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NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.  


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California

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Analysis of County of San Diego v. Workers’ Compensation Appeals Board (Pike)
by Christian P. Kerry

On March 6, 2018, in County of San Diego v. Workers’ Compensation Appeals Board (Pike), the Court of Appeals filed a published opinion regarding Labor Code section 4656(c)(2). The court held that an injured worker is not entitled to either temporary disability benefits or full salary benefits under Labor Code section 4850—more than five years from the date of injury. This decision reversed the decisions of the WCJ and WCAB, which held that, under Labor Code section 4656 (c)(2), an injured employee was entitled to temporary disability benefits and full salary benefits under Labor Code section 4850 for up to 104 weeks within a five-year period and unlimited benefits thereafter. For obvious reasons, an adverse decision could have had enormous consequences within the workers’ compensation system.

In Pike, the injured worker was employed as a deputy sheriff for the County of San Diego. He sustained an injury on July 31, 2010 to his right shoulder. His claim resolved in May 2011 by stipulations with request for award based on a disability rating of 12%. On May 26, 2015, he filed a timely petition to reopen. He sought salary continuation under Labor Code section 4850 from September 15, 2015 through March 28, 2016.  He also sought temporary disability benefits from March 29, 2016 through August 18, 2016. The County paid him Labor Code section 4850 benefits through July 31, 2015, equating to payments through five years after the date of his injury. The WCJ awarded Pike the additional benefits beyond July 31, 2015. The County filed a petition for reconsideration, and the WCAB upheld the opinion of the WCJ.

The Court of Appeals reversed the decision of the WCJ and WCAB, holding that an injured worker is not entitled to temporary disability benefits or Labor Code section 4850 benefits beyond five years from the date of injury. Several reasons supported this decision.

First, in reviewing the legislative history, the court observed that an Assembly Floor Analysis had noted the intention of the bill would be to extend the window in which an injured worker could receive temporary disability benefits from two years to five years.

Second, the court observed that, although there was no authority analyzing the limitations under Labor Code section 4656(c)(2), there was analogous authority to the original version of Labor Code section 4656. In Radesky v. City of Los Angeles (1974) 37 Cal.App.3d 537, 542, the court considered whether the five-year limitation in former section 4656 applied to a municipal workers’ claims for benefits under a provision of the municipal code that incorporated portions of State law. The court held that the applicant was not entitled to temporary disability beyond five years from the date of injury. By analogy, the court inPike held that, based on similar language in the statute, a similar finding was warranted.

Pike and its amicus, CAAA, advocated the position that the WCAB had jurisdiction to award benefits beyond five years from the date of injury pursuant to Labor Code sections 5410, 5803, and 5804. The court inPike was unpersuaded by this position. Citing Nickelsberg v. Workers’ Comp. Appeals Bd. (1991) 54 Cal.3d 288, it emphasized that the California Supreme Court made clear that the jurisdictional limitations in sections 5410, 5803, and 5804 are separate and distinct from the substantive law limiting an award of temporary disability benefits in section 4656. Thus, even though the WCAB had jurisdiction to determine benefits more than five years from the date of injury, it lacked the power under the expressed limitation in the statute. Simply stated, the court concluded that the WCAB “must have jurisdiction to act, and the law must entitle the worker benefits” in order to award benefits. (Emphasis in original.)

Finally, the court noted that there was no reason to evaluate Labor Code section 4850 benefits any differently than temporary disability. In footnote 10, it recognized that, in County of Alameda v. Workers’ Comp. Appeals Bd. (Knittel) (2013) Cal.App.4th 278—a successful Hanna Brophy decision, the Court of Appeals held that Labor Code section 4850 benefits are disability benefits within Labor Code section 4656(c)(2) for purposes of the 104-week cap on TD benefits. The court reasoned that it could see no reason, and none was provided by Pike, as to why the five-year limitation would not apply with equal force.

by Jessie Zaylia, Partner

Independent medical review (“IMR”) has survived another challenge in court.  On June 14, 2017, the California Supreme Court denied a petition for review regarding the Third District Court of Appeal’s decision inRamirez v. WCAB (2017) 10 Cal.App.5th 205.

The applicant raised constitutional challenges to IMR, claiming that IMR violates both the California Constitution and the United States Constitution.  The court rejected each of the petitioners’ challenges and upheld the constitutionality of IMR.

