STATE BY AND THROUGH WORKFORCE SAFETY AND INSURANCE v. LLC (2026)

[¶1] Russell Jones appeals from a district court judgment reversing an administrative law judge (ALJ) decision that continued Jones's workers’ compensation benefits for a back injury. Workforce Safety and Insurance appealed to the district court from the ALJ decision, arguing that Jones's claim could have been raised in an earlier proceeding and therefore was barred by administrative res judicata. The court agreed and held that administrative res judicata barred Jones's acceleration claim without reaching the merits of WSI's appeal. Because the acceleration claim could not have been raised in the earlier proceeding, we conclude that administrative res judicata does not bar the claim. We reverse and remand for the court to address the merits of the claim.

I

[¶2] Jones was involved in a motor vehicle accident at his job in western North Dakota that injured his lumbar spine. Subsequent imaging revealed both acute disc herniation and preexisting degenerative spinal changes. He applied to WSI for benefits. In its December 27, 2021 Notice, WSI accepted the claim for the disc herniation with radiculopathy and denied liability for the preexisting lumbar degeneration, citing N.D.C.C. § 65-01-02(11)(b)(7). At this initial stage, Jones requested reconsideration only as to a denied left lower leg injury.

[¶3] In response to Jones's request for reconsideration for the denial of his left lower leg injury, WSI issued an Order reaffirming its acceptances and denials. Jones requested a hearing with an administrative law judge to review the denial. The ALJ identified one issue for the December 1, 2022 hearing: “whether Claimant has established a compensable medical condition to his left lower leg.” The subsequent ALJ decision affirmed the Order. Jones did not appeal. WSI continued to pay benefits on the accepted disc herniation, and three months before the hearing, a September 28, 2022 MRI showed that the acute L3-L4 herniation had resolved but that multilevel degenerative changes persisted.

[¶4] Four days after the hearing, on December 5, 2022, WSI issued a separate Notice of Decision Ending Benefits. The Notice stated that the “lumbar disc herniation has resolved” and that, based on its medical advisor's opinion, “the work incident is not a substantial contributing factor to the current diagnosis” and “there is no objective evidence to suggest the current lumbar diagnosis was substantially accelerated or worsening [sic] due to the work incident.” Jones requested reconsideration of WSI's decision to end benefits, arguing that his work injury accelerated his preexisting condition, but WSI denied the acceleration claim. Jones again requested a hearing with an ALJ to review WSI's denial.

[¶5] The ALJ specified two issues for the second hearing: entitlement to further benefits despite WSI's decision to end benefits, and compensability of the preexisting lumbar spine conditions. WSI raised the defense of administrative res judicata for the first time in its post-hearing brief. The second ALJ decision favored Jones, finding that his work injury substantially accelerated his preexisting degenerative condition. The ALJ decision addressed res judicata only in a footnote, concluding that it was inapplicable.

[¶6] WSI appealed to the district court from the second ALJ decision. After an initial jurisdictional dispute resolved by this Court in Workforce Safety & Ins. v. Jones, 2025 ND 74, 19 N.W.3d 793, the district court reversed the ALJ decision solely on res judicata grounds. The court concluded that Jones had sufficient information as of the December 1, 2022 hearing to raise the acceleration issue and “could have” done so. Having decided the case on res judicata grounds, the court expressly declined to address the merits arguments of WSI's appeal: whether the ALJ decision erred as a matter of law in applying N.D.C.C. § 65-01-02(11)(b)(7), and whether the ALJ decision misapplied N.D.C.C. § 65-05-08.3 in evaluating the medical evidence.

II

[¶7] Jones argues that res judicata does not bar his acceleration claim because he could not have raised the issue at the December 1, 2022 hearing. Whether administrative res judicata applies is a question of law, fully reviewable on appeal. Cridland v. N.D. Workers Comp. Bureau, 1997 ND 223, ¶ 17, 571 N.W.2d 351. In Jones's view, the acceleration issue was not ripe for adjudication at the hearing because WSI had not yet terminated his lumbar spine benefits. We agree. Administrative res judicata “prohibits relitigation of claims that were raised or could have been raised in a prior proceeding ․” Id. Res judicata is applied less strictly in the administrative context than in the courts. Id. ¶ 18. We have considered three factors when determining whether administrative res judicata bars a claim: “(1) the subject matter decided by the administrative agency, (2) the purpose of the administrative action, and (3) the reasons for the later proceeding.” Id. (citations omitted). And res judicata applies more readily in the administrative context “when an administrative agency decides issues after according the parties the benefit of a trial-type procedure.” Id. ¶ 19.

