On 9/3/09, the WCAB revisited its earlier DFEC discussions with Ogilvie with yet another en banc decision: Ogilvie II.
Largely reiterating its earlier standard for rebutting the diminished future earnings capacity modified (DFEC) found in the 2005 Permanent Disability Rating Schedule, the majority gave employers much to cheer about. Indeed, given the language found on pages 30-32 of Ogilvie II, there is good reason to believe we will rarely see any serious attempt by an applicant’s attorney to fight the DFEC front.
It will take far too long!
How Long Can You Hold Your Breath, CAAA?
Responding to applicant attorney’s complaint that the Ogilvie I formula for rebutting the DFEC is so time-consuming as to violate the state constitution’s requirement that workers’ compensation “accomplish substantial justice…expeditiously,” the WCAB disagreed: “…nothing in [Ogilvie I] mandates that a party must challenge the DFEC…” In short, an applicant isn’t forced to fight the DFEC fight. If the Ogilvie formula represents too long a wait, tough luck…just don’t go there!
Although the majority tries to be a little wishy-washy (technical legal term!) on the issue, it is clear that the rebuttal formula requires three years of post-injury earning be used “…at least ‘ordinarily.'” (Nope… the WCAB makes no attempt to identify any “extraordinary” circumstances.) While stating “there is nothing magical about a three-year period,” three years is the period of time used in the 2003 and 2004 RAND studies “because these data provide the best balance.” If the RAND Corporation thinks three years is the “best balance,” good luck to any former VR counselor turned “DFEC expert” who tries to prove three years’ worth of economic data isn’t needed!
But wait! It gets worse from CAAA’s perspective…
Three years can easily stretch to over 5 years!
“[W]hen an employee is receiving [TD] he or she is unable to work or is unable to work for full wages… Accordingly, where an injured employee has been off work (or partially off work) and receiving [TD],” the three years during which to calculate the employee’s “actual earning capacity” gets pushed back to when TD discontinues… likely the P&S/MMI date. “Then, if within five years of the date of injury it later becomes clear that the employee’s individualized proportional earnings loss is significantly higher or lower than anticipated, a party may seek to reopen the issue of [PD] by challenging the originally used DFEC adjustment factor.” (p. 32, Ogilvie II)
Hmm… Let’s review that math…
Even assuming the two years of TD begins on the date of injury (and that there are no broken periods), two years of TD plus three years to measure the “employee’s actual earning capacity” equals five years. Assuming it takes at least a few months to collect the three years of data once that data is available, we’re quickly more than 5 years post-injury… and, more to the point, well past the statute of limitations for filing a Petition to Reopen. Of course, this is all rendered moot if applicant agrees to a Compromise & Release somewhere along the way!
Even if a 3- to 5-year wait isn’t sufficient to dissuade AA from fighting the DFEC issue, keep in mind:
- The DFEC adjustment factors found in the 2005 Permanent Disability Rating Schedule (PDRS) are presumptively correct.
- If applicant’s attorney wants to challenge the DFEC in the PDRS, he/she has the burden of proof. [See Labor Code 4660(c), Evidence Code 601 & 603]
- “[T]he rebuttal evidence must be legally substantial” [See, generally, Labor Code 5952(d)]
- “[E]ven if the rebuttal evidence is legally substantial, the WCAB as the trier-of-fact may still determine that the evidence does not ‘overcome’ the DFEC adjustment factor component of the scheduled [PD] rating.”
- A successful “individualized DFEC adjustment factor” requires: “(1) obtaining two sets of wage data (one for the injured employee and one for similarly situated employees),…; (2) doing some simple mathematical calculations with that wage data…(3) dividing the employee’s [wpi] by the proportional earning loss to obtain a ratio; and (4) seeing if the ratio falls within certain ranges of ratios in Table A of the 2005 Schedule… If it does not, then a non-complex formula is used to perform a few additional calculations to determine an individualized DFEC adjustment factor,” (Ogilvie II, p. 2, italics added) I’ve met no one who, after examining the so-called “simple mathematical calculations” and “non-complex formula,” agreed that these were child’s play. (In fact, many were either falling asleep or considering “hitting the bottle”!) I believe very few of our friends at CAAA are capable of collecting and calculating the requisite data on their own…and even far fewer have the time and/or inclination to do so.
- CAAA members do have the option of hiring a “DFEC expert,” but the question then becomes: Who is going to pay for this expert? Answer: Good question!
We Ain’t Paying for Applicant’s “Expert”!
What does the law say? Despite CAAA’s insistence that the “defense pays,” that ain’t what the labor code states. Labor Code 5811 provides: “…In all proceedings… before the appeals board, costs as between the parties may be allowed,” (italics and underline added).
If properly and aggressively defended, the defense should rarely be saddled with AA’s expert’s costs! Why?
Is the expert really an “expert”? (“[T]he qualifications of each… expert must… be determined on a case by case basis.” Costa II)
Is the testimony really “expert testimony”? (see Evidence Code 720)
Were the costs “reasonably, actually, and necessarily incurred”? [See Labor Code 4621(a) “… the employee… shall be reimbursed for… medical-legal expenses… reasonably, actually, and necessarily incurred… The reasonableness of, and necessity for, incurring these expenses shall be determined with respect to the time when… actually incurred.”]
If I were a CAAA member, I can think of many more entertaining (and financially rewarding) ways to spend my time than attempting to attack the DFEC (such as re-writing the AMA Guides… see B&B Scores a “Split Decision” in Almaraz/Guzman).
Good luck! And keep up the good fight!
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 to the Evaluation of Permanent Impairment 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 email@example.com.
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