State News

Ever seen an administrative violation from the Division of Workers’ Compensation and wondered how in the world it came up with the amount of the penalty? So have we. But that may be about to change. The Division is in the early stages of drafting amendments to rules that will require a change to its procedure for assessing such penalties. The amendments to Rule 180.8 and 180.26 will, among other things, require the Division to explain the factors it considered in determining the amount of the penalty. 

The amendments are in response to changes to Labor Code §415.021 that became effective September 1, 2017. Those legislative changes apparently were prompted by concerns from system participants that the Division’s determination of penalty amounts was arbitrary.  

The Division has posted informal working drafts of the amendments on its website. It is seeking comment on the drafts through March 7, 2018. You may send an email to InformalRuleComments@tdi.texas.gov to comment on the drafts.

- David Swanson, Stone Loughlin & Swanson, LLP.

Telemedicine is catching on. The Division of Workers’ Compensation is accepting public comment on a proposed rule that would expand its use in the workers’ compensation system. 

Broadly defined, telemedicine is a doctor’s use of a video system to examine a patient in a different location. It is already permitted in the Texas workers’ compensation system to some degree. Currently, however, it is limited to “underserved” areas – typically rural regions with insufficient access to health care providers. Proposed Rule 133.30 would eliminate this restriction and allow the use of telemedicine anywhere in Texas. 

The potential effects of this change are significant. For example, suppose – just suppose – that there was a chiropractor in Dallas to whom Claimant attorneys routinely referred their clients because the chiropractor was perceived to be Claimant-friendly, liberally prescribing treatment and doling out off-work slips. Would this proposed rule tempt Claimant attorneys in other cities to refer their clients to this chiropractor as well? Would the chiropractor in Dallas become the treating doctor for workers living in Waco, Tyler, and Abilene as a result? Only time will tell.

Proposed Rule 133.30 is scheduled to be published on the Division website by March 2, 2018. The Division will be accepting comments on the proposed rule through April 2, 2018. You may comment on the rule by sending an email toRulecomments@tdi.texas.gov.

-David Swanson, Stone Loughlin & Swanson, LLP.

A Houston couple has been indicted by  the Department of Justice, which  alleges  that the pair fraudulently billed the  federal government millions of dollars  for compound cream medications for injured workers.   
 
George and Marene Tompkins ran Piney Point Pharmacy on Fondren Road in Houston. They have been charged with conspiring to obtain illegitimate prescriptions for compound creams for which they billed the Department of Labor under the Federal Employee Compensation Act  (FECA), which is the federal workers’ compensation program. The couple allegedly billed the federal government over $23 million for those compound creams from 2009 to 2016. 

On February 21, George and Marene  appeared before a U.S. magistrate judge and entered pleas of not guilty. If convicted of the charges against them they reportedly face up to 20 years in federal prison. 

Piney Point Pharmacy specialized in compounding. George referred to himself as the “Compound King” on the pharmacy’s website and the pharmacy’s tagline was “Special Meds for Your Special Needs.”

- David Swanson, Stone Loughlin & Swanson, LLP.

The Associate Attorneys at Cousineau, Waldhauser, & Kieselbach have prepared case summaries of all WCCA decisions issued between October 2017 and January 2018. Please click the link below to view the summaries or see the "Resources" section of the CWK website.

http://cwk-law.com/workers-compensation-court-appeals-wcca-summaries-october-2017-thru-january-2018/

The summaries were prepared by attorneys Parker Olson, Scott Ferriss, Bryan Wachter, and Megan Oliver.

 In our effort to provide you with key up to date information on Minnesota Workers’ Compensation law and cases, we hope that you will find this to be helpful. Contact shareholder Thomas P. Kieselbach with your feedback and requests.

Jennifer Fitzgerald, shareholder at Cousineau, Waldhauser, & Kieselbach, P.A., will be presenting on Traumatic Brain Injuries (TBIs) on April 3, 2018 at the Golden Valley Country Club in Golden Valley, MN. Dr. Nathaniel Nelson, a neuro-psychologist will be the featured speaker.

The seminar is organized by Anderson Insurance and Investment Agency (DBA Minnesota Comp Advisor). CWK is a sponsor of this event.

The seminar is for professional in risk management, insurance, human resources, loss control, accounting/financing and safety. If you are interested in attending contact Mary Wells or click the link below for more information:

http://cwk-law.com/wp-content/uploads/2018/02/Traumatic-Brain-Injuries-Seminar-CE-Invite.pdf

 Jennifer Fitzgerald is also listed in "Best Lawyers in America".

