State News

SB1322 takes effect September 1, 2013 allowing informal networks for durable medical equipment and home health care. The Act was previously amended in 2011 to allow informal networks for pharmaceutical services. Within 30 days after an informal network is established, it must report certain information to the Division including the name and contact information for the network and a list of the carriers and entities with whom it contracts. At least quarterly, notice must also be given to each contracted health care provider of all carriers given access by the network to the provider’s discounted rates. The notice can be provided in an electronic format or through an Internet website link if certain requirements are met.

Effective September 3, 2013, Kerry Sullivan will join the Division as Deputy Commissioner for Hearings, replacing Dan Barry, Acting Deputy Commissioner for Hearings, who will return to his role as head of the Appeals Panel. Some of you may know Mr. Sullivan from his many years as an administrative law judge at the State Office of Administrative Hearings (SOAH). SOAH proceedings tend to be more formal than DWC proceedings. The rules of evidence apply at SOAH and there are also detailed procedural rules which tend to be consistently and uniformly applied, resulting in fewer surprises for the parties. Mr. Sullivan was well respected as a judge by those who appeared before him and will hopefully be a positive influence on the Division.

The trial court was presented with two theories of recovery: a specific incident or repetitive trauma.  Presenting both theories is permissible under Nebraska law.  The Court found that the trial judge only expressly addressed the specific incident claim, and it remanded the case for a reasoned decision pursuant to Rule 11, which required a specific finding on claimant’s alternate theory of recovery that repetitive trauma caused her injury.

This case should serve as a reminder for related companies to be careful how they structure their operations if they want to avoid liability for the company that is not considered the employer of the injured worker.  The deceased employee's wife sued his employer, Delta Steel, and its parent company, Reliance, for negligence in connection with his death. Delta Steel argued that the exclusive remedy defense barred the wife's ordinary negligence claims. The wife challenged the applicability of the exclusive remedy defense by disputing that Delta Steel had workers' compensation coverage even though she was receiving death benefits. Not surprisingly, the Fort Worth Court of Appeals held that the wife was estopped from denying that her husband's employer had workers' compensation coverage when she was receiving death benefits. However, the court of appeals held that the wife could maintain her ordinary negligence claim against Reliance, the parent company.  Reliance did not assert the exclusive remedy defense because it was not the deceased employee's employer. Instead, it argued that it did not owe a duty to the deceased employee and therefore, it could not be negligent since a legal duty is one of the elements of a negligence claim. The court disagreed that Reliance owed no duty to the deceased employee. It held that while parent corporations generally have no duty to control their subsidiaries, Reliance voluntarily undertook a duty to keep Delta Steel’s employees safe. The court held this duty arose because "Reliance generally controlled aspects of Delta Steel’s safety policies, specifically controlled policies concerning the inspection of cranes, had the authority to audit Delta Steel’s Fort Worth plant and to require Delta Steel to correct safety issues discovered upon an audit; audited Delta Steel’s other plants; had the authority to require Delta Steel to take a malfunctioning crane out of service; and required Delta Steel to mail monthly reports on accidents and investigations to Reliance." 

The party requesting a designated doctor examination is required to send a copy of the request to the other party. Be on the lookout if you don’t get a copy of the request. It could be a mere oversight or it could be intentional. The new form provides a number of opportunities for

shenanigans. Two of the biggest are injuries accepted as compensable by the carrier (box 37) and the description of the accident or incident that caused the claimed injury (box 42.C). If you don’t get a copy of the request, it may be because they don’t want you to see what they put on the form.

When you get a set notice for a DD exam, look to see if you have a copy of the request. If you don’t, you might have a basis to object to the exam but you have to be fast. You only have three business days to file a request for an expedited CCH in order to stay the exam. If you don’t get a

copy, contact your attorney who can help you obtain one and advise whether you should dispute the request.

The EEOC filed lawsuits this past May, claiming that employers had violated the Genetic Information Nondiscrimination Act (GINA) and the Americans with Disabilities Act (ADA) when they required applicants to submit to post-job-offer medical exams. Though GINA and ADA do not bear directly on workers’ compensation issues, they do affect post-job-offer medical examinations which are often important aspects of workers’ compensation claims.

