California: Jurisdiction Issues That Could Sabotage Your Case

Quite a few WCAB Noteworthy Panel Decisions (NPDs) have issued lately on the question of jurisdiction. In each of them, the parties had petitioned to go forward on an issue, only to discover at the hearing level, that the WCAB might not have jurisdiction to decide the matter. Practitioners should be well-versed on this issue so as to not be caught unprepared to argue this issue in their client’s favor.

Labor Code § 5300 [LC 5300][ grants the WCAB exclusive jurisdiction over all controversies related to workers’ compensation. Labor Code § 5500 [LC 5500] states that WCAB’s jurisdiction is established once a party files the application. And Labor Code § 5803 [LC 5803] provides the WCAB with continuing jurisdiction to enforce all of its awards and orders. But it is the “grey” areas that generate trouble for litigators when they find themselves confronted with a threshold argument that their issue is precluded, since the WCAB lacks appropriate jurisdiction. It is these grey areas that NPDs have addressed recently.

(Publisher’s Note: Citations link to lexis.com; bracketed cites to Lexis Advance.)

1. Labor Code § 5300 – WCAB Jurisdiction to Correct Clerical Errors

In the NPD of Rosenberg v. State of California—California Highway Patrol, 2016 Cal. Wrk. Comp. P.D. LEXIS 57 [2016 Cal. Wrk. Comp. P.D. LEXIS 57], the WCJ issued a decision with a clerical error, by incorrectly stating that defendant was “permissibly self-insured,” instead of “legally uninsured.”

The WCAB explained as follows:

“With respect to correcting clerical errors, the Workers' Compensation Appeals Board (WCAB) retains jurisdiction indefinitely. The WCAB may correct a clerical error at any time without the need for further hearings. (Toccalino v. Workers’ Comp. Appeals Bd. (1982) 128 Cal.App.3d 543 [47 Cal.Comp.Cases 145, 154-155].) We find the November 2, 2015 decision should be corrected for clerical error to reflect that defendant is legally uninsured.” (Emphasis added.)

PRACTICE TIP: Although, the WCAB would never intend to “chill” a practitioner’s right to object to a valid issue, make sure the issue you are challenging is a valid one and warrants a Petition for Reconsideration. If the WCJ has issued an Order or Findings and Award with a clerical error, a joint letter to the WCJ requesting a correction of that clerical error through amendment may be a more expedient process, than filing a Petition for Reconsideration.

2. Labor Code § 5500 – WCAB’s Jurisdiction Once Application Is Filed

In the NPD case of Aguilar v. Certified Concierge Services, 2016 Cal. Wrk. Comp. P.D. LEXIS 196 [2016 Cal. Wrk. Comp. P.D. LEXIS 196], applicant filed a Declaration of Readiness (DOR) to proceed to a Mandatory Settlement Conference (MSC) on the issue of AOE/COE (arising out of employment/occurring in the course of employment), among other issues. The MSC judge ordered the matter set for trial on 12/1/2014, over defendant’s objection, because they had not completed discovery. 

On 11/17/14, defendant filed a “Petition for Reconsideration/Removal” from this Order setting the case for trial. Defendant’s Petition ultimately caused the trial date to be continued. Although a Petition for Removal will not bar the WCJ from continuing jurisdiction to act on a case, a Petition for Reconsideration will remove jurisdiction from the WCJ and place jurisdiction solely with the WCAB commissioners. Jurisdiction will not be returned to the WCJ until after the WCAB has issued a determination on the Petition.

It is well-settled law that a Petition for Reconsideration is proper only from a “final order.” An order setting a case for trial is not considered a final order. The defendant should, therefore, have filed a Petition for Removal and not a joint Petition for Reconsideration/Removal, since defendant’s Petition essentially halted the proceedings. Therefore, in order to deter this type of “delay” behavior in the future, the WCAB, on its own motion, imposed sanctions against the defendant of $300 and ordered defendant to pay applicant attorney reasonable expenses of $750.

