Guidry v. Worknet 2000, Inc., 2021-89 (La. App. 3 Cir. 8/11/21)

(OWC Judge Anthony Palermo, District 4)

Summary: Claimant precluded from the receipt of workers’ compensation benefits based on his own actions (horseplay) is also precluded from recovering damages from a third-party in a subsequent tort suit.

              The Court of Appeal of Louisiana, Third Circuit affirmed lower court judgments dismissing Claimant, Robert Guidry’s workers’ compensation claim and tort suit for damages. Claimant was employed as a lumber puller with Worknet 2000, Inc. On the date of the incident, Claimant was engaged in lumber pulling at Gaiennie Lumber Company, LLC (“Gaiennie”), and was working alongside co-worker Marion Sam. At some point, another co-employee, Joseph John arrived driving a forklift, and commenced to complete donuts while Claimant held on to the side of the machine. In the process, Claimant either got off or fell off of the forklift which then rolled over his right leg causing serious, disabling injuries.

            Claimant filed a workers’ compensation claim against his employer and its workers’ compensation insurer. After a trial on the merits, the workers’ compensation judge (“WCJ”) took the matter under advisement, and later issued a ruling denying benefits because Claimant was engaged in horseplay and therefore not within the course and scope of his employment. Claimant also filed a suit for damages against his employer, Gaiennie, and Joseph Johns, alleging negligence, intentional tort, and vicarious liability. Gaiennie filed a motion for summary judgment on the basis of statutory employer immunity which was granted, resulting in the dismissal of Claimant’s disputed claims with prejudice.

            Claimant appealed both adverse rulings to the Court of Appeal of Louisiana, Third Circuit to review the correctness of those decisions. In support of his entitlement to workers’ compensation benefits, Claimant argues that while he admits to being engaged in horseplay, he maintains that he was in the process of returning to his duties when the accident occurred. In consideration of this fact, as noted in its opinion, the Court narrowed the issue to whether Claimant requested to stop or get off before the accident occur. Though Claimant argued that he purportedly asked Joseph John to stop prior to the accident, WCJ found the testimony and version of events offered by other witnesses, suggesting that Claimant did not ask to get off of the forklift, to be more credible.

            Moreover, Claimant argues that since the WCJ denied recovery on the basis of horseplay, he cannot be further denied the opportunity to bring his claim in tort. The First Circuit flatly rejected Claimant’s contentions, finding that Claimant’s injuries would have been covered under the Louisiana Workers’ Compensation Act, but for his own engagement in horseplay which caused him injury.

Hebert v. Aramark Servs., Inc., 2021-0631 (La. App. 1 Cir. 7/30/21)

(19^th Judicial District Court – Baton Rouge, Louisiana)

Summary: Claimant’s workers’ compensation file deemed discoverable in subsequent lawsuit.

            The Court of Appeal of Louisiana, First Circuit reversed a district court ruling which denied the production of a Claimant’s worker’ compensation file in a subsequent tort suit for damages. In its opinion, the Court held that the confidentiality provision of La. R.S. 23:1293[1] does not operate to preclude a claimant’s `workers’ compensation proceeding file from being sought through discovery in a subsequent personal injury action arising out of the same circumstances. The Court reasoned that Louisiana law[2] dictates that the information sought through discovery must be reasonably calculated to lead to the discovery of admissible evidence. In this instance, the information sought in Claimant’s workers’ compensation file could lead to the discovery of admissible evidence regarding the nature and extent of the Claimant’s injuries.

Zinn v. Zagis, USA, L.L.C., 2020-00971 (La. 3/2/21)

Summary: Language on the back of settlement check requiring claimant’s acceptance and endorsement is not an unconditional tender of settlement funds under Louisiana law and allows for additional penalties and attorney’s fees to be imposed.

            The Louisiana Supreme Court recently held that an employer who fails to unconditionally tender funds to a workers’ compensation claimant is subject to a mandatory award of penalties and attorney’s fees. In the case Zinn v. Zagis, USA, supra, the claimant settled his claim with his employer for $40,000 which was disbursed to him in two separate checks. The back of the settlement checks contained language which placed certain conditions on claimant’s acceptance and endorsement. Rather than contact the employer, claimant’s counsel retained the checks for 30 days then filed a motion seeking penalties and attorneys, which was ultimately granted by the Louisiana Supreme Court on the basis that the employer failed to unconditionally tender funds to claimant within 30 days as La. R.S. 23:1201(G) dictates.

Rodriguez v. Nola Motor Club, L.L.C., 19-447 (La. App. 5 Cir. 10/5/20), 304 So. 3d 147, 152, writ denied, 2020-01432 (La. 2/17/21)

Summary: Claimant forfeited his entitlement to workers’ compensation benefits after making false statements regarding pre-existing anxiety and heart related conditions.

            In this case, the Court of Appeal of Louisiana, Fifth Circuit affirmed the decision of a workers’ compensation judge who found that a claimant forfeited his right to compensation by willfully making false statements to obtain benefits in violation of La. R.S. 23:1208. The claimant sought benefits after a work-related accident in which a go-cart engine produced a false explosion pulling claimant to the back and the top of the go-cart. Claimant filed a disputed claim for compensation alleging that he sustained injuries to his lower back and left shoulder. Claimant’s employer and its workers compensation carrier filed a motion for summary judgment contending that claimant had violated La. R.S. 23:1208 by making false statements for the purpose of obtaining benefits in his deposition. The workers’ compensation judge granted the employer and its workers’ compensation carrier’s motion, and the claimant appealed.

