20 years after the fact was held to be exempt from the Statute of Limitations. As Justice Stephens noted above: “we held that a school district could bring tort claims for design and construction defects 20 years after completion because in building schools the district was acting in its sovereign capacity.” A third relevant case was HERRMANN v. CISSNA et al., 82 Wn.2d 1, 507 P.2d 144 [No. 42479. En Banc) decided by the Washington State Supreme Court on March 1, 1973. This case is relevant because it involves the obligations of an insurance company (such as the Retro Insurance companies). In this case, the State Insurance Commissioner brought an action in King County Superior Court against an insurance company. The Insurance Company filed a motion for partial summary judgment contending the State’s claim for $661,000 was time barred by the Statute of Limitations. King County Superior Court granted the insurance companies motion. In a unanimous Opinion, the Washington State Supreme Court found that there is no time limit to State claims and thus reversed the trial court. Justice Rosellini writing for the Supreme Court noted: “ The respondents (Insurance company) suggest that this provision (RCW 4.16.160) is inapplicable because the action is not brought in the name of the state itself but rather in the name of the Insurance Commissioner. We held in Smith v. Hopkins, 10 Wash. 77, 38 P. 854 (1894), that it was immaterial whether an insurance commissioner's action to recover assets of the corporation was brought in his own name or in the name of the state.
In Gustaveson v. Dwyer, 83
Wash. 303, 308, 145 P. 458 (1915), this court said that a county exercises a
part of the sovereign power of the state when it acquires property at a tax
foreclosure sale and holds it in trust for the state, and that the statute of
limitations does not run against the county when it acts in that governmental
capacity. We quoted with approval the following from Wasteney v. Schott, 58 Ohio
St. 410, 51 N.E. 34 (1898):
"When the action, though brought in the name of the state, is
prosecuted for the enforcement of some private or individual right, and the
state has no substantial interest in the litigation, the plea of the statute
may be interposed. On the other hand, if the state is the real party in
interest, the plea of the statute is not available though the action be not
prosecuted in its name;… We think the principle stated there is sound, and is
applicable here.
The Insurance Commissioner is
an elected officer of the state. RCW 48.02.010. He is charged under the insurance
code with the responsibility of carrying out the public policy of the state,
which is proclaimed by the legislature in that act. In performing the duties of
his office, he acts for and in the interest of the state and for its benefit.
We have no hesitancy in saying that an action brought by the Insurance
Commissioner, in his official capacity and exercising the authority conferred
upon him by statute, is an action by the state.«2»
After citing a bunch of legal cases, Justice Rosellini a page later writes: The business of insurance is one affected by the public interest, requiring that all persons be actuated by good faith, abstain from deception, and practice honesty and equity in all insurance matters. Upon the insurer, the insured, and their representatives rests the duty of preserving inviolate the integrity of insurance.
On page 7, Justice Rosellini further explains: “ the
public interest required that officers be required to make good any losses to
the company which they had caused.
The legislature reasonably could have
concluded that the deterrent effect of such proceedings by the commissioner,
upon other parties charged with the responsibility of managing insurance
companies, is a factor tending to benefit the public in general. See also Gustaveson v. Dwyer, 78 Wash. 336,
139 P. 194 (1914), holding that the statute of limitations does not run against
the county where it holds property in trust, if the state is one of the
beneficiaries of the trust, even though it may not be the sole beneficiary…
There is in the statute no express provision subjecting the commissioner to all
the defenses which would be available to a defendant in a private action.
Therefore, we must assume that the legislature had in mind the provision found
in RCW 4.16.160 and intended it to be given effect where applicable. “
The fact that the state may be
exercising a right derived by assignment or operation of law from a private
individual is not determinative, In the case of State v. Vinther, supra at 393,
the state, as assignee of a claim of a workman's widow, brought suit against a
third party who caused the death of the workman while he was in the course of
extra-hazardous employment. It was contended by the defendant that the statute
of limitations barred any action against the state upon such an assigned claim,
inasmuch as the proceeds would be used for the benefit of private individuals.
