Judicial Estoppel Does Not Bar WSI’s Statutory Subrogation Under N.D.C.C. § 65-01-09

Case: Moos v. WSI, 2026 ND 119 (N.D. June 25, 2026)

1. Introduction

In Moos v. WSI, the North Dakota Supreme Court addressed whether an equitable doctrine—judicial estoppel—can defeat Workforce Safety and Insurance’s (WSI) statutory subrogation lien after an injured worker settles a third-party tort claim. The case also raised an as-applied constitutional challenge to N.D.C.C. § 28-32-44, which requires an appellant to pay the estimated cost of preparing and filing the administrative record on appeal, subject to a discretionary “low-income” waiver.

Parties. Donald Moos (injured worker; appellant) versus North Dakota Workforce Safety and Insurance (appellee).

Key issues. (1) Whether judicial estoppel can bar WSI’s subrogation claim under N.D.C.C. § 65-01-09; (2) whether N.D.C.C. § 28-32-44 is unconstitutional as applied (due process, equal protection, and open courts theories); and (3) whether Moos should have been allowed to pursue (or was entitled to) a waiver of record costs as a “low-income person.”

2. Summary of the Opinion

Accordingly, the Court affirmed the judgment upholding WSI’s subrogation order and the order requiring payment of certified record costs.

3. Analysis

A. Precedents Cited (and How They Shaped the Decision)

1) Standard of review for agency decisions

• Across Big Sky Flow Testing, LLC v. Workforce Safety & Ins., 2014 ND 236, ¶ 5, 857 N.W.2d 380: The Court reiterated it reviews WSI’s decision, not the district court’s.
• Sandberg v. N.D. Workforce Safety & Ins., 2023 ND 76, ¶ 6, 989 N.W.2d 460: Cited alongside N.D.C.C. §§ 28-32-46 and 28-32-49 for the limited statutory grounds to reverse an agency order.
• State ex rel. Workforce Safety & Ins. v. Kringlie, 2024 ND 26, ¶ 8, 2 N.W.3d 709: Reinforced deference to an ALJ’s factual findings—whether a “reasoning mind” could find them proven by the weight of the evidence.
• Provins v. Workforce Safety & Ins. Fund, 2022 ND 213, ¶ 6, 982 N.W.2d 559: Legal conclusions receive no deference; questions of law are fully reviewable.

These authorities framed the Court’s approach: deferential review of fact, independent review of law—critical because the core holdings (judicial estoppel’s availability; constitutionality; interpretation of waiver procedure) were legal questions.

2) Subrogation’s purpose and statutory character

• Blaskowski v. N.D. Workmen's Comp. Bureau, 380 N.W.2d 333, 335 (N.D. 1986): Quoted for the purpose of WSI subrogation: to “reimburse the fund, to the extent possible, at the expense of the persons at fault.” This supported viewing the lien as a legislatively defined reimbursement mechanism rather than an equity-driven remedy.
• State ex rel. Workmen's Compensation Bureau v. Clary, 389 N.W.2d 347 (N.D. 1986): The opinion’s central precedent. In Clary, the Court rejected importing equitable principles into the meaning and operation of N.D.C.C. § 65-01-09, reasoning that although subrogation historically has equitable roots, the bureau’s rights under the statute are statutory and therefore “not controlled by equitable concepts.” The Court also referenced the statutory displacement principle reflected in N.D.C.C. § 1-01-06.

Clary did the heavy lifting: it supplied the doctrinal bridge from “subrogation is equitable in origin” to “this particular subrogation right is statutory and thus insulated from equitable defenses.”