            On appeal, the Fifth Circuit rejected the claimant’s argument that he was only seeking compensation for injuries to his lower back and left shoulder, and the statements he made regarding his anxiety and heart-related issues were inconsequential. Instead, the Court found the statements made by the claimant clearly and unambiguously indicated he suffered severe anxiety and heart-related issues as a result of the work-related accident. Moreover, claimant’s medical records indicated he was diagnosed and treated for anxiety less than two months prior to the work accident, he was taking anxiety medication the day of the work accident, and received significant medical treatment for his heart dating back to 2007 until as recently as three months prior to the work accident. Given the timing and extensive prior medical history, the Court believed it was highly unlikely that the claimant was mistaken or had a lapse in memory. Instead, it opined, at the very least, claimant was attempting to support or bolster his claim for injuries to his back and shoulder.

By Tracey Jones, Lindsay Underwood, Elizabeth Ligon, and Heather Baker

The North Carolina Industrial Commission has recently issued decisions in the first round of extended benefits cases, in which claimants are arguing entitlement to temporary total disability benefits past the 500-week cap. Seven cases have been heard and decided at the Deputy Commissioner level, and we recently received a decision from the Full Commission.  

To obtain indemnity benefits beyond the 500-week cap, the claimant must request a hearing and present evidence supporting an allegation of a total loss of wage-earning capacity. It should be noted that, pursuant to N.C.G.S § 97-29(d), there are certain claims which allow for automatic permanent and total disability benefits (i.e., catastrophic cases where a claimant loses two or more limbs). These claimants are entitled to lifetime benefits without findings concerning work ability or wage-earning capacity. Three other categories of claims create a rebuttable presumption of permanent and total disability benefits: (1) spinal injuries involving severe paralysis of both arms, both legs, or the trunk; (2) severe brain or closed-head injuries evidenced by severe and permanent motor or communication disturbances; and (3) second- or third-degree burns to 33% or more of the total body surface. Under these three categories of claims, if the employer can prove that the claimant is capable of suitable employment, then permanent and total disability would not be due and payable.

Deputy Commissioner Extended Benefits Decisions to Date

The first case, Milton Nobles v. North Carolina DHHS and CCMSI, was issued by Deputy Commissioner Robert Harris on January 25, 2021. The claimant in that case had no formal education outside of a high school diploma. He had work experience primarily as a health care technician. On June 26, 2011, the claimant was working for a hospital and sustained injuries while breaking up a fight, which ultimately resulted in headaches, PTSD, and depressive disorder. The Deputy Commissioner emphasized the severity of the fight and the resulting injuries to claimant as well as claimant’s limited job history and low IQ. Dr. Thomas Gualtieri saw the claimant for a one-time neuropsychiatric evaluation in September 2011 and opined that claimant was malingering. He testified in line with the same at hearing. Claimant then began seeing Dr. Edwin Hoeper, a psychiatrist, on his own starting in May 2012. Claimant was still seeing him as of the date of the hearing. Dr. Hoeper provided testimony for claimant that his PTSD would never be cured and that his treatment could only improve his life slightly. Dr. Hoeper testified that claimant was permanently and totally disabled, and unemployable in any job. Dr. Manish Fozdar also conducted a one-time independent medical examination of claimant. Dr. Fozdar found claimant to be uncooperative and opined claimant was malingering. He opined any further mental health treatment was not related to his initial injury. Defendants also hired a rehabilitation professional, who produced a labor market survey and identified several positions she believed claimant could perform. The defendants’ vocational expert never met with claimant and claimant did not hire his own vocational expert. 

Deputy Commissioner Harris determined that claimant was entitled to extended benefits beyond the 500 weeks. The Deputy Commissioner found that claimant had long-term chronic PTSD and chronic major depression, and that he had satisfied the requirements under N.C.G.S. § 97-29(c) and had proven by the preponderance of the evidence in view of the entire record that he “has sustained a total loss of wage-earning capacity.” Dr. Hoeper’s testimony was given more weight than that of Dr. Fozdar, Dr. Gualtieri, and the vocational rehabilitation professional. Thus, claimant was awarded extended benefits.

Defendants appealed to the Full Commission. On September 29, 2021, the Full Commission entered an Opinion and Award reversing Deputy Commissioner Harris’s Opinion and Award and denying claimant’s right to extended benefits beyond the 500 weeks, as well as his claim for PTSD. The Full Commission panel consisted of Commissioner Myra Griffin, Commissioner Kenneth Goodman, and Deputy Commissioner David Hullender. The Full Commission reviewed the evidence and testimony and noted that claimant had received no medical treatment for his physical injuries since 2012 and had no work restrictions related to those injuries. Additionally, the Full Commission noted that the Parsons presumption did not apply to claimant’s allegations of PTSD as it was not an accepted condition and found Dr. Gualtieri’s and Dr. Fozdar’ s testimony more creditable that that of claimant’s treating physician, Dr. Hoeper.  The Full Commission concluded that Dr. Hoeper relied solely on claimant’s subjective complaints without any diagnostic testing or objective finds to support his diagnosis of PTSD. They specifically noted that Dr. Fozdar and Dr. Gualtieri performed objective testing, which led them to conclude that claimant’s alleged mental conditions were not related to his work injury.  Accordingly, the Full Commission opined that claimant failed to prove that he suffered from PTSD or depression as a result of his work injury and did not prove that he lacked total wage-earning capacity. The Full Commission denied medical treatment for claimant’s alleged PTSD and denied his claim for extended benefits beyond the 500-week cap.

