Simi, Pebworth, Graczyk and Dueling Doctors

Sunday, February 13, 2005 | 0

As a result of SB 899, substantial changes were made to various Labor Codes. The legislature determined that, "This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to provide relief to the state from the effects of the current workers' compensation crisis at the earliest possible time, it is necessary for this act to take effect immediately." (Sec. 49)

In addition, the legislature declared, "The amendment, addition, or repeal of, any provisions of law made by this act shall apply prospectively from the date of enactment of this act, regardless of the date of injury, unless otherwise specified, but shall not constitute good cause to reopen or rescind, alter, or amend any existing order, decision, or award of the Workers' Compensation Appeals Board." (Sec. 47)(Underline added)

Amongst the various changes made by the legislature, Labor Code sections 4061, 4062, and 4062.2 were substantially changed in a manner that eliminated the "dueling QME" scenario.

Ever since the effective date of SB 899, April 19, 2004, there has been considerable discussion about the changes to Labor Code section 4062.2, and differing opinions on whether Labor Code section 4062.2(a), as amended, mandates that the Panel QME procedure outlined in Labor Code 4062.2(b) and (c) can only be utilized to "resolve any dispute arising out of an injury or a claimed injury occurring on or after January 1, 2005" or whether the dispute resolution process found in Labor Code 4062.2(b) and (c) can be applied to injuries sustained prior to January 1, 2005.

Recently, in the case of Marilyn Simi vs. Sav-Max Foods, Inc.; Springfield Insurance Company, (WCAB en banc)(2005) 70 CCC ______, the unanimous en banc panel chose to reincarnate former Labor Code section 4062, as was in effect prior to implementation of SB 899, rather than requiring the parties to comply with Labor Code section 4062.2 as enacted by SB 899.

Most respectfully, this writer disagrees with the logic, rationale, and outcome of the en banc panel's decision in Simi. This writer is also of the belief that the decision in Simi frustrates the legislature's intent to eliminate the "dueling QME" scenario.

DOES A PLAIN-READING OF LC section 4062.2(a) SUPPORT SIMI?

Initially, Labor Code section 4062.2(a) is clear and unambiguous on its face: "Whenever a comprehensive medical evaluation is required to resolve any dispute arising out of an injury or a claimed injury occurring on or after January 1, 2005, and the employee is represented by an attorney, the evaluation shall be obtained only as provided in this section." According to a plain reading of this language, if a represented employee sustains an injury on or after January 1, 2005, a comprehensive medical evaluation required to resolve any dispute shall be obtained only as provided in Labor Code 4062.2.

However, does Labor Code section 4062.2(a) contain any language precluding the parties from obtaining a comprehensive medical evaluation for an injury, or a claimed injury, pursuant to the present version of LC section 4062.2(b) and (c), sustained prior to January 1, 2005? Clearly, the answer is a resounding NO.

Nevertheless, the WCAB en banc panel chose to allow the "dueling QME" scenario to continue on, ad nauseum, for any injury or claimed injury sustained prior to January 1, 2005.

The demise of the "dueling QME" scenario pursuant to Labor Code section 4062.2, enacted by SB 899 as an "urgency statute" that "shall apply prospectively from the date of enactment" has been hindered by the decision of the en banc panel in Simi. In effect, the decision in Simi fully nullifies the following changes mandated by SB 899:

LC 139.2(h)(2);
LC 4060(c);
LC 4061(c);
LC 4061(i);
LC 4062(a);
LC 4062.3(f); and,
LC 4062.5.

In my opinion, the WCAB en banc panel's erroneously invalidated the plainly stated path to follow when a defendant wants to obtain a QME evaluation of a represented employee, injured prior to January 1, 2005. I believe that this particular decision by the WCAB is also in contravention of Pebworth and Graczyk.

DOES PEBWORTH AND GRACZYK LOGIC APPLY TO SIMI?
Although Pebworth addressed a mutually agreed-upon settlement of prospective vocational rehabilitation services, the appellate legal logic in Pebworth is certainly applicable to Simi.

As a threshold issue, the Pebworth appellate court was faced with determining if the changes to Labor Code section 4646 were procedural or substantive: "Whether the amendments may be applied in this case depends on whether they are procedural or substantive. If the amendments are procedural, there is no bar to applying them here because "'[t]he effect of such statutes is actually prospective in nature since they relate to the procedure to be followed in the future.'" (Tapia v. Superior Court (1991) 53 Cal.3d 282, 288 [279 Cal. Rptr. 592, 807 P.2d 434].)