The petitioners argued that IMR violated the California Constitution’s separation of powers and due process clauses.  The court embracedStevens v. WCAB to reject this argument. In Stevens, the court noted that Article XIV, Section 4 of the California Constitution vests the legislature “with plenary power,unlimited by any provision of this Constitution, to create, and enforce a complete system of workers’ compensation, by appropriate legislation.”  It found, however, that the constitution’s separation of powers and due process clauses yield to Section 4: the separation of powers clause does so expressly, whereas the due process clause excludes amendments “as to the subject matter of the new provision.”  Relying on theStevens court’s findings, the court held that IMR did not violate these constitutional clauses.

The petitioner also argued that IMR conflicted with Section 4 of the due process clause since Labor Code section 4610.6(i) restricts the ability of appellate courts to review IMR determinations.  TheRamirez court, however, “perceive[d] no conflict.”  It noted that Section 4 requires that all WCAB decisions are “subject to review by the appellate courts [. . .].”  It also noted that section 4610.6(i) only prohibits appellate courts from making a determination contrary to “determination of the independent medical review organization.”  The petitioner argued that section 4610.6(i)’s language does not permit a court of appeal to review the Board’s decision as required by Section 4.  The court opined, however, that section 4610.6(i) does not “impair[] the ability of the appellate courts to review decisions of the Board,” as an applicant may petition a court for review on grounds enumerated in section 4610.6(h).  For this reason, the court held that IMR did not conflict with Section 4.

Lastly, the petitioner argued that IMR “strip[ped] him of his right to a substantive appeal” as an appellate court could not make a determination contrary to IMR.  The court rejected this challenge by reference toStevens.  The Stevens court noted that due process requires that a state provide someone “sufficient notice and opportunity to be heard” before “depriv[ing] them of a property or liberty interest [. . .].”  It found that IMR presented a low “risk of erroneous deprivation of [medical] services” to applicants and that the government had a compelling interest when it established IMR.  As such, theStevens court concluded that an applicant “is afforded ample process.”  Agreeing withStevens’s conclusion, the court in Ramirez held that “the [IMR] process in its entirety provides sufficient due process protections” to applicants.

This is the second district to reject a constitutional challenge to IMR and the second time that the California Supreme Court has refused to review an appellate court’s decision.  As it stands, IMR looks as though it is here to stay.

by Jessie Zaylia, Partner

On April 26, 2017, the Third District Court of Appeal issued its decision in City of Jackson v. Workers’ Compensation Appeals Board (Rice) resolving the question whether “heritability and genetics” may be properly considered to apportion causation for a disability caused by a degenerative disease. (No. C078706, publication pending).  The court answered the question in the affirmative.

In City of Jackson (Rice), the applicant police officer filed a claim for his disability caused by a cervical degenerative disc disease.  The qualified medical examiner found the applicant suffered a cumulative neck injury and initially apportioned 25% causation to “heritability and genetics.”  In a supplemental report, however, the QME changed the apportionment to 49%.  In support, the QME cited three medical studies that found genetics to be “a significant causative factor in cervical spine disability [. . .].”  In response to the applicant’s petition for reconsideration, the Workers’ Compensation Appeals Board’s disregarded the QME’s apportionment and ordered an unapportioned disability award for the applicant.  The Third District granted the City of Jackson’s petition for writ of review and annulled the Board’s decision.

The court’s ruling in City of Jackson (Rice) is notable in two respects.  First, the court held that Labor Code section 4663 permits consideration of an applicant’s genetics when apportioning causation in a degenerative disease case.  The court dismissed the Board’s concern that “apportioning causation to genetics opens the door” to apportioning causation to “impermissible immutable factors.”  It cited two previous rulings where the Board permitted such apportionment “though it may not have used the term ‘genetics.’”

Second, the court did not require an inquiry into the applicant’s familial medical history to justify the apportionment.  Rather, the published medical studies that the QME relied on were substantial medical evidence in and of their own right to justify apportionment at 49%. The medical studies “indicated that genetics or heredity was a majority factor in all cases of degenerative disc disease,” “unless there [wa]s a clear traumatic injury.”  In light of this, the court found that an inquiry into the applicant’s familial medical history was “unnecessary.”

City of Jackson (Rice) will undoubtedly assist defendants in developing non-industrial apportionment for their claims.  The case highlights the importance of raising the issue of genetics when presenting an apportionment defense.  It also underscores the importance of using peer-reviewed medical journal articles during med-legal cross-examinations as well as within requests for reporting so that doctors can render conclusions based on substantial, industry-established grounds for apportionment.

On January 23, 2017, the WCAB issued an en banc decision in the case ofMaxham v. California Department of Corrections and Rehabilitation, SCIF that provides insight as to whether a party may provide an advocacy letter to a med-legal physician over an opponent’s objection.  The short answer to this question is one that lawyers and clients hear too often: it depends. 

