What Is Disability? An Apportionment Complication

Saturday, July 1, 2006 | 0

by David J. DePaolo, Esq.

Before SB 899, apportionment was a complex legal concept. After SB 899, the complexity increased ten-fold, and recent case law has created more issues, and raised more questions, than it has answered. The apportionment legal wars since the passage of SB 899 have examined complex issues such as when does SB 899 apportionment apply, what is the correct formula for determining the ultimate indemnity value, and evidence of causation. But the most important legal issue yet to be raised on appeal, or even litigated so far as we know, is the legal definition of "disability" for purposes of apportionment under Labor Code section 4663.

SB 899 reduced apportionment to two types: medical apportionment (LC 4663) and judicial apportionment (LC 4664). While both are based on causation (4663: "Apportionment of permanent disability shall be based on causation"; 4664: "The employer shall only be liable for the percentage of permanent disability directly caused by the injury"), Pasquotto vs. Hayward Lumber GRO 0028123 (WCAB En Banc, 02/27/2006) provides that if apportionment can not be based on a prior Award under 4664, then it is appropriate to examine the evidence for medical apportionment under 4663, and that the concept of medical rehabilitation from a prior industrial disability remains viable.

Recent cases have made it clear that the determinative factor is disability. Escobedo vs. Marshalls; CNA Ins. Co., 70 CCC 064 (WCAB En Banc - 2005) ruled that while apportionment "may include not only disability that could have been apportioned prior to SB 899, but it also may include disability that formerly could not have been apportioned (e.g., pathology, asymptomatic prior conditions, and retroactive prophylactic work preclusions), provided there is substantial medical evidence establishing that these other factors have caused permanent disability." Consequently, opinions on medical apportionment are paramount in all cases where apportionment is an issue.

But Pasquotto and Escobedo beg the question, just whose definition of "disability" do we use? Perhaps even more basic - what is disability?

This is more troubling than a simple definition can resolve, because if the physician commenting on apportionment does not provide medical evidence of the legally correct concept of disability ultimately established by the courts, then the medical opinion can not be substantial evidence on which to base an award (see the volume of reconsideration opinions that have issued on substantial evidence and apportionment referenced in the related presentation outline linked in the side bar at right, "The Continuing Saga of Apportionment").

There are numerous, competing, definitions of "disability". According to Merriam-Webster's Dictionary of Law (c) 1996, one definition is "inability to engage in any substantial gainful activity because of a medically determinable physical or mental impairment that can be expected to result in death or to be of long continued or indefinite duration in accordance with the Social Security Act." If this definition were to be employed, then there must be an impairment (are we to assume that this is an AMA Guide 5th definition of impairment?) that can be expected to result in death or of a duration that falls within Social Security guidelines. The parties would need to know and understand Social Security guidelines (more law, more medicine) not to mention that the standard, "can be expected" may not be legally sufficient if there is insufficient medical literature to eliminate speculation, surmise or conjecture (see Gay vs. WCAB, Guarantee Collection Service, (1979) 96 CA 3d 555, 44 CCC 817).

The Americans with Disabilities Act (ADA) might be looked at for a definition of "disability" - that law has the luxury of the United States Supreme Court interpreting it: ""A 'disability' exists only where an impairment 'substantially limits' a major life activity, not where it 'might,' 'could,' or 'would' be substantially limiting if mitigating measures were not taken." (Sutton v United Air Lines, Inc., 1999 WL 407488 (U.S.)).

The problem with the ADA as a model for the definition of "disability" is that the intent of the law is to deter discrimination, a more qualitative analysis, not to determine the amount of disability, which is a quantitative analysis. In addition, work is but one of many "major life activities" so the ADA is much too broad to employ in the workers' compensation setting.

What about the Social Security system's definition of disability? After all, that law is well settled.

An article on Findlaw ( http://library.findlaw.com/1999/Jun/1/127110.html) explains how the Social Security system deals with disability:

"Disability under Social Security is based on an inability to work. Social Security will only consider you disabled if you are unable to do any kind of work for which you are suited and your disability is expected to last for at least 1 year or to result in death. Social Security does not pay for partial disability or for short-term disability."

We immediately have a definitional problem inherent in a Social Security system analysis - that system considers only total disability - workers' compensation in the vast majority of cases deals with partial disability. In addition, there are earnings limitations, listed impairments, and alternative work evaluations. No, Social Security's definition of disability is not helpful.

Perhaps Labor Code section 4653 or 4657 is the proper standard: "... ability of the injured employee to compete in an open labor market." But 4653 and 4657 refer to temporary disability, and apportionment requires permanent disability.

Ironically, prior cases based on pre SB 899 law may be the most helpful.

Moyer v. WCAB, 24 Cal.App.3d 650, WCC 24781972 CA (1972) said a preexisting permanent partial disability must interfere with one's ability to do work. Moyer is a Subsequent Injuries Fund case where the issue was whether independent disabilities can total more than 100%. Citing then in effect Labor Code section 4660 and interpretive case law, the court said, "impairment of earning capacity or diminished ability to compete in an open labor market constitutes disability."

The Moyer definition is problematic because Labor Code section 4660 is radically different now than it was in 1972 when Moyer was decided, but does talk of "diminished future earning capacity." To this extent, is a medical opinion on disability sufficient? Does there need to be corresponding evidence from a vocational expert that "but for" the pre-existing "disability" the injured worker could have earned $X? And if so, wouldn't this too be speculative without solid evidence of available positions but for the disability?

DeCelle v. City of Alameda, 186 Cal.App.2d 574, WCC 25321960 CA (1960) said, "'Permanent disability' as that term is used with reference to the workmen's compensation laws, 'covers every type of impairment, including some as to which the disability feature is almost purely theoretical...' (2 Hanna, The Law of Employee Injuries and Workmen's Compensation, 259). Thus, the loss of even one phalanx of a finger or toe constitutes a partial permanent disability, as does the loss of taste or smell, even though, from a practical standpoint, such may produce no real loss of ability to work or earn."

Unfortunately, the DeCelle definition contradicts the black letter, plain meaning of SB 899 law which requires that there be a cause and effect between the apportionable factor and the disability (Escobedo, LC 4663).

I will not be so presumptuous as to proffer a definition of disability for purposes of Labor Code section 4663 apportionment. I will state that how to define disability in this new era of apportionment will likely be the most difficult, contentious, legal battle to arise out of SB 899, and will take years, and a Supreme Court decision, to settle.

David J. DePaolo is the President and CEO of WorkCompCentral.

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