The WCAB's opinion correctly states the distinction between a procedural and a substantive statute: " [A] statute is 'procedural' where it merely provides a new remedy for the enforcement of existing rights [citations], where it neither creates a new cause of action nor deprives defendant of any defense on the merits [citations]. It has also been said that a statute is 'substantive' when it "'imposes a new or additional liability and substantially affects existing rights and obligations.'" [citations]." (Pebworth, 69 CCC 199 at 202)

"We do not disagree that the amendments depart substantially from prior legislation on the subject. However, whether a statute is procedural or substantive does not depend on the degree it changes prior law. The test is whether the statute imposes a new or additional liability or affects existing vested or contractual rights on the one hand or merely changes the manner in which established rights or liabilities are invoked in the future. Thus, a procedural statute may be applied to pending cases even if the event underlying the cause of action occurred before the statute took effect. [citations] As our Supreme Court explained more than 50 years ago: "[P]rocedural statutes may become operative only when and if the procedure or remedy is invoked, the statute operates in the future regardless of the time of occurrence of the events giving rise to the cause of action. [Citation.] In such cases the statutory changes are said to apply not because they constitute an exception to the general rule of statutory construction, but because they are not in fact retrospective. There is then no problem as to whether the Legislature intended the changes to operate retroactively." [citation]" (Supra, at 202-203)

"The distinction is well illustrated in State Comp. Ins. Fund v. Workers' Comp. Appeals Bd. (Silva) (1977) 71 Cal.App.3d 133 [139 Cal. Rptr. 410, 42 Cal. Comp. Cases 493]. In Silva, the court determined that an amendment effective January 1, 1976, giving an employee the right to select his own physician, applied to injuries occurring prior to the effective date of the amendment. The court reasoned: "In this case the change effected by the Legislature does not on its face impose a new or additional liability. Although it affects the privilege of the employer and his insurer to control the employee's medical care it does not do so retroactively. Care through December 31, 1975, was presumably furnished under the prior statute . There is no retroactive effect in applying the statute to medical treatment due from the employer after December 31, 1976." (Id. at p. 139.)" (sic [writer's note: Clearly the last date, December 31, 1976, is a typo and should read: December 31, 1975])

"The amendments to section 4646, like the statute in Silva, become operative only when and if the statute is invoked and, thus, operate in the future only. Like the statute in Silva, the amendments do not increase the cost of benefits due from the employer to the employee. In fact, the $10,000 settlement amount is $6,000 less than the amount of vocational rehabilitation benefits the employer would be liable for if Pebworth chose not to settle under the amendments. (section 139.5, subd. (c); Edgar v. Workers' Comp. Appeals Bd. (1998) 65 Cal.App.4th 1, 11 [76 Cal. Rptr. 2d 83, 63 Cal. Comp. Cases 703].)" (Supra at 203)

In order to determine if Pebworth is applicable to Simi, the initial task is to determine if the changes to Labor Code section 4062.2 are substantive or procedural: "Whether the amendments may be applied in this case depends on whether they are procedural or substantive. If the amendments are procedural, there is no bar to applying them here because [t]he effect of such statutes is actually prospective in nature since they relate to the procedure to be followed in the future." " [A] statute is 'procedural' where it merely provides a new remedy for the enforcement of existing rights [citations], where it neither creates a new cause of action nor deprives defendant of any defense on the merits [citations]." "However, whether a statute is procedural or substantive does not depend on the degree it changes prior law. The test is whether the statute imposes a new or additional liability or affects existing vested or contractual rights on the one hand or merely changes the manner in which established rights or liabilities are invoked in the future. Thus, a procedural statute may be applied to pending cases even if the event underlying the cause of action occurred before the statute took effect. [citations] As our Supreme Court explained more than 50 years ago: " [P]rocedural statutes may become operative only when and if the procedure or remedy is invoked, the statute operates in the future regardless of the time of occurrence of the events giving rise to the cause of action." (Pebworth) (emphasis added by writer)

There can be no doubt that Labor Code section 4062.2, defines the procedural route for obtaining a QME evaluation if the employee is represented. This Labor Codes is clearly procedural in nature, in that it "merely provides a new remedy for the enforcement of existing rights," and it "neither creates a new cause of action nor deprives defendant of any defense on the merits."

If the parties are unable to agree on an AME to resolve the dispute, the parties can still obtain a QME evaluation, but neither side gets to select their QME of choice, the court is not faced with choosing between one or the other of the "dueling QME" evaluations, and the employer/insurer is saved from the costs associated with paying for both QME evaluations. This is the economical manner the legislature decided QME evaluations were to be conducted for any injuries sustained on or after January 1, 2005, and the legislature did not specifically preclude the use of Labor Code section 4062.2 for injuries sustained prior to January 1, 2005.

Now, let's take a look at Graczyk, to determine if it's applicable to the Simi decision. The Graczyk appellate court held that amended legislation, enacted after the date of injury, was to be applied retroactively to deny workers' compensation benefits to a student athlete who had been deemed an employee pursuant to the law existing at the time of his injury, but who was excluded from the definition of an employee under an amended statute (See Labor Code section 3352(k).) that took effect before Mr. Graczyk's case had been reduced to a final settlement.