The next case, Mary Betts v. North Carolina Department of Health and Human Services and CCMSI, was issued on March 12, 2021, also by Deputy Commissioner Robert Harris. The claimant in that case graduated from high school and had CNA qualifications. She was a certified EMT, but her certifications had lapsed. Claimant worked as a health care technician and sustained her injury on August 12, 2011, while trying to restrain a combative patient. She sustained an injury to the ankle, which resulted in multiple surgeries. Claimant had sedentary work restrictions, but the treating physicians noted that, even while performing sedentary work, she would still experience pain and swelling and would need to elevate her foot every hour. Evidence showed that claimant remained involved with the Girls Scouts as a troop leader and summer camp director, volunteered with the PTA, cut her own grass, and did crafts. The vocational expert hired by claimant testified that claimant’s condition prevented her from being employable. Defendants also hired a vocational expert who did not meet or speak with the claimant and who did not contact any potential employers to discuss the claimant’s limitations. The vocational expert was unaware of claimant’s need to elevate her foot to prevent swelling and pain. The Deputy Commissioner found the defendants’ vocational expert report to be too general and not tailored specifically to claimant. Accordingly, the Deputy found that claimant had proven by the preponderance of the evidence in view of the entire record that she “has sustained a total loss of wage-earning capacity” because of this compensable long-term ankle condition. As such, claimant was entitled to extended benefits.

The third case, Michelle Brown v. NC Department of Public Instruction/Surry County Schools and Sedgwick, was issued on May 4, 2021, by Deputy Commissioner Jesse Tillman, III. The claimant was working as a teacher’s assistant at a high school on February 24, 2012, when she sustained an injury. Claimant worked for the county in multiple capacities in the past, including bus driver, substitute teacher, tennis coach, and band director, and had experience as a CNA, truck dispatcher, cashier, food preparation, a line worker, and phlebotomist. The claimant had permanent sedentary work restrictions; however, no doctor testified she could not work in at least some capacity. Claimant testified she rode a motorcycle a few times during the summer, used a riding lawnmower, could walk one to two miles without issue, bowled twice a week, cared for multiple animals, and actively swam. A vocational expert provided a labor market survey that showed the availability of jobs within claimant’s work restrictions. Claimant presented no evidence that she continued to suffer a total loss of wage-earning capacity. The Deputy Commissioner found that claimant could at least work a part-time, sedentary job. As a result, this claim for extended benefits was denied.

The fourth case is Martin Sturdivant v. North Carolina Department of Public Safety and CCMSI. The decision was issued by Deputy Commissioner Erin F. Taylor on May 5, 2021. In this case, claimant sustained a compensable back injury on August 31, 2011. He was a high school graduate and had completed some post-graduate courses. He was certified to drive a forklift, had training in blueprint reading, and had CPR experience. The claimant had been on his church’s Board of Trustees since 2008. On the date of his injury, claimant was working transporting inmates. Four of claimant’s physicians testified he could work and noted he could perform many of the essential functions of his prior job as a correctional officer. Claimant only started looking for work in January 2020 and produced a job log, but some of the entries were inaccurate. Defendants’ vocational expert met with claimant, performed a transferrable skills analysis, performed a labor market survey, and identified several jobs in the surrounding area that claimant was capable of performing. Claimant’s vocational expert testified claimant was unable to work at all and disagreed with the treating physicians’ work restrictions. However, the vocational expert did not contact any potential employers, did not perform a transferable skills analysis, and only looked for jobs in Anson County. As a result, the Deputy Commissioner afforded more weight to the defendants’ vocational expert and determined that claimant could not show a total loss of wage-earning capacity and was therefore not entitled to extended benefits beyond the 500-week cap.

The fifth case is Glendell Murphy v. North Carolina Department of Public Transportation. The decision was issued by Deputy Commissioner Robert Harris on August 6, 2021. Claimant was 56 years old and suffered a compensable right knee injury while working at a youth center. Claimant had a high school diploma, worked at a chicken plant for two years, was in the US army, worked as a correctional officer, worked as a counselor at a Methodist home for children, and worked as a delivery driver. He earned his associate degree in 2001, his bachelor’s degree in 2013, and his master’s degree in 2015; all in criminal justice. Claimant had prior issues with depression and treated through the VA, but never requested psychiatric treatment from defendants. Claimant testified he had not looked for work since 2016. The orthopaedic authorized treating physician stated claimant could work and earn wages, but claimant’s unauthorized psychiatric doctor opined that he could not work at all. Defendants hired a vocational expert who met with claimant, reviewed claimant’s medical records, and performed a labor market survey, which identified 12 jobs that claimant could do within his orthopaedic work restrictions. When the vocational expert was questioned about claimant’s depression, she testified that his psychiatric condition was a “concern regarding claimant’s employability.” Claimant did not hire a vocational expert, but the Deputy Commissioner opined that defendants’ vocational expert testimony did not support a finding that claimant had wage earning capacity, and as result, claimant was granted extended benefits.

