California: Reconsideration or Removal and the Hybrid Decision

Decisions issued by workers’ compensation administrative law judges (WCJ) typically involve rulings that are considered “threshold” (i.e., fundamental to workers’ compensation liability like jurisdiction or the existence of an employment relationship) as well as “interlocutory” (i.e., procedural or evidentiary matters). Decisions that contain both threshold and interlocutory resolutions are in keeping with our constitutional mandate that workers’ compensation cases be resolved expeditiously, inexpensively, and without encumbrance. (Cal. Const., art. XIV, § 4.) Plain and simple, such decisions make good sense. Moreover, they are expeditious, efficient, and economical. But, as is so often true, with the good comes the problematic: which method to use to challenge such decision? Should the challenge be by a petition for reconsideration, a petition for removal, or both? Perhaps no aspect of workers’ compensation law has been more vexing to workers’ compensation practitioners than this very issue.

Although the statutes governing reconsideration and removal seem straight forward, often the correct application is less than clear, in large part because the typical WCJ decision contains both threshold and interlocutory matters. (Aldi v. Carr, MClellan, Ingersoll, Thompson & Horn (2006) 71 Cal. Comp. Cases 783, 784, fn. 2 (Appeals Board en banc).) Since a petition for reconsideration can only be taken from a final order, decision or award (Lab. Code §§ 5900(a), 5902, 5903), it is incumbent on the practitioner to make sure the decision actually determines a substantive right or liability of those involved in the case (Rymer v. Haglen (1989) 211 Cal. App. 3d 1171; Safeway Stores, Inc. v. Workers’ Comp. Appeals Bd. (Pointer) (1980) 104 Cal. App. 3d 528 [45 Cal. Comp. Cases 410]) or that it determines a threshold issue that is fundamental to the claim for benefits (Maranian v. Workers’ Comp. Appeals Bd. (2000) 81 Cal. App. 4th 1068 [65 Cal. Comp. Cases 650]; Capital Builders Hardware, Inc. v. Workers’ Comp. Appeals Bd. (Gaona) 5 Cal. App. 5th 658, 81 Cal. Comp. Cases 1122.) If, on the other hand, the decision only concerns interlocutory procedural or evidentiary decisions, such as pre-trial orders, evidentiary rulings, and venue decisions, then removal may be sought. (Lab. Code, § 5310.)

How should a practitioner present a challenge to a decision that resolves both threshold and interlocutory matters? This very question is the great conundrum because the risk in using the wrong vehicle to challenge a decision is great. The failure to timely petition for reconsideration from a final decision bars a later challenge to the propriety of the decision before the appeals board or the court of appeal. (Lab. Code § 5904.) Moreover, a petition for writ of review may only be sought from a final order, decision or award. (Lab. Code, §§ 5900, 5901; Capital Builders Hardware, supra, 5 Cal. App. 5th at p. 660, disapproving Alvarez v. Workers’ Comp. Appeals Bd. (2010) 187 Cal. App. 4th 575.) Well, colleagues, you can breathe a sigh of relief because there is good news. Over half a dozen recently issued panel decisions provide the clear and unequivocal guidance we all have been searching for on this matter.

Those decisions include Adney, 2019 Cal. Wrk. Comp. P.D. LEXIS 431; Elshami, 2019 Cal. Wrk. Comp. P.D. LEXIS 390; Martinez, 2019 Cal. Wrk. Comp. P.D. LEXIS 424; Martinez, 2019 Cal. Wrk. Comp. P.D. LEXIS 415; Sylva, 2019 Cal. Wrk. Comp. P.D. LEXIS 429; Vasquez, 2019 Cal. Wrk. Comp. P.D. LEXIS 419, and others. In each, the board panel uses the nomenclature, “hybrid,” to describe a decision that addresses both threshold and interlocutory issues. Of significance, these panel decisions provide the analytical framework that will be used when there is a challenge to a hybrid decision, no matter what vehicle (i.e., petition for reconsideration, petition for removal, petition for reconsideration/removal) the challenging party uses to bring the challenge. The appeals board will treat the petition seeking relief of a hybrid decision as a petition for reconsideration because the decision resolves a threshold issue. But if the petition challenging a hybrid decision only disputes a determination involving an interlocutory matter, the appeals board will evaluate the issues raised in the petition under the removal standard applicable to non-final decisions.

Adney is illustrative of the hybrid decision analytical paradigm articulated in these recent decisions. In Adney applicant claimed a cumulative injury to various body parts, including the psyche, while employed as a warehouse supervisor. An appointment was set for applicant to be evaluated by a psychiatric panel QME. Defendant objected to the appointment on the basis that it was scheduled outside of the 90-day period set forth in Administrative Director Rule 31.5(a)(2), and submitted a request to the medical unit for a replacement QME panel. Applicant objected and the matter was set for trial. The WCJ issued a Findings of Fact and Orders (F&O), finding industrial injury to applicant’s feet. The F&O also found that although the initial QME was set outside the allowed time frame, applicant was able to obtain an appointment within the time frame, thereby curing the defect with the original appointment. The F&O denied defendant’s request to replace the psychiatric QME panel. Defendant filed a petition for removal, challenging only the denial of its request for a replacement QME panel in psychiatry.

In its opinion and decision after reconsideration, the board panel explained its approach to hybrid decisions involving findings on both threshold and interlocutory issues. Because the F&O resolved a threshold issue (injury AOE/COE), the board panel construed it as a final decision subject to reconsideration rather than removal even though defendant’s challenge was limited to an interlocutory order— denial of its request for a replacement QME panel in the specialty of psychiatry. To evaluate that issue, the board panel applied the removal standard to determine whether defendant demonstrated that it would suffer substantial prejudice or irreparable harm if the order is allowed to stand (Cortez v. Workers’ Comp. Appeals Bd. (2006) 136 Cal. App. 4th 596 [71 Cal. Comp. Cases 155]; Kleeman v, Workers’ Comp. Appeals Bd. (2005) 127 Cal. App. 4th 274 [70 Cal. Comp. Cases 133]), and whether reconsideration at a later date would provide defendant with an adequate remedy. (Cal. Code Regs., tit. 8, § 10843(a). It determined that defendant failed to make the requisite showing, which, after all, is not surprising since removal is an extraordinary remedy that is intended to be used rarely. (Cortez, supra.)

What can we learn from Adney and the similar recent board panel decisions involving a hybrid decision? First, before a party makes a challenge to a WCJ decision, it is critical to analyze the import of that decision. What type of issue does the decision resolve? If it only resolves an interlocutory order, like a venue matter, the challenge should be made by a petition for removal. BUT, if the decision resolves both threshold and interlocutory issues, it is a hybrid decision, and the appeals board will treat the challenge as a petition for reconsideration, even if the objection is only to a finding/order on an interlocutory issue. Because a challenge to a hybrid decision is properly made by petition for reconsideration, it is imperative that the petition be timely and address all objections, irregularities and illegalities complained of because the failure to do so is deemed a waiver. (Lab. Code §§ 5903, 5904.) In the long run, practitioners will likely see the appeals board’s hybrid decision analytical framework as positive. It provides clarity on which vehicle (i.e., petition for reconsideration or petition for removal) should be used to challenge a WCJ determination. Moreover, it will help parties avoid prematurely filing a petition for writ of review in those circumstances in which the underlying determination is not a final order, decision or award. (Capital Builders, supra, 5 Cal. App. 5th at p. 660.)

Practitioners should check the subsequent history of any cases before citing to them.

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