In EEOC v. Fabricut, Inc. and EEOC v. Founders Pavilion, Inc., the employers allegedly required applicants to undergo medical examinations, which included questions about family medical histories. In both cases, the employers may have withdrawn job offers based on the applicants’ answers to these questions. In doing so, the EEOC claimed the employers violated GINA, which prohibits an employer from requesting, requiring or purchasing genetic information from applicants, including family medical histories.

Notably, the ADA and GINA do not prevent employers from requiring applicants to undergo any medical examinations, but they do limit the scope of such exams. Employers may require a medical examination that is designed to detect disabilities that would directly affect an applicant’s ability to perform the physical duties of a job. Based on the results of this type of limited medical exam, the applicant may be found physically incapable of safely performing the duties of the job, and unless a reasonable accommodation can be made, the employer may withdraw a job offer.

Practice Pointer:

Employers and their counselors should review post-offer medical examinations, if any, and make sure the exam is limited to gathering information that is relevant to the physical requirements of the job. If the post-offer exam asks about family medical history or conditions that would not affect an applicant’s ability to perform the job, then the exam may result in violations of the ADA and GINA. If testing is done by a private doctor or clinic, then employers should verify that prohibited information is not being requested on their behalf.

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About the Author

This blog post was written by Trey Cotney, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

The Alabama Court of Civil Appeals recently affirmed a trial court’s determination of disability which was based on the employee’s subjective complaints of pain and her appearance of physical disability during trial. InStericycle, Inc. v. Sonja Patterson, the trial court assigned a 57% permanent partial disability rating for a back injury sustained while loading a truck. On appeal, Stericycle contended that the trial court’s medical-causation and disability determinations were not supported by substantial evidence.

The Court of Appeals first addressed the issue of medical causation, holding that the parties stipulated that medical causation was not an issue before the trial court. The Appeals Court found the technical wording and structure of the stipulations supported the notion that the parties agreed the employee’s injury was caused by the accident. Furthermore, defense counsel did not challenge the trial court’s Order which clearly stated the parties had stipulated that causation was not an issue. As a result, the Appeals Court found no error in the trial court’s interpretation of the stipulation.

The Appeals Court then addressed the trial court’s assignment of a 57% disability rating. The evidence presented at trial indicated the employee’s treating physicians and physical therapists believed she was displaying symptom magnifications, which they define as reports of pain that exceed the objective medical findings. The medical evidence and thorough diagnostic studies provided little explanation for the employee’s pain, and she was given a full work release, without limitations, and a 0% impairment rating.

However, the employee continued to report severe pain and physical disability. At trial, the court noted the employee walked with a significant limp and moved around the courtroom as though she was much older than 44, her actual age. The trial court found the employee’s subjective complaints to be credible in spite of the significant medical evidence that showed otherwise.

In affirming the trial court’s determination of disability, the Appeals Court recognized its duty to uphold a decision that is supported by consideration of the totality of evidence. Though it was in striking contrast to medical evidence, the Appeals Court held that the employee’s subjective reports of pain and physical presentation of disability were sufficient grounds to support the trial court’s determination of disability.

My Two Cents:

This decision is a testament to the power of perceived credibility in workers’ compensation cases. As evidenced in the opinion, a trial court’s confidence in well-informed scientific and medical evidence can be stifled by an employee with a convincing demeanor. As such, there is significant value in developing credibility, or lack thereof, in the eyes of a court.

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About the Author

This blog post was written by Trey Cotney, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

Adam Weiner worked for the Elizabeth Board of Education and received an award of 100% total and permanent disability on October 18, 2000.  That entitled him to $480 per week for 450 weeks and thereafter.  That award was reduced on January 9, 2001 to $340.98 per week due to the social security disability offset rate. 

            The key development in this case occurred on April 1, 2002, when Mr. Weiner began receiving an ordinary disability pension benefit.  He did not disclose his receipt of ordinary disability pension benefits to the Board of Education, so the Board kept paying him $340.98 per week. 

