Appeals Court Validates Pendergrass II and Baglione II in One Fell Swoop

Saturday, June 2, 2007 | 0

By Jake Jacobsmeyer

The First Appellate District has issued the first of at least 11 upcoming decisions interpreting Labor Code Section 4660(d) on the use of the Old PDRS vs. the post 1/1/05 schedule based on the AME Guidelines. The Appellate Opinion addresses the issues raised in both of the W.C.A.B. en banc decisions on this issue, and agreed with the W.C.A.B.'s holding in each case, commenting on the existence of the decisions, without really relying on the W.C.A.B.'s holdings.

In Costco v W.C.A.B. the injured worker was seen by defendant's QME in Sept of 2004. The QME issued a report justifying continuing TTD which continued until an AME report issued later in 2005. The WCJ issued a PD award using the 1997 PDRS relying on the rational of Baglione 1, that a Comprehensive Medical Legal report, even without commentary on the existence of PD, triggered the exceptions to Labor Code Section 4660(d) to use that schedule. Defendant appealed and the W.C.A.B. upheld the decision in a pre-Baglione II ruling.

Defendant's Petition for Writ of review was accepted by the court. In the Applicant's brief, it was argued that either the existence of a CMLE or the commencement of TTD in 2004 was sufficient to trigger the old schedule use. The TTD issue had not been part of the arguments relied upon by the W.C.A.B. or the WCJ to issue the original opinion but was argued and considered by the appellate court.

That Court relied very heavily on the public policy behind SB 899 and the intent to implement the changes in that legislation at the earliest possible date;

Chavez's proposed construction of section 4660, subdivision (d), to require no indication of permanent disability in a comprehensive medical-legal report, would be contrary to the spirit of the statute and the workers' compensation reform package as a whole. Those reforms were enacted as urgency legislation to drastically reduce the cost of workers' compensation insurance, and the Legislature intended that the majority of the changes go into effect as soon as possible. (Stats. 2004, ch. 34, Section 49, p. 75; Brodie v. Workers' Comp. Appeals Bd. (May 3, 2007, S146979) ___ Cal.4th ___ [2007 Cal.LEXIS 4334 at p. *34]; Green v. Workers' Comp. Appeals Bd. (2005) 127 Cal.App.4th 1426, 1441.) The adoption of a new permanent disability rating scale was part of this scheme. The purpose of the reform package is not served by an interpretation of section 4660, subdivision (d), that delays the implementation of the new rating scale based on medical-legal reports that give no indication of permanent disability, and indeed, may have nothing to do with that subject.

The Court soundly rejected the W.C.A.B.'s reliance on the "last antecedent rule" to achieve an interpretation of the legislative intent:

"Although grammatically sound, this interpretation of the statute is unpersuasive. "The rules of grammar and canons of construction are but tools, guides to help courts determine likely legislative intent. [Citations.] And that intent is critical. Those who write statutes seek to solve human problems. Fidelity to their aims requires us to approach an interpretive problem not as if it were a purely logical game, like a Rubik's Cube, but as an effort to divine the human intent that underlies the statute.'...

The last antecedent rule does not trump these considerations. One exception to that rule exists when "  "several words are followed by a clause which is applicable as much to the first and other words as to the last, [and] the natural construction of the language demands that the clause be read as applicable to all." ' " (Garcetti v. Superior Court, supra, 85 Cal.App.4th at p. 1121.) A second exception is made when " the sense of the entire act requires that a qualifying word or phrase apply to several preceding [words]. . .' " "This is, of course, but another way of stating the fundamental rule that a court is to construe a statute  "so as to effectuate the purpose of the law." ' " (White v. County of Sacramento, supra, 31 Cal.3d at p. 681.) Our reading of section 4660 as a whole is to require that the implementation of the new permanent disability rating schedule be tied to an actual indication of permanent disability prior to the statute's effective date. It follows that the requirement of an indication of permanent disability would apply to medical-legal reports as well as to reports prepared by a treating physician. "

The Court also soundly rejected the applicant's argument that the commencement of TTD prior to 1/1/05 triggered the use of the old schedule, again finding that this interpretation defeated the legislative policy to apply the new schedule to as many cases as possible:

While the statute is not a model of linguistic clarity, its intent is clear. The intent is to apply the new rating schedule to injuries suffered prior to 2005 in three circumstances: (1) when a comprehensive medical-legal report issued prior to 2005 indicates permanent disability, (2) when a report from a treating physician issued prior to 2005 indicates permanent disability, and (3) when an employer has been required to give notice under section 4061 prior to 2005 concerning its intentions regarding payment of permanent disability benefits. This interpretation supports the legislative goal of bringing as many cases as possible under the new workers' compensation law. (See Stats. 2004, ch. 34, Section 49, p. 75; Green v. Workers' Comp. Appeals Bd., supra, 127 Cal.App.4th at p. 1441.) If, as Chavez argues, the commencement of any temporary disability payments before 2005 required application of the rating schedule in effect at the time of injury, this legislative goal would be defeated. It would be rare, indeed, for temporary disability payments not to be owed or paid prior to 2005 for an injury occurring in or before 2004. Such a limited exception would be pointless where the Legislature could more easily have drafted the statute to apply the schedule in effect on the date of injury in all cases.

This decision, while firmly upholding the W.C.A.B. en banc decisions in Pendergrass II and Baglione II, are but the first of a coming series of cases on these issues. There are currently pending an additional 10 cases with similar interpretation issues of this portion of the legislation. It seems quite likely that some of these courts may take a different view of the impact of these statutes thereby setting the stage for yet another legal issue that will require Supreme Court interpretation to finalize. Interestingly the court pushed many of the same buttons that the Supreme Court did in its analysis of the Welcher/Brodie issues. This may help to guide the future decisions in a similar direction but all we can do is wait to see.

Attorney Richard "Jake" Jacobsmeyer is a partner in the firm Shaw, Jacobsmeyer, Crain & Claffey and can be reached at jakejacobsmeyer@shawlaw.org.

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