After citing and quoting from the statute this court said:
There is a qualification of
the rule exempting the state from the operation of the statute of limitations
as well founded in authority as the rule itself, to the effect that the statute
will apply when the state is a mere formal plaintiff in a suit, not for the
purpose of asserting any public right or protecting any public interest, but
merely to form a conduit through which one private person can conduct
litigation against another private person. United States v. Beebe, 127 U. S.
338, 8 S. Ct. 1083; United States v. Fletcher, 242 Fed. 818. It is upon this
qualification of the general rule that the respondent relies to sustain the
Judgment of the trial court.
We discussed the public policy considerations which prompted the
enactment of the workmen's compensation act and said of it: The act, as a
whole, is the exercise of a governmental function in the fullest sense of the
word, having its support in the police power of the state. 176 Wash. at 394.
The fourth relevant case was State v Vinther, just discussed by Justice Rosellini in which the Supreme Court found that the Workers Compensation Act was specifically in accordance with the “sovereign powers of the State.” In conclusion, recovery of claims by the Workers Comp program meets the tests of RCW 4.16.160 and thus is not time barred by the Statute of Limitations.
Section Two: Case Law regarding RCW 51.48.260.
RCW 51.48.260
states: Liability of persons unintentionally obtaining erroneous payments.
Any person, firm, corporation, partnership, association,
agency, institution, or other legal entity, but not including an industrially
injured recipient of health services, that, without intent to violate this chapter, obtains payments under
Title 51 RCW to which such person or entity is not entitled, shall be liable for: (1) Any
excess payments received; and (2) interest on the amount of
excess payments at the rate of one percent each month for the period from the
date upon which payment was made to the date upon which repayment is made to
the state.
This statute
is different from RCW 4.16.160 in that it applies specifically to cases
involving payments received under Title 51 RCW (in other words to payments
received under the Workers Compensation Act including over payments made to
Retro agencies). RCW 51.48.260 requires repayment of “excess payments received”
including interest - even when there was no intent to violate the Chapter.
There are only
two citable cases regarding this statute. Both specifically concluded that claims owed the Workers Compensation
program are NOT time barred.
The first case, decided by Division Two of the Court
of Appeals on March 19, 1999 is Dept of Labor and Industries v. Kantor,
(1999) 94 Wn. App. 764. The primary issues were what the words “entitled” and
“excess payments” meant in RCW 51.48.260. In this case, the Department of Labor
and Industries (L&I) audited a medical provider’s records and determined
that the medical provider (Kantor) had improperly received “excess payments” to
which the medical provider “was not entitled to receive.” L&I found it had paid Kantor for services
in violation of the Washington Administrative Code and ordered Kantor to pay
back $63,231 plus interest.
Kantor appealed this decision to the Board of Industrial Insurance
Appeals (BIIA). The BIIA ruled that L&I did not have authority to order
Kantor to refund the payments. L & I appealed to the Superior Court which
also held that L & I did not have the authority to order Kantor to refund
the payments. L & I then appealed this decision to Division Two of the
Court of Appeals arguing that RCW 51.48.260 gave them the statutory authority
to order Kantor to refund the over payments.
Arguing the case for the State
L & I and for enforcement of RCW 51.48.260 was none other than Washington
State Attorney General Christine O. Gregoire. So she is
thus likely to be familiar with this statute. Gregoire won the case because
Division Two reversed the trial court and held that the Department of Labor and
Industries has a statutory right under RCW 51.48.260 to recover “any excess payments.” Thus,
when a payment has been later determined to be in excess of what the payee was
“entitled to receive”, L & I (and the State’s tax payers) can recover the
tax payers money back without limitation as to the reason the excess payment
was made to the provider, even if there was no intention to violate the Workers
Compensation Act. In a unanimous Opinion, Division Two wrote:
“If a health care provider,
acting without intent to violate the Act, "obtains payments" to which
he or she is not "entitled," the provider is liable for "any
excess payments received" and any applicable interest on such excess
payments. RCW 51.48.260.”
Here is how Division Two defines the word “entitled:”
“Neither the Industrial
Insurance Act, the medical aid rules, nor case law defines "entitled"
as that term is used in RCW 51.48.260.