            On April 29, 2010, the Board sought approval to access Mr. Weiner’s pension records to determine if it was entitled to an offset.  On August 10, 2011, Weiner and the Board entered into a consent agreement reducing Weiner’s disability rate going forward to $222.39. But there was no agreement on past overpayments of $57,753.33.

            This action was filed by the Board to obtain reimbursement for the overpayments between April 1, 2002 through August 10, 2011 totaling $57,753.33.   A hearing took place on August 1, 2012, and on August 29, 2012 the Judge of Compensation denied the Board’s motion for reimbursement based on the conclusion that petitioner did not have the ability to repay the funds.  The Board of Education then appealed.

            The Appellate Division was guided by the principle that “an underlying theme of the workers’ compensation law is that there should not be duplicative payments for the same disability” (citingYoung v. Western Elec. Co., 96 N.J. 220, 231 (1984).  The Court said that there is a two-step process: first, the Judge of Compensation must determine if petitioner was unjustly enriched for which the respondent has the burden of proof.  Second, the respondent can then “institute enforcement proceedings in the Law Division . . . which may be treated as a summary proceeding.”Hajnas v. Engelhard Mineral & Chemical Co., 231 N.J. Super. 353, 363 (App. Div. 1989). 

            The Court said, “It is considered unjust enrichment to permit the recipient of money paid under mistake of fact to keep it, unless the circumstances are such that it would be inequitable to require its return.” (citations omitted).  In this case, the Court felt that the Judge of Compensation did not take a detailed look at the ability of the petitioner to make reimbursement payments.

No evidential hearing was held.  The compensation judge’s finding that Weiner was unable to repay the money, and therefore, it would be inequitable to order reimbursement, was supported solely by ‘several years of his Individual Income Tax Returns, the most recent of which shows an annual salary of $17,295 for 2010.’ No statement of assets and liabilities evincing Weiner’s net worth was produced.  Further, no statement of income and expenses was considered by the judge of compensation.

            The Court reversed and remanded fur further proceedings.  “We will not indulge in hypothetical speculation of a net worth which would support the immediate return of the payments, which all parties agree, should never have been made to Weiner. Nor will we reach a conclusion based on incomplete facts concerning whether, after considering Weiner’s income and expenses, a payment plan would be appropriate.”

            This case can be found at Weiner v. Elizabeth Board of Education, A-0627-12T2 (App. Div. July 15, 2013).  It is an important case for employers for a number of reasons.  The Appellate Division endorses the right of the employer to obtain reimbursement of benefits that are overpaid to the petitioner, including payments from a disability pension.  It is also important because the situation in this case is rather common, namely that someone receiving workers’ compensation later obtains a disability pension without that information ever getting to the employer or carrier on a timely basis.  Lastly, the case is significant because it sets forth specific requirements for each party in an unjust enrichment claim.

The Supreme Court of Alabama recently addressed preemption of the Alabama Workers’ Compensation Act by the Federal Longshore and Harbors Workers’ Compensation Act (LHWCA) inFernando Rodriguez-Flores v. U.S. Coatings, Inc., where an employee sought Alabama workers’ compensation benefits in state court for alleged injuries he sustained while painting in a dry dock on the coast. The employee also filed tort actions for retaliatory discharge and fraud based on a co-employee’s handling of the claim.

The employee recognized that the LHWCA prohibits tort claims against an employer in state court if the basis of the tort is within the scope of the LHWCA. However, the employee cited a narrow exception that allows such actions in state court when the employer intended to harm the employee. The employee further contended that the LHWCA remedies for retaliatory discharge would be inadequate when compared to state law remedies, which allowed for punitive damages.

The trial court dismissed the fraud and retaliatory discharge claims, agreeing with U.S. Coatings that the tort claims were preempted by the exclusivity provisions of the LHWCA.

On appeal, the Supreme Court recognized that there existed a "twilight zone" of concurrent jurisdiction between the LHWCA and the Alabama Act, wherein the location of a work accident provides the employee the option to pursue benefits under federal or state law. In doing so, the Supreme Court also recognized that state law would be preempted by federal law, if the laws were in conflict.