The sixth case is George E. Tyson, Jr. v. North Carolina Department of Health and Human Services and CCMSI. The decision was issued by Deputy Commissioner Kevin Howell on August 12, 2021. Claimant in this case sustained a compensable injury to his lower back on October 8, 2011, while assisting a client from a wheelchair to a couch. Claimant was a 59-year-old high school graduate with some college education and a cosmetology certification. Claimant had previously worked as a seafood picker, cosmetologist, singer, custodian, and groundskeeper. Claimant was also an ordained minister and performed ceremonies for friends and family, but not for wages. He took online courses for psychology in 2016 and volunteered regularly at his church. Claimant’s treating physicians testified that claimant could work in the sedentary to light-duty category. Defendants’ vocational expert also testified that the claimant had the capacity for work. Claimant testified that he did not think he could work but provided no expert testimony to support this claim. The Deputy Commissioner determined that claimant could not show a total loss of wage-earning capacity. Therefore, claimant was not entitled to extended benefits beyond the 500-week cap.

The most recent case, as of the date of early November 2021, is Tapper v. Penske Logistics, LLC. This decision was issued by Deputy Commissioner Wes Saunders on October 7, 2021. Claimant sustained two compensable injuries to his back while delivering newspapers. He was 64 years old when the Opinion and Award was issued. His first date of disability was July 25, 2011. Following several surgeries, Dr. Dennis Bullard opined that claimant was totally disabled and precluded from gainful employment. Claimant was referred to Rex Pain Clinic for pain management, but his care was subsequently transferred to his primary care provider, Dr. Kirsten Avery, due to a lack of improvement. Dr. Avery saw claimant once every three months for medication refills. She testified that claimant lacked the functional capacity to return to work in any capacity. Deputy Commissioner Saunders found her testimony credible based on her familiarity with claimant and her status as claimant’s primary care provider for over twelve years.

Prior to the hearing, claimant obtained a second opinion evaluation with Dr. Charles Goodno and retained Michael Fryar as an expert in vocational counseling. Dr. Goodno did not have a complete copy of claimant’s medical records and did not consider that claimant was recovering from several unrelated surgeries when he tested claimant’s physical abilities. Consequently, Dr. Goodno’s testimony was given less weight by Deputy Commissioner Saunders because his opinions were based on incomplete information. However, Mr. Fryar testified that, because claimant had not been released to return to work in any capacity by any of his medical providers, his search for employment would be futile. Deputy Commissioner Saunders found Mr. Fryar’s testimony credible and concluded claimant had carried his burden of proving a total loss of wage earning capacity through Dr. Avery and Mr. Fryar’s expert testimony. Claimant was awarded extended benefits and ongoing medical compensation.  

Practical Takeaways for Jurisdictions with Statutory Caps

The decisions issued to date help to forecast what issues North Carolina appellate courts will consider when analyzing extended benefits cases. Below is a list of general takeaways on how to defend a claim for benefits beyond the statutory cap:

1.       Each case will be fact specific; documentation and communication remain critical.

2.       The claim will require the use of credible and, in many cases, multiple experts.

3.       Defendants should obtain solid expert opinions, both medical and vocational, that clearly support a finding that a claimant can participate in some form of employment.

4.       It is important to elicit detailed testimony, including dates, times, and follow-ups, from the claimant regarding his or her job search, or lack thereof.

5.       The vocational expert should meet with the claimant in person to identify jobs within the claimant’s labor market that are readily available in light of his or her work restrictions and educational and vocational background. Additionally, the vocational counselor should contact those potential employers to determine the likelihood that the claimant can secure employment within his or her work restrictions.

6.       The vocational expert should be provided an accurate summary of claimant’s work restrictions regardless of whether the condition has been accepted by defendants. Providing the vocational expert with claimant’s hearing testimony prior to his or her deposition should be considered.

7.       It is important to have a detailed understanding of the claimant’s job history, educational background, and daily activities, including volunteer activities, as evidence of the claimant’s wage-earning ability. 

8.       It will benefit the defense to develop solid medical evidence about the claimant’s loss of use or impairment ratings by highlighting the functionality of the injured body part.

Hearing requests for extended benefits are on the rise right now since there has been no guidance from the North Carolina Court of Appeals regarding the correct standard to be used when deciding these cases. These cases are fact specific and a full and complete understanding of the claimant’s medical, educational, and vocational history will be imperative. Defendants will need clear and strong expert testimony to prevail in these cases. 

We will continue to monitor extended benefits cases as they work their way through our court system. If you have any questions about extended benefits, please contact a member of our Teague Campbell’s workers’ compensation team.

In Florida, medical disputes before the Judge of Compensation Claims (JCC) are often handled with the appointment by the JCC of an Expert Medical Advisor (EMA). F.S. 440.13(9)(c) states in part:

If there is disagreement in the opinions of the health care providers, if two health care providers disagree on medical evidence supporting the employee’s complaints or the need for additional medical treatment, or if two health care providers disagree that the employee is able to return to work, the department may, and the judge of compensation claims shall, upon his or her own motion or within 15 days after receipt of a written request by either the injured employee, the employer, or the carrier, order the injured employee to be evaluated by an expert medical advisor.