Nor does the legislative history provide guidance. Thus, we resort to
extrinsic aids, such as dictionaries, to find the word's ordinary meaning.
Brenner v. Leake, 46 Wn. App. 852, 854-55, 732 P.2d 1031 (1987).
A legal definition of
"entitle" is "to give a right or legal title to" something.
BLACK'S LAW DICTIONARY 477 (5th ed. 1979). A more common meaning is to
"furnish with proper grounds for seeking or claiming something."
WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 758 (3d ed. 1969).
Here, Kantor did not have a
legal right to payment… And the audit authorized by RCW 51.36.100 provides the basis for L&I to take
"corrective action," including …recoupment of payments made to the
provider, together with interest.
Because the Act authorized
Kantor to bill L&I for proper and necessary treatment only, Kantor's bill
for medically unnecessary treatment did not provide "proper grounds"
for or a "right or legal title" to payment by L&I. Because Kantor
was not "entitled" to receive payment for improper treatment, he is
liable to L&I for those monies as "excess" payments. RCW
51.48.260.
RCW 51.48.260 focuses on the repayment of funds to which
the payee was not entitled.«10» Because Kantor is a payee of funds to which he
was not entitled, the statute authorized L&I to demand a refund.
Here is how Division Two defines the term “excess”:
“We also note that "excess" is an undefined term. According to the
common dictionary definition, "excess" is a "state of surpassing
or going beyond limits" or "more than or above the usual or specified
amount." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 7?2 (3d ed. 1969).
As Kantor was limited to payments
to which he was entitled only, and he was entitled only to payment for proper
and necessary medical treatment, payments for improper and unnecessary treatment
are "excess" under RCW 5l.48.260. "We note that RCW 51.32.240 allows L&I to recoup disability
payments made to injured workers due to error, mistake, erroneous adjudication
and fraud. See Weyerhaeuser Co. v. Bradshaw, 82 Wn. App. 277, 918 P.2d 933 (1996). Thus excess merely means more than what the payee was entitled to
receive even if that amount in excess was determined after the payee had
received the payment.
The second case, Department of
Labor and Industries v. Allen, 100 Wn.App. 526 was decided by Division One
on April 24, 2000. It went beyond the prior case in expanding what the State
was entitled to recover. Based on the
audit, DLI made certain factual findings. These findings were the bases for DLI
concluding that Dr. Alien violated certain medical aid rules. Based on the
findings and applying the governing provisions of the WAC to those findings,
DLI ordered Dr. Alien to refund excess payments in the amount of $48,367.83
plus statutory interest. Dr. Allen appealed DLI's order to the Board of
Industrial. Here the Board of Industrial Insurance Appeals (BIIA) found that a
medical provider must reimburse L & I for excess payments. The provider
appealed to King County Superior Court, which held that the medical provider
was not required to reimburse the State because “the payments were for
medically proper and necessary treatment” and thus, L & I “did not have the
authority to recover over payments. L & I then appealed this order to
Division One.
Arguing the case for the State L & I again was Christine
Gregoire. Once again, she prevailed. In
a unanimous Opinion, Division One reversed the trial court stating: “RCW
51.48.260 authorizes the Department of Labor and Industries to recover excess
payments made to health care providers over the amounts they are entitled to
receive under the Industrial Insurance Act (Title 51 RCW) for services
rendered, the term "excess payments" includes payments received by a
health care provider in violation of the medical aid rules, even if the
payments were for medically proper and necessary treatment.”
“Holding that the Department had statutory authority to recover
excess payments received by the physician in violation of the medical aid rules
and that the physician was contractually obligated to refund any excess
payments he received, the court reverses the trial court's order and grants
summary judgment in favor of the Department.”
“DLI's audit of Dr. Allen's records showed that he violated certain "medical aid rules," which are codified
in the WASHINGTON ADMINISTRATIVE CODE.
