Disgusted by physicians’ misapplication of the AMA Guides for fun and profit? Angered by the flippant manner in which many doctors regularly find a “more accurate” impairment percentage and cover their tracks by citing Almaraz/Guzman? Outraged by the fact that every time you turn around you’re hearing from a so-called “DFEC expert” who wants to rebut the DFEC on your dime?
Think you’ve seen enough PD shenanigans for a lifetime of adjusting?
The PD times are a’changing 1, and they’re getting worse!
The WCAB has paved the way for Applicants to get 100 percent PD awards:
(a) without being 100 percent per the AMA Guides and 2005 Permanent Disability Rating Schedule,
(b) without rebutting the AMA Guides via Almaraz/Guzman, and
(c) without retaining the services of a “DFEC expert.” And, via this novel approach, once the 100 percent is awarded, you do not get Labor Code §4664 apportionment…even if there was a prior PD award for the very same body part(s)!
The Labor Code
Where does all this trouble come from?
Labor Code §4662! 2
Most of us think of Labor Code §4662 as that “statutory exception” law that provides for 100 percent PD in four-and only four-scenarios:
(a) Loss of both eyes or the sight thereof.
(b) Loss of both hands or the use thereof.
(c) An injury resulting in a practically total paralysis.
(d) An injury to the brain resulting in incurable mental incapacity or insanity.
If limited to these four scenarios, LC §4662’s applicability is limited to a very (VERY) small number of cases. But the WCAB has recently expanded LC §4662’s conclusive presumption of total disability to far more cases than most of us had foreseen.
The WCAB has begun to focus on the very last sentence of LC §4660: “In all other cases, permanent total disability shall be determined in accordance with the fact.”
Let’s break that down:
(a) “all other cases” (that’s all of ’em!)
(b) “total disability” (100 percent PD…meaning millions of dollars at issue!)
(c) “in accordance with the fact” (meaning making it up as we go along!)
Be afraid…very afraid!
The Case Law
This 100 percent expansion appears to have gotten legs in Baldrige v. Swinerton, a July, 2010 panel decision. In that case, Applicant, a 50-year-old construction laborer, underwent a low back fusion. The Ortho AME rated 70 percent PD. The Psych AME rated 33 percent PD. Combined this amounted to 80 percent PD.
So how did 80 percent go to 100 percent PD?
Not via Almaraz/Guzman.
Not via Ogilvie.
Rather, Applicant did it the old fashioned way…following the likes of LeBoeuf. 3 Testimony was presented that there were “only four or five days each month when [Applicant is] not in excruciating pain” and “three or four days each month [Applicant] must spend the whole day inside the house”. This testimony, taken in conjunction with the Ortho AME’s opinion that the Applicant was limited to “sedentary work” and “must get up and move…every 15 or 30 minutes”, along with the Psych AME’s opinion that “chronic pain…removed him from the work force” all coalesced for a 100 percent PD award. Of course, in true LeBoeuf fashion, this evidence was relied upon by the Agreed Vocational Evaluator (AVE) Scott Simon, who opined (a) Applicant was “not…feasible for…on-the-job training”, (b) “psychiatric symptoms would interfere with [Applicant’s] ability to learn”, and (c) Applicant was “unable to work”.
Ain’t LeBoeuf Dead?
I know what you’re thinking! LeBoeuf is “old school”, right? After all, LeBoeuf indicated that “[a] permanent disability rating should reflect as accurately as possible an injured employee’s diminished ability to compete in the open labor market. The fact that a worker has been precluded from vocational retraining is a significant factor to be taken into account in evaluating his or her potential employability.” (Underline and bold added) Reference to the “ability to compete in the open labor market” in Labor Code §4660 (the labor code defining permanent disability), was removed via SB 899 and replaced with the phrase “diminished future earning capacity”.
Even though the applicable labor code has been rewritten, the WCAB doesn’t appear to believe that makes any difference. Thus, LeBoeuf comes to haunt us from the grave. Says the WCAB, LeBoeuf “indirectly supports the principle that an employee’s permanent disability rating may be affected where the…injury causes a total loss of earning capacity. That is, a complete loss of future earning capacity is analogous to a complete inability to compete in the open labor market.”
Words To Fear
Let’s interpret what the WCAB is saying… 4
The Baldrige commissioners continued:
“[T]he LeBoeuf analysis and Labor Code §4662—which allows applicant to establish permanent total disability in accordance with the facts…is still appropriate for determinations of permanent total disability. This approach allows the injured worked to establish permanent total disability when it is shown that applicant has lost the ability to work in the open labor market and/or has 100 percent loss of future earning capacity even though the impairment rating under the AMA Guides is less than 100 percent.”
What’s Wrong With the WCAB’s Analysis?
Where did the WCAB go wrong?
Simple. Inability to “compete in the open labor market” does not mean complete loss of “future earning capacity”. (Hint, hint…that’s why the legislature changed the words!!!)
Don’t take my (logical) word for it. LC §4660, as amended by SB 899, provides in pertinent part:
“…an employee’s diminished future earning capacity shall be a numeric formula based on empirical data and findings that aggregate the average percentage of long-term loss of income resulting from each type of injury for similarly situated employees. The administrative director shall formulate the adjusted rating schedule based on empirical data and findings from the Evaluation of California’s Permanent Disability Rating Schedule, Interim Report (December 2003), prepared by the RAND Institute…”
Interestingly, in equating DFEC with loss of ability to compete in the open labor market, the WCAB wholly ignores the above language!
If You Think That’s The Worst Of It…
Don’t like this bad news?
Don’t think it can get worse?