The opinion of an EMA is presumed to be correct unless there is clear and convincing evidence to the contrary as determined by the JCC.   Thus, the appointment of an EMA in effect takes the litigation out of the JCC’s hands and the opinion of the EMA will for the most part  decide the disputed medical issues before him or her.   The presumption of correctness only attaches to the opinions responding to the precise questions asked of the EMA.

The First District Court of Appeal which hears all workers’ compensation appeals in Florida, recently issued two decisions involving EMAs.  The first case is ABM Industries, Inc. and ACE/ESIS v. Valencia, No. 1D20-2027 (Fla. 1^st DCA 2021).  In this particular case, the employer made an argument that the opinions of a physician chosen by the claimant through the one-time change of physician statute were not admissible.   However, as a contingent argument, the employer argued that if the opinions of the claimant selected physician were admissible, then the JCC must appoint an EMA because the claimant’s new physician has conflicting medical opinions with the prior treating physician.  The JCC after trial ordered that there was no dispute requiring the appointment of an EMA because it was not until the entry of judgment that the claimant’s new treating physician became authorized. 

The First DCA reversed and rejected this reasoning as flawed as a matter of both logic and law.   The appellate court held that the instant the JCC determined the claimant’s newly selected physician was authorized, it required the appointment of an EMA in light of the record conflict in the medical opinions.   While not groundbreaking this holding is an extension of existing case law from the First DCA that it is mandatory the JCC appoint an EMA when a disagreement exists between the opinions of two healthcare providers.  This is so even if the conflict becomes apparent after trial begins.

In another case, the Florida First DCA reaffirmed the necessity of appointing an EMA where conflicts in the medical evidence exist.   In Shelton v. Pasco County Board of Commissioners, No. 1D20-3511 (Fla. 1^st DCA 2021), the JCC did appoint an EMA who evaluated the claimant due to several conflicts in the medical evidence.   At trial the JCC struck the EMA’s opinions based on a Daubert objection raised by the claimant.[1]  The claimant moved for the appointment of a successor EMA, which the JCC denied.  The First DCA reversed the JCC once again holding that where conflicts exist in the medical evidence, an EMA must be appointed.   The striking of the EMA’s testimony and report did not resolve those conflicts so an alternate had to be appointed.   The end result was a remand with instructions to appoint an EMA for resolution of the conflicts in the medical testimony.

                                                                        Robert J. Grace, Jr.

                                                                        rgrace@bbdglaw.com

                                                                        Bleakley Bavol Denman & Grace

                                                                        15316 N. Florida Avenue

                                                                        Tampa, FL 33613

                                                                        813-221-3579

On June 2, 2021, the Supreme Court of South Dakota released its opinion in the matter of Hughes v. Dakota Mill & Grain, 2021 S.D. 35, which addressed the Court’s interpretation of the causation standard of “a major contributing cause.”.  Although this opinion addresses aspects of the causation standard (i.e., what a claimant does not have to prove), it does not give clear direction regarding how medical experts should interpret the causation standard when there are multiple causes for the condition from which the injured worker complains.

Claimant, Taylor Hughes, worked various construction and heavy labor jobs from the time he left high school in the ninth grade (2004) until his employment with Dakota Mill & Grain (the “Employer”) in 2017.  In 2010 and 2011, prior to his employment with Employer, he underwent two back surgeries that he related to his work activities with a prior employer Hughes reported no real back issues between 2014 and 2017.  Hughes began working for the Employer in 2017.  Before being cleared to work for the Employer, Hughes underwent a physical examination.  At the physical, Hughes reported no back problems and was approved by the examining doctor to start work.  Hughes’ job duties with the Employer included heavy labor.  Several months after starting with the Employer, Hughes claimed that he injured his back when he fell off a skid-loader but did not report the injury.  Five days after the injury, Hughes went to the emergency room complaining of back pain similar to the pain experienced from his prior injury with his previous employer.  An MRI after the work injury in 2017 detected a herniated disk in Hughes’ back, and Hughes complained of shooting pain down his legs.  Hughes filed a worker’s compensation claim against the Employer.

The South Dakota Department of Labor (the “Department”) held an administrative hearing.  At the hearing, conflicting expert testimony was submitted regarding whether Hughes’ symptoms were the result of degenerative back conditions from the prior injuries sustained while working for his previous employer, or whether they were caused by Hughes’ fall from the skid-loader and related to the work injury of June 26, 2017, reported to the Employer.  The Department determined that Hughes failed to show that his disability was caused by a workplace injury and failed to show that his work activities with the Employer were a major contributing cause of the injury.  The Department’s decision was appealed.  The decision was appealed to the Sixth Judicial Circuit in Hughes County, South Dakota.  The Circuit Court reversed the Department’s decision, finding that the Department committed clear error in reaching the decision, and the matter was then appealed to the South Dakota Supreme Court (the “Court”).

On appeal, the Court addressed two issues.  The first issue was whether the Department erred in determining Hughes failed to establish that he sustained an injury that arose out of his employment. The Court identified three instances where an injury is said to “arise out of” the employment under South Dakota law: (1) the employment contributes to causing the injury; (2) the activity is one in which the employee might reasonably engage; or (3) the activity brings about the disability upon which compensation is based.  The Court determined that an employee need only show that the employment was “a contributing factor” to the injury to establish this element.

