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Associated Business Products v. Industrial Claim Appeals Office of the State of Colorado11/3/2005
ive, employer raises three points of error. We address and reject each in turn.
A.
Employer first contends that the Panel erred in reviewing the ALJ's penalty award for an abuse of discretion. Relying on Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001), employer asserts that a de novo standard of review should apply. We are not persuaded.
In Cooper Industries, supra, the Supreme Court held that when a punitive damages award is reviewed for excessiveness under the Due Process Clause and the Eighth Amendment, a de novo standard of review should be applied. However, the Court noted that legislatures have extremely broad discretion in setting the range of permissible punishments for statutorily enumerated offenses and that judicial decisions operating within the legislatively enacted guidelines are typically reviewed for abuse of discretion. Cooper Indus., Inc. v. Leatherman Tool Group, Inc., supra, 532 U.S. at 432, 440, 121 S.Ct. at 1683, 1687.
The Panel relied on Cooper and concluded that because § 8-43-304(1) contains a legislatively enacted penalty range, the ALJ's order must be reviewed for an abuse of discretion. Because Cooper mandates a de novo standard of review only for punitive damages awards, but not for legislatively enacted penalties, the Panel did not err in applying an abuse of discretion standard to the penalty imposed here. See United States v. Smithfield Foods, Inc., 191 F.3d 516 (4th Cir. 1999)(highly discretionary calculations necessary to award civil penalties are reviewed for abuse of discretion); Atl. States Legal Found., Inc. v. Tyson Foods, Inc., 897 F.2d 1128 (11th Cir. 1990)(same).
Moreover, the fact that a legislative body identifies the prohibited conduct and potential range of penalties in a statute goes far in assuring due process to employers whose violations may subject them to the penalty provisions. See Romano v. U-Haul Int'l, Inc., 233 F.3d 655 (1st Cir. 2000)(due process requires notice of prohibited conduct and the range of penalties available); Madeja v. MPB Corp., 149 N.H. 371, 821 A.2d 1034 (2003). This assurance provides support for reviewing for abuse of discretion when examining the excessiveness of a penalty that lies within a statutorily prescribed range.
Our review is also for abuse of discretion. See § 8-43-308, C.R.S. 2005; Cooper Indus., Inc. v. Leatherman Tool Group, Inc., supra; Dee Enters. v. Indus. Claim Appeals Office, 89 P.3d 430 (Colo. App. 2003); see also Jarosinski v. Indus. Claim Appeals Office, 62 P.3d 1082 (Colo. App. 2002)(an abuse of discretion occurs when the ALJ's order is beyond the bounds of reason, as where it is unsupported by the evidence or contrary to law); cf. People ex rel. Bill Lockyer v. Fremont Life Ins. Co., 104 Cal. App. 4th 508, 128 Cal. Rptr. 2d 463 (2002)(reviewing imposition of civil penalty under abuse of discretion standard and rejecting claim that de novo review is required under Cooper); May v. Colo. Civil Rights Comm'n, 43 P.3d 750 (Colo. App. 2002)(reviewing assessment of a civil penalty for an abuse of discretion).
B.
Employer contends that the penalty violates the due process protections guaranteed by the federal and state constitutions and the excessive fines clause of the Eighth Amendment. We disagree.
Under § 8-43-304(1), any employer or insurer who fails, neglects, or refuses to obey any lawful order for payment of medical benefits is subject to a fine of up to $500 per day. See Holliday v. Bestop, Inc., 23 P.3d 700 (Colo. 2001); Pioneers Hosp. v. Indus. Claim Appeals Office, 114 P.3d 97 (Colo. App. 2005). However, the Eighth Amendment and Colo. Co
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