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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. DeNuptiis v. Unocal Corp. (1/31/2003) sp-5657

DeNuptiis v. Unocal Corp. (1/31/2003) sp-5657

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

TIMOTHY DENUPTIIS,            )
                              )    Supreme Court No. S-10098
               Appellant,          )
                              )    Superior Court No.
     v.                       )    3AN-00-3660 CI
                              )
UNOCAL CORPORATION       )    O P I N I O N
and the ALASKA WORKERS'       )
COMPENSATION BOARD,      )
                              )
               Appellee.      )    [No. 5657 - January 31, 2003]
                              )


          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Fred Torrisi, Judge.

          Appearances:  Joseph A. Kalamarides,  Randall
          S.  Cavanaugh,  Kalamarides & Lambert,  Inc.,
          Anchorage, for Appellant.  Richard  L.  Wagg,
          Russell,  Tesche,  Wagg,  Cooper  &  Gabbert,
          Anchorage, for Appellee Unocal Corporation.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, and Carpeneti, Justices.   [Bryner,
          Justice, not participating.]

          MATTHEWS, Justice.

           The  main  question presented is whether the  Workers'

Compensation  Board  erred in applying  a  clear  and  convincing

standard  of  proof to an employer's claim for  reimbursement  of

benefits  based  on  fraud.  We conclude  that  it  did.   Alaska

Statute  44.62.460(e)  directs that  the  standard  of  proof  in

administrative  hearings be by a preponderance of  the  evidence,

unless  applicable  law specifies a different  standard.   As  no

statute  or  rule relating to reimbursement claims addresses  the

issue  of  what  standard  of proof is appropriate,  the  default

standard of this section applies.

I.   FACTS AND PROCEEDINGS

           Timothy DeNuptiis was injured while working for Unocal

in  September  1996.   An accident on an oil  platform  left  him

unable  to work for several periods in 1996 and 1997 due to  pain

in his neck, wrist, and lower back.  Unocal paid $700 per week in

temporary  total disability benefits from September 9 to  October

13, 1996; December 13 to December 15, 1996; and May 12 to October

19, 1997.

           In  November 1997 Unocal filed a controversion  notice

with the Alaska Workers' Compensation Board, claiming that it had

collected  evidence  on  several  surveillance  videotapes  "that

[DeNuptiis]  is  exaggerating  his claims  to  obtain  benefits."

Unocal  further explained that " [DeNuptiis] has been  determined

able  to return to work as of 6-8-97 based on the report  of  Dr.

Brockman,"  an  orthopedic  surgeon  who  examined  DeNuptiis  at

Unocal's  request.  Unocal stated that it was "pursuing  recovery

pursuant to AS 23.30.250."

          Alaska Statute 23.30.250(a) imposes civil liability and

criminal  penalties  for  knowing false  statements  in  workers'

compensation cases.1  Subsection .250(b) authorizes the board  to

order  reimbursement of fraudulently obtained benefits and  costs

and fees incurred in obtaining reimbursement and in defending any

claim for benefits:

                If  the  board, after a hearing,  finds
          that  a  person  has  obtained  compensation,
          medical   treatment,   or   another   benefit
          provided  under  this  chapter  by  knowingly
          making  a  false or misleading  statement  or
          representation for the purpose  of  obtaining
          that  benefit,  the board  shall  order  that
          person to make full reimbursement of the cost
          of  all benefits obtained.  Upon entry of  an
          order  authorized under this subsection,  the
          board shall also order that person to pay all
          reasonable  costs and attorney fees  incurred
          by the employer and the employer's carrier in
          obtaining an order under this section and  in
          defending  any claim made for benefits  under
          this  chapter.  If a person fails  to  comply
          with   an   order  of  the  board   requiring
          reimbursement of compensation and payment  of
          costs  and  attorney fees, the  employer  may
          declare the person in default and proceed  to
          collect  any  sum  due as provided  under  AS
          23.30.170(b) and (c).[2]
          
           Neither  subsection  specifies a  standard  of  proof.

