Oakland, CA – Private self-insured claim volume in the California workers' compensation system fell 9.5% in 2023, producing the biggest year-to-year decline in private self-insured claim frequency...
By Hon. Susan V. Hamilton, Former Assistant Secretary and Deputy Commissioner, California Workers’ Compensation Appeals Board No matter the source of your media consumption, it seems that the topic...
By Hon. Colleen Casey, Former Commissioner, California Workers’ Compensation Appeals Board Who doesn’t agree with the fact that “[w]e should not interpret or apply statutory language...
When do the exclusivity provisions of Labor Code section 3600 permit an action for law at damages? By Hon. Susan V. Hamilton, Former Assistant Secretary and Deputy Commissioner, California Workers’...
Oakland, CA -- Payments for medical-legal evaluations and reports used to resolve medical disputes in California work injury claims have increased more than expected since a new Med-Legal Fee Schedule...
By Hon. Colleen Casey, Former Commissioner, California Workers’ Compensation Appeals Board
Who doesn’t agree with the fact that “[w]e should not interpret or apply statutory language in a manner that will lead to absurd results?” (See the recent Noteworthy Panel Decision (NPD) of Fraire v. Department of Corrections, 2020 Cal. Wrk. Comp. P.D. LEXIS 60, 85 Cal Comp Cases 697 (Appeals Board noteworthy panel decision).)
There are pundits who claim that Labor Code § 4664(c)(1) leads to absurd results. They argue its application might deem an injured worker to be 700% disabled. That’s never happened.
However, what has happened, is that application of this statute has resulted in judicial decisions that bar permanently and totally disabled (PTD) workers from genuine 100% disability awards. In fact, it often bars seriously disabled workers from lifetime pensions they would otherwise be entitled to, when the statute arbitrarily reduces their PD award below that critical 70% level.
In any event, the WCAB has altered the required schematic for applying this Labor Code section in the future. Defense attorneys should take special note of this change, since they have the burden of proof on this issue. Applicant attorneys should also take note, as it’s likely their clients will be the ones to benefit
1. WCAB’s New Guidelines for Application of Labor Code § 4664(c)(1)
In the recent Appeals Board Noteworthy Panel Decision (NPD) of Stranak v. City of Los Angeles, 2024 Cal. Wrk. Comp. P.D. LEXIS –, the WCAB has offered a new paradigm for applying Labor Code § 4664(c)(1) in a way that leans more towards accuracy and less towards absurdity.
This is the issue:
What is the most accurate way for a WCJ to assign body parts to the seven categories of body parts listed in Labor Code § 4664(c)(1)?
This is the roadmap:
Labor Code § 4664(c)(1) is intended to preclude accumulation beyond 100% disability “with respect to any one region of the body.” When there is an issue as to which category a body part falls, defendant is required to do the following:
1) Establish a prior award(s) of disability.
2) Establish through expert medical evidence which body systems were impacted by the prior disability.
3) Establish a current award of disability.
4) Establish through expert medical evidence which body systems are impacted by the current disability. (Emphases added.)
This is the goal:
More accurate and less absurd results in compliance with the law.
This is the takeaway:
“If applicant’s disability is found to span across multiple body systems, applicant is entitled to assign the disability to the body system that will achieve the highest rating.”
This is the statute:
Labor Code § 4664(c) states:
(a) The employer shall only be liable for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment.
(b) If the applicant has received a prior award of permanent disability, it shall be conclusively presumed that the prior permanent disability exists at the time of any subsequent industrial injury. This presumption is a presumption affecting the burden of proof.
(c)(1) The accumulation of all permanent disability awards issued with respect to any one region of the body in favor of one individual employee shall not exceed 100 percent over the employee’s lifetime unless the employee’s injury or illness is conclusively presumed to be total in character pursuant to Section 4662. As used in this section, the regions of the body are the following:
(A) Hearing.
(B) Vision.
(C) Mental and behavioral disorders.
(D) The spine.
(E) The upper extremities, including the shoulders.
(F) The lower extremities, including the hip joints.
(G) The head, face, cardiovascular system, respiratory system, and all other systems or regions of the body not listed in subparagraphs (A) to (F), inclusive.
(2) Nothing in this section shall be construed to permit the permanent disability rating for each individual injury sustained by an employee arising from the same industrial accident, when added together, from exceeding 100 percent.
(Added by Stats. 2004, Ch. 34, Sec. 35. Effective April 19, 2004.)
This is the Case Summary:
Officer Steven Stranak served the city of Los Angeles as a police officer for over 30 years. During that time, he sustained an admitted cumulative trauma (CT) injury from 2/25/1980 through 5/13/2012, along with a variety of other industrial injuries.
