Workers' Compensation
3rd DCA Rejects PTD “in accordance with the fact”
By Jake Jacobsmeyer
The 3rd District Court of Appeal has issued a stunning decision rejecting the W.C.A.B.’s reliance on an award by a WCJ of Permanent Total Disability based on Labor Code 4662(b)’s language of disability “…in accordance with the fact”. In doing so, the Court specifically found, in the absence of PTD under Labor Code 4662(a), the only way to make a finding of PTD is under Labor Code 4660[1].
In California Department of Corrections and Rehabilitation (CDCR) v W.C.A.B. (Fitzpatrick) the Court framed the question as follows:
“Must a finding of permanent total disability be made in accordance with Labor Code section 4660, or does section 4662, subdivision (b), provide a separate path to such a finding?”
The question of whether Labor Code 4662(b) provides a separate path to PTD has been the source of intense discussion by applicant attorneys and WCJ’s for the past several years, especially after the Dahl case appeared to severely limit the use of VR testimony to increase PD. The argument has been made even if an Applicant did not qualify under Labor Code 4662(a), PD could be bootstrapped to 100% by arguing the WCJ could find PD “in accordance with the fact” and avoid Labor Code 4660 altogether. Multiple decisions by WCJ’s and W.C.A.B. panels had lent credence to the concept a WCJ could effectively sidestep Labor Code 4660 (and presumably 4660.1, effective for injuries after 1/1/13) and jump PD from a high level of impairment that did not get to 100% to PTD by invoking Labor Code 4662(b).
In the Fitzpatrick case, the Applicant was described as having permanent disability of 97% for his cardiac injury and 71% for his psyche, which combined under the Combined Values Chart (CVC) to 99%. The WCJ quoted extensively from the report of Dr. Lieberman who concluded the injured worker was “…on strict psychiatric grounds totally and permanently disabled”. Relying on that, and other language in the medical record, the WCJ concluded:
“Based upon [Fitzpatrick’s] credible testimony, the medical reports of Dr. Chang-Sing and Dr. Lieberman, and in accordance with the facts (see Labor Code §4662(b)), it is found that applicant is permanently totally disabled.”
As noted by the Court of Appeal, the WCJ did not comment on the PD rating using the CVC.
Defendant, CDRC, appealed the award of PTD, arguing Dr. Lieberman’s report alone did not support PTD where it rated only 71% and Dr. Lieberman did not discuss the Applicant’s amenability to vocational rehabilitation[2]. The W.C.A.B. rejected defendant’s appeal, adopting and incorporating the WCJ’s opinion. The WCJ in his opinion specifically opined:
“With regard to the argument that [Fitzpatrick] didn’t rebut the rating schedule, total permanent disability may be shown by presenting evidence showing total permanent disability ‘in accordance with the fact’ as provided in Labor Code section 4662, subdivision (b), or by rebutting a Labor Code section 4660 scheduled rating [citations]. The Appeals Board specifically discussed the different paths provided by these two Labor Code sections in [Coca-Cola Enterprises, Inc. v. Workers’ Comp. Appeals Bd. (Jaramillo) (2012) 77 Cal.Comp.Cases 445 [writ. den.] (Jaramillo)]. In the present case, the undersigned relied upon Labor Code section 4662, subdivision (b), [Fitzpatrick’s] credible testimony, and the opinions of [Lieberman and Chang-Sing]. Specifically, the undersigned relied upon Dr. Lieberman’s opinion that applicant was permanently and totally disabled psychiatrically.
. . . [The Department] has not presented evidence that would compromise Dr. Lieberman’s opinion that [Fitzpatrick] was permanently and totally disabled. Dr. Lieberman clearly felt that [Fitzpatrick] was 100% disabled psychiatrically and was dubious that applicant could return to work in any capacity . . .”
Applicant and the W.C.A.B. attempted to limit the scope of appellate review arguing the decision was strictly a factual determination, and only subject to limited review. However, the 3rd District determined the issue was whether the W.C.A.B. properly interpreted and applied the law in its interpretation of Labor Code 4660 and 4662 which allowed the Court to exercise its independent judgment.
The 3rd District viewed the relationship of these two sections very differently than did the W.C.A.B:
“We easily harmonize sections 4660 and 4662, subdivision (b). Section 4662, subdivision (b), provides that, in nonconclusively presumed permanent total disability cases (i.e., those cases not enumerated in section 4662, subdivision (a)), permanent total disability may be found “in accordance with the fact.” This section does not, however, address how such a determination shall be made; read plainly, it merely provides that a determination of permanent total disability shall be made on the facts of the case. Section 4660 addresses how the determination on the facts shall be made in each case for injuries occurring before January 1, 2013. Indeed, section 4660 expressly applies to the determination of “the percentages of permanent disability” and permanent total disability is defined by statute as a percentage of permanent disability, i.e., 100 percent.”