Written by: Kyla K. Block

Workers’ compensation employers’ subrogation lien rights have received attention in recent years in the appellate courts. The North Carolina Supreme Court recently issued an opinion in Easter-Rozzelle v. City of Charlotte which clarified the impact of a third party settlement made without the written consent of the employer on the workers’ compensation claim, claimant’s entitlement to benefits, and the employer’s resultant lien.

David Easter-Rozzelle sustained compensable injuries while working for the City of Charlotte (hereinafter “the City”). The City requested he obtain an updated work note and on the way to pick up the note, Mr. Easter-Rozzelle sustained injuries in a motor vehicle accident (“accident”).  After the accident, Mr. Easter-Rozzelle notified his supervisor and reported the accident to the City’s personnel office.

Mr. Easter-Rozzelle hired a personal injury attorney and settled the personal injury claim.  The settlement proceeds were disbursed without any reimbursement to the City.  Likewise, there was no Superior Court order eliminating the City’s lien and no Industrial Commission Order allowing distribution of the funds, as required under N.C.G.S. §97-10.2. Additionally, Mr. Easter-Rozzelle’s personal injury attorney alleged he was not “at work” when he sustained his injuries and the personal health insurance carrier should be responsible for those bills.

At the worker’s compensation mediation, Mr. Easter-Rozzelle’s workers’ compensation attorney first learned Mr. Easter-Rozzelle was injured while traveling to see his authorized treating physician. The attorney ultimately requested a hearing due to the City’s denial of the accident on the grounds that the City did not have notice of the accident and because Mr. Easter-Rozzelle reached a settlement with a third party and distributed funds without preserving the City’s lien.

The Deputy Commissioner found for the City, holding Mr. Easter-Rozzelle had no right to recover additional compensation from the City when the third-party settlement funds had already been disbursed.  The Full Commission reversed, concluding that the City had sufficient actual notice of the accident and subsequent injuries, and should have “at a minimum” investigated whether the accident was compensable under the Act.  The Full Commission also found the City was entitled to a statutory lien on recovery from the third-party proceeds of the personal injury claim, once the subrogation amount was determined by the parties’ agreement or by a Superior Court judge.

On appeal to the Court of Appeals, the City argued the Full Commission erred in concluding Mr. Easter-Rozzelle was entitled to recover additional compensation from the City for injuries sustained in the third-party accident when the settlement amount had already been disbursed in violation of N.C.G.S. § 97-10.2.  The Court agreed, holding where an employee is injured in the course of his employment by the negligent act of a third party, settles with the third party, and the proceeds of the settlement are disbursed in violation of N.C.G.S. § 97-10.2, the employee is barred from recovering compensation for the same injuries from his employer in a proceeding under the Workers’ Compensation Act.

The Supreme Court reversed, finding the Court of Appeals erroneously relied upon cases that had been superseded by statute and as such, misinterpreted the Act.  The Supreme Court held that an employee who: (1) had been injured at work; (2) was on his way to see his approved treating physician; (3) was injured again in an auto accident during the trip; (4) notified his employer of the new accident; and (5) settled with the third-party tortfeasor without notifying his employer was not barred from receiving workers’ compensation benefits.  The Court noted that an employer’s lien interest in third-party proceeds is mandatory, so there was no windfall to the employee because the employer is entitled to recover the amount of its lien by means of a credit against the employee’s ongoing workers’ compensation benefits.  The Court noted that N.C.G.S. § 97-10.2(j) contains no temporal requirement, and that either party may apply to the Superior Court judge to determine the amount of the employer’s lien.

The Court further highlighted that the City received actual notice of the accident, and as a result, had an opportunity to promptly investigate the claim and determine its compensability.  Had the City done so, it would have discovered Mr. Easter-Rozzelle had suffered compensable injuries, and it could have participated in the settlement process.

Risk Handling Hint: Employers need to communicate with their TPAs and carriers regarding notice of accidents, especially car accidents, which they think may be related to the workers’ compensation claim. Likewise, carriers and TPAs need to communicate with their contacts at employers and proactively ask whether there are any accidents after the date of injury, what the circumstances are, and whether there is additional liability or exposure.

Brian Sims suffered a terrible injury working for Express Scripts, Inc. (hereinafter ESI) on August 24, 2015 when his hand was caught in an industrial machine, leading to the amputation of his left hand and wrist.  He brought a civil law suit against his employer alleging willful and intentional conduct.  Express Scripts moved to dismiss the complaint as barred by the exclusive remedy rule in the Division of Workers’ Compensation.

In evaluating the motion to dismiss the complaint, the Court noted that plaintiff did allege that the conduct of defendants was intentional by altering or removing safety features or permitting the non-existence of safety features.  The Court said, “Plaintiff makes only conclusory statements that ESI acted ‘knowing with substantial certainty’ that injury would result from its actions; he alleges no facts or circumstances to support that claim. . . “  The Court added that plaintiff failed to indicate what specific safety features were missing, who altered or removed them, and how these safety features might have prevented Plaintiff’s injury.  The Court said, “Plaintiff’s mere recital of a requirement of the ‘intentional wrong’ exception cannot survive ESI’s motion to dismiss.”