3) Judicial estoppel doctrine (defined but ultimately excluded)

• Great Plains Royalty Corp. v. Earl Schwartz Co., 2021 ND 62, ¶ 13, 958 N.W.2d 128; and In re Est. of Harms, 2012 ND 62, ¶ 10, 814 N.W.2d 783: Cited for the general definition of judicial estoppel as an equitable doctrine preventing inconsistent positions in the same or successive litigation.
• Krenz v. XTO Energy, Inc., 2017 ND 19, ¶ 33, 890 N.W.2d 222: Cited for the limitation that judicial estoppel applies only where the later position is “totally inconsistent” with the earlier one.
• The Court noted it has previously assumed without deciding that judicial estoppel applies in North Dakota, citing: Dunn v. N.D. Dep't of Transp., 2010 ND 41, ¶ 10, 779 N.W.2d 628; DeMers v. DeMers, 2006 ND 142, ¶ 19, 717 N.W.2d 545; Ingebretson v. Ingebretson, 2005 ND 41, ¶ 18, 693 N.W.2d 1; Meide v. Stenehjem ex rel. State of N.D., 2002 ND 128, ¶ 15, 649 N.W.2d 532; and BTA Oil Producers v. MDU Res. Grp., Inc., 2002 ND 55, ¶ 15, 642 N.W.2d 873.

Notably, the Court did not resolve whether North Dakota recognizes judicial estoppel generally. Instead, it carved out (or confirmed) a workers’ compensation subrogation-specific exclusion: even if judicial estoppel exists, it cannot be used to defeat WSI’s statutory lien.

4) As-applied constitutional challenges and fee/record-cost access arguments

• Sorum v. State, 2020 ND 175, ¶ 19, 947 N.W.2d 382; and D.A.H. v. D.A.D., 2025 ND 208, ¶ 18, 29 N.W.3d 590: Cited for the proposition that as-applied constitutionality is a question of law fully reviewable on appeal.
• Weeks v. N.D. Workforce Safety & Ins. Fund, 2011 ND 188, ¶ 7, 803 N.W.2d 601: Cited for the challenger’s burden to prove constitutional infirmity.
• Snyder v. N.D. Workers Comp. Bureau, 2001 ND 38, ¶ 19, 622 N.W.2d 712: Used to reject “bare assertions” as insufficient to raise constitutional issues.
• M.L.B. v. S.L.J., 519 U.S. 102 (1996): The Court treated this as recognizing only a narrow exception in certain civil cases; it did not support a general constitutional requirement to waive fees or record costs in administrative appeals.
• Overboe v. Farm Credit Servs. of Fargo, 2001 ND 58, ¶ 13, 623 N.W.2d 372: Reinforced that unconstitutionality must be supported by authority and reasoned analysis.

5) Waiver discretion and interpretation of “may”

• Int. of C.A.R., 2020 ND 209, ¶ 9, 950 N.W.2d 186: Cited to interpret “may” as permissive, conferring discretion (relevant to § 28-32-44(3)’s waiver provision).
• Koenig v. Schuh, 2016 ND 252, ¶ 6, 888 N.W.2d 385: Used by analogy to set the abuse-of-discretion standard for a court’s decision regarding fee waivers/in forma pauperis-type requests.

B. Legal Reasoning

1) Why judicial estoppel cannot defeat WSI’s lien

Moos argued WSI took inconsistent positions: WSI denied ongoing workers’ compensation benefits for neurological issues, yet later sought subrogation from a third-party settlement that (according to Moos) reflected those same injuries. The Court did not engage the factual premise in depth because it resolved the issue at the threshold: WSI’s lien arises under N.D.C.C. § 65-01-09, and under State ex rel. Workmen's Compensation Bureau v. Clary the lien’s operation is governed by statute, not equity.

The Court therefore announced a clear rule: “the equitable doctrine of judicial estoppel does not apply to subrogation claims arising out of workers' compensation proceedings.” It expressly limited the holding, stating it need not decide whether judicial estoppel may apply in other contexts.