We hold that the plain meaning of the governing statutes mandates
recovery from Dr. Alien of the "excess" payments to which he was not
entitled plus statutory interest. (RCW 51.48.260; Department of Labor &
Indus, v. Kantor, 94 Wn. App. 764, 973 P.2d 30, review denied, 139 Wn.2d 1002 (1999). Finding that there was “no debatable issue,” Division One took the
unusual step of granting the State a summary judgment motion in their favor.
In Kantor, Division Two of
this court essentially held that DLI's payment of the bills the doctor
submitted was irrelevant to the question of whether Dr. Kantor was entitled to
the payments. Rather, it focused on legal and common definitions of the
statutory word "entitled": A legal definition of "entitle"
is "to give a right or legal title to" something. BLACK'S LAW
DICTIONARY 477 (5th ed. 1979). A more common meaning is to "furnish with
proper grounds for seeking or claiming something." WEBSTER'S THIRD NEW
INTERNATIONAL DICTIONARY 758 (3d ed. 1969).«18»
The court concluded that
because Dr. Kantor's treatment was medically unnecessary, he had no legal right
to payment for that treatment. Accordingly, he was not "entitled" to
the payments he received and was liable for the "excess payments"
plus interest. In so holding, the court held that "excess" payments
were payments to which a recipient is "not entitled."
The same underlying rationale
applies here… The statutory framework makes no distinction between these types
of violations of the medical aid rules in terms of the remedy. Both types of
violations require that DLI recover the excess payments. And the fact that Dr.
Allen provided treatment that was "proper and necessary" is irrelevant.
That fact does not preclude the remedy of repayment.
There is no controlling
authority that dictates a different result.«19» We are not bound by erroneous
interpretations of the law, notwithstanding the fact that the interpretation
comes from the administrative agency with Jurisdiction.«20»
In short, Dr. Allen received
excess payments to which he was not entitled. He must reimburse DLI for those
payments plus statutory interest.
«19» The BIIA appears to have
decided this question differently in at least two matters See In re Gary
Bruner, BIIA 91 P045 (1992), In re Clifford J Johnson, BIIA 91 P045 (1995)
(deciding that once DLI pays for medical services that it has conclusively
decided whether the recipient is "entitled" to payment, and DLI may
not recover payment after that)
«20» City of Redmond v Central
Puget Sound Growth Management Hearings B., 136 Wn.2d 38, 46, 959 P2d 1091 (1998)
Section 3: Case
Law regarding WAC 296-17-90402
This statute requires L & I to set retro refunds at an amount
such that the loss ratios (developed claims paid out divided by premiums paid
in) are the same between retro and non-retro groups. In other words, if L &
I later discovers that retro groups received $525 million in retro refunds to
which they were not entitled, then the excess payments MUST be refunded to the
State in order to make the loss ratios equal.
There is only one citable case referencing this statute. It is Tri-State
Construction Council v. Westfall, 127 Wn. App. 669, decided by Division
Three on May 24, 2005. The case began when L & I charged a Retro agency
(Tri-State Construction Council) an additional assessment as part of their
Retro agreement to pay additional assessments if the loss ratio of the retro
group was higher than the loss ratio of comparable non-retro groups. Tri-state
paid L & I for the additional assessment per their Retro agreement.
Tri-state then tried to collect $12,476 from Westfall, a member of
Tri-state, who had agreed to pay his fair share of any additional Retro
assessments. When Westfall went bankrupt, Tri-State tried to collect from
Westfall’s security bond by filing a motion in Benton County Superior Court.
The bonding company filed for summary judgment to dismiss the action. The
Superior Court granted the motion for summary judgment.
Tri-state then appealed this order to Division Three of the Court
of Appeals. Division Three reversed the trial court finding “the principle of
equitable subrogation” required the bonding company to pay for Westfall’s share
of the assessment charged per WAC 296-17-90402.
In a unanimous Opinion, Division Three wrote:
This case centered on the “equitable” principles which required a
“liberal application” wherein each case must be decided on the “circumstances of each case and the demands
of justice for an equitable result.”