The Board provided the parties with two holdings as follows (verbatim):

  1. “Information," as that term is used in section 4062.3, constitutes (1) records prepared or maintained by the employee's treating physician or physicians, and/or (2) medical and nonmedical records relevant to determination of the medical issues.
  2. A "communication," as that term is used in section 4062.3, can constitute "information" if I it contains, references, or encloses (1) records prepared or maintained by the employee's treating physician or physicians, and/or (2) medical and nonmedical records relevant to determination of the medical issues.

So, what does this mean?  First, for the purposes of this case, it’s best to understand “information” as evidence—whether medical or non-medical.  Second, it’s best to understand “communication” as an advocacy letter for the purposes of this case as well as for the purposes of what we do on a daily basis.

To boil the holding down, the Board essentially defined “information” as either medical or non-medical evidence, and it explained that an advocacy letter can transform into evidence if it “contains, references, or encloses” any medical or non-medical evidence.  Thus, for all intents and purposes, the Maxham case supports the notion that any advocacy letter worth its salt will always “transform” into evidence because, after all, if there is any reference to medical or non-medical evidence (including any information found in pleadings, such as an applicant’s occupation, age, mechanism of injury, etc.), then such a letter becomes evidence by way of merely mentioning other evidence.  In fact, under this decision, the only way that an advocacy letter could not transform into evidence is if it simply identified the name of the alleged injured worker, authorized the doctor to see the applicant on a med-legal basis, and asked the doctor to address med-legal issues; such a letter could hardly be deemed an “advocacy” letter, though, because there is no advocating for any position whatsoever is such correspondence.

Please note that, technically, the Maxham case only dealt with letters that are sent to AMEs, but the case law can easily apply to cases where PQMEs are used.

In order to not be disheartened by the holdings in the Maxham case, it is important to read the case in its entirety.  The Board engages in a dance of sorts.  It explains that, even if a letter becomes evidence, there is a follow-up inquiry that must be made: “Is a party prevented from sending such a letter to a med-legal physician?”  The answer depends upon whether the evidence mentioned in or attached to the letter has been agreed upon (in the case of an AME) or, as an extension of the case, whether the evidence has been properly and timely objected to (in the case of a PQME).  TheMaxham case explains that, so long as the evidence in an advocacy letter has been agreed upon when there is an AME, then a party can send a letter to the AME that mentions or encloses such evidence, regardless of whether an opposing party objects to the letter.

The Labor Code and regulations provide that, when an AME is used, any medical and/or non-medical evidence must be agreed upon by both parties before it can be sent to the AME.  Contrastingly, when a PQME is used, the standard is different; the opposing party only has the right to object to non-medical evidence within 10 days after service.  If the opposing party fails to object timely, then, by default, the party may send all proposed evidence to the PQME.

It would follow then that, from the Maxham case, we can extrapolate rules that would apply in cases where a PQME is used.  Hence, letters to a PQME can be sent to the med-legal physician, regardless of any objection by opposing counsel, so long as the letter only contains evidence to which the opposition has not properly and timely objected.

If opposing counsel fails to agree to evidence (in the case of an AME) or timely objects to non-medical evidence (in the case of a PQME), then the party wishing to present such evidence to the med-legal physician should file a DOR on the issue in order for a judge to determine whether such evidence may be sent to the physician.

The good news is that the Maxham case allows for advocacy letters to be sent to med-legal physicians regardless of any objection by opposing counsel, so long as the letter contains evidence that is not in dispute.  Indeed, the Board explained inMaxham that the parties are within their rights to make legal arguments about undisputed evidence, and that is a good thing for all parties involved.  After all, the legal system is set up to be an adversarial one for the benefit of the parties.

If you have any questions regarding the Maxham case, please contact Jessie Zaylia atjzaylia@hannabrophy.com.

Per Beltran v. Structural Steel Fabricators (2016) Cal. Wrk. Comp. P.D. LEXIS [citation pending], parties may resolve Supplemental Job Displacement Benefits ("SJDB vouchers") regardless of whether a date of injury occurred before, on, or after 1/1/2013.  In order to resolve the SJDB voucher for dates of injury on or after 1/1/2013, there must be at least one serious and good-faith issue, which, if resolved against the injured worker, would defeat all of the injured worker's rights to compensation benefits, including any SJDB voucher.

On Monday May 23, 2016, the U.S. Supreme Court denied lien claimants’ petition for certiorari in the case ofAngelotti v. Baker. The denial effectively ends the litigation over the constitutionality of the lien activation fee imposed by SB 863, now Labor Code section 4903.06.                                                                                      

Labor Code section 4903.06 required payment of an activation fee of $100.00 to the Division of Workers’ Compensation prior to January 1, 2014 if the lien was filed prior to January 1, 2013. If the fee was not paid, the lien was subject to dismissal as a matter of law as of January 1, 2014. Due to litigation in the Angelotti case, the final day to pay the activation fee was extended to the end of December 31, 2015.

