## Facts

- Vincent Pettinato, a truck driver for CTI, Inc., suffered work-related back and right knee injuries (1977) and received workers’ compensation benefits.
- The claim was closed with an unscheduled permanent partial disability and supportive-care benefits.
- In 1983, the Industrial Commission found a 100% loss of earning capacity and awarded Pettinato monthly benefits; the employer and carrier protested and requested a hearing.
- During discovery, respondents claimed a private investigator would testify Pettinato was working and that motion pictures would show no impairment; a deposition indicated no surveillance films existed.
- Pettinato subpoenaed a purported employer (Richard Long) and retained a labor market consultant and psychologists to evaluate employability; respondents conducted no discovery.
- At a prehearing conference, Pettinato withdrew his supportive-care challenge and sought sanctions in the form of costs against respondents.
- After hearing testimony (including that Pettinato could not work and that Long did not employ him), the ALJ found respondents’ position frivolous, dismissed their hearing request, but denied Pettinato’s request for attorney’s fees and costs.
- The Industrial Commission affirmed the denial, and Pettinato sought special action review.

## Issues

1. Whether an Industrial Commission ALJ has statutory, rule-based, or implied authority in a workers’ compensation proceeding to award a claimant attorney’s fees and costs as sanctions for allegedly frivolous conduct by an employer and carrier.

## Decision

- The Court of Appeals affirmed the Industrial Commission’s denial of attorney’s fees and costs.
- The court held the ALJ lacked express or implied authority to award fees and costs as sanctions in this setting.
- The court declined to infer fee-shifting authority from the Commission’s exclusive jurisdiction over workers’ compensation claims.
- The court found no Industrial Commission rule that expressly authorized awarding attorney’s fees or litigation costs as a sanction.

## Legal Principles

- Attorney’s fees are recoverable only when authorized by statute or contract, or within a recognized exception.
- The Industrial Commission is a statutory entity whose powers are limited to those granted by the legislature; broad jurisdiction over compensation disputes does not imply authority to shift fees.
- Absent explicit statutory or rule-based authorization, an ALJ may not award attorney’s fees and costs as sanctions in workers’ compensation proceedings.
- Arguments for expanding remedial or sanctioning authority in Commission proceedings are for the legislature, not the courts, when the governing scheme is silent.

## Conclusion

The court held that, even where an employer or carrier’s litigation position is deemed frivolous, the Industrial Commission and its ALJs may not award a claimant attorney’s fees and costs as sanctions without clear statutory or regulatory authorization, and it affirmed the denial of Pettinato’s request.


Pettinato v. Indus. Comm’n of Ariz., 698 P.2d 746 (Ariz. Ct. App. 1985)