As noted by the Graczyk court, "California workers' compensation law [citation] is a statutory system enacted pursuant to constitutional grant of plenary power to the Legislature to establish a complete and exclusive system of workers' compensation." (Graczyk, 51 CCC 408 at 410) "The right to workers' compensation benefits is "wholly statutory" [citations] and is not derived from common law." "This statutory right is exclusive of all other statutory and common law remedies, and substitutes a new system of rights and obligations for the common law rules governing liability of employers for injuries to their employees. " (Supra, at 412) " [A]pplicant's inchoate right to benefits under the workers' compensation law is wholly statutory and had not been reduced to final judgment..." "Where a right of action does not exist at common law, but depends solely on statute, the repeal of the statute destroys the inchoate right unless it has been reduced to final judgment, or unless the repealing statute contains a saving clause protecting the right in pending litigation." (Supra, at 414)

"In determining whether a given retroactive provision contravenes due process in impairing a vested right, certain policy factors are considered, such as "the significance of the state interest served by the law, the importance of the retroactive application of the law to the effectuation of that interest, the extent of reliance upon the former law, the legitimacy of that reliance, the extent of actions taken on the basis of that reliance, and the extent to which the retroactive application of the new law would disrupt those actions." [citations] Where retroactive application is necessary to subserve a sufficiently important state interest, the inquiry need proceed no further. [citations] ." (Supra, at 416)

"The justification for the rule that a statutory right of action may be repealed is that all statutory remedies are pursued with full realization that the Legislature may abolish the right to recover at any time. (Younger v. Superior Court (1978) 21 Cal. 3d 102, 109 (145 Cal. Rptr. 674, 577 P.2d 1014]; Governing Board v. Mann, supra, 18 Cal. 3d at p. 829; Callet v. Alioto, supra, 210 Cal. at pp. 67-68; 13 Cal. Jur. 3d, supra, "Constitutional Law," section 275, p. 515.)" (Supra, fn 5)

In addressing the legislative act defining an employee, which was amended subsequent to when Mr. Graczyk sustained injury, but prior to when Mr. Graczyk's claim for benefits was reduced to a final judgment, the appellate court explained, "The Legislature expressly declared the act "an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution"" (Supra, at 413)

Interestingly enough, the amendments to Labor Code section 3352(k) in 1981, just like the amendments to Labor Code section 4062.2 that took effect April 19, 2004, were considered to be "retroactive" and just like the amendments to Labor Code section 3352(k) in 1981, SB 899 was also declared an "urgency statute."

In summation, a plain reading of Labor Code section 4062.2(a) reveals that there is no prohibition against application of the new QME process for represented workers who sustained injuries prior to January 1, 2005. Labor Code section 4062.2 is procedural in nature in that, "it merely provides a new remedy for the enforcement of existing rights" does not "deprive[] defendant of any defense on the merits," but merely changes the way QME evaluations are to be conducted, in that it has made "dueling QME" evaluations obsolete. (Pebworth)

In Graczyk, the appellate court explained "The right to workers' compensation benefits is "wholly statutory" and is not derived from common law." "Where a right of action does not exist at common law, but depends solely on statute, the repeal of the statute destroys the inchoate right unless it has been reduced to final judgment, or unless the repealing statute contains a saving clause protecting the right in pending litigation." "The justification for the rule that a statutory right of action may be repealed is that all statutory remedies are pursued with full realization that the Legislature may abolish the right to recover at any time."

SB 899 does not contain any "saving clause" but was passed as an "urgency statute" with "all changes retroactive" unless otherwise specified.

The WCAB en banc panel in Simi has erred, grievously. The elimination of the "dueling QME" scenario will be painfully prolonged, thus eliminating any savings of med-legal costs to employers and insurers, as was clearly one of the intentions of the authors of SB 899.

If Simi is not successfully appealed, represented injured workers who sustained injury, prior to January 1, 2005, and are the recipient of a stipulation for future medical treatment, or represented injured workers who received a Findings and Award granting the injured worker future medical treatment will end up repeatedly be subjected to a lifetime of "dueling QME" evaluations.

Simply put, the legislature determined that the passage of SB 899 was urgent, "[i]n order to provide relief to the state from the effects of the current workers' compensation crisis at the earliest possible time" and that all changes, unless otherwise specified, are to be retroactive. The WCAB en banc panel decision in Simi will frustrate the beneficent savings to be gained by the passage of SB 899. Regardless of the date of injury, Labor Code section 4062.2, in its present form, should be utilized to resolve disputes in cases where the injured worker is represented.

By York McGavin. York can be reached at ymcgavin@socal.rr.com.

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