Filed: December 14, 2000

In the Matter of the Compensation of
George D. Koskela, Claimant.

GEORGE D. KOSKELA,

Petitioner on Review,

v.

WILLAMETTE INDUSTRIES, INC.,

Respondent on Review.

En Banc

On review from the Court of Appeals.*

Argued and submitted January 6, 2000.

David W. Hittle, Burt, Swanson, Lathen, Alexander, and McCann, Salem, argued the cause and filed the brief for petitioner on review.

David L. Johnstone, VavRosky, MacColl, Olson, Bush & Pfeifer, P.C., Portland, argued the cause and filed the brief for respondent on review.

Julene M. Quinn, Salem, filed a brief on behalf of amici curiae SAIF Corporation and South Hills Health Care Center.

Phil Goldsmith, Portland, filed a brief on behalf of amici curiae Oregon Trial Lawyers Association, Legal Aid Services of Oregon, Oregon Advocacy Center, Oregon Law Center, and Oregon AFL-CIO. With him on the brief was Lake James H. Perriguey.

LEESON, J.

The decision of the Court of Appeals is reversed. The order of the Workers' Compensation Board is reversed. The case is remanded to the Workers' Compensation Board for further proceedings.

*Judicial Review from the Workers' Compensation Board.

159 Or App 229, 978 P2d 1018 (1999).

LEESON, J.

The underlying issue in this workers' compensation proceeding is whether claimant is permanently totally disabled. (1) The Workers' Compensation Board (Board) held that claimant is only permanently partially disabled. The Board rejected claimant's assertion that the post-1995 process for determining whether a worker should receive an award of permanent total disability (PTD) benefits facially is invalid under the Due Process Clause of the Fourteenth Amendment to the United States Constitution. (2) In a split, en banc decision, the Court of Appeals affirmed. Koskela v. Willamette Industries, Inc., 159 Or App 229, 978 P2d 1018 (1999). We allowed claimant's petition for review, and, for the reasons that follow, we reverse the decision of the Court of Appeals and the order of the Board. We remand the case to the Board for further proceedings.

The facts relevant to claimant's challenge are not in dispute. Claimant began working for Willamette Industries in 1965. In 1986 and 1989, claimant suffered compensable injuries to his jaw while he was working as a scrubber. Claimant already had an extensive history of medical problems with his temporomandibular joint (TMJ). In June 1994, after multiple surgeries, claimant's treating physician declared claimant medically stationary, (3)but he noted that claimant continued to experience facial swelling and pain when engaged in physical activities.

The declaration that claimant was medically stationary triggered the claim closure process conducted by the Department of Consumer and Business Services (DCBS) for determining the extent of claimant's permanent disability. See former ORS 656.268(2)(a) (1993) renumbered as ORS 656.268(1)(a) (1999) (claim closure begins after claimant "has become medically stationary"). As part of the claim closure process, claimant underwent three medical examinations that his self-insured employer had ordered. ORS 656.325(1)(a). Employer's medical examiners conducted physical examinations of claimant and reviewed a "surveillance videotape" that employer had made, showing, among other things, claimant mowing his lawn, chopping wood, fishing, and driving his truck. The medical examiners concluded that claimant was capable of performing at least sedentary work. Claimant's physician also reviewed the videotape and agreed that claimant was capable of performing the physical activities depicted on it, but he questioned whether claimant could perform such activities on a regular basis. In October 1994, after reviewing the medical reports from employer's medical examiners and claimant's treating physician, DCBS issued a determination order that awarded claimant 14 percent permanent partial disability (PPD) benefits. See ORS 656.268(2) and (5) (1993) (describing DCBS review).

Claimant sought reconsideration, and the matter was assigned to the appellate review unit (ARU) of DCBS. ORS 656.268(5), (6)(a) (1993). When claimant sought reconsideration, ORS 656.283(7) (1993) provided, in part:

"Nothing in this section shall be construed to prevent or limit the right of a worker, insurer or self-insured employer to present evidence at hearing and to establish by a preponderance of the evidence that the standards * * * for evaluation of the worker's permanent disability were incorrectly applied in the reconsideration order pursuant to ORS 656.268."

The Court of Appeals had construed that wording as permitting a party to introduce evidence at hearing that it had not introduced previously at reconsideration. Safeway Stores, Inc. v. Smith, 122 Or App 160, 163, 857 P2d 187 (1993).

In the reconsideration proceeding, claimant bore the burden of proving the extent of his disability. ORS 656.266. Claimant sought to prove that he was permanently totally disabled. To prove that he should receive PTD benefits, claimant had to demonstrate: (1) "permanent total disability status," that is, that his disability permanently prevented him from regularly performing work at a gainful and suitable occupation, (2) that he was willing to seek regular gainful employment, and (3) that he had made reasonable efforts to obtain such employment. See ORS 656.206(3) (describing claimant's burden).

In July 1995, the ARU issued an order on reconsideration rejecting claimant's contention that he was permanently totally disabled, but increasing his permanent disability rating from 14 percent to 29 percent PPD. Claimant requested a hearing before an administrative law judge (ALJ). Former ORS 656.268(6)(b) (1993) renumbered as ORS 656.268(6)(g) (1999); ORS 656.283(1) (1993).

At outset of the hearing, on October 16, 1995, claimant stated that he planned to introduce testimonial evidence from himself, his family physician, a vocational expert, and lay witnesses who knew him. That testimony would regard the extent of his permanent disability, whether suitable sedentary employment was available, his willingness to work, and his efforts to find suitable work. However, on June 7, 1995, while claimant's case was pending before the ARU, a legislative amendment to ORS 656.283(7) took effect. See Or Laws 1995, ch 332,