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Mar 25, 2020

SD Supreme Court Construes State’s “No Progress” Rule in Comp Cases

Construing South Dakota’s “no progress” rule [S.D. Admin. R. 47:03:01:09], which allows the state’s Department of Labor to dismiss a workers’ compensation petition when there has been “no activity for at least one year, unless good cause is shown,” the state’s Supreme Court reversed a decision by the Department, and affirmed by a circuit court, dismissing an injured worker’s petition where it was clear that she had engaged in a vocational rehabilitation program less than five months before the motion to dismiss was filed by the employer [LaPlante v. GGNSC, Madison S.D., LLC, 2020 SD 13, 2020 S.D. LEXIS 27 (Mar. 18, 2020). Observing that neither “activity” nor “good cause” were defined in the Rule, the Court stressed that both the Department and the circuit court had read the Rule too narrowly.

Background

LaPlante sustained injuries while working as a certified nursing assistant at the employer. She filed a petition with the Department seeking workers’ compensation benefits on October 29, 2015. The parties exchanged written discovery in March 2016. LaPlante’s deposition was taken in July 2016. In August 2016, LaPlante presented a settlement demand to the employer/insurer. LaPlante also completed a functional capacity evaluation (FCE) that she forwarded to employer/insurer in September 2016. One month later, as a part of the settlement discussions, the employer/insurer submitted a settlement counter-proposal, but LaPlante did not respond.

Instead, LaPlante applied for vocational rehabilitation assistance in December 2016, to assist in finding employment within her physical limitations identified in the FCE. LaPlante did not, however, advise the employer/insurer of her VR request, nor did she later inform them that she was participating in such a program.

In September 2017, counsel for the employer/insurer sent LaPlante’s counsel a letter indicating that a response to the settlement counter-offer was required, that the matter had been dormant for a year, and that the parties either needed to settle or move forward. Neither LaPlante nor her lawyer responded. In April 2018, the employer/insurer filed a motion to dismiss under the no progress rule.

LaPlante submitted an affidavit and brief asserting, inter alia, that her involvement in the VR program constituted “activity” under ARSD 47:03:01:09, and in the alternative, that her efforts established a good cause for delay. Nevertheless, the Department entered a memorandum decision dismissing the petition under ARSD 47:03:01:09.

The Department found that LaPlante had finished the VR program less than one year before the motion to dismiss was filed. However, it concluded there had been no activity within the last year because “there has not been record activity and no effort was made to communicate with the Employer and Insurer” [emphasis added]. The Department agreed that waiting on the results of the VR program would be good cause for delay, but it found LaPlante’s participation was not good cause because it had not been communicated to the employer/insurer. The circuit court affirmed essentially on the same grounds.

Supreme Court Disagrees

Noting that the rule did not define either “activity” or “good cause,” the high court also indicated that it had not been required to pass on the Rule in any prior decision. Acknowledging that there were some parallels between the situation in the instant case and in civil cases in which there had been no progress, and acknowledging further that LaPlante bore the duty to advance the case, the Court nevertheless stressed that one could not ignore the beneficent purposes of the Workers’ Compensation Act.

Both the Department and the circuit court had read the Rule too narrowly, said the Court. There was no requirement that there be “record activity.” The Department had acknowledged that the VR participation was “activity.” Here, not only had LaPlante been engaged in a VR program within five months of the motion to dismiss, she had provided verification of that fact in response to the motion.

The Court stressed that both the Department and the circuit court had erroneously focused on the lack of communication by LaPlante with the employer/insurer in determining whether any activity occurred within one year. It said, however, that once LaPlante established she was engaged in a VR program, her lack of communication was not relevant to the threshold question of whether she was engaged in “activity” within the meaning of ARSD 47:03:01:09. Moreover, the employer/insurer had not cited any authority supporting their claim that “activity” must involve actual proceedings in the case, or communication between the parties. LaPlante had established “activity,” and it was error for the Department to have found otherwise.