05 Aug 2021

California: Apportionment under Labor Code Section 4664(c)(1)(g)

The 100% Lifetime Cap, Overlap, and Rebuttal of the Scheduled Rating

Labor Code section 4664, as enacted by Senate Bill 899 (Stats. 2004, ch. 34, § 35), makes the employer liable only for permanent disability directly caused by the industrial injury. If an injured employee has a prior award of permanent disability, section 4664 creates a presumption that such prior permanent disability still exists at the time of any later industrial injury. Further, unless an injured employee’s permanent disability is conclusively presumed to be total in character under section 4662, the injured employee is precluded from accumulating permanent disability in excess of 100% in the employee’s lifetime with respect to any one region of the body. Subparagraph (c)(1) of the section identifies the body regions as:

Hearing
Vision
Mental and behavioral disorders
The spine
The upper extremities, including the shoulders
The lower extremities, including the hip joints
The head, face, cardiovascular system, respiratory system, and all other systems or regions of the body not listed in subparagraphs (A) to (F), inclusive.

An Appeals Board decision that issued in 2005 addressed the mechanics of apportionment under then newly enacted section 4664. That decision is Sanchez v. County of Los Angeles (2005) 70 Cal. Comp. Cases 1440 (Appeals Board en banc) (Sanchez). In that case, Sanchez had a prior injury to her bilateral knees that resulted in a stipulated award of 22% permanent disability. Later she sustained an injury to her left foot and claimed entitlement to an award of 7% permanent disability for the foot injury. Both injuries are encompassed within subparagraph (F), “The lower extremities, including the hip joints.” Defendant argued Sanchez was not entitled to any permanent disability for the foot injury because the factors of foot disability were completely overlapped by the factors of disability from her prior knee injury. The dispute was ultimately assigned to the Appeals Board as a whole for an en banc decision, which held:

Where an employee has an industrial injury that causes permanent disability, and where that employee has a prior award of permanent disability relating to the same region of the body, section 4664 requires apportionment of overlapping disabilities.
Defendant has the burden of proving the existence of any prior award(s) of permanent disability to the same region of the body.
Such prior permanent disability to the same region of the body is conclusively presumed to still exist, and the percentage of permanent disability is subtracted from the current overall permanent disability unless the injured worker disproves overlap.
Moreover, even where there is no overlap, the sum of permanent disability awards for any one body region cannot exceed 100% unless the new industrial injury causes permanent disability that is conclusively presumed to be total under section 4662.

When the prior award(s) of permanent disability is to the same body part as the current injury, e.g., the lower extremities, the Sanchez holding makes perfect sense. Afterall, if an injured worker has a prior award of permanent disability of 50% to the lower extremity and then has a new industrial injury also to the lower extremity, any resulting permanent disability should logically not exceed 100%. But what about those situations where different body regions or systems are implicated? For example, the injured worker has a prior award of permanent disability for a cardiac injury and sustains a subsequent injury that causes permanent disability to the teeth? Should Sanchez apply?

A recent decision by an Appeals Board panel addresses the application of the 100% lifetime cap where the prior and current awards of permanent disability fall under the “catch-all” portion of section 4664(c)(1)(G). The decision is Russell v. County of Los Angeles, 2021 Cal. Wrk. Comp. P.D. LEXIS 152 (Appeals Board panel decision), pet. for writ of rev. filed 7-23-2021 (G060516). The panel’s decision provides clarity on the mechanism of apportionment under subparagraph (G), which lumps together disparate and distinct body parts/systems. It seems logical that where different bodily regions/systems are injured, the resulting factors of disability will be different and, therefore, any overlap in disability would be unlikely. However, as the panel reminds us, where the 100% lifetime cap is reached for those systems or regions of the body identified in subparagraph (G), the issue of overlap is simply not applicable. Moreover, the panel concludes that even where the current permanent disability is based on rebuttal of a scheduled rating, the 100% lifetime cap applies.

Jeffrey Russell (applicant), while employed as a fire battalion chief, sustained a cumulative trauma injury in the form of colon cancer. Applicant claimed that the colon cancer caused 100% disability with no basis for apportionment, arguing that he had rebutted the scheduled rating with vocational evidence. Defendant disputed that claim and provided documentation of two prior stipulated awards of permanent disability to various body parts, including the skin, upper digestive tract, dietary restrictions, bruxism and TMJ. Those body parts come within the “catch all” portion of section 4664(c)(1)(G). The parties stipulated as to the Whole Person Impairment (WPI) values to each of those injured body parts. The WCJ found that applicant successfully rebutted the scheduled rating for colon cancer and that he was entitled to a finding of 100% permanent disability before apportionment. As regards the prior awards, the WCJ calculated the permanent disability rating for the regions of the body that fell within the “catch-all” provision of section 4664(c)(1)(G), and he found 34% to be an accurate calculation for those body parts. Next, he subtracted the 34% prior disability from the 100% current disability, leaving 66% as the permanent disability attributable to applicant’s colon cancer.

Applicant sought reconsideration, contending that defendant failed to properly establish the existence of the prior awards of permanent disability and also failed to prove overlap. Additionally, applicant claimed that because he successfully rebutted the scheduled rating with vocational evidence, the finding of 100% permanent disability is not subject to reduction, that any such reduction would be inequitable and contrary to the purpose of allowing rebuttal of a scheduled rating where the circumstances warrant it.

The panel rejected each of applicant’s arguments and affirmed the WCJ’s award of 66% permanent disability. As to applicant’s claim that when a scheduled rating has been successfully rebutted with vocational evidence, apportionment is not allowed, the panel observed an absence of any authority that would preclude application of Section 4664. Since the parties submitted applicant’s prior awards into evidence and entered into stipulations as to the WPI values for the relevant body parts included in the prior awards, the panel concluded that defendant successfully established the existence of the prior awards of permanent disability. Next, the panel found no error in the WCJ’s calculation that applicant had previously sustained 34% permanent disability to the same region of the body as in his current claim. Because applicant’s colon cancer injury and his prior awards of permanent disability all fall within the “catch-all” provision in Section 4664(c)(1)(G), the panel recognized that applicant is not allowed to accumulate more than 100% permanent disability for such injuries within his lifetime. Thus, the panel reasoned that it was compelled to reduce applicant’s colon cancer permanent disability (100%) by the prior awards of 34%, resulting is an award of 66% permanent disability as the maximum allowable in applicant’s lifetime. Finally, the panel concludes its decision with the reminder that when the 100% lifetime cap is reached for one specified bodily region/system, the issue of overlap is not applicable.

Admittedly, Russell is only a panel decision and not binding or persuasive with the same gravitas as an en banc or significant panel decision. Nonetheless, the decision is compelling and reflects the thoughtful and careful analysis that underlies Sanchez. It may be that including colon cancer, skin irritation, upper digestive issues, bruxism, TMJ and so forth as the same bodily system/region is inherently inequitable or unfair, but, as the panel reminds us, that is not a basis to ignore the clear language of section 4664(c)(1)(G). Warning: It remains to be seen how the Court of Appeal acts on the applicant’s petition for writ of review. Counsel should track this case for the outcome.