“Courts liberally apply the doctrine of equitable subrogation in
the interests of justice and equity. The doctrine as now applied is broad
enough to include every instance in which one person, not acting voluntarily,
pays a debt for which another is primarily liable and which in equity and good
conscience should have been discharged by the latter. “
(Under Washington’s
Retrospective Rating Plan), The Council may be assessed an additional
retrospective premium if the members were not able to reduce their workers'
compensation costs. Former WAC
296-17-90463(1); former WAC 296-17-90469 (2000). And the Department
"hold[s] the [sponsoring] organization responsible for any additional
assessment." Former WAC 296-17-90469 . To maintain the account in good
standing, the "group must have . . . paid all industrial insurance premium
payments, assessments , penalties and interest when due and
on time." Former WAC 296-17-90402 (2000)
Equitable Subrogation
We address, first, the
question of equitable subrogation since we find that dispositive here.
Principles of natural justice
give rise to the doctrine of equitable subrogation. Tilly v. Doe , 49 Wn. App. 727 , 734, 746 P.2d 323 (1987). This
means that we will require the party who should pay a debt to ultimately pay
it. Mahler v. Szucs , 135 Wn.2d 398 , 411, 957 P.2d 632, 966 P.2d 305
(1998); In re Liquidation of Farmers
& Merchants State Bank of Nooksack , 175 Wash. 78 , 85, 26 P.2d 631 (1933). But there
is no absolute right of equitable subrogation. Farmers & Merchants State Bank , 175 Wash. at 86. It is,
instead, based upon the circumstances of each case and the demands of justice
for an equitable result. Id. at
85-86; Tilly , 49 Wn. App. at 734 . And we will apply the
doctrine liberally "in the interests of justice and equity." J.D. O'Malley & Co. v. Lewis , 176 Wash. 194 , 201, 28 P.2d 283 (1934). "
'[T]he doctrine as now applied is broad enough to include every instance in
which one person, not acting voluntarily, pays a debt for which another is
primarily liable, and which in equity and good conscience should have been
discharged by the latter.' " Farmers
& Merchants State Bank , 175 Wash. at 85-86 (quoting 25 R.C.L. 1322
et seq.).
Retrospective rating plans,
like the one represented by the Council here, are administered according to
rules adopted by the Department. RCW 51.18.010 (1), (2). Under the plan, Westfall was
obligated to pay the Council. And the Council was obligated to pay the
Department.
Thus, this case supports the contention that WAC 296-17-90402
requires an equitable distribution of insurance assessments. Combined with the
other six court cases cited above, it is clear that there is no time limit
barring recovery of excess payments made contrary to WAC 296-17-90402. David
Spring
I
requested that Attorney General Rob McKenna release his opinion that our state
can’t recover money sent to BIAW in error.
I received a response that 13 pages have been located that are
responsive to my request. However due to
Attorney-Client Privilege because it was prepared at the request of a client
for legal advice, these pages will not be released.
David
Spring has informed me that since the client (Director of Labor and Industries)
had already released Rob McKenna’s opinion to the media, there should not be
any Attorney-Client Privilege. Dave
Thomas
Ostrich Officials Should Be Replaced
Our
governor and state department heads and financial officials. 98 state representatives and 40 state
senators. Amidst a large decline in
state revenues, during which our state services were severely reduced, none of
these officials questioned the decision of our Labor and Industries that most
of the funds that BIAW erroneously received could be recovered. Such is the power of conventional wisdom.
We
would be much better off if many of these ostrich officials were replaced with
officials who seriously address the obstacles to adequately funding state
services. Officials who seriously
addressed these obstacles would have questioned the decision by our Labor and
Industries to allow erroneous rebates to escape correction. Dave Thomas
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Here’s the Beef
An
oxygen-depleted dead zone off Washington’s coast may be irreversible due to
climate warming.
Seattle
considering allowing detached backyard cottages to increase density and
affordable housing.
A
Microsoft website allows Seattle City Light customers to compare their usage
with neighbors.
Did McDonald-Douglas
influence Boeing to put financial considerations before quality?
Nation
and World
Natural Gas Augments Wind and Solar Power
Natural gas emits half the carbon of coal. New technologies have made greatly increased
the amount of natural gas available from shale.
The price has decreased.
Utilities are finding it useful to combine natural gas with wind and
solar power generation, because natural gas can be easily turned on and off to
supply power when there is not enough wind or sun. For
more.
