California: Presenting Evidence of the Vocational Expert Post SB 863

Rebuttal of an injured worker’s “strict” permanent disability rating has consistently been one of the hottest topics in recent case law. See Milpitas v. WCAB (Guzman) (2010) 75 Cal. Comp. Cases 837 (lexis.com), 75 Cal. Comp. Cases 837 (Lexis Advance). Although Guzman dealt with a rebuttal of the Whole Person Impairment (WPI) component of the rating string, the WCAB made it quite clear that it was also possible to rebut permanent disability (PD), which includes WPI, along with the other components of the rating string. In fact, in the recent noteworthy panel decision of Dahl v. Contra Costa County, 2014 Cal. Wrk. Comp. P.D. LEXIS 2 (lexis.com), 2014 Cal. Wrk. Comp. P.D. LEXIS 2 (Lexis Advance), the WCAB commissioners provided a rather explicit roadmap as to what kinds of evidence is needed to successfully challenge a permanent disability rating.

The clear consensus from the legal community is that vocational experts may provide a valuable role in presenting rebuttal evidence at trial. Just when parties thought they understood how to do this, SB863 came along and changed the rules. Since these provisions became effective in 2013, a few noteworthy panel decisions have issued, as set forth below, that provide some guidance as to how these new rules will be applied in practice.

I. Vocational Expert Report as Substantial Evidence:

Just as medical legal evaluations must meet the criteria set forth in 8 Cal. Code Reg. § 10606, a new WCAB regulation, 8 Cal. Code Reg. § 10606.5, came into effect on October 23, 2013 that identifies the elements that must be included in a vocational report for it to constitute substantial evidence. Failure to comply with this regulation would go to the weight of the evidence, but not to its admissibility. Some of the requirements are as follows:

> Declaration under penalty of perjury

> Disclosure of qualifications

> Rationale and analysis of conclusions

> Statement from the vocational expert that no person, other than the vocational expert, did the following:

> took the employee’s history

> reviewed the medical and/or non-medical records

> composed and drafted the conclusions

A. Vocational Report From Applicant Did Not Constitute Substantial Evidence

In the noteworthy panel decision of Meza v. Perma Steel, 2013 Cal. Wrk. Comp. P.D. LEXIS 441 (lexis.com), 2013 Cal. Wrk. Comp. P.D. LEXIS 441 (Lexis Advance), the Workers’ Compensation Judge (WCJ) held that the injured worker did not meet his burden of proving he was 100% permanently and totally disabled based on the vocational evidence. The WCJ compared the reports of both the injured worker’s vocational expert and the defense vocational expert and found the defense vocational expert to be far more credible and accurate.

The WCJ explained in detail as to why he did not follow the conclusions of the vocational specialist for the injured worker as follows:

> Vocational specialist did “not have any credentials from any of the recognized vocational expert associations.”

> Vocational specialist “had no prior experience in testifying to such matters in any court of law.”

> Vocational specialist’s “testimony regarding the report she prepared was merely a recitation of that which was in the report.”

> Vocational specialist “acknowledged that the efforts of the applicant in the work evaluation are all subjective and she based her opinions in the report on these subjective factors.”

> The vocational report did not contain any of the accepted methodologies, such as “looking at applicant's transferable skills, applicant's work history, the employability of the applicant in the current labor market.”

> The vocational report “did not contain any reference to the Dictionary of Occupational Titles regarding applicant's employability.”

> The vocational report “is based solely on the observations of the evaluator as to whether or not the applicant was employable and is not based on any medical determination.”

> The multiple AME’s failed to review and comment on the vocational report.

PRACTICE TIP: If the vocational expert report is deficient in some way, the prudent practitioner should request a supplemental report or perhaps take the expert’s deposition to cure any deficiencies. This should be done well before a Declaration of Readiness is filed to avoid allegations of lack of due diligence.

B. Vocational Report From Defendant Did Constitute Substantial Evidence

By contrast, the WCJ explained why the vocational specialist for the defense met the criteria to qualify his testimony as substantial evidence in this case:

> He is a certified rehabilitation counselor (CRC) which is considered the "gold standard" in the industry for vocational experts.

> He is a certified case manager.

> He is a member of multiple associations and groups that specialize in vocational rehabilitation issues.

> He has presented lectures on the subject at local, state and national levels and was a speaker on the subject at the 2013 winter convention for the California Applicants' Attorney Association and he has testified in over 100 workers' compensation trials as a vocational expert.”

