California: Two Different Paths to Establishing Permanent and Total Disability

In Anaya v. Bay Area Carbide, 2016 Cal. Wrk. Comp. P.D. LEXIS --, a split WCAB panel affirmed the WCJ’s finding that the applicant, who suffered an industrial injury to his lungs, respiratory system, psyche, and in form of diabetes while employed as a tool handler from 7/8/2009 through 7/8/2010, was entitled to an unapportioned award of 100 percent permanent disability “in accordance with the fact” pursuant to Labor Code § 4662(b) [LC 4662] based on the opinions of the examining physicians indicating that the applicant was unable to return to the labor market due to his physical and psychiatric limitations.

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However, the WCAB panel disagreed with the WCJ’s implication that Labor Code § 4660 [LC 4660] does not apply in cases involving permanent total disability, clarifying that permanent total disability may be established by presenting evidence of permanent total disability “in accordance with the fact” as provided in Labor Code § 4662(b) or by rebutting the Labor Code § 4660 scheduled rating, which is based on a percentage of disability.

The WCAB panel did not concur with the defendant’s position that Labor Code § 4660 standards are applicable to determinations made pursuant to Labor Code § 4662, but instead recognized that Labor Code §§ 4660 and 4662 offer different paths to prove permanent total disability, that it is not necessary for an injured worker to have total loss of earning capacity in order to be found permanently and totally disabled, and that the entirety of evidence in this case established that the applicant was permanently and totally disabled “in accordance with the fact” under Labor Code § 4662(b).

Commissioner Razo dissented from the panel majority’s conclusion that permanent total disability was established “in accordance with the fact” as required by Labor Code § 4662, and would return the matter to the trial level for development of the record on the issues of the applicant’s amenability to vocational rehabilitation and his loss of future earning capacity. Commissioner Razo reasoned that, although the medical examiners in this case opined that the applicant was permanently totally disabled and unable to work, the physicians are not vocational experts and their opinions are not substantial evidence of lack of amenability to vocational rehabilitation and total loss of future earning capacity, and that, while permanent total disability “in accordance with the fact” under Labor Code § 4662(b) may not always require evidence of lack of amenability to vocational rehabilitation and proof of total loss of future earning capacity, here, the reporting physicians did not provide sufficient reasoning to support their opinions that the applicant was permanently totally disabled.

Commentary:

The panel in Anaya does an excellent job of analyzing the two different avenues available for establishing permanent and total disability. The first path is to apply Labor Code Section 4660. Using Labor Code Section 4660, an employee can prove permanent and total disability by way of rebutting the permanent disability “rating”. The American Medical Association Guides to the Evaluation of Permanent Impairment (AMA Guides) are used to determine a Whole Person Impairment and the Permanent Disability Rating Schedule is then used to determine the final percentage “rating”. If the percentage “rating” is less than 100%, the employee can choose to rebut the rating pursuant to the methodologies described in Almaraz v. Environmental Recovery Services/Guzman v. Milpitas Unified School District (2009) 74 Cal. Comp. Cases 1084 [74 CCC 1084] (Appeals Board en banc opinion), and Milpitas Unified School Dist. v. W.C.A.B. (Guzman) (2010) 187 Cal. App. 4th 808, 115 Cal. Rptr. 3d 112 [75 Cal. Comp. Cases 837], Ogilvie v. City and County of San Francisco (2011) 197 Cal.App.4th 1262 [76 Cal. Comp. Cases 624] and most recently Contra County v. Workers’ Comp. Appeals Bd. (Dahl) (2015) 240 Cal.App.4th 746 [80 Cal. Comp. Cases 624].

As pointed out by the panel in Anaya, there is also a second and very different manner of establishing permanent and total disability. This alternative approach is provided for under Labor Code Section 4662. Instead of dealing with the appropriate percentage of permanent disability as required by Labor Code Section 4660, the focus of Labor Code Section 4662 is whether an applicant should be determined permanently and totally disabled “in accordance with the fact”.

This is really the difficult aspect of Labor Code Section 4662. The term “in accordance with the fact” has not yet been definitively interpreted at the appellate level. The panel cases finding permanent and total disability in accordance with Labor Code Section 4662 appear to look at the entire evidentiary record in an individual case and make the determination as to whether the employee has totally lost his or her ability to work.  But does a finding of permanent and total disability under this section require a finding that the employee can no longer work? The Anaya panel cites to a 1998 case which held that a showing of a total loss of earning capacity is not required, but again, this begs the question, what does “in accordance with the fact” mean?

In conclusion, panel cases like Anaya are an important reminder that the inquiry in a permanent and total disability case may move away from what can be described as the constraints of Labor Code Section 4660 toward a more general, factual determination that an employee is permanently and totally disabled “in accordance with the fact”.  Though rebutting the Labor Code Section 4660 rating through the use of vocational rehabilitation experts can be time consuming and expensive, trying to navigate the murky waters of what constitutes “in accordance with the fact” can prove to be challenging as well.

Read the Anaya noteworthy panel decision.

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