The Court agreed with the Circuit Court and overturned the Department’s determination that Hughes’ disability was not “caused by” a workplace injury. The Court held that the correct standard to determine whether an injury “arose out of” Hughes’ employment should have been whether Hughes’ work activities “contributed to” his injury.  The Court held that, under the correct standard, Hughes established that his injury arose out of and in the course of his employment with the Employer by a preponderance of the evidence because Hughes reported that he felt “100 percent” before beginning work with the Employer, Hughes informed his supervisor that his back was sore the day he fell off the skid-loader, and the work Hughes performed with the Employer included activities that would aggravate one’s back.

The second issue determined by the Court was whether Hughes established that his’ work activities were a major contributing cause of his condition.  The Court determined that, under SDCL 62-1-1, the test for causation when a person has a pre-existing work injury is whether the injury was a major contributing cause of the injury.  Relying on Orth v. Stoebner & Permann Constr., Inc., 2006 S.D. 99, 724 N.W.2d 586, the Department found that a major contributing cause was “a cause which cannot be exceeded.”  The Department determined that because 60% of Hughes’ condition was caused by other factors, any of which could have exceeded 40%, Hughes did not meet the causation threshold.

The Court found that a claimant does not need to reach a 50% threshold to establish causation or show that the work activities were the sole cause of the injury.  Instead, the Court determined that the injury only needs be determined to be a major contributing cause.  Although both experts agreed that from 2012 through 2017 Hughes’ showed an increasing disc bulge in his back, the Court ultimately sided with Hughes’ expert and found that the work activities were a major contributing cause of his condition and he had proven this by a preponderance of the evidence.  In doing so, the Court adopted the opinion of Hughes’ expert determined that because Hughes was symptom-free before working for the Employer; because he had worked full-time for months without complaint prior to his injury with the Employer; and, because he had not been utilizing pain medication or back injections for years prior to the injury, his work activities were a major contributing cause of his condition.

As noted above, this decision gives direction from the Court on what “a major contributing cause” standard is not.  However, the Court left open the definition of “a major contributing cause” by adopting the definition provided by Hughes’ expert stating that “a major contributing cause” is “not the only cause, not the most significant cause, just a major contributing cause.”  When reviewing cases for causation, this new direction from the Court should be taken into consideration.

Workers’ compensation laws vary in each of the 10 Canadian provinces and 3 territories. Each of the distinct regimes are government-administered within each jurisdiction.  While some mandate coverage to all employers operating in the province or territory, some impose it only within certain industries.

Even though the particularities of the legislation and their corresponding health and safety regulations vary from one province to the next, it is possible to foresee  certain similar issues that will be of interest to all employers as we start this new year.

While we have no crystal ball, we envision that the five following topics will be trending across Canada in 2022:

1.       COVID-19 Workers’ Compensation Litigation

The upcoming months will undeniably be filled with contestation of claims relating to COVID-19 as a compensable injury. While the appeals process before the various administrative organisations are now exhausted, we predict a trend of cases behind tried [ not sure what this means ?]. Some of these cases will involve complex medical evidence regarding pre-morbid conditions, in provinces which allow for an associated cost-relief. The months to come will build a foundation for these cases that will need to be monitored closely and will vary from one province to the next. Presumptions integrated into applicable legislation may facilitate the demonstration that a COVID-19 spread in a given community may have in fact be contracted [ at work ?]

2.       Teleworking Workers’ Compensation Litigation and application of OHS rules in this setting

During the pandemic, a large proportion of the workforce was suddenly compelled to work for home, sometimes in inadequate settings. Some employers have  decided not to recall certain employees to their establishment and will keep them in their remote settings on a permanent basis, either on a hybrid mode or on a full-time basis. When injuries occurred in that context, some workers brought compensation claims and the upcoming months will clarify the boundaries applicable to them and the resulting worker entitlements and liabilities/costs for employers.  Given the unique circumstances of the pandemic, existing precedents are simply insufficient to anticipate these rulings. As an example, when an employee logs off their computer, they  are immediately ”off”  of work, unlike in the workplace where they still have to walk to the break room or leave the premises. How will tribunals rule on these claims, where the private and professional sphere of the worker overlap, in an environment over which the employer clearly has no control? Similarly, how far will employers need to improve their control over the worker’s private residence to prevent the risks of injuries? As some provinces are amending their laws or extending their definitions of the workplace, accordingly the balance between the employee’s right to privacy and the employer’s exercise of due diligence in view of preventing compensable injuries will be increasingly challenging to strike. As our view of what is and what is not the “workplace” has changed, so too will the laws regarding this issue.  

3.       Coverage of employees working outside their province of origin

As the pandemic raged on, some workers elected to work remotely outside their “home” province  during ,  some even internationally. Several claims were not recognized under these conditions as being compensable under applicable provincial laws. Case law arising from these claims will be another legacy of the pandemic to be expected this year.

4.       Mandatory Vaccine Policy Challenges

Following the Canadian government’s mandate to have all federally-regulated employers enact a vaccination policy by the end of Fall 2021, several employers have adopted such policies and imposed them on their sub-contractors and  as well. Several provincial governments also imposed on their healthcare sector employees' similar policies, as well as to all subcontractors’ employees entering the premises.  As a result, we may anticipate numerous and varied claims filed by employees who were negatively impacted by these policies to be heard in the upcoming months.

