Constitutional Due Process Issues

Federal Insurance Company vs. Workers’ Compensation Appeals Board (Adrian Johnson), 221 Cal. App. 4th 1116; 78 Cal. Comp. Cases 1257 (2013, Court of Appeal of California, 2nd Appellate District, Division 5)

Applicant, a former professional basketball player, filed a cumulative trauma workers’ compensation claim in California.  The court held California did not have a significant or sufficient interest in the matter to apply its workers’ compensation law and to retain jurisdiction over the case.  The employment relationship is in Connecticut where the team the applicant played for was located.  She signed her contract in New Jersey.  The court found that the places of the applicant’s injuries, employment relationship, employment contract, and residence, all potential connections for the application of a state’s workers’ compensation law, did not have any relationship to California.  California did not have a significant enough relationship with applicant’s injuries for the application of California’s workers’ compensation laws to be reasonable.  California had no obligation to apply the workers’ compensation law of any other state.  As a matter of due process, California cannot have power to entertain the applicant’s claim.

The court began its analysis indicating that certain threshold issues are reviewable by way of a Writ of Review before there is a final order in the case.  Examples of such issues include whether the injuries arose out of and in the course of employment, the territorial jurisdiction of the board, the existence of an employment relationship, and the applicability of the statute of limitations.  The court noted these are threshold issues that are potentially dispositive of the case.  Review of such issues may resolve the case without the time, effort, and expense of fully litigating a case.  Where the employer or carrier asserts in good faith and with reasonable cause that it has no statutory liability at all, and the board has decided that issue on review after bifurcated hearing, prompt judicial review, may avoid the necessity of further litigation.

The court identified the issue as to which state’s workers’ compensation laws applied.  The court characterized the issue as a “conflicts issue,” which arises when there are contacts in multiple states.

Under general principles, the court stated if an employer or insurer are subject to workers’ compensation law of a state that does not have a sufficient connection to the matter they are deprived of due process.  The court noted that if the workers’ compensation law of another state exclusively should apply California does not have a sufficient contact with the matter, California must, under the full faith and credit clause, accede to the other state to provide a forum.

Regarding jurisdiction, the court stated that the test is not whether the interest of the forum state is relatively greater, but only whether it is legitimate and substantial in itself.  The court stated that the forum state can grant relief if it has some substantial interest in the matter.

The court then summarized when a state court may award relief to a person under its workers’ compensation laws.  The court stated that a state may do so if the injury occurred in the state; if the employment is principally located in the state; if the employer supervised the employee’s actions from a place of business in the state; if the state is that of the most significant relationship to the contract of employment with respect to the issue of the workers’ compensation rules; if the parties have agreed in the contract of employment or otherwise that the forum should be determined under the Workers’ Compensation Act of the state; or if the state has some other reasonable relationship to the occurrence, the parties, and the employment.  The court noted under the due process clause of the 14th amendment, a state of the United States may apply its local law to affect legal interest if its relationship to a person, thing or occurrence is sufficient to make such application reasonable.

The court then commented that if multiple states’ laws apply it is widely accepted that the “rights created by the compensation act of one state cannot ordinarily be enforced in another state or in a federal court.” 

The court went on to state the test of jurisdiction is whether the forum state has a legitimate interest.  If it does, that state will grant relief.  If it does not, it will deny relief.  Thus, if the forum state lacks a sufficient connection to the matter, it will, in effect, give full faith and credit to the workers’ compensation law of another state that has such sufficient connection to the matter.

Regarding the facts in the case, the court stated the effects of participating in one of 34 games do not amount to a cumulative injury warranting the implication of California law.  A state must have a legitimate interest in the injury.  A single basketball game played by a professional player does not create a legitimate interest in injuries that cannot be traced factually to one game.

The court summarized the facts and stated that the places of Johnson’s injuries, employment relationship, and employment contract, residence, all possible connections for the application of the state’s workers’ compensation laws, do not have any relationship to California.  The court therefore found that as a matter of due process, California does not have the power to entertain Johnson’s claim.