Aldi Reversed; Issues Remain

Saturday, July 1, 2006 | 1

The Workers' Compensation Appeals Board has issued its long await decision in the Aldi case holding in a unanimous En banc decision that the trial judge's ruling was an incorrect interpretation of Labor Code Section 4660(d). In the original trial decision the WCJ ruled that the new permanent disability rating schedule applies to all injuries on or after 1/1/05 and the old schedule would apply to all injuries before that date.

The Board specifically noted that in interpreting legislation it was necessary that they attempt to "determine and effectuate the legislature's intent." In doing so it was necessary that "meaning must be given to every word or phrase, if possible, so as not to render any portion of the statutory language near surpluses." (Page 7).

As noted by the Board in their decision the language in Labor Code Section 4660(d) requiring that the new permanent disability rating schedule apply to injuries occurring on or after the effective date of the schedule is a hold over from prior statutory language and has been in Labor Code Section 4660 in one form or another since at least 1951. It is the language identifying the exceptions which has been added to the legislation. By not giving any affect to the revised portion of the section the trial judge's decision in Aldi affectively negated the legislature's clear and unequivocal intent to apply the old rating schedule to some injuries which occurred prior to 1/1/05.

"... nevertheless, the addition of the third sentence of Section 4660(d) provides a clear and specific exception to the general rule of perspective application as stated in the second sentence, and mandates the application of the revised schedule to injuries occurring before January 1, 2005 in specified instances. That is, the third sentence that unambiguously states "for compensable claims arising before January 1, 2005 the schedule as revised... shall apply to the determination of permanent disabilities" if none of the specific exceptions have been met." emphasis added by WCAB.

The court further noted that the WCJ's conclusion the legislature intended the newly adopted schedule not to apply retroactively as prescribed in the section does not follow the requirements for statutory interpretation to give meaning to every word, phrase and not render any portion of the statutory language mere surplusage. The Board appeared to as puzzled as many practitioners were by the WCJ's analysis that the presence of Labor Code Section 4660(e) somehow nullified the statutory language to apply the revised schedule retroactively. Using an section that makes no direct reference to 4660(d) and does not appear to impact the timing of the application of the schedule, did not impress the WCAB as perhaps most importantly the WCAB held their "... interpretation of the application of the revised permanent disability rating schedule is most consistent with the urgency clause in Section 49 of SB-899 which provides that reform act shall go into effect immediately.

The WCAB remanded the case to the WCJ for further determination of whether any of the three exceptions under Labor Code Section 4660(d) existed in this particular case. In doing so the WCAB missed an opportunity to provide some additional clarification of how to apply the section to other current disputes. As an example, the applicant in Aldi has argued that because temporary disability benefits commenced prior to 1/1/05, the defendant had an existing obligation to serve the notice pursuant to Labor Code Section 4061 (which is the third of the different exceptions) even though temporary disability itself did not stop until after 1/1/05. The argument relied upon by applicant is that it is the payment of temporary disability prior to 1/1/05 in affect creates the obligation to send notice at some point under 4061 and therefore any time temporary disability is paid prior to 1/1/05; even if it terminates after that date; the obligation to send notice exists. It seems unlikely that this interpretation is one which will prevail however there is clearly an effort at the trial level to avoid application of the new PDRS and WCJ's are looking for virtually any excuse, regardless of how thin, to avoid the legislative mandate to use the new schedule is the specified circumstances.

There are a host of additional issues regarding use of the old vs new PDRS that are currently making the rounds and will ultimately require WCAB action. Given the limited issue and facts presented to the WCAB in the case it probably was not possible to provide a broader discussion on some of the additional controversies. One of the current pending issues is whether the use of form checkbox reports indicating the existence of permanent disability is adequate to trigger the use of the old permanent disability rating schedule. In the case of Vera v. Sapper Const Co. a Panel of the WCAB held in a two to one decision that it did not and that a report which describes the existence of permanent disability must be substantial evidence. It is unclear whether the remaining commissioners are in concurrence with the majority in that case were with the minority decision of Commissioner Rabine that any report which comments on the existence of permanent disability is sufficient to utilize the old schedule.

Similarly there is also a controversy over whether a comprehensive medical-legal report which does not comment on the existence of permanent disability is going to trigger the use of the old schedule. This would apply, for instance, to Labor Code Section 4060 evaluations obtained on injuries prior to 1/1/05 which have commented on only the issue of injury AOE/COE. It is the this authors belief that there are at least four votes at the commission level for such reports to be sufficient to trigger the use of the old schedule which is sufficient to obtain a majority decision at the WCAB should the board address this issue En banc.

The decision in Aldi was not particularly difficult one for the Board to attack (as evidenced by the unanimous decision in this regard) as the Appeals Board had in its other multiple decisions on application of the old versus new rating schedule never once even seriously considered this particular rationale. The original trial decision was clearly an effort to shoehorn a result into the statute rather than draw the result from it. It would have been of great assistance to the medical-legal community if the Board had expanded the scope of their discussion and given further guidance but judicial restraint suggests that the WCAB should let the further issues come to it rather than try and handle all of the controversies in one fell swoop.

The Aldi's decision can be read by clicking on the case title at right (must be logged in, and a WorkCompCentral subscriber).

By attorney Richard "Jake" Jacobsmeyer, managing partner of the Concorde office of Adelson, Testan, Brundo & Popolardo. Jake can be reached at richardjacobsmeyer@atblaw.net.

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