13 Sep 2013

California: A Radical/Diametrical Change in the Law of Apportionment

ACME STEEL v. WCAB (BORMAN): ANOTHER PUBLISHED DECISION FROM THE COURT OF APPEAL REMINDING US ONCE AGAIN THAT LABOR CODE §4663 IS A RADICAL/DIAMETRICAL CHANGE IN THE LAW OF APPORTIONMENT.

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It has been almost ten years since the enactment of SB899 and Labor Code §§4663 & 4664. Both of these Labor Code sections reflect a clear legislative intent and mandate to reverse the prior thirty-six years of case law that had evolved in the area of apportionment. In Acme Steel v. Workers’ Comp. Appeals Bd. (Borman) 218 Cal.App.4th 1137; 78 Cal.Comp.Cases 751; 2013 Cal.App.Lexis 638, the First District Court of Appeal in a decision certified for publication, sent a clear message that even when the vocational evidence in the case pursuant to Oglivie v. Workers’ Comp. Appeals Bd. (2011) 197 Cal.App.4th 1262, establishes an applicant is 100% permanently totally disabled, that unrebutted substantial medical evidence establishing a basis for apportionment under Labor Code §4663 cannot be ignored.

PROCEDURAL HISTORY AND OVERVIEW

In July 2012, the Workers’ Compensation Judge (WCJ) issued a Findings and Award and Opinion on Decision finding applicant to be 100% permanently totally disabled without any apportionment. Defendant filed a Petition for Reconsideration, which was denied by the WCAB who adopted and incorporated the WCJ’s Report on Reconsideration. Defendant filed a Petition for Writ of Review with the Court of Appeal, which was granted. The Court of Appeal, in granting the Petition for Review, annulled the WCAB’s Decision mandating that apportionment, as reflected in the unrebutted report of the AME in hearing loss in this case, must be followed.

FACTUAL OVERVIEW

The applicant was employed by ACME Steel as a steel worker for approximately 31 years, from 1972 to 2003. In a 1993 industrial explosion, applicant suffered an injury to his ears, resulting in bilateral hearing loss. An examining physician in 1994 confirmed that as a result of the 1993 explosion, applicant had a 37.5% bilateral hearing loss. In 1994, the examining physician also recommended he should be fitted with hearing aids. Following the 1993 industrial explosion, applicant did not lose any time from work and continued to work until 2003, and then filed a cumulative trauma claim. However, he did receive an Award of 22% P.D related to the 1993 explosion.

THE VOCATIONAL EVIDENCE

During the course of trial there was expert vocational testimony finding there was no job in the open labor market that could accommodate applicant’s difficulty with oral communications, limitations with use of the upper extremities, limited mobility, need for daily narcotic medication, rest, and serious headaches. It was also established applicant had cochlear implants which, while improving his hearing, did not have a significant impact on his ability to hear in crowded or noisy environments and in using a telephone. Based on this evidence and pursuant to the Oglivie Decision, the WCJ found applicant effectively rebutted any diminished future earning capacity (DFEC) and as a result established 100% loss of earning capacity rendering him 100% vocationally permanently totally disabled.

THE MEDICAL EVIDENCE

Applicant was examined by three AMEs in different specialties. The focal report was from the AME in hearing loss. There were two medical reports issued by the AME in hearing loss. One in July of 2004, and a later report in June of 2009. In both reports the AME determined the applicant was 100% permanently disabled based on his 100% “binaural neurosensory hearing loss.” However, the AME indicated that with respect to the disability attributed to the 100% bilateral hearing loss, 60% was due to occupational factors, specifically noise-induced hearing loss and approximately 40% of applicant’s hearing loss was the result of non-occupational factors, primarily cochlear degeneration. The AME gave a very detailed and well-reasoned opinion as to the etiology of applicant’s hearing loss, and based on diagnostic testing indicated the low frequency component of applicant’s hearing loss was not consistent with industrial noise induced hearing loss, but was rather attributable to the degenerative process of the cochlea. In his second report the AME indicated that after the 1993 industrial explosion that injured applicant’s ears, further hearing loss between 1993 and 2003 was the result of both cochlear degeneration in the lower frequencies and persistent industrial noise exposure in the higher frequencies. The AME did not specifically apportion to the hearing loss indicated by the physician who examined the applicant in October 1994, and resulted in an award of 22% permanent partial disability. It was undisputed applicant’s hearing gradually got worse after he returned to work following the industrial explosion in 1993.

THE WCJ’S REJECTION OF THE AME’S REPORT AND OPINIONS

In rejecting the AME’s opinion reflecting industrial apportionment of 60% and nonindustrial apportionment of 40%, the WCJ for some reason focused on the fact there was no documented earnings loss due to the prior award of 22% related to the 1993 explosion and applicant continued to work after the prior award and his hearing loss progressed to a point where cochlear implants were required. The WCJ also stated she was not bound by the AME’s findings on apportionment when there was conflicting and convincing vocational testimony/evidence regarding loss of earning capacity. In essence, the WCJ felt she was justified in ignoring the AME’s apportionment formula based on the vocational evidence that applicant was unemployable and had a complete loss of earning capacity. As indicated, hereinabove, defendant’s Petition for Reconsideration was denied, with the WCAB adopting and incorporating the WCJ’s Report on Reconsideration.

THE COURT OF APPEAL

The Court of Appeal affirmed both the WCJ and the WCAB, consistent with the Ogilvie Decision, could conclude that applicant rebutted the rating schedule DFEC by offering vocational expert testimony showing 100% total loss of earning capacity. However, even if there is vocational evidence showing a 100% loss of earning capacity, there is no legal basis under Labor Code §4663 for the WCJ and the Board to refuse to address and consider unrebutted substantial medical evidence from an AME establishing there were nonindustrial contributing causal factors of applicant’s hearing loss disability.