Oil Prices Keep Edging Up
Oil prices fell this last year from as high as $140 a barrel earlier to
$35. Now the value of the dollar has
fallen with regard to European currencies and the price of oil has increased to
$74 a barrel. The low value of the
dollar helps our economy by making the products and services we export more
competitive. For
more. But the increased oil price
drains money from our economy to pay for the oil we import. Each dollar that goes abroad to pay for oil
imports is a dollar that we can’t spend to create jobs here. By using less gasoline, so we can use less
oil and import less oil, we will have more money to stimulate our economy.
Healthy San Francisco Provides Uninsured a Medical
Care Home
and
Primary Physician
People, who
have no medical home and primary care physician to coordinate their care,
suffer from wasted and incompatible medical treatments which cause increased
illness and death as well as increased costs of care. Without health care insurance, people not
only lack a medical home and primary care physician, delay care and then go to
expensive emergency rooms for care which often lacks follow-up. Such people lack preventive care, adequate
treatment care and hospice care.
Healthy
San Francisco is an innovative
program designed to make health care services accessible and affordable to
uninsured San Francisco residents. It is operated by the San Francisco Department of Public
Health (DPH). Urgent Care and Health
Clinics offer an alternate to expensive emergency rooms. These clinics provide a low cost medical home
with a primary care physician coordinating referral to specialists. This allows a greater focus on preventive
care, as well as specialty care, urgent and emergency care, laboratory,
inpatient hospitalization, radiology, and pharmaceuticals. It is funded by money from a variety of
sources. For more.
On a smaller scale, Healthy San Francisco is similar to Group Health
Cooperative of Puget Sound. If all
communities had clinics which serve as a medical home with a primary care
physician to coordinate care, much money would be saved from better care, with
fewer errors and reduced unnecessary emergency room visits. Such clinics are a major way to reduce the
cost of health care, which is necessary even if we substitute a single payer
health care insurance system for our present system of private insurers. For
more.
Here’s the Beef
To avoid
systemic risk, regulators need a maps of the financial company’s network of
obligations.
Two Wall Streeters are
on trial for lying to their clients.
New locally owned banks
could use local public money to provide loans.
Tax credits
for housing purchases should be related to different needs in different
markets.
Subway’s
healthy food offers an alternative to McDonalds type unhealthy food.
People
who live in neighborhoods which encourage exercise are less likely to develop
diabetes.
American
greenhouse emissions have rapidly declined.
Americans
may be allowed to visit Cuba.
Even
an al Qaeda presence in Afghanistan would pose no greater threat to the United
States.
Michael
Moore asks President Obama to earn Nobel Peace Prize by Leaving Afghanistan.
Our
Liberal Spirit
Questioning Conventional Wisdom
We are all susceptible to
unquestionably accepting conventional wisdom.
A major strategy for avoiding this blindness is to be clear about our
values, mission and the obstacles to that mission. We are then motivated to examine these
obstacles in detail. When we do, we may
find that some of the obstacles are based upon erroneous premises. For example:
·
Publically
funding political campaigns does not cost the government money. It is more than paid for by avoiding the
giveaways that result from private campaign funding.
·
Introducing a
progressive income tax will not increase most people’s taxes. It will decrease them, providing both
fairness and adequate tax revenue for our state to serve our people.
·
Money erroneously
rebated to BIAW is not unrecoverable.
Recovering it is legal and even legally required.
Recommended Books – See our list of books for liberals
Larry
Sabato, 2007, A More Perfect
Constitution. Why the Constitution Must
Be Revised: Ideas to Inspire a New Generation
Larry
Saboto’s book makes many useful suggestions for improving our constitution,
including especially correcting the bias of our Senate and Electoral system
toward increasing the political power of our least populous states, removing
the power of our president to initiate wars without congressional approval, and
putting term limits (perhaps 15 years) on supreme court judges. But his opposition to allowing minority
parties to exist, results in eliminating various needed reforms. And many of the needed reforms are politically
impossible to realize, especially those which reduce the political power of our
rural states.