In Angelotti, several medical providers filed challenges to the constitutionality of the activation fee at the U.S. Ninth Circuit Court of Appeals. They argued that the activation fee was a forfeiture penalty and a governmental deprivation of their right to be paid.  However, the circuit court found that a lien is only an expectation of payment, so there was no governmental “taking” with the imposition of a fee. The expectation of payment was not property subject to governmental taking.  The DIR argued that the fee was akin to a user fee. The circuit court found that the activation fee was constitutional.

The plaintiffs requested reconsideration by the Ninth Circuit, which was denied. The only option remaining was to file a petition for certiorari to the U.S. Supreme Court, which they did.  The California Department of Industrial Relations submitted a waiver of its right to respond, but the U. S. Supreme Court requested a response, which was filed. After receipt of the response, the Court issued notice on May 23, 2016 that it was declining to hear the case. Thus, the circuit court decision stands.

What does this mean in practical terms?   Lien claimants subject to the activation fee who did not pay by the end of December 31, 2015 are deemed dismissed by operation of law without further action by the parties.  Select medical liens are exempted from the activation fee as follows:

  • A Health care service plan under Health and Safety Code section 1349
  • A Group disability insurer under Insurance Code, section 10270.5
  • A Self-insured employee welfare benefit plan under Insurance Code section 10121
  • A Taft-Hartley health and welfare fund
  • A Publicly funded program providing medical benefits on a nonindustrial basis.

Additionally, non-medical lien claimants are not subject to the activation fee, including liens for attorneys’ fees, living expenses, burial expenses, spousal and child support expenses, Employment Development Department liens, and Victims of Crime liens.

Questions?  Find your local Hanna Brophy attorney: www.hannabrophy.com/offices/

Here are five things you need to know to be prepared to process a CalPERS application for industrial disability retirement (IDR) for safety officers.

1) Is your contract with the Office of Administrative Hearings (OAH) current?

2) Did you know the agency can no longer delegate to an executive officer the final determination?

3) Are your dispute resolutions in current compliance with recent changes to the Government code and judicial determination? If they are older than five years they should be reviewed to ensure current compliance.

4) Did you know that safety officers terminated for cause may not be eligible for an industrial disability retirement where the cause for termination occurs prior to vesting.

5) Did you know that as of January 1, 2003 contacting agencies are required to advance disability pension payments until a decision has been made to approve or disapprove the members application for industrial retirement? Do you know the procedures for recouping pension payments in the event of a denial.

 The California Public Employees’ Retirement System (CalPERS) is responsible for the management of pension and health benefits for over 1.7 million California public employees, former employees, and their families. In recent years, CalPERS Industrial Disability Retirement (IDR) cases have become more frequently litigated as state and local governments have become increasingly diligent in their defense against inappropriate, and even fraudulent, claims of entitlement to IDR.

The standard for proving entitlement to IDR is a higher standard than that applied in workers’ compensation cases. A CalPERS member is eligible for IDR when the member is incapacitated from the performance of duty as a result of industrial disability. Not surprisingly, the exact meaning of this standard is not abundantly clear from the plain language of the statute. However, subsequent case law has shed some light on the courts’ interpretation of Government Code section 21150.

Essentially, in order to prove entitlement to IDR, the applicant bears the burden of showing that the CalPERS member (1) has disability of permanent or extended and uncertain duration based on competent medical opinion, (2) the disability was caused by an injury or disease arising out of and in the course of the member’s employment, and (3) as a result of the disability, the member is substantially unable to perform his or her job duties.

The procedure for litigation of an application for IDR is also quite different than the procedure for litigation of a workers’ compensation claim, though there are some similarities. An application for IDR may be filed by either the CalPERS member or the employer if the employer believes the member to be disabled. Government Code section 21153. The identity of the applicant is important because it is the applicant who bears the burden of proof.

The application must be based upon competent medical opinion in order to serve as the basis for proving eligibility for IDR. Ensuring that the physician providing the medical opinion in connection with the IDR application is familiar with the standard of incapacity under the Government Code is thus an important step in properly administering and defending IDR applications. Oftentimes due to the risk of conflating the workers’ compensation and IDR standards for determining ability to return to work, it is advisable to obtain a separate IDR evaluation to address the question of substantial incapacity.

