Old vs New PDRS Issue Joined

Saturday, January 28, 2006 | 0

A recent decision by a WCJ in San Francisco on the effective date of the new Permanent Disability Rating Schedule (PDRS) is making the rounds of the legal community. Judge David Hettick has issued a 10 page opinion that the new PDRS, which incorporates the AMA guides, is effective only for injuries after 1/1/05 and has no application to injuries arising before that date. Regardless of whether one agrees with Judge Hettick's analysis, inevitably this case is going to bring much of the process for resolving many pre 1/1/05 cases to a grinding halt while the matter is further clarified on appeal.

Judge Hettick has given a detailed analysis of the Labor Code section 4660 with analysis of legislative intent and utilizing rules of statutory construction in arriving at his conclusion. The relevant portions of Labor Code section 4660 read as follows with the parts that form the basis for this issue in italics.:

(a) In determining the percentages of permanent disability, account shall be taken of the nature of the physical injury or disfigurement, the occupation of the injured employee, and his or her age at the time of the injury, consideration being given to an employee's diminished future earning capacity.

... (d) The schedule shall promote consistency, uniformity, and objectivity. The schedule and any amendment thereto or revision thereof shall apply prospectively and shall apply to and govern only those permanent disabilities that result from compensable injuries received or occurring on and after the effective date of the adoption of the schedule, amendment or revision, as the fact may be. For compensable claims arising before January 1, 2005, the schedule as revised pursuant to changes made in legislation enacted during the 2003-04 Regular and Extraordinary Sessions shall apply to the determination of permanent disabilities when there has been either no comprehensive medical-legal report or no report by a treating physician indicating the existence of permanent disability, or when the employer is not required to provide the notice required by Section 4061 to the injured worker.

(e) On or before January 1, 2005, the administrative director shall adopt regulations to implement the changes made to this section by the act that added this subdivision.

Judge Hettick provides a multi-step analysis to ultimately conclude that, of the 3 possible interpretations of these provisions; the only interpretation which completely harmonizes the statutory language results in claims arising after the effective date of the PDRS as being covered under the new schedule. His rationale essentially is that the Administrative Director could have adopted the schedule before January 1, 2005 and that the language in third sentence in paragraph "d" would have then applied to injuries between the date of adoption of the schedule and January 1, 2005. Judge Hettick concludes that this is the only interpretation that completely harmonizes the statutory language and gives meaning to both the second and third sentences in subsection "d".

The WCJ's decision is clearly set up for the issue to proceed to the next level of decision, either with a Petition for Reconsideration or a Petition for Removal as no other issues are addressed in the decision and the opinion discusses the purely legal issues involved in this dispute. We should therefore anticipate an appeal being filed and the Judge's decision and analysis to be put to the test at the next level. Given the significance of this issue it is also entirely possible that which ever side looses at the WCAB level will also take the matter up to Courts of Appeal and/or the Supreme Court.

It is also important to keep in mind that this decision sets no precedent on the legal issue presented and is not binding on other WCJ's who are free to accept to reject the rational behind the decision. I have to admit that I have read these sections over many times and find it very difficult to reconcile the language without having to make some kind of compromise on giving full interpretation to some portion of the language. I am not convinced that Judge Hettick's analysis fully reconciles the language in this inartfully drawn statute. After all, if the intent was to provide that all injuries occurring after the effective date of the schedule were covered for claims between the adoption of the schedule and 1/1/05, the third sentence would not be needed at all as the second sentence in paragraph "d" would have provided for that effect. If the intent was to make some injuries occurring prior to the effective date of the schedule utilize the new PDRS, I find the judge's analysis to justify this as applying only if there was a schedule adopted prior to 1/1/05 to be equally puzzling. The reality is that it may be impossible to reconcile the second and third sentences in paragraph "d" and any interpretation is going to have to ignore some aspects of one or the other.

The WCJ also injects a spurious due process argument. He concludes that the legislature must have "been cognizant that reducing the compensation payable for injuries that occurred prior to the enactment of SB 899 might well have been a violation of due process of law". However there really is no viable argument that applying the PDRS to old injuries would have been any more a violation of due process than any other provision of SB 899 that was immediately implemented under sections 46 or 47 of the bill. It is well established under the Gryzak v WCAB, 184 Cal. App. 3d 997; 51 Cal. Comp. Cas 408, that workers' compensation is purely a creature of statute and that the legislature has complete control over its provisions. We have had this issue firmly established with Kleemann v WCAB and a whole host of subsequent decisions confirming this concept. Relying, even in part, on an argument that the legislature must have been concerned with a due process issue; given the rather specific and direct language in the rest of SB 899 to affect existing benefits regardless of the date of injury; makes no sense at all.

This decision is being widely disseminated and, as it is the first decision to specifically address this critical issue, will certainly be widely discussed, critiqued and argued over. Much like the pending decisions in Nabors v WCAB and the appeal to the Supreme Court filed that is being by defendant in the Dykes case, this decision will have the unintended but unavoidable consequence of stalling action to move files to conclusion until the parties have a better grasp on the actual state of the law. Just as most cases where apportionment under Labor Code section 4664 are now in suspended animation waiting for final appellate authority; cases where there is potential for application of the AMA guides on permanent disability will be held up pending a definitive decision on this issue. We can therefore only hope that the WCAB grants reconsideration quickly, carefully considers the issue and issues a definitive opinion on the topic as quickly as possible to resolve, at least at the WCAB level, this significant issue.

By attorney Richard "Jake" Jacobsmeyer, managing partner of the Concorde office of Adelson, Testan, Brundo & Popolardo. Jake can be reached at richardjacobsmeyer@atblaw.net.

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