Nabors/Dykes/Welcher; It's A Horserace

Saturday, September 9, 2006 | 0

By Jake Jacobsmeyer

To quote the Morton Salt container;

"When it rains, it pours."

After receiving yet another decision supporting (in a sort of sideways fashion), the appellate decisions in Nabors v. WCAB and Dykes v. WCAB , the workers' compensation community has now been presented with a dissenting opinion in the form of Welcher v. WCAB, a decision involving four different claims that was argued just last week, all consolidated for consideration by the 3rd appellate district (Nabors and Brodie, were 1st appellate district and Dykes was 5th).

In this decision the 5th appellate district agreed with the WCAB in Nabors and disagreed with everyone else in just about every other case.

Three of these cases involve apportionment issues under Labor Code Sec. 4664 (Welcher, Strong, & Williams) with the 4th (Lopez) raising the issue of calculation of apportionment under Labor Code Sec. 4663 to non-industrial factors. In each case the WCAB apportioned consistent with its en banc decision in Nabors. Strong is also an en banc decision that relied on Nabors for a portion of its holding.

The court in the consolidated cases, hereinafter referred to as Welcher, provided an extensive review of the law both before and after California Senate Bill 899 including the now famous Formulas A, B & C identified by the state Supreme Court in Fuentes v. WCAB. The court framed the initial discussion of apportionment under the new law by looking for legislative intent to overturn well established case law (Fuentes) and found no such intent in either code section:

"Thus, section 4663 speaks of apportioning permanent disability based on causation by determining the percentage of the permanent disability directly caused by the current industrial injury as distinguished from the percentage of the permanent disability caused by other factors. Subdivision (a) of section 4664 then expressly provides that the employer is liable only for the former percentage -- that is, "the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment."

In our view, these provisions neither clearly express nor necessarily imply an intent to abandon formula A from Fuentes for apportioning permanent disability. On the contrary, we conclude these provisions compel the continued application of that formula. By its plain terms, section 4664 limits an employer's liability for a claimant's overall permanent disability to "the percentage of permanent disability directly caused by" the present industrial injury. Thus, the employer is not liable for "the percentage of permanent disability" caused by any other factors -- including both non-industrial factors and previous industrial injuries. In this context, the phrase "percentage of permanent disability" is easily referable to the phraseology used in section 4658 to express the extent of permanent disability caused by an injury, which in turn is used to determine the amount of permanent disability benefits payable to a claimant for that injury.

The court firmly rejected Dykes, and by implication, Nabors' courts inference that by repealing Labor Code Sec. 4750 that a change in the law is the compelled result, in part because the code section was replaced with other sections that created the same result simply using different language:

" ... We acknowledge that "(i)t is ordinarily to be presumed that the Legislature by deleting an express provision of a statute intended a substantial change in the law." That presumption, however, is rebutted here with respect to the Legislature's repeal of former section 4750 by replacement of that section with a new section covering the same subject. Where former section 4750 limited an employer's liability for compensation to "that portion (of the claimant's combined disability) due to the later injury as though no prior disability or impairment had existed," subdivision (a) of section 4664 now limits the employer's liability for compensation to "the percentage of permanent disability directly caused by the (current industrial) injury." We perceive no intended change in meaning between these two provisions; thus, the presumption on which the Gallo court relied is not controlling here. The remaining portions of former section 4750, which the Legislature did not reenact in the new law, were likely omitted because they were simply superfluous."

The court further noted that Labor Code Section 4658 as well as Labor Code Section 4663 & 4664, reference apportionment of permanent disability, not permanent disability benefit. The court's analysis notes that the benefits are calculated after and from the calculation of permanent disability, not the other way around:

" ... Only the continued application of formula A ensures that an employer is liable only for "the percentage of permanent disability directly caused by the (current industrial) injury," as section 4664 requires, and harmonizes the use of the word "percentage" in sections 4663 and 4664 with the use of that word in section 4658."

The court also considered arguments raised in the Strong case regarding overlapping apportionment for different parts of the body and other issues with calculation of the award. The court ultimately simply endorsed the WCAB's decision in Strong and left the rules involving overlap untouched.

These cases certainly create a conflict between the 1st & 5th district cases and the 3rd. As these are all courts of equal weight from the standpoint of stare decis we are left without any definitive authority at all. Ultimately this issue will now have to be decided by the Supreme Court. With these decisions, and the court's very strong rejection of the Nabors/Dykes rational that the repeal of Labor Code Sec. 4750 compels a new statutory scheme for calculation of apportionment, it would seem more likely that the Supreme Court would grant a hearing on the issue rather than simply decertify one of these sets of cases (the time for decertification of Nabors and Dykes has long since passed). Especially since the decision that is causing all of the controversy was originally from Supreme Court (Fuentes), it is only fitting the court should weigh in on this issue and provide a definitive answer.

Until the Supreme Court resolves this issue, and we may very well get additional rulings from several other districts in the near future that add to the confusion, it is difficult to know what practitioners are to do. One is tempted to point out that the decisions are now 4 - 3 (Welcher is four cases at once) so subtraction by percentage should prevail, but that is not a very compelling argument.

However on one issue this case is now the definitive decision; that being interpretation of apportionment under Labor Code Sec. 4663. While the court in Brodie commented on the issue, it was not really before them and the court's comment on this issue is mere dicta. The application of Labor Code Sec. 4663 was specifically before the court in Lopez v. WCAB and the court's decision, until reversed or at least controverted by an court of comparable jurisdiction in a case with the issue before it, is the law of the land.

However given the fluidity of this area of law, what is the law of the land today may not be so tomorrow.

To read a copy of this decision, click on the case to the right.

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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