PRACTICE TIP: In order to avoid sanctions, file a Petition for Reconsideration from a final order only. If the order is not final, but is merely an interlocutory order, file a Petition for Removal, instead, so as not to halt the proceedings and remove jurisdiction from the trial judge. If you are unclear as to whether the order in question is a “final” order or an “interlocutory” order, there is plenty of case law which defines this issue. Research should be done, to determine whether or not your particular order will be deemed “final” by the WCAB. Also, if you do file a Petition for Removal, carefully review 8 Cal. Code Reg. § 10843 [R 10843] to make certain you have met you burden of proving the requirements for filing a Petition for Removal, to avoid sanctions for filing a frivolous petition.

3. Labor Code § 5804 [LC 5804] and Jurisdiction Over “Progressive, Insidious Diseases”

In the Supreme Court case of General Foundry Service v. WCAB (1986) 42 Cal. 3d 331 [51 Cal. Comp. Cases 375], the court struggled over jurisdiction issues related to the determination of the permanent disability (PD) rate, when the injured worker suffered from the “progressive, insidious disease” of asbestosis. The Court stated:

“Exposure to asbestos in the workplace may cause cancer in a worker after a latency period of 20 to 40 years. The Labor Code contains a five-year statutory limitation [Lab. Code, § 5804] on the Workers’ Compensation Appeals Board’s (Board) jurisdiction once a date of injury is established for a permanent disability. Thus, if a permanent disability rating takes place too early, an employee with a progressive lung disease such as asbestosis faces the risk of being precluded by the statute of limitations from seeking full compensation for his industrial injury.” (Bracketed text added.)

The Court concluded the following should occur in cases dealing with an employee who has a contracted a “progressive, insidious disease”:

“The Board, we conclude, may tentatively rate the permanent disability of an employee with a progressive disease, and order advances based on that tentative rating. It may then reserve its jurisdiction for a final determination of permanent disability when the employee's condition is permanent and stationary, or when the employee's permanent disability is total (100 percent) and further deterioration would be irrelevant for rating purposes.”

This issue was raised in the NPD of Adair v. City of San Diego, 2016 Cal. Wrk. Comp. P.D. LEXIS 8 [2016 Cal. Wrk. Comp. P.D. LEXIS 8], in which applicant alleged that his industrial skin cancer qualified as a “progressive insidious disease” and that jurisdiction should be left open indefinitely. The WCJ disagreed, and awarded applicant a PD rating of 9%, which was affirmed by the WCAB.

The WCAB first talked about the definition of a “progressive insidious disease” as set forth in the case of Ruffin v. Olson Glass Company (1987) 52 Cal. Comp. Cases 335, 341-342 [52 Cal. Comp. Cases 335] (Appeals Board en banc opinion) as follows:

“(1) that it is caused by a ‘remote’ and ‘undramatic’ work exposure—one that is likely to be undetected at the time, or if detected, the significance is likely to be unappreciated (2) that the disease worsens over time, but at a rate so gradual that it is well established before becoming apparent and, (3) that it has a ‘long latency period’ between exposure to the risk and the onset of symptomatology.”

In the Adair case, the WCAB explained that the applicant failed to meet this definition of “progressive insidious disease,” in that no evidence was presented to indicate that the applicant’s skin cancer is “slowly and gradually worsening.” In fact, the skin cancer had been removed with the doctor opining that there was just a 3% chance of that particular skin cancer returning. Therefore, an indefinite reservation of jurisdiction in this case was not warranted.

PRACTICE TIP: When arguing in favor of a particular legal theory, make sure that your facts are a legitimate match to the existing legal definitions for that theory. It might be helpful to prepare a trial brief on the issue and quote from the case, Labor Code section or regulation you are relying on for your legal definition. Then, explain how your facts align with that definition.

