California: Duty to Develop the Record vs. Mandate to Close Discovery

California: Duty to Develop the Record vs. Mandate to Close Discovery

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Judges are often forced to make a difficult choice. Should they exercise their duty to develop the record? Or should they follow the closure of discovery rule and proceed with the trial?

In two recent panel decisions, the WCAB reversed the Judge and came down on opposite sides of this issue. However, in both cases they were loath to ignore the mandatory closure of discovery requirement of Labor Code §5502(e)(3).

Discovery Is Ordered Closed at Mandatory Settlement Conference (Burton):

In Burton v. Long Beach Unified School District, 2012 Cal. Wrk. Comp. P.D. LEXIS 170, the WCAB refused to allow the record to be further developed. In Renetzky v. State of California; DIR; SCIF, 2012 Cal. Wrk. Comp. P.D. LEXIS 205, the WCAB deemed development of the record to be necessary in order to ensure substantial justice. 

In the Burton case, the applicant was the party who filed the Declaration of Readiness to Proceed (DOR). The DOR included a declaration signed by the attorney under penalty of perjury indicating that discovery was complete and that applicant was ready to proceed to trial. However, on the day of the Mandatory Settlement Conference (MSC), applicant tried to amend her application to add psyche as an industrially injured body part. She also requested the matter go off calendar so that she could obtain a medical report to support her claim for injury to her psyche. The Judge granted her motion and took the matter off calendar.

The WCAB reversed the judge relying on Labor Code §5502(e)(3) which provides that discovery shall close at the MSC.  The purpose of this section is two-fold:

  • It provides notice to the opposing party as to all relevant issues, and
  • It allows for a realistic evaluation of the case, so that parties may be fully informed on all issues and have fruitful settlement discussions.

The WCAB cited two decisions in support of their conclusion, San Bernardino Hospital v. WCAB (McKernan) (1999) (4th DCA) 74 Cal. App. 4th 928; 64 CCC 986 and County of Sact’o v WCAB (Estrada) (1999) (3rd DCA) 68 Cal. App. 4th 1469; 64 CCC 26. In both of these cases, the District Court of Appeal (DCA) mandated closure of discovery at the MSC and followed the strict interpretation of LC§5502(e)(3) which provides:

“Discovery shall close on the date of the mandatory settlement conference. Evidence not disclosed or obtained thereafter shall not be admissible unless the proponent of the evidence can demonstrate that it was not available or could not have been discovered by the exercise of due diligence prior to the settlement conference.”

In both of these DCA cases, the applicant offered medical reports at trial that were not listed on the MSC statement. In both cases, the applicant made no showing that these reports were able to be discovered prior to the date of the MSC. Therefore, applicant was barred from offering the medical reports into evidence at the trial.

The facts in the Burton case were quite similar to those in McKernan, supra and Estrada, supra. The WCAB in Burton recognized that the WCJ does have a “duty/power” to develop the record under Labor Code §§5701 and 5906, but that doesn’t mean they can circumvent the requirements of Labor Code §5502(e)(3). Therefore, discovery was deemed closed at the MSC and applicant was not permitted to litigate her claim of industrial injury to her psyche.

Development of the Record Allowed (Renetzky):

In the Renetzky case, the WCAB came up with a rather creative analysis for getting around the mandate to close discovery under Labor Code §5502(e)(3). They retroactively deemed the relevant conference a status conference, instead of an MSC. Since the statute only applies to MSCs, discovery was not deemed closed, and the defense was permitted to go forward with their requested discovery.

The Renetzky case deals with the issue of whether the injured worker was entitled to home health care reimbursement. There were medical reports discussing this issue from both his primary treating physician and the parties’ home health care evaluator. However, as of the date of the MSC, the AME in this case, had not yet made a final determination on this issue. The defense wanted to make sure that the AME report would be admissible at trial. The WCAB reversed the Judge’s ruling to close discovery and allowed the record to remain open for the AME report to be admitted into evidence.

The two cases can be reconciled, based on the facts. In Burton, supra, the party requesting the development of the record was the same party who filed the DOR stating that they had completed discovery. However, in the Renetzky case, the party requesting the development of the record, i.e. the defendant, was not the party who filed the DOR. In addition, the defendant established that they had acted with due diligence in proceeding with all relevant discovery.

History of the Conflict: LC §§5701 and 5906 versus LC §5502(e)(3):

In the early 1990’s, the trend was to allow Judges full discretion on this issue. The DCA often affirmed the WCAB’s decision to exercise their duty to develop the record pursuant to Labor Code §§5701 and 5906 even after discovery has been deemed closed pursuant to §5502(e)(3). (See Tyler v. WCAB, (1997) 62 CCC 924 (2nd DCA); McClune v. WCAB, (1998) 63 CCC 261 (4th DCA) and M/A Com-PHI v. WCAB(Sevadjian), (1998) 63 CCC 821 (2nd DCA).

However, in 1999 after the Estrada and McKernan cases issued (as cited in the Burton case above,) the trend was reversed and both the WCAB and the DCA took a much stricter approach in closing discovery at the MSC per LC §5502(e)(3). It appears from the summary of cases cited below that the trend now is to allow development of the record only in cases where neither side has presented evidence at trial upon which a decision may be based.

Cases Permitting Development of the Record per LC §§5701 and 5906:

Cases Mandating Closure of Discover per LC § 5502(e)(3)

CONCLUSION:

An argument to keep discovery open at the MSC will most likely not be successful if made by a party who filed the DOR, (unless that party can make a bullet proof argument that the evidence was not available prior to the MSC.) However, if a party objects to the opposing counsel’s DOR, an argument to keep discovery open may well be viable.

© Copyright 2012 LexisNexis. All rights reserved. This case summary will appear in a forthcoming issue of the California WCAB Noteworthy Panel Decisions Reporter (LexisNexis).

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