Unocal  argued  before  the  board  that  it  should  apply   the

preponderance standard.  DeNuptiis advocated the higher clear and

convincing standard.3

           The board concluded that clear and convincing was  the

appropriate  standard to be used in section .250 claims.   Noting

that   Unocal's   charge  was  essentially  that  DeNuptiis   was

malingering to obtain benefits, the board quoted and agreed  with

Professor  Larson's  recommendation that  malingering  should  be

found "only upon positive and convincing evidence":

          [A]  heavy  burden should be upon  the  party
          that  alleges malingering. . . .   There  are
          several reasons for such a rule.  One is that
          a    mistaken   inference   here   works    a
          particularly  severe  hardship,  for  if  the
          claimant is in fact genuinely disabled, he or
          she suffers the double blow of being deprived
          of compensation and of being publicly labeled
          a liar and a cheat.  Another is the pervading
          remedial character of [workers' compensation]
          legislation.  Still another is the  imperfect
          state  of  medical knowledge in many  of  the
          fields here involved, in spite of spectacular
          advances in recent decades.[4]
          
           The  board also supported its conclusion with a number

of reasons:

          [W]e  find  a  250 petition  is  criminal  in
          nature.   The statute provides for punishment
          under   AS  11.46.180,  theft  by  deception.
          Second,  the  implications of our  finding  a
          250   petition  violation  has   severe   and
          serious  financial implications under 250(b).
          Third,   a  stigma  is  associated  with   an
          individual being labeled a "malinger[er]"  or
          "liar"  or  the  like.  Next, from  a  policy
          perspective, proving a mere preponderance  of
          evidence  to terminate all benefits  under  a
          250  petition  does  not strike  a  chord  of
          fairness;   employers   have   much   greater
          resources    with   which   to   investigate.
          Finally,  the  elements  of  a  250  petition
          should  be more difficult to prove  to  avoid
          the  use  of  250  as a sword  to  coerce  an
          employee every time a minor inconsistency  in
          the evidence is found.
          
          The board then proceeded to evaluate the evidence based

on  the  clear and convincing standard.  It concluded that Unocal

had  failed  to  prove  that DeNuptiis had made  knowingly  false

statements  in support of his benefits claim and denied  Unocal's

request  for  reimbursement.  But two of the three board  members

filed  a  separate statement indicating that if the preponderance

of  the evidence standard had been used they would have found  in

favor of Unocal.

           Unocal  petitioned for reconsideration on the standard

of proof issue.  The board granted reconsideration but reaffirmed

its earlier ruling:

                Having granted reconsideration, we  now
          consider whether our decision in DeNuptiis II
          adopting  the "clear and convincing" standard
          of   proof  was  proper.   For  the   reasons
          detailed below, we reaffirm our decision that
          the standard should be "clear and convincing"
          evidence.   We have considered the employer's
          argument and reviewed the applicable caselaw.
          Nevertheless,  we  continue   to   find   the
          criminal  sanctions  provided  under  a   250
          petition,  and  the  ramifications   therein,
          mandate  a  higher  standard  of  proof  than
          "preponderance of the evidence."  The caselaw
          on  which  the employer relies is  civil  and
          does not have criminal sanctions intertwined.
          
                Furthermore,  an  employee  enjoys  the
          presumption    of     compensability.      AS
          23.30.120.   Therefore, we find it  would  be
          inconsistent  to  authorize  an  employer  to
          unilaterally cease payments of benefits on an
          alleged   violation  of  250,  based   on   a
          preponderance of evidence.  Utilizing such  a
          standard would run contrary to the provisions
          of  AS  23.30.120  which protect  an  injured
          worker   from  having  his  or  her  benefits
          terminated.   Therefore,  we  find  a  higher
          standard of proof is required.
          
           Unocal  appealed  to the superior court.   On  appeal,

Superior  Court Judge Karen L. Hunt ruled that the  board  should

have  used  a preponderance of the evidence standard  of  review.

Judge  Hunt  reasoned that subsection (b) of section  .250  is  a

civil remedial provision and that while it contains no indication

as  to  what  standard of proof should be used,  civil  fraud  in

Alaska, in the absence of statute, has traditionally been  proved

using a preponderance of the evidence standard.5  Judge Hunt also

relied  on  AS  44.62.460(e), a subsection of the  Administrative

Procedure  Act,  that calls for a preponderance of  the  evidence

standard of proof "unless a different standard of proof is stated

in  the  applicable  law."  Judge Hunt found  that  reimbursement

claims were governed by this provision.

          On remand from the superior court's decision, the board

concluded  by  a  two-to-one margin that Unocal had  shown  by  a

preponderance  of  the  evidence that DeNuptiis  "knowingly  made

false  and misleading statements to obtain benefits."  On  appeal

to the superior court, Judge Fred Torrisi ruled that Judge Hunt's

earlier  decision on the standard of proof was  the  law  of  the

case.   He  found  that  the board's decision  was  supported  by

substantial evidence and affirmed it.  This appeal followed.

