Oral Argument Before the Hawaii Supreme Court

No. SCWC-11-0000460, Thursday, January 9, 2014, 8:45 a.m.

In the Matter of Attorney’s Fees Pertaining to JOHN C. MCLAREN, Petitioner/Appellant, in the case of ETSUKO FURUKAWA, Claimant, vs. PARADISE INN HAWAI`I LLC, Employer, and FIRST SECURITY INSURANCE COMPANY OF HAWAIʻI, INC., Insurance Carrier.

The above-captioned case has been set for argument on the merits at:

Supreme Court Courtroom
Ali`iolani Hale
417 South King Street
Honolulu, HI 96813

Attorneys for Petitioner: 

Arthur Y. Park and John C. McLaren of Park & Park

Attorney for Respondents Director of DLIR and Administrator of the Disability Compensation Div., DLIR:

Frances E.H. Lum, Deputy Attorney General

NOTE: Order granting Application for Writ of Certiorari, filed 11/07/13.

COURT: MER, CJ; PAN, SRA, SSM, & RWP, JJ.

[ Listen to the entire audio recording in mp3 format ]

Brief Description:

Petitioner/Defendant-Appellant John C. McLaren (McLaren) timely filed an application for writ of certiorari seeking review of the ICA’s July 26, 2013 Judgment on Appeal, entered pursuant to its June 27, 2013 Memorandum Opinion, which affirmed the Labor and Industrial Relations Board’s March 21, 2011 “Decision and Order” and May 11, 2011 “Order Denying John C. McLaren’s Motion for Reconsideration of Decision and Order Filed March 21, 2011.”

This case arises out of McLaren’s request for attorney’s fees filed with the Disability Compensation Division (DCD) of the Department of Labor and Industrial Relations (DLIR) for fees and costs for his work on a workers’ compensation claimant’s case. The Director of the DLIR, through the DCD, approved McLaren’s request, but reduced the amount awarded by 48%. McLaren objected to the reduction and requested a hearing and access to the DCD’s records on his attorney’s fees. The DCD responded that hearings were not provided for attorney’s fee approvals and if there were any objections to attorney’s fee awards, an appeal should be filed to the Labor and Industrial Relations Board (LIRAB).

Upon receipt of the DCD’s response, McLaren filed an appeal with the LIRAB; however, the LIRAB dismissed his appeal as untimely. McLaren appealed to the ICA asserting, among other things, that (1) his application was timely because his objection to the reduction and his request for a hearing was essentially a request for reconsideration under Hawai#i Revised Statutes (HRS) section 386-89, which tolled the time for appeal until the Director made a decision on the request; (2) objections to the reduction in his attorney’s fees had to be resolved via a contested hearing or comparable procedure; and (3) his due process rights had been infringed because he was not given notice and an opportunity to be heard on his objection to the reduction in his fees.

The ICA agreed with the LIRAB and held that McLaren’s application was untimely. The ICA concluded that none of McLaren’s requests could be construed as a request for reconsideration under HRS section 386-89 because none of his requests asserted any newly discovered information or fraud, as is required by HRS section 386-89. In addition, the ICA concluded that a contested case hearing for attorney’s fee objections was not required by law. The ICA further concluded that McLaren’s due process rights had not been infringed, stating that McLaren had the opportunity to timely seek an appeal to the LIRAB.

In his Application, McLaren presents the following questions:

A. Did the ICA gravely err in concluding that the September 7, 2010 appeal to the LIRAB was untimely made?

B. Did the ICA gravely err in concluding that I have no fundamental due process rights of notice and an opportunity to be heard at the DCD to review and present evidence against its fee reduction?

C. Did the ICA gravely err in concluding that my three requests to DCD for reconsideration were insufficiently supported?

D. Did ICA gravely err in concluding that DCD does not have to convene a contested case type hearing pursuant to my three requests to review and explain its drastic reduction in my attorney’s fees and costs?

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