2) Why the as-applied constitutional challenge failed

Moos attacked N.D.C.C. § 28-32-44(2) as “pay to play.” The Court’s reasoning was largely methodological and burden-focused:

• Moos offered unsupported factual assertions (e.g., arbitrary enforcement) without record citations.
• He failed to provide constitutional authority and a developed, reasoned analysis connecting the statute to asserted violations.
• M.L.B. v. S.L.J. did not supply a broad right to fee-free civil litigation; it describes a narrow exception.
• The existence of a statutory waiver mechanism in N.D.C.C. § 28-32-44(3) undermined the “pay-to-play” characterization.

On that basis, the Court concluded Moos did not meet his burden to show unconstitutionality as applied.

3) Why Moos did not obtain a “low-income” waiver

N.D.C.C. § 28-32-44(3) allows waiver “upon application” and a showing the appellant is a “low-income person unable to afford these costs.” The Court emphasized procedure and proof:

• The statute does not require “permission” to apply; it requires an application with a showing.
• Moos’s district court briefing asserted low income but provided no evidence of financial status.
• Given the absence of an evidentiary showing, the district court’s order requiring payment was not arbitrary or irrational and therefore was not an abuse of discretion.

C. Impact

1) Workers’ compensation subrogation litigation: narrowed defenses

The opinion’s most significant doctrinal contribution is its categorical rejection of judicial estoppel as a defense to WSI’s statutory lien under N.D.C.C. § 65-01-09. Practically, this strengthens lien enforceability by preventing claimants (and potentially their counsel) from reframing lien disputes as equity-based fairness contests when the statute’s lien triggers are met—particularly the 30-day payment window in § 65-01-09(5).

2) Litigation conduct and settlement practice

Although not the formal basis of the decision, the factual backdrop underscores a recurring risk: settling a third-party claim without promptly addressing WSI’s lien exposure can lead to statutory liability for the injured employee and counsel once notice requirements and timing conditions are satisfied. Future litigants may treat Moos as reinforcing that lien compliance is statutory and time-sensitive, not a discretionary matter for post-settlement negotiation.

3) Administrative appeals: record-cost waiver requires evidence

On N.D.C.C. § 28-32-44, the decision reinforces that appellants must build a record for fee-waiver relief. Conclusory claims of low income are insufficient; the waiver is discretionary and depends on an evidentiary showing. This is likely to shape district court practice by encouraging sworn financial affidavits and documentation when seeking § 28-32-44(3) relief.

4. Complex Concepts Simplified

• Subrogation lien (WSI lien). When WSI pays workers’ compensation benefits and the worker later recovers money from a responsible third party, the statute gives WSI a right to be reimbursed from that recovery (up to statutory limits). The lien exists by statute and attaches upon first payment of benefits.
• Judicial estoppel. An equitable rule that can prevent a party from asserting a position in a later case that is inconsistent with a position the party took earlier. In Moos, even if the doctrine exists in North Dakota, it cannot be used to defeat WSI’s statutory subrogation claim.
• “As-applied” constitutional challenge. Instead of claiming a statute is always unconstitutional, the challenger argues it is unconstitutional in the challenger’s specific circumstances. The challenger must support the claim with evidence, authority, and reasoned analysis.
• Record preparation and filing costs (administrative appeal). In many administrative appeals, the reviewing court needs the agency record. N.D.C.C. § 28-32-44(2) generally requires the appellant to pay the estimated costs for preparing and filing that record.
• Low-income waiver. N.D.C.C. § 28-32-44(3) allows (but does not require) the district court to waive record costs if the appellant applies and proves inability to pay. “May” signals discretion, not entitlement.

5. Conclusion

Moos v. WSI establishes a clear, workers’ compensation-specific rule: equitable defenses such as judicial estoppel do not apply to WSI’s statutory subrogation lien under N.D.C.C. § 65-01-09. The Court also reaffirmed that constitutional challenges require developed argument and evidentiary grounding, and it clarified that record-cost waivers under N.D.C.C. § 28-32-44(3) depend on a supported application and remain within the district court’s discretion.