Almost immediately after the passage of SB 899 (4/19/04), the “TD cap” language found in Labor Code §4656(c) became the subject of vigorous dispute and rancor. Labor Code §4656(c), provides:
- Aggregate disability payments for a single injury occurring on or after the effective date of this subdivision, causing temporary disability shall not extend for more than 104 compensable weeks within a period of two years from the date of commencement of temporary disability payment.
- Notwithstanding paragraph (1), for an employee who suffers from the following injuries or conditions, aggregate disability payments for a single injury occurring on or after the effective date of this subdivision, causing temporary disability shall not extend for more than 240 compensable weeks within a period of five years from the date of the injury:
- Acute and chronic hepatitis B
- Acute and chronic hepatitis C
- Amputations
- Severe burns
- Human immunodeficiency virus (HIV)
- High-velocity eye injuries
- Chemical burns to the eyes
- Pulmonary fibrosis
- Chronic lung disease
What is the “Date of Commencement”
As noted above, the 104-week TD cap begins from the date of commencement of temporary disability payment (italics added). Thus, if an employee is injured on 1/1/05 and begins receiving TD that same day, the date of commencement is 1/1/05. Regardless of whether the employee remains TD for only one day, for the next 104 weeks, or for some period of time within that range, TD may be discontinued 104 weeks later (1/1/07).
What happens, however, if there is a delay in the payment of TD? Imagine, for example, that the same employee, injured and TD effective 1/1/05, has his TD benefits delayed? What if the claim is timely delayed and denied? The matter goes to trial on the issue of AOE/COE and temporary disability. An F&A issues on 1/1/07 (104 weeks after the injury) finding that the applicant was injured AOE/COE and that he has been TD from 1/1/05 and continuing. Can the defense simply issue a check retroactively for the last 104 weeks and discontinue temporary disability by citing Labor Code §4656(c)(1)’s prohibition from extending TD “for more than 104 compensable weeks”?
The “Hawkins” Effect
The answer to our hypothetical is an emphatic “No,” per the recent WCAB en banc decision, ` (72 CCC 805) (6/13/07). Writing for the majority, Chairman Miller agreed with the WCJ in the matter, who wrote:
The plain language [of §4656(c)(1)] requires that the 2 year limitation starts when defendant commences payment. That must mean the date on which defendant made its first payment. That is the date on which payment commences. The Legislature could have said that the 2 years started ‘On the date eligibility for benefits commences’ or other language that would cause the result that defendant seeks. They could have left out the word ‘payment’ leaving the date as ‘commencement of Temporary Disability.’ They did not do so…in this case defendant did not make any payment of temporary disability until 5/3/05. That is the date that they have commenced payment. They must pay up to 2 years from that date.
Cut it Out Versus Cut it Off
Labor Code §4656(c)(2) extends the 104-week TD cap to 240 weeks where the applicant “suffers” from certain specified “injuries or conditions,” namely:
- Acute and chronic hepatitis B
- Acute and chronic hepatitis C
- Amputations
- Severe burns
- Human immunodeficiency virus (HIV)
- High-velocity eye injuries
- Chemical burns to the eyes
- Pulmonary fibrosis
- Chronic lung disease
Exception (c), amputations, has received much judicial attention. In what can only be described as judicial activism, judges throughout California have awarded TD beyond the 104-week cap in cases where, they argued, that the applicant had undergone an “amputation” when, in fact, the injured worker had merely undergone a:
- Lumbar fusion, laminotomy, decompression, and bone graft [see Cruz v. Mercedes-Benz, SFO 501425 (4/7/07)]
- Partial cervical disc removal and ilium graft
- Removal of a distal clavicle
- Removal of a spleen
Interestingly, a recent review of all available judge-level decisions defining “amputation” for purposes of Labor Code §4656(c)(2) revealed that all but one judge used a non-traditional, overly-expansive definition of “amputation” to justify expanding the TD cap to 240 weeks. 1
Thankfully, the WCAB has stepped in and put an end to the judicial activism by way of the recent en banc decision, Cruz v. Mercedes-Benz (SFO 0501425) (9/5/07). 2
Reversing San Francisco Judge Jacqueline Duncan’s Decision in Cruz, the WCAB relied upon a long-standing statutory interpretation dictate (“In reading statutes, we are mindful that words must be given their plain and commonsense meaning.”) Given this requirement; the WCAB rejected the WCJ’s definition of amputation (that is, “removal by surgery of a part of body”). Stated the WCAB, defining “amputations” as “the severance or removal of a limb, part of a limb, or other body appendage” represents the “ordinary usage” of the term. “To the extent that some definitions refer to organs, appear to encompass all body parts, or include an equivocal ‘etc,’ we reject them…”
While joining the majority’s opinion in Cruz, Commissioner Caplane added a concurring opinion, arguing that Labor Code §4656’s 2-year/104-week cap on TD is “unreasonable and unjust.” Noting that the “Legislature has carved out exceptions for specified injuries or conditions, while leaving other equally devastating conditions, such as traumatic brain injuries or failed back syndrome, subject to the cap,” the Commissioner opined that the “anticipated savings in establishing this limit will result from the termination of payments to those injured workers who are most in need of it because of extended periods of temporary disability.” Commissioner Caplane’s concerns have echoed throughout California.
