During September of each of the past five years, my colleague, Robin Kobayashi, and I have pulled together a volume entitled, Workers’ Compensation Emerging Issues Analysis. Annually published by LexisNexis®, it is a compendium of expert analysis and commentary highlighting current state trends, legislation, and court decisions in the field of workers’ compensation law. Part II of the work includes short summaries of important recent workers’ compensation decisions from around the nation. I take this occasion to highlight what I think are the 10 most important comp decisions so far in 2017. Bearing in mind that one’s assessment of “importance”—like one’s appreciation for beauty—is in the eye of the beholder, I recognize that your own list may differ from mine. Let me know if I’ve missed a crucial decision from your state.
Pennsylvania High Court Strikes Down AMA Guides Provision
In what is likely the most important workers’ compensation decision during 2017, a split Supreme Court of Pennsylvania, in Protz v. Workers’ Comp. Appeal Bd. (Derry Area Sch. Dist.), 161 A.3d 827 (Pa. 2017), held that the provision of the state’s Workers’ Compensation Act [Section 306(a.2); 77 P.S. § 511.2(1)], requiring physicians to apply the methodology set forth in “the most recent edition” of the American Medical Association Guides to the Evaluation of Permanent Impairment (AMA Guides), violates the state’s constitutional requirement that all legislative power “be vested in a General Assembly” [Pa. Const. art. II, § 1]. The majority added that in spite of the severability clause found within the Pennsylvania Workers’ Compensation Act, Section 306(a.2) was “a paradigmatic example of a law containing valid provisions that are inseparable from void provisions” [161 A.3d at 841]. Accordingly, the majority of the Court struck Section 306(a.2), in its entirety, from the Act. The decision is important in that seven other states (Alaska, Arizona, Illinois, Louisiana, New Mexico, Oklahoma, and Wyoming) have similar language requiring the most recent edition of the AMA Guides be utilized in determining medical impairment (New Mexico has an earlier contra decision, however).
The Protz decision put a four-foot hole below the water line in Pennsylvania’ impairment rating evaluation process. As anticipated by many practitioners within the Keystone State, on the heals of Protz, the Commonwealth Court of Pennsylvania, in Thompson v. Workers’ Comp. Appeal Bd. (Exelon Corp.), 2017 Pa. Commw. LEXIS 596 (Aug. 16, 2017), held that without the undermining supplied by Section 306(a.2), the entire impairment rating evaluation (IRE) process set forth within the state’s Workers’ Compensation Act could no longer be sustained. Accordingly, it was error for the Board to affirm a decision by the workers’ compensation judge that reduced claimant’s benefits from full to partial based upon the unconstitutional scheme. The court indicated that no other provision of the Act allowed for the modification of benefits based upon an IRE [For additional discussion, see Larson’s Workers’ Compensation Law, § 80.07].
Imposition of Prevailing Party Costs on Claimant Was Not Unconstitutional Denial to Access to Courts
Among the most contentious of Florida’s recent workers’ compensation “reforms” is the requirement that litigation costs be assessed against the non-prevailing party, including the unsuccessful claimant. Claimants have contended that the statutory provision works as a detriment to the filing of legitimate claims. Earlier this summer, in Govea v. Starboard Cruise Serv., 212 So. 3d 466 (Fla. 1st DCA 2017), a state appellate court held that the provision was not an unconstitutional denial to access to the courts [For additional discussion, see Larson’s Workers’ Compensation Law, § 133.02].
Apportionment in California May Take Genetic Factors into Consideration
In City of Jackson v. Workers’ Comp. Appeals Bd. (Rice), 11 Cal. App. 5th 109, 82 Cal. Comp. Cases 437 (April 26, 2017), the court saw no relevant distinction between apportionment for a preexisting disease that is congenital and degenerative, and apportionment for a preexisting degenerative disease caused by heredity or genetics. Practitioners and others should remember that segregating/apportioning a workers’ compensation claim based on comorbidity factors was one of several state practices criticized last year in U.S. Department of Labor’s report on the adequacy of state workers’ compensation programs. It is, of course, one thing to blame the worker for overeating. It’s quite another to blame his or her ancestors for their contribution to the gene pool [For additional discussion, see Larson’s Workers’ Compensation Law, § 90.03].