5.       Litigation Surrounding Misclassification or Defective Coverage of Dependant Workers under provincial workers’ compensation regime

With the rise of the gig economy comes unpredictable liability: Some provincial regimes with mandatory coverage require employers to cover their “dependent workers” as if they were regular employees. The conditions applicable to these requirements  vary from one province to the next and we expect that in the  months and years to come  a greater number of verification notices from  workers compensation boards raising these issues. Where applicable this may also give rise to substantial backdated premiums owed by employers.. Close analysis to the regime applicable in the provinces where an employer operates in Canada should be undertaken to evaluate whether this risk is a materi alone. 

Legal Update by Attorney Alison Stewart and Law Clerk Jordan Gehlhaar

Happy Holidays from Peddicord Wharton!

We have a few recent updates concerning workers’ compensation matters:

• Commissioner Cortese filed the most recent supervisory order concerning COVID-19 impact on November 29, 2021. All in-person hearings are now suspended through April 29, 2022. Hearings are to be held in an online format, unless the parties are in agreeance and the Deputy, in their discretion, grants a timely joint motion for an in-person hearing.
  
  
• The Iowa Supreme Court recently interpreted their COVID-related supervisory orders in the context of a workers’ compensation case in Askvig v. Snap-On Logistics Company. The order provided that due to the pandemic, the statute of limitations “or similar deadline for commencing an action in district court” was tolled—in essence, parties could add an additional 76 days to their filing deadline. A Deputy Commissioner ruled Claimant Askvig did not sustain a shoulder injury, and the Commissioner did not act on her application for rehearing. As such, she had thirty days to file a petition for judicial review. See Iowa Code §§ 17A.19; 86.29. When Claimant’s counsel missed the deadline, he argued that the supervisory order applied, extending the deadline to file such applications for judicial review of Agency action. The Iowa Supreme Court rejected this argument on appeal. The Court reasoned that these are intended to be short appellate deadlines, so they are a continuation of an existing action, not “commencing an action.” Additionally, these deadlines are different because workers’ compensation is an administrative process entrusted to the executive branch, unlike litigation between private parties. Therefore, the Court’s extension did not “deny finality to the actions of [the Agency].”
  
  
• In Foster v. East Penn Manufacturing Company, the Iowa Court of Appeals ruled on penalty benefits for delay. The employer accepted Foster’s injury and paid for initial treatment and benefits. However, when the first surgery did not resolve the condition, the employer refused to authorize a second surgery or pay for temporary total disability (TTD) benefits. A Deputy Commissioner imposed penalty benefits and the district court affirmed. The employer appealed, arguing: (1) the delay was necessary to investigate; (2) there was a reasonable basis to delay; and (3) there was a good faith basis to dispute entitlement. The Court of Appeals likewise affirmed the penalty, finding that even if entitlement was “fairly debatable,” the employer “missed a step.” In addition to a reasonable basis for denial or delay, the statue requires an employer to “contemporaneously convey” the basis for the same. See Iowa Code § 86.13(4). The employer had sent an email to Claimant’s counsel requesting they hold off on filing a petition for alternate medical care, but did not notify the Claimant of their reasoning until months later. Further, there was no evidence in the record showing that the employer did in fact conduct a timely investigation during their delay.

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NOTICE TO THE PUBLIC

The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. This disclosure is required by rule of the Supreme Court of Iowa.

Peddicord Wharton Legal Updates are intended to provide information on current developments in legislation impacting our clients. Readers should not rely solely upon this information as legal advice. Peddicord Wharton attorneys would be pleased to answer any questions you may have about this update. ©2021 Peddicord Wharton. All Rights Reserved.

Legal Update by Attorneys Alison Stewart and Chris Spencer, and Law Clerk Jordan Gehlhaar

Use of medicinal cannabis is legal in narrow cases in Iowa. The Medical Cannabidiol Act was first passed in 2014 and has historically been very restrictive and slow to expand. Today’s Act provides that individuals determined by a health care practitioner to have a qualifying “debilitating medical condition” may legally obtain cannabis from a licensed dispensary. Qualifying conditions include cancer (producing certain symptoms), multiple sclerosis, seizures, AIDS, PTSD, chronic pain, or any terminal illness (producing certain symptoms). The Cannabidiol Act provides that it does not give rise to any employment law claims, which is consistent with Iowa law allowing employers to set conditions of employment. A separate provision states that workers’ compensation carriers are not required by the Act to reimburse for costs associated with medicinal marijuana use. See Iowa Code § 124E (2020).

Due to its medical relation, workers’ compensation claimants or providers may seek authorization for use of cannabis as a treatment option. This is likely to come as a petition for alternate medical care by the claimant. In the most recent Iowa case, an Iowa treating provider recommended referral to a provider who could prescribe medicinal cannabis, due to the claimant’s history of intolerance to oral medication. The employer and insurance carrier refused to authorize the referral and the claimant filed an alternate care petition under Iowa Code 85.27. The Deputy Commissioner found the refusal to be reasonable and therefore denied the alternate care.

The Deputy reasoned that:

(1) the Iowa Board of Pharmacy considered marijuana a schedule I drug with "no medicinal use,” and
(2) since marijuana and cannabis are illegal under federal law, the Defendants would put themselves at risk by paying for the treatment.

It was determined inappropriate for the Agency to recognize medicinal value prior to the Iowa Board of Pharmacy or Congress. See Presson v. Freiburger Concrete & Topsoil, Inc., File No. 5049542 (2018). This reasoning still applies today, meaning employers and insurance carriers have a reasonable basis and case law support for denying such care.