Arnold to the Rescue
Sacramento has heard Commissioner Caplane’s concerns. In October, Governor Schwarzenegger signed into law AB 338. This bill, which will impact only dates of injury on or after 1/1/08, provides that TD “shall not extend for more than 104 compensable weeks within a period of five years from the date of injury.” This effectively keeps the 104-week TD cap, but allows an injured employee to collect those benefits over a 5-year period. This, therefore, would avoid the problem where an applicant receives TD for a short period of time, goes back to work, and later is determined to again be TD. It also protects the employer who, in good faith, disputes TD and eventually is required to pay TD retroactively. This retroactive payment, it appears, will not fall outside of the 104 week cap.
How to Defend Yourself
- Remember: AB 338 only impacts DOI’s on or after 1/1/08. Thus, the potential problem of retroactive TD “outside of the cap” remains a problem for all injuries occurring between 4/19/04 and 12/31/07. This risk must be considered when deciding whether to litigate AOE/COE and TD issues.
- Never accede to applicants’ non-traditional definition of the 104 week exceptions listed at Labor Code §4656 (c)(2)(A)-(I). While the WCJ may be impressed, the WCAB and Courts of Appeal have demonstrated their collective ability to see through this nonsense.
- Carefully draft your stipulations! If required to enter into an agreement stipulating to continuing TD, be certain to include language to the effect that the agreement “does not extend defendant’s obligations beyond those mandated by Labor Code §4656.”
We will, undoubtedly, continue to see new TD “wrinkles”3 in the near future. Expect CAAA and company to look for creative and imaginative ways to “side-step” the TD cap.
Are you facing such a challenge presently? Call Don Barthel to assist you in developing your “plan of attack.”
Don Barthel is a founding partner of Bradford & Barthel, LLP, and the founder of B&B Rating Services.
1 See Maria Murillo v. High Point/Norco Ranch, Republic Insurance, by Crawford & Company (LAO 848876) (1/31/07). The judge, Jeffrey R. Ward, ruled that “disc removal is not an amputation for purposes of Labor Code §4656(c).” In his Opinion on Decision, Judge Ward wrote that “applicant had surgery, and sections of various disc material were removed, but [this does not qualify as] an amputation…amputation is a word that describes the cutting off or removal of a limb or other appendage of the body. An appendage is part of the body that sticks out.”
2 En banc decisions of the WCAB are binding precedent on all Appeals Board Panels and Workers’ Compensation Judges.
3 As of recently as 11/07, the Court of Appeals (5th Dist.) announced it would decide whether industrial disability leave benefits provided to state employees by Government Code 19870 are to be counted as part of the 104-week cap.
Viewing this website does not form an attorney/client relationship between you and Bradford & Barthel, LLP or any of its attorneys. This website is for informational purposes only and does not contain legal advice. Please do not act or refrain from acting based on anything you read on this site. This document is not a substitute for legal advice and may not address every factual scenario. If you have a legal question, we encourage you to contact your favorite Bradford & Barthel, LLP attorney to discuss the legal issues applicable to your unique case. No website is entirely secure, so please be cautious with information provided through the contact form or email. Do not assume confidentiality exists in anything you send through this website or email, until an attorney/client relationship is formed.