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Geaney: High Court Settles Jurisdiction, Medical Marijuana Cases

By John H. Geaney

Wednesday, April 21, 2021 | 0

We are a few weeks into April, and already the New Jersey Supreme Court has considered two extremely significant issues for workers’ compensation practitioners, employers and carriers.

John H. Geaney

John H. Geaney

The first decision was announced on April 1 when the Supreme Court decided not to take certification in the matter of Anesthesia Assocs. of Morristown, PA v. Weinstein Supply Corp. This means that the unreported Appellate Division decision stands dealing with jurisdictional issues in medical claim petitions.

There are many hundreds of medical claim petitions in New Jersey where the only contact with the state of New Jersey is the location of the medical procedure. Anesthesia Associates of Morristown involved two consolidated cases. In the first case, the petitioner lived in, worked in and was injured in Pennsylvania and even filed a claim petition in Pennsylvania. 

The medical procedure took place in New Jersey, and the medical provider filed a medical claim petition in the New Jersey Division of Workers’ Compensation seeking additional charges.

In the other case, Surgicare of Jersey City v. Waldbaum’s, all contacts were in New York state, but the medical procedure again occurred in New Jersey. The medical claim petition was thereafter filed by the provider in the New Jersey Division of Workers’ Compensation seeking the balance of its original charges of $252,000.

In both cases, the respective judges of compensation found that there was no jurisdiction in New Jersey because the state had no jurisdiction over the worker’s underlying workers’ compensation claim. 

The judges dismissed the medical claim petitions. The Appellate Division affirmed:  “Applying these considerations to the two cases before us, we agree with the two judges of compensation that there was no cognizable claim for a work-related injury in either case."

Therefore, the division did not have jurisdiction over AAM’s or SJC’s claims and they were appropriately dismissed, substantially for the reasons expressed by the two judges of compensation.

The medical providers next sought certification from the New Jersey Supreme Court.  The action of the Supreme Court in denying certification in effect is an affirmance of the unreported Appellate Division decision. The problem is that unreported decisions are not technically precedential. They do not have to be followed by other judges. 

It seems clear that the New Jersey Supreme Court agrees with the reasoning of the judges of compensation and the Appellate Division. Frankly, the Appellate Division decision needs to be reported by the Committee on Publications because it resolves a hotly contested issue within the division and will avoid further appeals.

On April 13, the New Jersey Supreme Court released its decision in Vincent Hager v. M&K Construction. The facts of this case will be dealt with only briefly. The issue concerned whether an employer can be ordered to reimburse the petitioner for the ongoing costs of medical marijuana under the New Jersey Compassionate Use Act.  The judge found in favor of the petitioner and ordered the employer to make reimbursement.

The Appellate Division affirmed in 2020. The Supreme Court has now affirmed the Appellate Division decision in a very lengthy opinion.

The Supreme Court found as follows:

  • The Compassionate Use Act cannot require a private health insurer to reimburse a person for costs associated with the medical use of cannabis, but the term “private health insurer” does not include workers’ compensation coverage. Therefore, employers and carriers in workers’ compensation are not exempt from the reimbursement requirement by statute.  
  • The court found that there is competent medical evidence to support the argument that medical marijuana can restore some of a worker’s function or, as in Mr. Hager’s case, relieve symptoms such as chronic pain and discomfort. For this reason, the court said medical marijuana may be found to constitute reasonable and necessary care under the New Jersey Workers’ Compensation Act.
  • The court devoted most of its decision to the conflict between the federal Controlled Substances Act, which lists marijuana as a Schedule I drug, and the state Compassionate Use Act. The issue more precisely was whether the federal law preempts state law in respect to requiring reimbursement for costs of medical marijuana. The court focused heavily on recent congressional appropriations riders: “Congress has, for seven consecutive fiscal years, prohibited the DOJ from using funds to interfere with state medical marijuana laws through appropriations riders.” The court continued, “We conclude that the CSA, as applied to the Compassionate Use Act and the order at issue, is effectively suspended by the most recent appropriations rider for at least the duration of the federal fiscal year.” The Court added, “Qualified patients may continue to possess and use medical marijuana, and related compensation orders may be entered while federal authorities continue to enforce the CSA to the extent Congress permits.”
  • The court rejected the argument that employers that are ordered to reimburse employees for costs of medical marijuana are violating federal law by aiding and abetting under 18 U.S.C. Section 20. To be more precise, M&K contended that the company was being forced to break federal law. The court concluded that there can never be aiding and abetting when actions are taken pursuant to a court order, including an order in the Division of Workers’ Compensation.

Some other state courts, such as in Maine and Massachusetts, have gone in a different direction from the New Jersey Supreme Court on preemption. The New Jersey court acknowledged that there is no consensus on this issue among all the states that have addressed it. Eventually, this issue may find itself before the United States Supreme Court.   

John H. Geaney is an attorney, executive committee member and shareholder with Capehart Scatchard, a defense law firm in New Jersey. This post appears with permission from Geaney's New Jersey Workers' Comp Blog.


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