If there is a question as to the industrial nature of the disability being claimed, the issue of causation must be submitted to the Workers’ Compensation Appeals Board. However, the decision to grant or deny an IDR application is made by CalPERS for miscellaneous members and by the governing body or its delegate for local safety members. Appeals of the determination of eligibility for IDR are then heard by the Office of Administrative Hearings (OAH) or by the governing body with an OAH Administrative Law Judge presiding.

CalPERS contracting agencies are provided with some leeway in determine the exact procedures to utilize in handling disputes over applications for IDR under the Government Code. Periodic review of dispute processes can allow contracting agencies to make sure they are taking advantage of the nuances in procedure under the Government Code. Outside counsel can serve as a valuable resource in the review process and can assist in ensuring compliance with current government statutes and judicial rulings.

The Division of Workers’ Compensation’s Medical Unit has made changes to the Qualified Medical Evaluator (QME) panel request process as a result of Senate Bill 863. Emergency QME regulations introduce the following new requirements for QME panel requests:

Click here for more info.

On Jan. 1, six sets of emergency regulations that implement SB 863 became effective. Those regulations remain in effect until July 2, and then expire by operation of law unless the Division of Workers’ Compensation (DWC) files a certificate of compliance with the Office of Administrative Law (OAL) by 5 p.m. on July 1, or requests a readoption of the emergency regulations.
Click here for more info.

February 12, 2013

 ISSUE 1:   

SUPREME COURT SAYS FUENTES “A”

ISSUE 2:
WILKINSON DEAD

FUENTES
Until May 3, 2007, the question of how to compute the value of an award after apportionment under L.C. 4663 / 4664 had been answered / unanswered since April 19, 2004.

The first major landmark in this area was an en banc decision in the Escobedo case rendered April 19, 2005 (petition for Writ of Review later denied). A couple of months later, another en banc decision issued in Nabors on June 9, 2005. This decision would later be overturned by a 1st District Court of Appeal (DCA) decision one year later, June 8, 2006.

In between the 2 decisions in Nabors, the 5th DCA rendered its decision in Dykes on December 20, 2005. In short, the Dykes formula for computing the value of an award after apportionment was the polar opposite of the en banc decision in Nabors. The DCA opinion in Nabors agreed with Dykes.

On August 30, 2006, another panel of justices in the 1st DCA, different from the Nabors panel, issued an opinion inBrodie, basically agreeing with Nabors and Dykes in principle, but changing the formula a little.

A day later, the 3rd DCA weighed in with a 44 page opinion in 4 consolidated cases, referred to as Welcher. This opinion, in no uncertain terms, disagreed with Dykes and Nabors, and found that the original majority opinion in the Nabors en banc set forth the correct formula. 

Given this great disparity in the interpretation of the new apportionment law, the Supreme Court granted review inWelcher and companion cases on November 15, 2006.

In related matters, the 3rd DCA, in a published opinion in Kopping dated 9-11-06, had confirmed that the L.C. 4664(b) presumption is indeed a conclusive presumption. The injured worker may not even offer evidence of medical rehabilitation following the prior award. However, the court also clarified that the burden is on the CA to prove overlap. Prior cases (Strong, Sanchez) had burdened the injured worker with disproving overlap.

On May 3, 2007, the Supreme Court issued its decision in Welcher/Brodie et al. Given the circumstances in the several cases before it, the Court addressed calculation of the level of permanent disability after apportionment under L.C. 4664 and also after apportionment under L.C. 4663.

In short, the Court retained what had become known as Fuentes Formula A, which in workers' compensation parlance became "subtracting percentages, not money". That is to say, if the current overall level of disability is 71%, and the employee had a prior award of 63%, the "new" disability would be 8% (71-63). Or, if the overall level of disability is 50%, but only 70% of the causation of disability is industrial and 30% of the causation is non-industrial, the disability is 35% (.7 x 50).

WILKINSON

When L.C. 4750 was repealed 4-19-04, the “(Bauer) Wilkinson Doctrine” – which held that when a worker sustains two or more injuries to the same part of the body [while employed by the same employer], and the condition resulting from the several injuries becomes permanent and stationary at the same time, the worker would be entitled to one over-all level of permanent disability without apportionment – became ancient history.

L.C. 4750 had allowed apportionment for “pre-existing” disability.  L.C. 4663 requires apportionment of permanent disability based on CAUSATION.  One of the apportioned CAUSES of current disability may be a prior injury which had not yet resulted in a definable disability which “pre-existed” the subject injury.

So concluded the WCAB (en banc) in Benson v. WCAB  72 CCC 1620, a decision affirmed by First DCA 74 CCC 113.  On April 29, 2009, the Supreme Court denied review.

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