At trial involving the CT, the parties stipulated to the ratings for each body part.
On 11/7/2020, the Judge issued a Findings and Award (F&A) and assigned the body parts into two of the seven categories of Labor Code § 4664(c)(1) as follows:
LC § 4664(c)(1)(C) PD % & Assigned body parts to Mental & Behavioral disorders:
LC § 4664(c)(1)(G) PD % & Assigned body parts to Category “G”:
It is common for emergency service personnel to sustain multiple industrial injuries during the course of their career. Therefore, it is not surprising that applicant had obtained multiple prior disability awards, the aggregate amount of which was stipulated to be 90% PD.
If all prior awards include body parts and systems that are labeled in the Labor Code § 4664(c)(1)(G) category (i.e., miscellaneous), then applicant would only be entitled to a 10% award of PD for the bulk of his CT related disability. This is hardly reflective of the level of permanent disability sustained. The applicant certainly did not stipulate to this result. It was clear he disputed the WCJ’s lumping all of his current injured body parts or body systems into just two of the seven possible categories.
The WCAB explained that it is fine for parties to stipulate to “common sense” allocations to the Labor Code § 4664(c)(1). However, when applicant does not agree to certain allocations, such as in the instant case, substantial medical evidence MUST be produced by defendant to resolve the dispute. Since the defendant did not submit this issue to the medical evaluator, the case was returned to the trial level to develop the record consistent with the guidelines set forth in the Stranak opinion.
The WCAB explained their analysis as follows:
The requirements for proving application of section 4664(c) are essentially no different than apportionment under 4664(b):
First, the employer must prove the existence of the prior permanent disability award. Then, having established by this proof that the permanent disability on which that award was based still exists, the employer must prove the extent of the overlap, if any, between the prior disability and the current disability.
Under these circumstances, the employer is entitled to avoid liability for the claimant's current permanent disability only to the extent the employer carries its burden of proving that some or all of that disability overlaps with the prior disability and is therefore attributable to the prior industrial injury, for which the employer is not liable. (Kopping v. Workers’ Comp. Appeals Bd., 2006) 142 Cal.App.4th 1099, 1115.)
In both 4664(b) and 4664(c), defendant is proving overlap. The difference between the two sections is that 4664(b) focuses on overlapping disability, whereas 4664(c) focuses on overlapping body systems, which are impacted by disability.
This is an important distinction.
Disability, as a result of an industrial injury, is often conflated with injury to a body part(s). Here, much of the confusion around which body system was impacted arose out of the way in which the parties stipulated to the “body parts.”
Specifically, they stipulated to “cognitive impairment, psyche, gait, hypertensive heart disease, apraxia/agnosia, headaches, erectile dysfunction, GERD, bilateral lower extremities (DVT), vision, sleeping, and hypertension.” Based upon the parties’ stipulations, the WCJ listed multiple disabilities as “body parts” in the F&A. For example, “gait” is not a part of the body — it is a disability that can affect a body part.
This confusion is further compounded by the parties stipulated ratings, which include stipulations to the body part systems impacted by each impairment.
However, the WCJ’s findings do not follow the stipulations. For example, the parties stipulated rating places DVT as a disability of the lower extremities, but the WCJ assigned DVT under the general provision of section 4664(c)(1)(G). It appears that the parties may not have intended their stipulated rating to be an agreement on body systems under section 4664(c). Parties must be cognizant when entering into stipulations not to confuse disability with the body part affected by a disability. (Emphasis in the original)
Therefore, when, as in the instant case, there is a dispute as to how the body systems should be characterized pursuant to Labor Code § 4664(c)(1), the defendant must follow the new procedure for doing so as outlined above.
Once possible options for categorization are determined by substantial medical evidence, the WCAB has reminded the parties that “(w)here a disability impacts multiple body systems, it may be assigned to any of the impacted systems, and it should be assigned to the body system that will generate the higher rating.” (Emphasis added) In support of this holding, the WCAB has cited a plethora of case law holding that “where applicant’s disability can be rated using multiple methods, applicant is entitled to the higher rating.”
2. Case Law Using Prior Standard for Allocation Under LC §4664(c)(1)
a. Russell v. WCAB (2021) 86 Cal Comp Cases 1011 (writ denied)
As discussed above, “emergency service personnel” often sustain many industrial injuries over the course of their employment. Some of these injuries may result in PD awards of 10 or 15%. As these smaller awards accumulate over the course of a career, they may rack up a considerable amount of PD as occurred in the Stranak case.