II.  DISCUSSION

          A.    The Standard of Proof To Be Used in Reimbursement
          Claims Is the Preponderance of the Evidence Standard.
          
           The  question of what standard of proof applies  to  a

given issue in a given case is a question of law.  Ordinarily  we

use  our  independent judgment on questions  of  law  unless  the

"issue   involves  agency  expertise  or  the  determination   of

fundamental  policy  questions  on  subjects  committed  to   the

agency."6   If the issue involves agency expertise or fundamental

policy  questions, we review under the reasonable basis  standard

and defer to the agency if its interpretation is reasonable.7  We

believe that the board's decision to apply a clear and convincing

standard  of  proof is a policy decision that should be  reviewed

deferentially.   The  board found that the clear  and  convincing

standard  was  necessary to prevent the threat of a reimbursement

suit  from  being used for coercive purposes against an employee.

In  effect,  the  board decided that the heightened  standard  of

proof  was  necessary  to  maintain a fair  balance  between  the

interests of employees and those of employers.  This is a  policy

determination.

           Further, the board has been delegated broad powers  to

administer  the  Workers'  Compensation  Act.   "The   Board   is

authorized  to  formulate policy, interpret statutes,  adopt  and

enforce regulations."8  Specifically, the Department of Labor may

adopt, subject to approval by a majority of the board, "rules for

all panels; and . . . regulations to carry out the provisions  of

[the Workers' Compensation Act]."9  In conducting a hearing, "the

board  is  not bound by common law or statutory rules of evidence

or  by technical or formal rules of procedure, except as provided

by  [the  act]."10   Further, the board has  been  delegated  the

authority to "conduct its hearings in the manner by which it  may

best  ascertain the rights of the parties."11  Since the  board's

decision  to  use a clear and convincing standard  of  proof  was

policy-based and concerned a subject that is within  the  general

authority of the board, we will uphold the decision of the  board

if  it can be said to be a reasonable interpretation of governing

law.12

           A  subsection of the Administrative Procedure Act,  AS

44.60.460(e)(1),  calls  for a default standard  of  proof  by  a

preponderance of the evidence in cases where another standard  of

proof is not set by applicable law:  "Unless a different standard

of  proof is stated in applicable law the (1) petitioner has  the

burden of proof by a preponderance of the evidence . . . ."

           This  section applies to hearings before the  Workers'

Compensation Board.  Alaska Statute 44.62.330(a)(15) includes the

Alaska  Workers'  Compensation Board within the coverage  of  the

Administrative Procedure Act "where procedures are not  otherwise

expressly provided by the Alaska Workers' Compensation Act."   In

a  number  of cases we have recognized the application  of  other

rules   specified  in  AS  44.62.460  to  workers'   compensation

proceedings.13

           Based  on  the board's delegated rulemaking authority,

the  board  could  adopt a rule that the  standard  of  proof  in

reimbursement  proceedings  should be  by  clear  and  convincing

evidence.  Such a rule could reasonably fall within the excepting

language  of  AS 44.62.460(e) as "a different standard  of  proof

.  . . stated in applicable law."  But no such rule exists and in

its   absence  subsection  .460(e)(1)  governs.14   We  therefore

conclude that the board's application of the clear and convincing

standard  in the present case was not a reasonable interpretation

of governing law.

          B.       The    Preponderance    Standard    Is     Not

          Unconstitutional.