The Court said it was not enough to just allege that a safety guard was missing:  “Here, Plaintiff has not identified what specific safety device was allegedly removed or altered and for what reason, nor that ESI was ‘substantially certain’ that injury to its workers would occur as a result of such conduct.”   The Court noted that removal of a safety device standing alone does not equate to “intentional wrong.”

The Court granted ESI’s motion to dismiss without prejudice, allowing plaintiff one more opportunity to provide a factual basis for the alleged intentional harm allegations.

This case underscores a strong theme in New Jersey case law, namely that it remains extremely difficult to surmount the exclusive remedy hurdle in this state.  It is not enough to file a complaint that provides the magic words regarding substantial certainty to cause injury.  One must provide factual support for the allegations or risk having the case dismissed.

This case can be found at Sims v. VC999 Packaging Sys., D. N.J. (January 24, 2018).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

On March 2, 2018, Tom Coleman of Cousineau, Waldhauser, & Kieselbach will be on a panel of legal experts discussing the opioid crisis and possible solutions.

 The ABA Midwinter Seminar and Conference is an annual event. This year it will be held in Nashville, Tennessee. The seminar addresses issues that are national in origin and geared to attorneys and industry experts. Congratulations, Tom.  

https://shop.americanbar.org/ebus/ABAEventsCalendar/EventDetails.aspx?productId=301691101

We are pleased to announce the hiring of Megan Oliver as an associate in workers' compensation.

Megan is a magna cum laude graduate of Benedictine College and a 2017 graduate of the University of St. Thomas School of Law.

While in law school Megan participated in the Jessup International Moot Court competition and was a Senior Editor on the Journal Law and Public Policy. She is currently the global initiatives director of the pro bono group International Dispute Resolution Research Network. 

http://cwk-law.com/megan-m-oliver/

Dennis Smith v. WCAB (SuperValu Holdings PA),

 No. 796 C.D. 2016 (Pa. Cmwlth. Ct., 2018)

             In an Opinion filed January 5, 2018, close in time to its prior Opinion in the case ofValenta v. WCAB (Abington Manor Nursing Home and Rehab and Liberty Insurance Company), No. 1302 C.D. 2016, (filed December 7, 2017), addressing the issue, the burden of proof in a vocationally based case involving an Earning Capacity Assessment is further explored and clarified by the Pennsylvania Commonwealth Court.

            This was a Claimant’s Appeal from the grant of a Petition to Modify by a Workers’ Compensation Judge based on a Labor Market Survey reflecting five (5) available jobs with an average wage of $456.00 a week.  The WCAB affirmed, noting that in its view there was compliance with the directives of the Pennsylvania Supreme Court set forth in the case ofPhoenixville Hospital v. WCAB (Shoab), No. 32 EAP 2011 (Supreme Court of Pennsylvania, November 21, 2013).  The Commonwealth Court affirmed the WCAB, other than for a small change in the applicable weekly benefit rate. 

            The Claimant, Mr. Smith, sustained a work injury in February 2011 involving his head and neck when a case of product fell on him.  A Notice of Temporary Compensation Payable, later converted, recognized the injury as a cervical strain/sprain with a temporary total disability rate of $661.67, based on an average weekly wage of $992.50.  The subject Petition to Modify was filed in November 2013, alleging earning power of $440.00 a week, which would reduce the Claimant’s weekly rate to $368.33.  The Claimant filed an Answer denying the allegations of the Petition to Modify.  The Employer’s Request for Supersedeas was denied. 

            An Expert Vocational Interview reflected various transferable skills and five (5) employment positions in the Claimant’s geographic area, open and available, including jobs as a dispatcher, alarm dispatcher operator, dispatcher, and two (2) security guard positions.  The pay for the jobs ranged from $360.00 to $440.00 a week.

             The Claimant was post-surgical.  A post-surgical complication in the nature of a failed fusion was noted in the record. 

            Mr. Smith agreed he met with the defense vocational expert and further stated that he applied for the five (5) identified positions.  He was not offered employment.  He also conducted a job search on his own but was not interviewed or offered employment based thereon.

             The Workers’ Compensation Judge accepted the expert vocational testimony as credible and persuasive, notwithstanding that the Claimant applied for the five (5) positions identified therein via the Labor Market Survey, noting that there was no evidence of record suggesting that the five (5) positions were not open and available at the time of application or that the jobs were already filled at that time and did not exist.  The Workers’ Compensation Judge therefore modified wage loss benefits. 