Currently, marijuana is a controlled substance in Iowa, and the possession of any amount is a misdemeanor offense in the state. Under Iowa Code Section 85.16, compensation is not allowed for work injuries caused by intoxication, if the intoxication was a substantial factor in causing the injury. This is known as the “intoxication defense” claimed by employers. It is presumed that the employee was intoxicated at the time of injury, and that the intoxication was a substantial factor in causing the injury if the employer shows a positive drug test at the time of or immediately following the injury. Therefore, if marijuana or cannabis is shown to be present in an employee’s system at or immediately after a work injury, the employee is not entitled to workers’ compensation benefits unless they overcome the presumption, a heavy burden. The closer a test is to the time of the injury, the more likely it is to be admissible. Additionally, toxicologists or similar expert witnesses are often required in these types of cases.

These sources lead to several conclusions:

(1) employers are free to adopt their own drug policies, even against legal use of medicinal cannabis;
(2) compensation may be denied for injuries caused substantially by intoxication; and
(3) Iowa law does not require workers’ compensation coverage of medicinal marijuana or cannabis.

Peddicord Wharton will continue to monitor statutory and case law on this topic.

If you'd like to sign up for our e-newsletter, please click here.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

NOTICE TO THE PUBLIC

The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. This disclosure is required by rule of the Supreme Court of Iowa.

Peddicord Wharton Legal Updates are intended to provide information on current developments in legislation impacting our clients. Readers should not rely solely upon this information as legal advice. Peddicord Wharton attorneys would be pleased to answer any questions you may have about this update. ©2021 Peddicord Wharton. All Rights Reserved.

Employers and Insurers in Minnesota are currently not legally required, under Minnesota Workers’ Compensation law, to reimburse employees for medical cannabis treatment based on the recent decision from the MN Supreme Court summarized below.

On October 13, 2021, the Minnesota Supreme Court issued two major decisions regarding medical cannabis. See Musta v. Mendota Heights Dental Center, A20-1551 (Minn. Oct. 13, 2021) and Bierbach v. Digger’s Polaris, A20-1525 (Minn. Oct. 13, 2021). The Court treated the two decisions as companion cases, and the majority of the analysis is contained in the Musta case.

The Minnesota Supreme Court made two major rulings regarding medical cannabis. First, it held that the Workers’ Compensation Courts, including the Workers’ Compensation Court of Appeals (WCCA), lack jurisdiction to decide whether federal law preempts Minnesota law requiring an employer or insurer to reimburse an employee for medical treatment in the form of medical cannabis. Second, the Minnesota Supreme Court held that the Minnesota Workers’ Compensation Act is preempted by the Federal Controlled Substance Act (CSA). As such, Employers/Insurers are not required to reimburse employees for medical cannabis used to treat a work injury.

As background, the employee in Musta worked as a dental hygienist when she suffered a work-related neck injury in February 2003. She received conservative care, underwent surgery in November 2003 and August 2006, and was ultimately prescribed medication to manage the continuing pain, including Vicodin and Fentanyl. In late 2009, the employee discontinued using narcotics to treat her pain because of the side effects. By April 2019, she began using medical cannabis in compliance with the THC Act (Minn. Stat. §§ 152.21–.37 (2020)) to treat her consistent pain. The employee then requested reimbursement for said medical cannabis from the employer, Mendota Heights Dental Center (Mendota Heights).

The employer opposed the request for reimbursement because cannabis possession is prohibited by federal law under the CSA. Cannabis is a Schedule I controlled substance, which is the most restrictive level, and cannot be lawfully prescribed under federal law. However, the Compensation Judge ruled that the employer must reimburse the employee for medical treatment, including medical cannabis. See Minn. Stat. § 176.135, subd. 1(a) (2020). The Compensation Judge declined to resolve the issue of preemption. On remand, the Compensation Judge found that the use of medical cannabis is legal under Minnesota law, and nothing in Minnesota workers’ compensation law would prohibit reimbursement for medical cannabis when used to treat a work-related injury. Therefore, the employer was required to reimburse the employee for medical cannabis expenses. The employer appealed.

The WCCA held that it lacked subject matter jurisdiction over the preemption issue and stated that it could not address whether the CSA preempts Minnesota Law as it relates to medical cannabis in workers’ compensation cases. The WCCA then affirmed the Compensation Judge’s decision, requiring the employer to reimburse the employee for medical cannabis expenses. The employer appealed the WCCA’s decision to the Minnesota Supreme Court.

The Minnesota Supreme Court held that: (1) the WCCA lacks jurisdiction to decide whether federal law preempts Minnesota law that requires an employer to provide medical treatment when the treatment sought is medical cannabis; and (2) because it is impossible to comply with both state and federal law, the Workers’ Compensation Court orders are preempted by the CSA. In a footnote, the Minnesota Supreme Court noted that its decision was limited to “a claim for reimbursement of medical expenses, incurred to treat a work-related injury, where the treatment for which the expense is incurred is the purchase and use of medical cannabis, with the reimbursement liability determined in a legal proceeding.” They expressed “no opinion on whether the CSA preempts any component of Minnesota’s medical cannabis program, nor does our preemption decision here extend to any other form of medical treatment."

Summary by Attorney Andrew Carballo