The Court identified a clear conflict between the LHWCA, which prohibits lawsuits against a co-employee, and Alabama common law, which allows for them. Because of this conflict, the Court held that the state law was preempted by the Federal law. The Court further held that U.S. Coatings did not intend to harm the employee, so the action did not fall within the exception. As a result, the Court affirmed the dismissal of the fraud claim.

As for the retaliatory discharge claim, the Court recognized that both the Alabama Act and the LHWCA provided relief for employees who are fired for claiming workers’ compensation benefits, and therefore, the laws were not in conflict. The Court did note that Alabama provides for punitive damages in retaliatory discharge actions, but that the LHWCA does not. However, this discrepancy in potential remedies did not create a conflict between the substantive causes of action. The Court held that the legislative history and interpretation of the LHWCA supports the notion that the federal law shall supplement state law, if possible, and if no conflict exists between the laws, the employee may pursue the action under state law. As a result, the Court held that the employee’s retaliatory discharge claim brought under state law should not have been dismissed and remanded the case back to the trial court.

My Two Cents:

The Alabama Supreme Court made it clear that a work related accident occurring in the twilight zone of concurrent jurisdiction between the LHWCA and the Alabama Act may be compensated by either set of laws. The restriction that the Court enforced supports the long standing preemptive theory, whereby federal law will trump state law when they are in actual conflict. Interestingly, as held in this case, a significant discrepancy in the potential remedies available to an employee will not result in a conflict between a state law and a federal law which address the same cause of action.

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About the Author

This blog post was written by Trey Cotney, Esq. of Fish Nelson LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of The National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

John Machiaverna worked for the City of Newark as a firefighter since 1988.  He filed a workers’ compensation claim for his left knee in 2008, alleging that repeated work stressors over many years caused extensive knee problems and a need for knee replacement surgery in May 2007.  He contended that his knee problems were due to regular climbing of extension ladders and stairs, crawling through buildings and carrying people out of buildings. The City denied the claim and put petitioner to his proofs.

            During the testimony at trial, petitioner was asked if he had ever suffered any injuries in his work career. He testified that he had no previous injuries to his knee or hip.  That testimony fell apart on further questioning.  He then admitted that he injured himself in 2002 when a piece of sheetrock gave way during a fire, causing injury to his left leg. He next admitted on cross examination that he had arthroscopic surgery on his left knee in April 2002.

            The petitioner was seen by four IME doctors, two for each side.  The Court noted that he “lied to all four doctors who examined him because he failed to disclose his prior left knee injuries.” The Judge also commented that he initially failed to admit to having prior knee surgery in April 2002 and failed to admit two incidents in 2001.  The IME doctors testified in court, and their testimony was critical in proving fraud.

  Dr. Canario for respondent said that petitioner had not told him about a previous surgery to his left knee in 2002. In the opinion of Dr. Canario, petitioner’s size and weight were major factors in his knee problems.  Petitioner was six foot five inches tall and weighed 345 pounds.  Dr. Wong for petitioner stated in testimony that petitioner had not told her about his 2002 knee surgery.  Dr. Kulkarni for petitioner also said that petitioner had not told him about three prior knee injuries. 

The Honorable Theresa Yang, Judge of Compensation, found that petitioner was not a credible witness.  She held that in concealing his prior knee injuries and surgery, petitioner committed fraud as defined by the New Jersey Fraud Act, N.J.S.A. 34:15-57.4 She therefore dismissed the case.

On appeal, petitioner argued that his due process rights had been violated because he was “deprived of the opportunity to defend himself against the court’s allegations of fraud.” The Appellate Division categorically rejected that position.  “There was sufficient evidence to support Judge Yang’s credibility assessments and her determination that a violation ofN.J.S.A. 34:15-57.4 (c) (1) had occurred.”  The Appellate Division held that petitioner failed to prove an occupational claim. 

This case is important because it shows that Judges of Compensation are following the statutory law under the New Jersey Fraud Act.  It is not necessary for an employer to prove a claimant was working while on temporary disability benefits to establish fraud.  That is just one issue in a fraud case.  If a claimant deliberately misrepresents or conceals prior medical information that is relevant to the claim, that in itself constitutes fraud.  The case also shows how important it is for defense counsel to get prior records, whether attacking credibility or attempting to prove fraud.