Apportionment of Occupational Disease Claims Based on Genetics
At least when it comes to occupational disease claims, Colorado appears also to be following California’s path toward division of the claim into two segments: a portion that is “caused by the workplace,” and another that is “caused by personal factors.” In Hutchison v. Industrial Claim Appeals Office, 2017 COA 79, 2017 Colo. App. LEXIS 696 (June 1, 2017), an appellate court emphasized that within the Colorado workers’ compensation scheme, the employer does not necessarily take the employee as it finds him (or her)—at least when it comes to occupational disease and repetitive trauma claims. Accordingly, co-morbid factors, such as obesity, may require apportioning some percentage of permanent disability to the employee. In the instant case, a Colorado appellate court affirmed an order by the state’s Industrial Claim Appeals Office that required the employer to pay no more than one-third of any medical benefits and other compensation due to the employee, since only one-third of the injured worker’s bilateral knee osteoarthritis was due to work-related factors. That the job required the employee to spend half his work time over a 25-year period on his knees and on concrete floors was not the controlling factor, indicated the Court. Multiple causal factors were at play, including perhaps, the employee’s genetic predisposition [For additional discussion, see Larson’s Workers’ Compensation Law, § 90.03].
Alabama Trial Judge Strikes Down State’s Workers’ Compensation Act as Unconstitutional.
Ordinarily, a decision by a state trial judge would not be included within a “Top 10” list. Yet one must recall the ripples set in motion following Florida’s 2015 Padgett decision, in which a trial court judge declared unconstitutional the exclusive remedy provision of the state’s Workers’ Compensation Law, on the grounds that original “grand bargain” had become so eroded that injured employees should no longer be bound by it. In somewhat similar fashion, an Alabama Circuit Court judge, in Clower v. CVS Caremark Corp., 01-CV–2013–904687 (Jefferson County Circuit Court, May 8, 2017), found unconstitutional two separate provisions of the Alabama Workers’ Compensation Act: the $220 cap on weekly PPD benefits [Ala. Code § 25–5–68] and a 15 percent cap on attorneys’ fees [Ala. Code § 25–5–90(a)].
Noting that the Alabama Legislature had inserted a non-severability statute [Ala. Code § 25–5–17] into the Act in 1984, Judge Ballard indicated the effect of his ruling was to declare the entire Act unconstitutional. With more than a nod to the Oklahoma high court’s 2016 “opt out” decision in Vasquez, Judge Ballard stressed that Alabama’s Act impermissibly established two groups of disparately treated injured workers without a rational basis. The first group—those receiving TTD benefits and PTD benefits—enjoy indexed benefits; their weekly benefits increase annually with changes in Alabama’s statewide average weekly wage. The second group—those who qualify for PPD benefits—can receive no more than $220 per week, a maximum amount that has not been increased by the Legislature in several decades. As to the attorney fee cap, the judge referenced Florida’s 2016 Castellanos decision, finding the 15 percent cap on attorneys’ fees violated the due process rights of Alabama’s injured workers [For additional discussion, see Larson’s Workers’ Compensation Law, § 2.08].
Disparate Treatment of Certain West Virginia Inmates is OK
In a bit of a departure from the recent “disparate impact” decisions (Clower, Vasquez, Castellanos, etc.), the Supreme Court of Appeals of West Virginia, in Crawford v. West Va. Dep’t of Corr. Work Release, 801 S.E.2d 252 (W. Va. 2017), held that a provision in the West Virginia Workers’ Compensation Act [W. Va. Code § 23–4–1e(b)] that prohibits an inmate housed at a state work release center from receiving workers’ compensation benefits for injuries sustained while performing work for the state’s Division of Highways (DOH) does not violate the inmate’s equal protection rights, in spite of the fact that such benefits are allowed if a similarly-housed inmate sustains injuries while working for a private employer. The court noted, inter alia, that private employers hiring inmates would be impermissibly favored if they were shielded from the costs of workers’ compensation coverage for inmate employees. The court also observed that the state paid more than $90,000 in medical expenses related to the inmate’s injury [For additional discussion, see Larson’s Workers’ Compensation Law, § 64.03].
