Appeals Court Slams Door to Potential Floodgate of Psychiatric Claims

Saturday, September 9, 2006 | 0

By Jake Jacobsmeyer

The 1st District Court of Appeal firmly shut the door on an effort to drive an enormous hole in the requirement for predominate causation of psychiatric injuries as required in Labor Code Section 3208.3. In reversing the WCAB's decision in Sonoma State v. WCAB (Hutton), the court reaffirmed the requirement that a work-related component of a psychiatric illness be "predominate as to all causes".

In this case the employee filed a claim for work-related stress. The agreed medical evaluator reported that the employee did suffer from psychiatric illness with three different diagnoses. The AME opined that only 35% of the overall disability was related to employment factors; that the applicant had significant pre-existing conditions and likely would suffer significant disability even in the absence of her employment at Sonoma State University. However the AME did offer that of the three different diagnoses which applied to the applicant, one -- adjustment disorder -- was exclusively industrially caused.

The workers' compensation judge (and the WCAB on reconsideration) used the AME's differentiation among the three disorders to find that applicant had met her burden as to predominate causation for the adjustment disorder only and awarded benefits. The defendant appealed arguing that the applicant's burden required that the work-related nature of the overall psychiatric illness meet the 50+ test under Labor Code Section 3208.3.

The Court of Appeal agreed. While the court noted that either the defendant's or the WCAB's interpretation was logical given the statutory language, the petitioner's argument was more consistent with the statutory history and purpose of the revisions to Labor Code Section 3208.3 in 1991 and 1993. As noted by the court, the legislative history as outlined in a series of cases interpreting this section has held that the intent of the statutory scheme was to restrict not expand the scope of psychiatric claims. This would not be the result of the WCAB's interpretation of the statute:

"Similarly, here, the WCAB's interpretation would undermine rather than effectuate the Legislature's purpose. Allowing each diagnosable psychological disorder to be analyzed separately for compensability would create a lower rather than a higher threshold for obtaining compensation, would result in more rather than fewer stress claims, and would provide more rather than less potential for fraud."

The court further pointed out that if the WCAB's rational were to be followed, that individuals with multiple diagnoses, but small industrial components, could conceivably be awarded benefits where other employee's with significant industrial components to their illness, but only one diagnosis would get nothing. The court also showed a remarkable grasp of exactly what would be the result if the WCAB's rational were adopted as the law:

"... This interpretation would award compensation to those applicants whose experts are prompted to parse the psychological injuries into separate diagnoses even though the work-induced components are de minimis, while precluding compensation for employees whose work was a substantial factor in causing their injuries but whose experts did not or could not make compartmentalized diagnoses. We are satisfied this could not have been what the Legislature meant to do in adopting section 3208.3."

Does anyone doubt that this would exactly be the result of the WCAB's interpretation? Physicians reporting for injured workers would be splitting hairs to come up with obscure diagnosis to attribute predominate causation to employment, thereby contributing to extensive TTD and medical care for psychiatric illnesses that were only tangentially related to employment. We would have been in a replay of the pre-1990 situation where minimal employment contributions to individuals with serious non-industrial problems resulted in enormous burdens on the system and ultimately led to the reforms that we currently have.

Luckily the Court of Appeal seemed to understand the consequences of this issue, was able to accurately assess the legislative intent and purpose behind the statutory scheme and prevent the opening of floodgates to a whole new round of psychiatric claims based on how minutely the reporting physicians wanted to split diagnostic hairs.

This case can be located by clicking on the name above.

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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