           DeNuptiis argues that applying a preponderance of  the

evidence  standard is unconstitutional on due process  and  equal

protection  grounds.  His premise as to both grounds is  that  AS

23.30.250(b)  remedy  is  penal, and  that  because  of  this,  a

heightened  standard of proof is required.  But this  premise  is

incorrect,  as  subsection .250(b) only requires  restitution  of

benefits that were fraudulently obtained and reimbursement of the

employer's expenses occasioned by the fraud.15

          Due process does require a heightened standard of proof

in certain categories of civil cases.  Thus in Santosky v. Kramer16

the United States Supreme Court held that a standard at least  as

demanding  as  clear  and convincing evidence  was  necessary  in

termination of parental rights cases.  Similar elevated standards

are  necessary  in  involuntary civil commitments,17  deportation

proceedings,18 and denaturalization proceedings.19  Each of these

categories involves sensitive liberty interests and each involves

attempts  by  the  government  to  deprive  individuals  of  such

interests.  By contrast, the United States Supreme Court has held

that  the  preponderance of the evidence standard is adequate  in

paternity cases where the main interest of the putative father is

avoiding  the "serious economic consequences" that  flow  from  a

court  order establishing paternity.20  The United States Supreme

Court  has  also  observed that in a civil case  between  private

parties  involving  a  monetary dispute a  preponderance  of  the

evidence  standard is adequate:  "The typical civil case involves

a  monetary dispute between private parties.  Since society has a

minimal   concern  with  the  outcome  of  such  private   suits,

plaintiff's  burden  of  proof is a  mere  preponderance  of  the

evidence.  The litigants thus share the risk of error in  roughly

equal fashion."21

           Due  process does not require an elevated standard  of

proof  in  every civil proceeding involving non-monetary  liberty

interests.   We  held  in  Disciplinary  Matter  of  Walton  that

employing  a  preponderance  standard  in  attorney  disciplinary

proceedings satisfied due process:  "[W]e are unwilling  to  hold

that  the  risk of an incorrect factual determination  in  a  bar

disciplinary proceeding should be placed primarily on the public.

Because  there are substantial interests on both sides, the  risk

of error should be borne equally."22

           The usual construct for determining whether a standard

of proof is appropriate is that suggested by Mathews v. Eldridge.23

Three factors are considered:

          the private interest affected by the official
          action;  the risk of an erroneous deprivation
          of  such interest through the procedures used
          and the probable value, if any, of additional
          or   substitute  procedural  safeguards;  and
          finally, the government's interest, including
          the  fiscal  and administrative burdens  that
          additional     or    substitute    procedural
          requirements would entail.[24]
          
In  considering  these factors a strong presumption  of  validity

must   be  afforded  to  the  legislature's  choice  as  to   the

appropriate standard.25

           The  Mathews  factors  are  directly  aimed  at  cases

involving  litigation  between  the  government  and  a   private

individual.  Adapting them to this case, they do not point  to  a

conclusion  that  the preponderance standard is unconstitutional.

The  interest  of  the  litigants  on  both  sides  is  primarily

monetary.26  It is not fundamentally unfair that they  share  the

risks  of  an  erroneous  decision roughly  equally.   Of  course

substitute  safeguards  might  be  applied.   A  more   demanding

standard could be imposed on the employer.  While as a matter  of

policy this might be a wise choice, we are unable to say that  it

is  constitutionally required.  The parties' main  interests  are

economic  and their interests are equal in the eyes of  the  law.

Further,  a worker's economic interests do not stand on a  higher

footing than the economic interests of any litigant against  whom

a  civil fraud claim is brought.  As noted, in civil fraud  cases

we  have applied a preponderance standard.27  There are at  least

two  governmental interests involved.  The first is the  interest

that underlies the workers' compensation system:  making adequate

compensation  available  to  injured  workers  expeditiously  and

without  undue cost.  The second is to deter and redress fraud.28

In  the  context  of this dispute these goals point  in  opposite

directions; they are sufficiently balanced as not to dictate  any

particular conclusion on the question before us.

           Considering,  then,  the three  Mathews  factors,  the

presumption of statutory validity, the standard we use  in  civil

fraud  cases,  and  the  nature of the civil  cases  in  which  a

heightened   standard   of   proof   has   been   found   to   be

constitutionally   required,  we  conclude   that   employing   a

preponderance  standard  in subsection  .250(b)  cases  does  not

violate due process.

          DeNuptiis's equal protection arguments are that persons

subject  to subsection .250(a) have more protection than  workers

subject  to  subsection .250(b), and that  taxpayers  subject  to

civil  fraud claims have the protection of a clear and convincing

evidence  standard.29  But the premise of the argument concerning

persons subject to subsection .250(a) is false, for there  is  no

reason  to  think that those who are merely civilly liable  under

subsection  .250(a)  are  in  fact  protected  by  a  clear   and

convincing evidence standard.  Based on our case law,  we  assume

that  the  standard  of  proof  in  such  cases  would  be  by  a

preponderance of the evidence.30  Likewise, DeNuptiis's  argument

that  taxpayers  accused of fraud are protected by  a  clear  and

convincing  standard  is unavailing to show  a  denial  of  equal

protection.   Taxpayers are subject to penalties in  addition  to

the  amount  of taxes they owe,31 whereas the subsection  .250(b)

remedy is limited to restitution and reimbursement.

