Supreme Court to Review COLA Calculation Case

Friday, April 2, 2010 | 0

By Richard M. Jacobsmeyer
Shaw, Jacobsmeyer, Crain, Claffey & Nix

The Supreme Court issued an order March 24 granting the petiton for hearing filed by the Division of Workers' Compensation in the Duncan v WCAB case.  This case involves the calculation of the cost-of-living increases in life pension and permanent total disability cases.

The 6th District Court of Appeal had adopted the approach advocated by the Califonria Applicants' Attorneys Association that the calculation of COLA increases, regardless of the date of injury, would be calculated based on increases in the state average weekly wage (SAWW) beginning on Jan. 1, 2004. The WCAB had ruled such COLA calculations began with the date of injury.  While the application of the Court of Appeal decision in current cases is not a significant financial issue, as time goes one and the COLA calculations accruing before the date of injury mount up, the approach taken by that court becomes increasingly costly.

With the acceptance by the Supreme Court, the Court of Appeal decision ceases to exist. In theory the WCAB en banc decision still exists but as a practical matter, this issue will now have to wait for the Supreme Court to issue its opinion. Certainly in making calculations at this point for settlement purposes, the value of life pensions calculated using the
WCAB's analysis makes the most sense and is what I will be recommending to my clients.

While it is certainly speculation to predict what the Supreme Court is likely to do in this case, if there was a strong sense the 6th district was correct the Court could have simply denied the request. One can also speculate the fact the petitioning party is the DWC in its capacity as adminstrator of the Subsequent Injuries Fund, which has this issue come up in every single case, perhaps encouraged the court to grant review.

The typical time frame for a decision to issue from the Supreme Court is anywhere from around 20 to 24 months from the grant of review. This means the status of life pension calculations will be up in the air for that time frame unless the Court grants, as it did in the Welcher/Brodie line of cases, a preference.  Such a step is rare.

For further information about the grant here is a link to the Court's
website:

http://appellatecases.courtinfo.ca.gov/search/dockets.cfm?dist

Richard M.Jacobsmeyer is a partner for the Shaw, Jacobsmeyer, Crain, Claffey & Nix workers' compensation defense law firm in Oakland.