For instance, in the writ denied case of Russell v. WCAB (2021) 86 Cal. Comp. Cases 1011, Battalion Commander Russell had accumulated 34% in prior PD awards at the time his admitted industrial injury of colon cancer workers’ compensation case went to trial. Medical evidence indicated this industrial disease of cancer deemed Commander Russell to be 100% permanently and totally disabled.
The Judge determined that Applicant’s prior awards totalling 34% PD fell within the “catch-all” provision of Labor Code § 4664(c)(1)(G). That’s also the category that applicant’s colon cancer would be placed. The Judge then subtracted that 34% from the 100 percent disability for Applicant’s colon cancer, which resulted in an award of 66 percent PD, thus depriving applicant of the lifetime pension he would have rightfully received if the award was greater than 70%.
Applicant filed a Petition for Reconsideration based on a lack of substantial evidence to drop ALL of his prior awards into the “catch all” category of Labor Code § 4664(c)(1)(G).
In response, the WCAB explained there was no error in the WCJ’s calculation of 66% as workers’ compensation judges are deemed competent to perform PD ratings.
It was further noted that, at that time, the “preferred procedure for establishing the existence of a prior PD award is for the defendant to submit a copy of the prior award or to request that the WCAB take judicial notice of the award.” Since this was the process followed by the judge in this case, the ruling was affirmed.
Applicant’s Writ of Review was subsequently denied by the 4th DCA.
b. Ross v. California Highway Patrol, 2020 Cal. Wrk. Comp. P.D. LEXIS 331 (Appeals Board noteworthy panel decision)
Gary Ross was a CHP officer who filed a CT claim ending 6/30/2009 for an admitted industrial heart disease which rated at 91% PD. As with the other two emergency service personnel cases discussed above, Officer Ross had a series of prior industrial disability awards which totaled 59% PD.
The WCAB determined that the prior awards (which are listed below) all involved injuries to regions of the body that fell within the catch-all provision in Labor Code § 4664(c)(1)(G), as follows:
Five Prior Awards:
(The total of awards #4 + #5 results in 9% PD.)
When Officer Ross’s industrial heart condition came to trial, it would have rated 100% if the “addition method” had been applied. However, the WCJ rejected the “addition method” argument and applied the Combined Values Chart for a result of 91% PD. Since applicant had prior awards of totaling 59% PD, his ultimate award was reduced to 41% PD. (The calculation would be 100% maximum lifetime limit provided in the statute, less 59% PD from prior awards, leaving an allowable PD balance of 41% PD.)
As was the case with Battalion Commander Russell, Officer Ross’s ultimate level of PD for this career-ending industrial injury also did not reach the “life pension level” of 70%, to which he would otherwise have been entitled.
3. Conclusion
Query as to whether the results in the last two cases discussed above might have been different (perhaps more “accurate”) if the Stranak roadmap had been applied? Counsel is reminded that Defendant has the burden of proof that the Labor Code § 4664(c)(1) “reduction” applies in a case in which there are prior awards. In the Stranak case, the WCAB returned the matter to trial level to develop the record using this NEW paradigm and requiring “substantial medical evidence” to support a viable determination. Although Judges are highly trained and able to make calls on all legal issues, when a medical issue is involved, it is mandatory that they be presented with “substantial medical evidence” to support a viable determination. With this in mind, there is no guarantee that future holdings will permit “development of the record” to obtain “substantial medical evidence” after the MSC has occurred. It is possible that if Defendant does not meet their burden of proof on this issue, no reduction per Labor Code § 4664(c)(1) will be permitted.
Parties have also argued that when a 100% PD case has been established at trial by rebuttal of the strict PD rating, that finding should be immune from reduction, given that the level of PD in those cases is not based on the strict rating of the Permanent Disability Rating Schedule. To date, neither that argument nor other colorable arguments to avoid the Labor Code § 4664(c)(1) reduction of 100% PTD awards have gained traction.
PRACTICE TIP: As always. when developing the record BEFORE the MSC, expect the unexpected. Initially, in addition to preparing a Pretrial Conference Statement for each date of injury, perhaps parties should also keep a trial prep template handy. The first column should include the usual burdens of proof, such as medical-legal issues, earnings, accurate rating, apportionment, affirmative defenses, etc. The second column should list the evidence needed to meet each burden. When the paradigm for a burden of proof changes, as has occurred in the Stranak case, regarding Labor Code § 4664(c)(1), that item in the second column should be revised with reference to the relevant case. Keeping your trial prep checklist up to date will definitely optimize your chances of prevailing at trial.
REMINDER: Board panel decisions are not binding precedent.
© Copyright 2024 LexisNexis. All rights reserved.