     C.   Appellant's Other Points Lack Merit.

           DeNuptiis also argues that the board's decision is not

supported  by  substantial evidence in general or  in  particular

with  respect  to  the termination date for his benefits.   While

there   is  conflicting  evidence  concerning  whether  DeNuptiis

knowingly  made a false statement or representation in  order  to

obtain  benefits, there is substantial evidence  to  support  the

board's  decision.32       DeNuptiis did present evidence  of  an

injury.    Dr.  Kufel  and  Jeanette  Lawson  reported  objective

evidence  of  an  injury to DeNuptiis's neck.   Jeannette  Lawson

testified   that  DeNuptiis's  biofeedback  test   results   were

consistent with his reports of pain, and that those results would

be  very  difficult to falsify.  At the same time,  however,  the

videotapes    showed    that   DeNuptiis's   condition    changed

dramatically,  sometimes  within  only  a  short  time  after  he

reported  worsening  pain.   Dr. Kufel's  testimony  showed,  for

example, that DeNuptiis represented his injury as "getting worse"

just  two  days before he was filmed exhibiting a full  range  of

motion.   Drs.  Brockman and James testified that  there  was  no

physiological  reason  to  explain these inconsistencies  between

DeNuptiis's appearance at the clinics, at the deposition, and  on

the  surveillance  tapes.  Dr. James opined  that  DeNuptiis  was

malingering.   Dr.  Brockman  opined  that  they  could  only  be

explained by a "[m]iraculous cure."

           DeNuptiis's last argument is that instead of a June 7,

1997  cut-off date for his benefits, the board should  have  used

November  12,  1997,  the  date on  which  two  doctors  formally

expressed  their  opinions  that he  was  malingering.   But  the

board's  use  of June 7, 1997, is based on substantial  evidence.

That was the date that DeNuptiis was videotaped participating  in

various  activities  in  which  he exhibited  no  irregular  neck

posture.  Dr. Brockman testified that DeNuptiis was at that point

healthy enough to go back to work.

III. CONCLUSION

           We  conclude  that Judge Hunt correctly remanded  this

case to the board with instructions to employ a preponderance  of

the  evidence standard, that this standard is constitutional, and

that  the  board's decision on remand from Judge Hunt's order  is

supported by substantial evidence.  The decision of the  superior

court affirming that decision is therefore AFFIRMED.

_______________________________
1AS 23.30.250(a) provides:

                A  person who . . . knowingly  makes  a
          false      or      misleading      statement,
          representation, or submission  related  to  a
          benefit  under this chapter . . . is  civilly
          liable to a person adversely affected by  the
          conduct,  is guilty of theft by deception  as
          defined  in AS 11.46.180, and may be punished
          as provided by [the sentencing provisions] AS
          11.46.120 -11.46.150.
          
2AS 23.30.250(b).
3The difference between the two standards is as follows:

                Where  one  has the burden  of  proving
          asserted  facts  by  a preponderance  of  the
          evidence,  he  must induce a  belief  in  the
          minds  of the jurors that the asserted  facts
          are  probably true.  If clear and  convincing
          proof  is  required, there must be induced  a
          belief  that the truth of the asserted  facts
          is highly probable.
          
Spenard  Action  Comm. v. Lot 3, Block 1, Evergreen  Subdivision,
902 P.2d 766, 774 n.15 (Alaska 1995) (citations omitted).