[¶8] Although Jones never raised the acceleration claim before his request for reconsideration of WSI's termination of benefits, the district court concluded that administrative res judicata still barred his claim. The court reasoned that Jones “could have” raised the acceleration issue at the December 1, 2022 hearing because he possessed Dr. Potocki's September and October 2022 medical notes discussing the interplay between the work injury and the degenerative condition. But the court's analysis conflates a claimant's awareness of medical facts with the existence of a justiciable controversy. The termination of benefits was a factual predicate for the justiciability of Jones's acceleration claim. Administrative res judicata does not apply here because the acceleration claim was not a live controversy until WSI terminated Jones's benefits.

[¶9] At the time of the December 1, 2022 hearing, WSI was still paying benefits for Jones's lumbar spine condition. WSI did not issue its Notice of Decision Ending Benefits until December 5, 2022, four days after the hearing. Under the statutory framework, a claimant must challenge a denial or termination of benefits through the reconsideration and hearing process set out in N.D.C.C. § 65-01-16. Jones followed that process. He was not required to anticipate and litigate a termination that had not yet occurred. Sprunk v. N.D. Workers Comp. Bureau, 1998 ND 93, ¶ 15, 576 N.W.2d 861 (“An issue is not ripe for review if it depends on future contingencies which, although they might occur, necessarily may not, thus making addressing the question premature.”).

[¶10] WSI argues that the initial December 27, 2021 Notice already denied preexisting condition coverage, so the issue was ripe from the outset. But this confuses two distinct determinations. The initial denial concerned whether WSI would cover the preexisting condition as part of the accepted claim. The acceleration question is different: it asks whether the work injury “substantially accelerate[d] the progression or substantially worsen[ed] the severity” of the preexisting condition. That inquiry “requires consideration of whether the preexisting injury, disease or other condition would have progressed similarly in the absence of employment.” Mickelson v. N.D. Workforce Safety & Ins., 2012 ND 164, ¶¶ 21, 23, 820 N.W.2d 333. That inquiry would have made no practical difference while WSI was still paying benefits for the acute herniation, and the record reveals no indication the benefits owed would have been any different depending on whether the underlying basis was acceleration of a preexisting condition or the acute injury itself. On this record, there is no indication the scope or duration of the claimed benefits would have been different under an acceleration claim as opposed to the acute injury, thus the acceleration claim was not a live controversy. The acceleration question arose only after the acute condition resolved and Jones's symptoms persisted. Those facts arose with the September 2022 MRI and Dr. Potocki's October 2022 opinion, but WSI did not act on them until its December 5, 2022 Notice.

[¶11] The “could have been raised” prong of res judicata does not require claimants to litigate acceleration claims before the agency has determined that the acute condition has resolved and ongoing benefits should end. Each of the three factors Cridland directs us to consider weighs against barring Jones's claim. See Cridland, 1997 ND 223, ¶ 18, 571 N.W.2d 351. The subject matter of the first proceeding was confined to “whether Claimant has established a compensable medical condition to his left lower leg,” the only issue the ALJ specified. The acceleration of Jones's preexisting lumbar condition was not litigated. The purpose of the first proceeding was to resolve Jones's challenge to the denial of his lower-leg claim; the purpose of the second was to resolve WSI's termination of his lumbar benefits and its denial of the acceleration claim. And the reasons for the second proceeding—WSI's December 5, 2022 termination of benefits and its March 2023 denial of the acceleration claim—did not exist when the first hearing closed.

III

[¶12] The district court reversed the ALJ decision solely on res judicata grounds. Because administrative res judicata does not apply, the district court erred, and its judgment must be reversed. Jones asks this Court to reverse and remand. WSI asks this Court to affirm, or in the alternative to remand for the district court to address its two unreached merits arguments.

[¶13] Remand is appropriate. The district court is the forum designated by statute for first-line judicial review of an ALJ's decision. N.D.C.C. § 28-32-46. WSI's alternative arguments implicate both a legal question about the construction of N.D.C.C. § 65-01-02(11)(b)(7) and a sufficiency question about whether a reasoning mind could have found, on the evidence before the ALJ, that Jones's work injury substantially accelerated or substantially worsened his preexisting condition. Those arguments were briefed but not decided below. We decline to reach them in the first instance.

IV

[¶14] We need not address Jones's due-process and affirmative-defense arguments because the grounds analyzed above are sufficient for the disposition. We reverse the judgment of the district court and remand for further proceedings consistent with this opinion.

Tufte, Justice.

[¶15] Lisa Fair McEvers, C.J. Jerod E. Tufte Jon J. Jensen Douglas A. Bahr Mark A. Friese