LC §4664 apportionment can’t help you in a 100 percent PD case this is based on §4662! In other words, even if Applicant had a recent prior award of PD for the very same body part(s), the defense does not—at the present time—get to subtract out the earlier award.
After all, doesn’t LC §4664 say “[t]he 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”?
Yes, it does!
And doesn’t LC §4664 say, “[i]f 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”?
Yes, it does!
So why doesn’t the defense get to subtract the “prior award of permanent disability” that is “conclusively presumed” to exist?
Answer…Labor Code §4664(c)(1):
(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 §4662.
Yep! The fact that the WCAB is creating this 100 percent PD award out of LC §4662 allows the matter to fall outside of the general §4664 subtraction rules.
Practice Pointers—Where Did The Defense Go Wrong?
Analysis of the Baldrige case provides many insights as to how you can improve your defense when facing a potential new-fangled LeBoeuf-type case.
A. Avoid AMEs Baldrige had not one, but two AMEs! Not happy with your AME? You’re probably going to live with whatever the AME does (or, perhaps more accurately, does to you!). When the WCAB is faced with a party complaining about what an AME has done, the Commissioners retort is almost always the same:
“[W]e begin by presuming that the AME has been chosen by the parties because of his expertise and neutrality. Therefore his opinion should ordinarily be followed…(Power v. WCAB (1986) 179 Cal. App. 3d 775 (51 CCC 1141)”
Want to avoid this headache? Avoid AMEs (and go with PTPs and PQMEs who, by the way, are more likely to apply the AMA Guides correctly). 5
B. Agreed Vocation Evaluator
The parties in Baldrige agreed to an Agreed Vocational Evaluator, Mr. Scott Simon. In so doing, the defense stipulated to the expertise of the AVE…an AVE that Applicant’s counsel thought would likely provide the evidence his client needed.
Why? Or, rather, why not use your own Vocational Expert? 6
Agree to an AVE and you will
(a) pay for the evaluation,
(b) pay for the reports,
(c) pay for the testimony, and
(d) pay for increased PD.
LC §5811(a) says that “…in all proceedings…before the appeals board, costs between the parties may be allowed by the appeals board.” Note: “may” is discretionary, not mandatory. Thus, when Applicant’s counsel retains his/her own expert, you do have arguments against paying the bill. But once you’ve agreed to Applicant’s expert by making him/her an AVE, your defenses to the resulting costs have largely been gutted.
C. Case Law
The defense in Baldrige attempted to cite Hertz v. Aguilar, and was—appropriately—chastised for their efforts.
California Supreme Court dismissed Applicant’s Petition for Review in Hertz Corporation v. W.C.A.B. (Aguilar) (2008) 73 Cal. Comp. Cases 1653, back in May, 2010. In that case, the Sixth District Court of Appeal—citing LC 4664(a) 8—had held that the employer was not liable for increased permanent disability benefits when Applicant’s inability to participate in vocational rehabilitation was due to non-industrial causes (such as his inability to read English, poor education, etc), and not due to his work-related injury. Interestingly, the Supreme Court had originally granted Applicant’s petition and, thereafter, ordered it dismissed. Thus, even though the original Court of Appeal decision had been certified for publication, the Supreme Court’s actions rendered it unpublished and not citeable. 9
What should the defense do in such a situation?
Cite Labor Code §4664(a)!
While Aguilar was a wonderful case that had interpreted Labor Code §4664(a) in a manner very beneficial to the defense, that case cannot now be cited as precedent. Labor Code §4664(a) nevertheless remains unchanged and a wholly viable argument in favor of apportionment…apportionment, if not via LC §4664, then apportionment through LC §4663!
Got a case reserved for 60, 70, or 80 percent, but certain it won’t hit 100% given the conservative nature of the AMA Guides and the 2005 PDRS?
Review those reserves and prepare to go to battle…without reliance on an AME and/or AVE!
Donald R. Barthel is a Founding Partner of Bradford & Barthel, LLP, as well as B&B’s Rating & File Consultation Services. Mr. Barthel is an acknowledged expert regarding the AMA Guides (5th) and the 2005 PDRS. Much of his time is dedicated to teaching these topics to adjusters, human resource directors, employer representatives, attorneys, and physicians throughout California and the United States. Have a PDRS or AMA Guides question? Call Don Barthel at (916) 996-1263 or email him at firstname.lastname@example.org.
1 Apologies to Bob Dylan
2 “4662. Any of the following permanent disabilities shall be conclusively presumed to be total in character: (a) Loss of both eyes or the sight thereof. (b) Loss of both hands or the use thereof. (c) An injury resulting in a practically total paralysis. (d) An injury to the brain resulting in incurable mental incapacity or insanity. In all other cases, permanent total disability shall be determined in accordance with the fact.”
3 LeBoeuf v. WCAB (1983) 34 Cal. 3d 234 [193 Cal.Rptr. 547; 666 P.2d 989] held that where an injured worker is found to be less than totally disabled and the Bureau of Rehabilitation (Bureau) subsequently finds the worker not qualified for rehabilitation benefits, this finding constitutes “good cause” to reopen the permanent disability proceeding.
4 Even though the California Legislature largely rewrote LC §4660 and changed the very language of that statute that LeBoeuf relied on, nothing has changed!?!?
5 For further details on why the defense should avoid AMEs, see “The AME Trap (aka Why Agreed Medical Examiners Make Me Disagreeable” at http://www.bradfordbarthel.com/blog/V5N4/One-1.htm.
6 I simply have no good answer for this rhetorical question!
7 Some of these arguments including challenging the so-called expert’s expertise (See Costa II) and citing LC 4621(a).
8 4664(a) provides: “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.”
9 See Cal. Rules of Ct., rule 8.528(b)(3) and 8.1115(a).
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