The Court noted achieving a PTD award was difficult, but not impossible; citing multiple examples under Labor Code 4660. However, the Court also noted that was an issue for the Legislature, not the courts. The Court further opined application of Labor Code 4660 to identify disability (independent of any application of Labor Code 4662(a)) was mandatory. The Court observed the Board’s interpretation of 4662(b) would
“…return us to the ad hoc decision making that prevailed prior to 2004” with regard to permanent disability findings, which is exactly what the Legislature sought to avoid in enacting the amendments. (Contra Costa County v. Workers’ Comp. Appeals Bd., supra, 240 Cal.App.4th at p. 761.) It would allow an administrative law judge to make a subjective determination that may lead to inconsistent and nonuniform permanent disability ratings with respect to the most expensive claims under our workers’ compensation framework.
Such a result cannot be squared with the Legislature’s intent.”
The W.C.A.B. participated in this proceeding, a relatively unusual step as it usually allows the parties to carry the burden of arguing the legal issues before an Appellate Court. In its brief, the W.C.A.B. argued the 100% award could be alternatively supported by arguing the ratings could have been added rather than combined. The Court rejected this assertion as it raised a new theory. The Appellate court also observed there was no evidence that adding impairments vs combining would result in a “more accurate rating” and therefore, even if the argument was accepted, there was no evidence to support it in the instant case.
The Court ordered the W.C.A.B. decision annulled and remanded the case for proceedings consistent with its decision.
Comments and Conclusions:
As noted above, Applicant attorneys have been arguing Labor Code 4662(b) as a separate path to PTD that required a lower level of proof than full scale Ogilvie/Dahl analysis or a showing under Labor Code 4662(a). The Court’s decision completely blocks this argument and limits applicant attorney (and WCJ/WCAB finders of fact) to rating under Labor Code 4660, legally permissible rebuttal under Ogilvie/Dahl, Almaraz/Guzman or Labor Code 4662(a).
This case involves a pre-1/1/13 injury and therefore does not directly address Labor Code 4660.1, however the rationale certainly applies and may even make the arguments for rebuttal more restrictive. The Court noted the language in 4660 identified either “ability to compete in the open labor market” (pre-2005) or “diminished earning capacity” (2005 – 1/1/13) and the ability to rebut with a showing the PD rating did not accurately reflect those considerations.
Labor Code 4660.1 has no such “measuring stick” to consider for rebuttal. While the language in Dahl regarding inability to be rehabilitated may still be considered under that section, there are certainly arguments such rebuttal no longer applies absent a measuring standard for comparison purposes. This case seems to be leaning in that direction.
It would also have been helpful if the Court had addressed the W.C.A.B.’s arguments for adding vs combining impairments. While the Court did not specifically address that issue, it does appear to have been somewhat skeptical. The Appellate Court cited prior appellate language arguing PD ratings be objective and uniform. The Court made the point several times in its decision a statute should be interpreted with the aim of “…promoting rather than defeating” its purpose. The W.C.A.B.’s interpretation of Labor Code 4662(b) along with its interpretations to avoid application of the CVC are arguably efforts to get around the Legislature’s dictates to create a more objective and factually based disability system. This Court seems to be suggesting stricter interpretation of the AMA Guides is needed to avoid the rampant subjectivity that existed prior to 2005 in PD rating.
While this case is clearly a very significant decision, it should not be interpreted to preclude WCJs from framing a record under Labor Code 4660/4660.1 to result in PTD. This case precludes simply making a finding of PTD based on Labor Code 4662(b) but other avenues under Labor Code 4660/4660.1 still exist. However, this decision may dampen the fervor to avoid application of the AMA Guides to describe PD.
A copy of the decision is attached here.
1. While a VR expert was utilized by applicant attorney, the WCJ did not rely on that opinion to arrive at a PD finding. ↩
2. The date of injury in this matter is pre 1/1/13 and Labor Code 4660 applies to injuries prior to that date. However much of the rational of this case applies even more strongly to post 1/1/13 cases where Labor Code 4660.1 applies. See Comments and Conclusions below. ↩
Jake Jacobsmeyer is a name partner in the Oakland firm of Shaw, Jacobsmeyer, Crain & Claffey. He can be reached at jakejacobsmeyer@shawlaw.org.
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