            Both parties appealed to the WCAB which as noted affirmed.  The WCAB noted that the identified jobs were consistent with the Claimant’s transferrable skills and were in a suitable geographic area in terms of the applicable labor market. 

            The Claimant argued that the WCAB improperly shifted the burden of proof to him to establish that the positions in question were not open and available, and thereby improperly applying thePhoenixville case.

            The Commonwealth Court noted that the testimony of the vocational expert was that the identified positions were open at the time of the Survey and further noted that the Claimant applied the positions which apparently remained open - and there was no indication that any evidence was presented that the positions were not open as of the time of the Survey.  In the view of the WCAB, the opinion inPhoenixville provides the Claimant with the opportunity to present evidence that he applied for the indicated positions but that none were open.  The WCAB then observed that the WCJ found there was nothing in the record to indicate the five (5) positions were not open and available at the time of Claimant’s application.  That is, although the Claimant contended that the positions were not open and available, he presented no satisfactory proof to that effect.  The WCAB saw no error in that the Claimant’s record evidence did not establish his contention that the positions were not open and available. 

            The Claimant further argued to the Commonwealth Court that the vocational expert did not establish that the identified positions were located through a transferrable skills analysis. 

            The Claimant also asserted that it was error not to consider his own independent job search in the credibility process.  The Employer argued that the Decision of the WCJ and the WCAB was supported by substantially competent evidence.  It was noted that the vocational expert had testified that the identified positions were “just an example” [of jobs in the labor market].  It was noted that the vocational expert described the suitability of the jobs, noting that they required only a High School Diploma and that each employer was willing to train as necessary. 

            The Commonwealth Court noted that in the Phoenixville case it was required that jobs remain open for a reasonable amount of time to allow for a Claimant to apply for the jobs.  To this end, a Claimant was to be given the opportunity to submit evidence regarding his or her experience in pursuing the jobs identified in the Labor Market Survey, but it was not the Claimant’s burden to do so. 

            The Commonwealth Court noted that in the recent case of Valenta v. WCAB (Abington Manor Nursing Home and Rehab and Liberty Insurance Company), No. 1302 C.D. 2016, filed December 7, 2017,the employer did not offer evidence of the jobs remaining open past the discovery of those jobs, but likewise the Claimant offered no evidence that the jobs were not open and available when she applied for some of them but received no offer of employment. 

             Pointing to Valenta, the Commonwealth Court indicated that it was indeed the employer’s burden of proof to show that the jobs were open and available, but the Claimant could present evidence to the contrary.  The Court held that “if a Claimant offers evidence about her experience in pursuing the jobs identified in a Labor Market Survey, the evidence can be considered against her in the overall evaluation of the availability of the jobs”.  “Based onPhoenixville and Valenta, we hold that a modification of benefits based on proof of earning power associated with specific positions cannot be granted without evidence in the record that the specific positions remain open until such time as a Claimant is afforded a reasonable opportunity to apply for them.  In the absence of such evidence, earning power associated with specific positions cannot be used in the calculation of earning power under §306(b).”  The Commonwealth Court emphasized that the Employer bore the burden of proof of establishing all facts entitling it to a modification of benefits, including the continued availability of the jobs identified as proof of earning power.  If the Claimant presented evidence of pursuant of the jobs identified in the Labor Market Survey, that evidence can be considered on the issue and could be considered against a Claimant in an overall evaluation of the availability of the jobs. 

            The Commonwealth Court then discussed the concept of substantial evidence in the realm of establishing the open and available nature of the jobs identified in the Labor Market Survey.  The Court stated that where there is an in-person application where information is exchanged, evidence of follow-up communications between the Claimant and a prospective employer which prompts acts or inaction by a Claimant, or evidence relating to an interview, such might constitute substantially competent evidence to establish that the jobs identified in the Labor Market Survey remained open and available through that time period.  The Commonwealth Court emphasized that there must be evidence beyond mere application.  Importantly, the Commonwealth Court stated that “consequently, we note the Board’s observation that Claimant only received an interview for the two (2) security guard positions with Am-Guard.  Therefore, we are constrained to hold that only those two (2) positions remained opened and available underPhoenixville.  It was on this basis that the Court affirmed the modification with a slight change in the partial rate.  A concurring opinion by Judge McCullough joined by Judge Leavitt concurred in the result but did not considerPhoenixville Hospital to allow a Claimant’s employment applications to be used against him or her on the question of the open and available nature of the jobs.  There was a dissent by Judge Cosgrove, again citing disagreement with the holding in Valenta to the extent of using the application process against the Claimant.  Judge Cosgrove was of the view thatPhoenixville Hospital was being misinterpreted and considered the misapplication a taint requiring the dissent.