by David Grant –
On December 10, 2010, the Court of Appeal for the Third District reversed the WCAB holding that a cost of living adjustment (COLA) applies commencing January 1 of the year after the injury. See Allied Waste Industries, Inc. v. SCAB (Rojas).
While this decision is unpublished, it should provide ammunition for the employers as the California Supreme Court prepares to finalize its review of the Duncan case, a Sixth District case in which that DCA held that January 1, 2004, is the effective date for COLA in all cases involving injuries occurring on or after January 1, 2003. The California Supreme Court granted review of the Duncan case on March 24, 2010. (See Duncan v. WCAB (2009) 179 Cal. App. 4th 1009.)
Labor Code §4659, subdivision (c) provides: “For injuries occurring on or after January 1, 2003, an employee who becomes entitled to receive a life pension or total disability indemnity… shall have that payment increased annually commencing on January 1, 2004, and each January 1 thereafter, by an amount equal to the percentage increase in the state average weekly wage (SAWW) as compared to the prior year…”
According to Allied Waste, the definition of the “state average weekly wage” is determinative: the increase applies “for the 12 months ending March 31 of the calendar year preceding the year in which the injury occurred.”
The Third District went as far as to say that the Duncan application of Labor Code §4659(c) was “nonsensical.” It further stated that: “COLA cannot be calculated by looking at one year and then suddenly jumping back several other years.”
The date of injury in Allied Waste was February 18, 2005. The Applicant was, therefore, entitled to a cost of living adjustment (COLA) effective January 1, 2006.
This opinion makes far more sense than the Duncan decision and is certainly less confusing to calculate. (How would you calculate the increase in the cost of living for an injury occurring in 2024 by beginning your COLA adjustment with an effective date of January 1, 2004?)
Hopefully the Supreme Court will follow the Third District’s analysis. We predict that is exactly what will happen and strongly recommend that no one consider a settlement based on the “nonsensical” analysis of the 6th DCA.
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