42  A. Larson, The Law of Workmen's Compensation  42.24(d) (1994)
(citation  omitted) (now 3 A. Larson, Workers'  Compensation  Law
56.05[4] (1999)).
5Judge  Hunt cited Gabaig v. Gabaig, 717 P.2d 835, 838-39 (Alaska
1986) and Saxton v. Harris, 395 P.2d 71, 72 (Alaska 1964).
6O'Callaghan v. Rue, 996 P.2d 88, 94 (Alaska 2000).
7Id.;  Lakosh  v. Alaska Dep't of Envtl. Conserv., 49  P.3d  1111
(Alaska 2002).
8Wausau Ins. Cos. v. Van Biene, 847 P.2d 584, 587 (Alaska 1993).
9AS 23.30.005(h).
10AS 23.30.135(a).
11Id.
12O'Callaghan,  996  P.2d at 94; Mukluk Freight  Lines,  Inc.  v.
Nabors Alaska Drilling, Inc., 516 P.2d 408, 411-12 (Alaska 1973).
13See  Whaley v. Alaska Workers' Compensation Bd., 648 P.2d  955,
957-58  (Alaska  1982); Commercial Union Cos. v.  Smallwood,  550
P.2d 1261, 1266-67 (Alaska 1976); Employers Commercial Union Ins.
Group  v.  Schoen, 519 P.2d 819, 823-24 (Alaska  1974);  Cook  v.
Alaska Workmen's Compensation Bd., 476 P.2d 29, 31 (Alaska 1970).
14Assuming that "applicable law" might reasonably include a well-
established decision law principle as to the applicable  standard
of  proof, we note that there is no well-established principle in
Alaska  that  civil  fraud claims are governed  by  a  clear  and
convincing  standard.  To the contrary, our common law  decisions
require  only a preponderance of the evidence.   Dairy  Queen  of
Fairbanks, Inc. v. Travelers Indem. Co. of America, 748 P.2d 1169
(Alaska 1988); Gabaig v. Gabaig, 717 P.2d 835, 838 (Alaska 1986);
Saxton  v. Harris, 395 P.2d 71 (Alaska 1964).  Further, it  seems
that in the only board ruling, the board employed a preponderance
of  evidence standard to a reimbursement claim, although  neither
party  argued  that a higher standard should have been  employed.
Gourley v. Qwick Constr., AWCB Decision No. 97-0255 (December 15,
1997).
15The  caption  to section .250 is "Penalties for  fraudulent  or
misleading acts."  But captions are not part of the statute.  See
AS  01.05.006;  Ketchikan Retail Liquor Dealers Ass'n  v.  State,
Alcoholic  Beverage Control Bd., 602 P.2d 434, 438 (Alaska  1979)
("[H]eadings  are not part of the law of Alaska."),  modified  on
other grounds by 615 P.2d 1391 (Alaska 1980).
16455 U.S. 745 (1982).
17Addington v. Texas, 441 U.S. 418, 425 (1979).
18Woodby v. Immigration & Naturalization Servs., 385 U.S. 276, 277
(1966).
19Chaunt v. United States, 364 U.S. 350, 353 (1960).
20Rivera v. Minnich, 483 U.S. 574, 580-81 (1987).
21Id. at 578 n.5 (quoting Addington, 441 U.S. at 423).
22676 P.2d 1078, 1085 (Alaska 1983) (footnote omitted).
23424 U.S. 319, 332 (1976).
24Keyes  v. Humana Hosp. Alaska, Inc., 750 P.2d 343, 353  (Alaska
1988).
25Rivera, 483 U.S. at 578.
26A worker might suffer some degree of harm to his reputation  if
the  board  were to find that he obtained benefits  fraudulently.
However,  a  worker's reputational interest is not so fundamental
that  it  must  be  protected  by  a  heightened  standard.   The
potential  taint to an worker's reputation is no worse  than  the
taint  suffered  by  any civil litigant found liable  for  fraud.
Additionally,  the  reputational interests of  medical  or  legal
professionals  can  be substantially harmed  if  they  are  found
liable   for   malpractice,  yet  such   proceedings   employ   a
preponderance standard.  See Kaiser v. Sakata, 40 P.3d  800,  805
n.16 (Alaska 2002); Shaw v. State, Dep't of Admin., 861 P.2d 566,
572  (Alaska  1993);  and   Dairy Queen  of  Fairbanks,  Inc.  v.
Travelers  Indem.  Co. of America, 748 P.2d  1169,  1171  (Alaska
1988).
27See cases cited note 14 supra.
28See  Dairy Queen, 748 P.2d at 1172 (noting "compelling"  public
policy  reasons for applying preponderance standard in  cases  of
arson and false swearing).
29DeNuptiis cites 15 Alaska Administrative Code (AAC) 05.230(d).
30Of  course,  subsection  .250(a) is also  a  criminal  statute.
Persons  accused  of  the crime it defines  are  protected  by  a
standard  of  proof beyond a reasonable doubt.  This differential
treatment is justified by the risk of criminal sanctions.
3115 AAC 05.230(b) imposes a fifty percent penalty calculated  on
the tax deficiency.
32DeNuptiis argues that the evidence presented is consistent with
his claim of injury.  He asserts the evidence shows only that  he
had  "good  and bad days."  He points to the testimony  of  other
witnesses at the hearing that they saw DeNuptiis in pain.