> The vocational report contained the accepted methodologies, such as “looking at applicant's transferable skills, applicant's work history, the employability of the applicant in the current labor market.”

> The vocational report contained references to the Dictionary of Occupational Titles regarding applicant's employability.

> The vocational expert “reviewed the AME and PQME reports, then identified the skills the applicant had acquired in his life and compared those to similar jobs and skills available on the market.”

> The vocational expert “used the Department of Labor Information Network as well as treatises and documents from this agency in preparing a transferable skills analysis.”

C. Evaluation Recommended by PQME Was Not Obtained

The WCJ also took issue with the fact that the PQME in psychiatry reviewed the report of the applicant’s vocational expert and “cast doubt on the reliability of the report and specifically requested that the report be reviewed by someone ‘skilled’ in reviewing such evaluation results…” For some reason, the applicant’s attorney did not obtain a review of the vocational expert’s evaluations as suggested by the PQME.

PRACTICE TIP: When a Panel Qualified Medical Evaluator (PQME) makes a recommendation to have a particular diagnostic test, review or evaluation performed or a particular report reviewed, as in the Meza case, it is incumbent upon the parties to make sure that this occurs. If the applicant’s attorney makes a request pursuant to the recommendation of the PQME and such a request is denied by the defense, this should be brought to the attention of the trial judge and documented as a possible basis for development of the record.

D. Vocational Experts Must Use Correct Legal Theories

In the panel decision of Williams v. Long Beach Unified School District, 2013 Cal. Wrk. Comp. P.D. LEXIS 344 (lexis.com), 2013 Cal. Wrk. Comp. P.D. LEXIS 344 (Lexis Advance), the WCJ was unable to rely upon the applicant’s vocational expert since she based her determination on an incorrect legal theory. The injury to the employee occurred on February 23, 2005. Therefore, permanent disability must be based on the legal standards set forth in the 2005 Permanent Disability Rating Schedule (PDRS). One of the components of the rating under the 2005 PDRS is the injured worker’s “diminished future earning capacity (DFEC).”

The vocational expert in this case did not analyze Carolyn Williams’ “diminished future earning capacity.” Instead, the vocational expert analyzed the injured worker’s percentage of loss of “access to the labor market.” This analysis of the injured worker’s inability to “compete in the open labor market” was the standard used under the “old” 1997 PDRS for dates of injury prior to 2005. Since the applicant’s vocational expert used the wrong legal standard, her report was not relied on by the WCJ.

PRACTICE TIP: It is critical that both medical and vocational experts employ the correct legal standards in their analysis. If the legal standards applied are invalid, outdated or inaccurate, the report generated most likely will not constitute substantial evidence. If so, it cannot be relied upon by the WCJ. If the expert uses an incorrect legal standard for a significant finding, parties should attempt to cure the defect through either supplemental reports or deposition testimony.

For more information on what constitutes a viable vocational expert report, see Bates v. Valley Vinters Wine Company, 2013 Cal. Wrk. Comp. P.D. LEXIS 95 (lexis.com), 2013 Cal. Wrk. Comp. P.D. LEXIS 95 (Lexis Advance).

E. A Vocational Expert Declaration Is Now Mandatory

PRACTICE TIP: When reviewing your vocational expert’s report for accuracy and substantial evidence compliance, also confirm that it includes a declaration compliant with NEW post-SB863 section Lab. Code § 5703(j)(2), which states:

“Reports are admissible under this subdivision only if the vocational expert has further stated in the body of the report that the contents of the report are true and correct to the best knowledge of the vocational expert. The statement shall be made in compliance with the requirements applicable to medical reports pursuant to subdivision (a).”

II. Presenting Vocational Expert Evidence at Trial:

Decades ago, it was not unusual for physicians to testify in person at workers’ compensation hearings. As the number of trials increased, this practice became unwieldy for both the workers’ compensation court system, as well as for the evaluating physicians. Thereafter, medical evidence was mandated to be in the form of either a medical report or a deposition transcript.

This same issue has arisen in recent years with regard to the plethora of permanent disability rebuttal cases and the necessity for live testimony of vocational experts. Since the workers’ compensation court does not have a trailing calendar system, a trial with testimony from both a defense and an applicant vocational expert could easily be extended over a period of several months, in order to accommodate the day long testimony of each party’s vocational expert. The drafters of SB863 attempted to remedy this delay in resolution of issues by mandating that vocational evidence be “produced in the form of written reports.”