North Dakota Need Not Subordinate its Workers’ Comp Death Benefits Statute to Colorado’s More Liberal Provisions
The 8th Circuit Court of Appeals, in DeCrow v. North Dak. Workforce Safety & Ins. Fund, 2017 U.S. App. LEXIS 13877 (8th Cir., July 31, 2017), held that the widow of a Colorado resident killed in a traffic accident while working in North Dakota could not successfully challenge—on constitutional grounds—a North Dakota statute that suspended her previously awarded death benefits while she pursued supplemental benefits in Colorado, and which would have also required her to reimburse the state’s Workforce Safety and Insurance Fund (“WSI”) if her Colorado claim ever proved successful. Noting that the central question was one of first impression, the 8th Circuit added that the North Dakota statute satisfied rational basis review. The Court also reiterated that a State need not substitute the statutes of other states for its own statutes dealing with a subject matter concerning which it is competent to legislate [For additional discussion, see Larson’s Workers’ Compensation Law, § 141.04].
Challenge to Florida’s Maximum Comp Rate Limits
In Jimenez v. UPS, 2017 Fla. App. LEXIS 8907 (1st DCA, June 19, 2017), the Florida appellate court held a state judge of compensation claims had erred in dismissing a claimant’s constitutional challenge to the state’s statutory cap on weekly workers’ compensation benefits [see § 440.12(2); Fla. Stat. (2014)]. The appellate court acknowledged that it was beyond the jurisdiction of the JCC to decide a constitutional issue. The appellate court indicated, however, the JCC should have taken evidence and heard arguments on the issue in order that a record could be built for appeal. The matter was returned to the trial level for further proceedings. Florida claimants have long complained that the weekly maximum caps work to the detriment of highly paid employees. Florida is beginning to supplant California as a venue for battling out important constitutional issues. We likely haven’t heard the last of this case [For additional discussion, see Larson’s Workers’ Compensation Law, § 92.01].
Louisiana Court Says Choice of Pharmacy is up to Employer
in a split decision, the Supreme Court of Louisiana held that the choice of pharmacy in a workers’ compensation case belongs to the employer, and not the employee [Burgess v. Sewerage & Water Bd. of New Orleans, 2017 La. LEXIS 1387 (June 29, 2017)]. Resolving a split in the state’s circuit courts of appeal, the Court acknowledged that La. Rev. Stat. § 23:1203 obligates an employer “to furnish all necessary drugs” to the injured employee. The statute does not, however, directly address who has the right to choose the pharmacy to dispense those drugs. Nowhere in the statute did the legislature provide the employee with the right to choose a pharmaceutical provider from which to obtain the necessary prescription drugs, said the Court. By contrast, the legislature had specifically delegated to the employee the choice of physician [see La. Rev. Stat. § 23:1121(B)(1). The Court reasoned that had the legislature intended the employee to have the choice of pharmaceutical provider, it could easily have done so [For additional discussion, see Larson’s Workers’ Compensation Law, § 94.03].
Placing Injured Undocumented Worker on Unpaid Leave May Be Retaliatory Discharge
In a divided decision, the Supreme Court of Minnesota held that an injured undocumented worker had raised a genuine issue of material fact as to whether an employer had discharged him—and whether that discharge was motivated by the worker’s action of seeking workers’ compensation benefits—where the employer placed the worker on unpaid leave until the worker could show that his return to employment would not violate federal immigration law [Sanchez v. Dahlke Trailer Sales, 2017 Minn. LEXIS 372 (June 28, 2017)].
Writing for the majority, Justice Chutich indicated that, taking the facts in the light most favorable to Sanchez, there was reason to doubt whether the employer ever intended to rehire Sanchez, regardless of his change in work status. The evidence suggested that the employer had known for several years that Sanchez was undocumented. Justice Chutich said that in the end, the question of whether the employer intended Sanchez’s unpaid leave to be permanent was a factual dispute, to be resolved by a fact-finder. Thus, Sanchez raised a genuine issue of material fact as to whether he was discharged. Moreover, federal immigration law did not preempt an undocumented worker’s claim for retaliatory discharge under Minn. Stat. § 176.82, subd. 1 (2016) [For additional discussion, see Larson’s Workers’ Compensation Law, § 104.07].
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