4. In Certain Circumstances, the WCAB Lacks Appropriate Jurisdiction

As discussed above, the Labor Code provides extensive and exclusive jurisdiction over all workers’ compensation controversies. However, there are many issues over which the WCAB does not have jurisdiction, such as in the three cases discussed below.

a. No Jurisdiction Over Certain Addenda to C&R

In the NPD of Corrales v. Kimpton Hotel and Restaurant Group, 2016 Cal. Wrk. Comp. P.D. LEXIS 144 [2016 Cal. Wrk. Comp. P.D. LEXIS 144], the parties agreed to a Compromise & Release (C&R) with an Addendum “A” that, among other items, settled, “any future unknown injuries that may arise to body parts not included in the C&R including claims that may exist outside the jurisdiction of the State of California.” When the applicant petitioned to set aside the C&R, the WCAB questioned whether the addendum dealt with issues outside of the WCAB’s jurisdiction, and held as follows:

“The parties to a C&R may agree on an addendum to the C&R, so long as the terms of said addendum are within the jurisdiction of the Workers’ Compensation Appeals Board and permissible under the law. Upon return, the WCJ should thoroughly examine Addendum ‘A’ to determine whether the WCJ has jurisdiction to approve the addendum and whether the terms of the addendum are consistent with the language of the C&R and permissible under the law.”

b. No Jurisdiction Over Federally-Recognized Indian Tribes

In the NPD of Sylves v. County of Riverside, 2016 Cal. Wrk. Comp. P.D. LEXIS 109 [2016 Cal. Wrk. Comp. P.D. LEXIS 109], the County of Riverside attempted to shift liability for applicant’s cumulative trauma industrial injury to the Pauma Band of Luiseno Tribal Police Department pursuant to Labor Code § 5500.5 [LC 5500.5]. However, the WCAB noted that under Labor Code § 5500.5, the last year of injurious exposure is assigned to the previous employer over which the WCAB has jurisdiction. (See Portland Trailblazers v. Workers’ Comp. Appeals Bd. (Whatley) (2007) 72 Cal. Comp. Cases 154 [72 CCC 154] (writ denied).) Since the Pauma Band of Luiseno Tribal Police Department is part of a federally recognized Indian Tribe, the WCAB did not have jurisdiction over this employer, and liability could not attach. (See Middletown Rancheria v. Workers’ Comp. Appeals Bd. (Sherron) (1998) 60 Cal. App. 4th 1340 [63 Cal. Comp. Cases 15].)

c. No Jurisdiction if Injury Occurs Outside of California, the Worker Is Not a Resident of California and the Contract of Hire Is Made Outside the State of California

In the NPD of Walker v. Petrochem Insulation, Inc., 2016 Cal. Wrk. Comp. P.D. LEXIS 60 [2016 Cal. Wrk. Comp. P.D. LEXIS 60], the applicant, Ramonda Walker, was injured while at work in the state of Utah. Applicant filed a claim for workers’ compensation benefits in the State of California, claiming that California had jurisdiction, since the employer was a California corporation. However, Labor Code § 5305 [LC 5305] provides:

“The DWC, including the administrative director, and the appeals board have jurisdiction over all controversies arising out of injuries suffered outside the territorial limits of this state in those cases where the injured employee is a resident of this state at the time of the injury and the contract of hire was made in this state.”

The WCAB held that at the time of hire, Mr. Walker was a resident of Georgia and emailed his acceptance of employment from his home in Georgia. Therefore, the contract of hire was not made in the state of California. In addition, Mr. Walker was not a resident of California and the industrial injury occurred in Utah. Even though the employer was a California corporation, none of the mandatory elements of Labor Code § 5305 were met. Therefore, California did not have jurisdiction over Mr. Walker’s workers’ compensation claim.

Conclusion

The issue of jurisdiction is always a threshold issue, which can adversely impact the outcome of a case. If there is not proper jurisdiction, the legal merits of the case cannot be heard. When jurisdiction is an issue, prudent practitioners should thoroughly research all aspects of relevant jurisdiction perimeters and be prepared to cite specific case law and statutes that support their position in order to properly represent their respective clients.

© Copyright 2016 LexisNexis. All rights reserved.