Lab. Code § 5703 was amended to provide:

(j) Reports of vocational experts. If vocational expert evidence is otherwise admissible, the evidence shall be produced in the form of written reports. Direct examination of a vocational witness shall not be received at trial except upon a showing of good cause. A continuance may be granted for rebuttal testimony if a report that was not served sufficiently in advance of the close of discovery to permit rebuttal is admitted into evidence.

In the pre-SB863 case of Grupe v. WCAB (Ridgeway) (2005) 132 Cal. App. 4th 977, 70 Cal. Comp. Cases 1232 (lexis.com), 70 Cal. Comp. Cases 1232 (Lexis Advance), the trial judge excluded the applicant’s vocational expert from testifying at trial, since the vocational expert did not evaluate the injured worker until after discovery closed at the Mandatory Settlement Conference (MSC). (Discovery closes at the MSC per Lab. Code § 5502(d)(3).)

The 3rd DCA affirmed the WCAB’s reversal of the WCJ, stating that it was sufficient for the vocational expert to be identified at the MSC. The court held it was not necessary that the content of the vocational expert’s testimony also be revealed at the MSC, such as in the form of a written report.

Since vocational experts are now required to provide written reports in lieu of live testimony, per the newly revised Lab. Code § 5703(j), it appears that the holding in Ridgeway may no longer apply. Pursuant to Lab. Code §§ 5502(d)(3) and 5703(j), the content of the vocational experts report SHALL be served prior to and identified at the MSC. Lab. Code § 5703(j) allows that “if the report was not served sufficiently in advance of the close of discovery”, the WCJ may grant a continuance and allow the opposing party an opportunity to obtain rebuttal evidence.

This line of reasoning is somewhat consistent with the following explanation for the 3rd DCA’s rationale for their conclusion in Ridgeway. The DCA explained that, “Faced with a party's ‘sandbagging’ an opposing party by failing to develop expert testimony prior to the settlement conference, a WCJ may allow the deposition of the expert after the mandatory settlement conference…”

In any event, vocational expert reports are now mandatory, and the record should be developed on these issues well before a party files a Declaration of Readiness to proceed to trial.

III. Liability for Reimbursement of Vocational Expert’s Fee:

It is a well-established policy of the WCAB that the defense is liable for reimbursement of vocational expert fees. (See Costa v. Hardy Diagnostic (Costa I) (2006) 71 Cal. Comp. Cases 1797 (lexis.com), 71 Cal. Comp. Cases 1797 (Lexis Advance), and Costa v. Hardy Diagnostic (Costa II) (2007) 72 Cal. Comp. Cases 1492 (lexis.com), 72 Cal. Comp. Cases 1492 (Lexis Advance).)

The WCAB has even held that the defense is liable for reimbursement of vocational expert fees when the vocational report is not relied upon by the WCJ. See Hernandez v. Spiess Construction, 2013 Cal. Wrk. Comp. P.D. LEXIS 308 (lexis.com), 2013 Cal. Wrk. Comp. P.D. LEXIS 308 (Lexis Advance), and Lentz v. Henry Mechanical, 2013 Cal. Wrk. Comp. P.D. LEXIS 262 (lexis.com), 2013 Cal. Wrk. Comp. P.D. LEXIS 262 (Lexis Advance). However, there does not appear to be a requirement to pre-pay the vocational expert fee. (See Arbizu v. Westac, 2013 Cal. Wrk. Comp. P.D. LEXIS 588 (lexis.com), 2013 Cal. Wrk. Comp. P.D. LEXIS 588 (Lexis Advance))

At some point, the Administrative Director will adopt a fee schedule for vocational expert fees per Lab. Code § 5307.7(a), which was enacted as part of the SB863 reform package. However, until then, the expert should be prepared to provide an itemization of his or her time spent on the case and should make sure that the fee requested is reasonable and necessary.

IV. Conclusion:

SB863 substantially changed the way practitioners should obtain and present vocational expert testimony at trial. The newly revised Labor Code sections and regulations should be reviewed carefully and complied with in order to ensure that key evidence on the injured workers’ permanent disability rating in the form of vocational rehabilitation analysis is admitted into evidence. If properly prepared and admitted, it may be considered substantial evidence upon which the WCJ may rely for his or her decision.

© Copyright 2014 LexisNexis. All rights reserved. This article will appear in a forthcoming issue of California WCAB Noteworthy Panel Decisions Reporter.

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