The Court of Appeal referenced several key principles from the California Supreme Court’s decision in Brodie v. WCAB (2007) 40 Cal.4th 1313 (Brodie). The Court of Appeal also relied on E.L. Yeager Construction v. Workers’ Comp. Appeals Board (2006) 145 Cal.App.4th 922, that the WCAB cannot ignore unrebutted substantial medical evidence showing applicant’s 100% hearing loss could not be attributed solely to the current cumulative trauma industrial injury. Pursuant to the Supreme Court’s mandate in Brodie and based on the specific language of Labor Code §4663 given the AME’s opinion in this case “The WCAB should have parceled out the “causative sources—nonindustrial, prior industrial, current industrial—and decide[d] the amount directly caused by the current industrial source.”

In understanding the core, conceptual and legal principles related to apportionment under Labor Code §§4663 and 4664, the following quotes from Brodie were emphasized by the Court of Appeal and are instructive:

- · “Sections 4663 & 4664…enacted in 2004 as part of Senate Bill No. 899…, changed the former process of apportionment pursuant to which apportionment based on causation was prohibited, where employers were “liable for any portion of a disability that would not have occurred, but for the current industrial cause.”
- · “The plain language of new sections 4663 & 4664,” noted the Supreme Court, “demonstrates they were intended to reverse these features of the former workers’ compensation system.”
- · “[T]he new approach to apportionment is to look at the current disability and parcel out its causative sources—nonindustrial, prior industrial, current industrial—and decide the amount directly caused by the current industrial source. This approach requires thorough consideration of past injuries, not disregarded of them.”
- · “In short, the “clear intent” of the Legislature in enacting Senate Bill No. 899 was to “to charge employers only with that percentage of permanent disability directly caused by the current industrial injury.”
- · “Therefore, evaluating physicians, the WCJ, and the Board must “make an apportionment determination by finding what approximate percentage of the permanent disability was caused by the direct result of injury arising out of and occurring in the course of employment and what approximate percentage of the permanent disability was caused by other factors, both before and subsequent to the industrial injury, including prior industrial injuries.”
- · “Indeed, apportionment is excused only under extremely limited circumstances... when the evaluating physician cannot parcel out, with reasonable medical probability, the approximate percentages to which each distinct industrial injury causally contributed to the employee’s overall permanent disability...”

APPLICANT’S PRIOR 22% PERMANENT DISABILITY AWARD FOR HEARING LOSS

The Court of Appeal found applicant’s arguments unpersuasive as to whether or not applicant received a prior 22% permanent disability award for hearing loss. Under the facts of this case there was no apportionment attributed by the AME in hearing loss to the applicant’s prior 22% permanent disability award. The WCAB also rejected applicant’s argument there was no evidence of loss time off work for the hearing loss injury related to the 1993 explosion. The Court of Appeal also indicated applicant’s arguments confused causation of injury with causation of disability.

CONCLUSION

With respect to causation of disability, the focal issue or question in this case was whether the progressive nonindustrial degenerative cochlear condition, even if aggravated by applicant’s employment subsequent to the 1993, industrial explosion, was a contributing cause of his bilateral hearing loss disability. And, as this case demonstrates, the unrebutted persuasive opinion of the AME constituted substantial medical evidence that approximately 40% of the applicant’s 100% hearing loss disability was attributable to nonindustrial factors. Therefore, even in the face of vocational expert testimony and evidence establishing applicant was 100% vocationally permanently disabled, the WCJ and the WCAB were mandated to apply the AME’s apportionment formula.

Borman, now joins the growing number of WCAB and published appellate decisions affirming the expansive and “radical” change in apportionment based on “factors” both industrial and non-industrial, that may be found to be contributing causes of permanent disability. See also: Brodie v. Workers’ Comp. Appeals Bd. (2007) 40 Cal.4th 1313, 72 Cal. Comp. Cases 565; Marsh v. Workers’ Comp. Appeals Bd. (2005) 130 Cal.App.4th 906; Kleeman v. Workers’ Comp. Appeals Bd. (2005) 127 Cal.App.4th 274, 70 Cal. Comp. Cases 133; Kopping v. Workers’ Comp. Appeals Bd. (2006) 142 Cal.App.4th 1099, 71 Cal. Comp. Cases 1229; E.L. Yeager Construction v. Workers’ Comp. Appeals Bd. (2006) 145 Cal.App.4th 922, 71 Cal. Comp. Cases 1687; Benson v. Workers’ Comp. Appeals Bd. (2009) 170 Cal.App.4th 1535; Escobedo v. Marshalls (2006) 70 Cal. Comp. Cases 604 (WCAB en banc).

Lexis.com links:

Acme Steel v. Workers’ Comp. Appeals Bd. (Borman) 218 Cal.App.4th 1137

Oglivie v. Workers’ Comp. Appeals Bd. (2011) 197 Cal.App.4th 1262

Brodie v. WCAB (2007) 40 Cal.4th 1313 (Brodie)

E.L. Yeager Construction v. Workers’ Comp. Appeals Board (2006) 145 Cal.App.4th 922

Marsh v. Workers’ Comp. Appeals Bd. (2005) 130 Cal.App.4th 906

Kleeman v. Workers’ Comp. Appeals Bd. (2005) 127 Cal.App.4th 274

Kopping v. Workers’ Comp. Appeals Bd. (2006) 142 Cal.App.4th 1099

Benson v. Workers’ Comp. Appeals Bd. (2009) 170 Cal.App.4th 1535

Escobedo v. Marshalls (2006) 70 Cal. Comp. Cases 604 (WCAB en banc)

Labor Code §4663

Labor Code §4664