The Ogilvie opinion held in significant part that the Permanent Disability Rating Schedule (PDRS) is rebuttable and, more specifically, the Diminished Future Earnings Capacity modifier (DFEC) is rebuttable. Thus, an injured worker may be allowed to show that his or her permanent disability award should be higher than that which is statutorily prescribed by the rating schedule. The Ogilvie opinions came in two WCAB en banc Decisions after Reconsideration, with the opinions commonly referred to as Ogilvie I and Ogilvie II: Ogilvie v. City and County of San Francisco (2009) 74 Cal.Comp.Cases 248 (Appeals Board en banc) (Ogilvie I) and Ogilvie v. City and County of San Francisco (2009) 74 Cal.Comp.Cases 1127 (Appeals Board en banc) (Ogilvie II).
When we last checked, the first DCA had not yet determined whether to grant a writ to reconsider the decisions, but because they were issued by the WCAB en banc (see editor’s note following this article) all WCAB judges are bound to follow the mandates of the decisions unless and until the Ogilvie cases might be reversed by a higher court.
Meanwhile, a segment of the Applicant’s bar gleefully threatens to challenge the PDRS using Ogilvie every time they negotiate resolution of a case where the applicant has not returned to work. How effective a threat this may be, and how much heed a defendant should pay to it in any given case, demands a clear understanding of the burden of proof required to successfully rebut the rating schedule under an Ogilvie theory
Who has the burden? That falls on the shoulders of the party attempting to rebut the PDRS. Although a defendant can attempt to do so to manipulate a rating downward, in most instances it is the applicant who is trying to escalate the rating and thus increase the compensation dollars for permanent disability. It is the burden of the applicant in such cases to establish every element of the Ogilvie theory as it may apply to each particular injured employee.
The evidentiary burden on the applicant to obtain an award of increased disability by using a more severe DFEC is rather significant. No less significant is the burden placed on the WCAB trial judge to make sure there is an adequate record to sustain an Ogilvie-type award. The Ogilvie decisions themselves (especially Ogilvie II) and several subsequent panel decisions have provided enlightenment as to how heavy the burden of proof actually is in mounting an Ogilvie attack.
Ogilvie grants a WCAB judge discretion regarding what evidence to rely upon in determining an applicant's post-injury earnings, and the post-injury period upon which to base lost earnings calculations. For instance, in Ogilvie I, the WCAB stated:
"In determining an individual employee's proportional earnings loss, the first step ordinarily will be to establish the employee's actual earnings in the three years following his or her injury (as did the RAND Studies), using the employee's EDD wage data or other empirical wage information. Generally, this will be accomplished by having the employee obtain his or her wage information from EDD, either voluntarily or through an order compelling. However, other empirical earnings information also may be used, including earnings records from the Social Security Administration. Moreover, while federal and state tax records, including W-2 forms, are privileged the privilege is not absolute and does not apply where a stronger public policy controls or when a party has waived the privilege. (Ogilvie I, 74 C.C.C. at p. 266.)
In a subsequent panel decision which has drawn a lot of attention, the decision of a trial judge awarding increased disability pursuant to Ogilvie was reversed because the trial judge merely relied on the applicant’s testimony as to post-injury loss of earnings. John Shini vs. Pacific Auto Body (2010) ADJ2079252 (SDO 0339791). The Shini case noted that such testimony alone was not necessarily competent to establish actual earnings loss and, more importantly, it is post-injury earnings capacity that is the true determining factor.
The opinion in Shini recited language in Ogilvie I as follows:
“When a proportional earnings loss calculation is made for a particular employee in a DFEC rebuttal case, the employee's post-injury earnings portion of that calculation may not accurately reflect his or her true earning capacity. As the Supreme Court stated years ago in Argonaut Ins. Co. v. Industrial Accident. Com. (Montana) (1962) 57 Ca1.2d 589 [27 Cal.Comp.Cases 130, 133]: “'An estimate of earning capacity is a prediction of what an employee's earnings would have been had he not been injured .... [A] prediction [of earning capacity for purposes of permanent disability] is...complex because the compensation is for loss of earning power over a long span of time .... In making a permanent award, [reliance on an injured employee's] earning history alone may be misleading .... [A]ll facts relevant and helpful to making the estimate must be considered. The applicant's ability to work, his age and health, his willingness and opportunities to work, his skill and education, the general condition of the labor market, and employment opportunities for persons similarly situated are all relevant.' (Montana, supra, 57 Ca1.2d at pp. 594-595 [27 Cal.Comp.Cases at p. 133] (internal citations omitted).)”
“Certainly, an individual employee should not be able to manipulate the proportional earnings loss calculation through malingering or otherwise deliberately minimizing his or her post-injury earnings. Similarly, motivational or other factors may play a role in determining whether a particular employee's post-injury earnings accurately reflect his or her true post-injury earning capacity. Further, an employee may voluntarily retire or partially retire for reasons unrelated to the industrial injury. [Citations.] Temporary economic downturns or other factors may also come into play. Accordingly, the trier-of-fact may need to take a variety of factors into consideration.”
Thus, it is clear that the mere fact that an employee has not returned to work for a given period of time is not, in and of itself, sufficient to successfully argue for increased PD pursuant to Ogilvie. Not only does the applicant need hard data regarding similarly situated workers, but the applicant’s attorney must also show that the earnings capacity of this particular employee is diminished, and to what extent it is diminished because of the industrially-related impairment as opposed to extrinsic factors. Assuming a prima facie case can be made, the defendant will then be able to attempt to rebut the case by demonstrating that earning capacity either is not impaired beyond what the PDRS envisioned or, if it is, it is due to extrinsic factors as discussed in Montana.
Nor does the burden end here. If a case is sufficiently made to support an Ogilvie increase in the PD rating, the judge may still decide against the increase, especially where the defense has introduced rebuttal evidence. "Even if the …evidence is legally substantial, the WCAB as the trier-of-fact may still determine that the evidence does not 'overcome' the DFEC adjustment factor component of the scheduled permanent disability rating. (See Glass v. Workers' Comp. Appeals Bd. (1980) 105 Cal.App.3d 297, 307] [45 Ca1.Comp.Cases 441] ('While the Rating Schedule is prima facie evidence of the proper disability rating, it may be controverted and overcome.'; see also Black's Law Dictionary (6th ed. 1990), at p. 1190 (one definition of 'prima facie evidence' is '[t]hat quantum of evidence that suffices for proof of a particular fact until the fact is contradicted by other evidence; once a trier of fact is faced with conflicting evidence, it must weigh the prima facie evidence with all of the other probative evidence presented.' (Ogilvie II, 74 Cal.Comp.Cases at pp. 1143- 1144.)” (Shini at p. 9)
In another case the WCAB issued a panel decision suggesting a stop-gap remediation in a case where the evidence did not properly support an Ogilvie determination, but where the possibility of such an outcome could not be permanently discarded. In the case of Bertha Noriega Garcia vs. Patrick Hinrichsen, et.al. ADJ6721939 , the applicant sought to overcome the DFEC and the judge issued an F&A without adequate explanation of the evidence relied upon to reach a conclusion supporting the applicant. The WCAB remanded and outlined the burden on the judge to support the award: “In this case, the WCJ gave no explanation in either his Opinion on Decision or Report regarding the period used to calculate the applicant’s post-injury earnings and earnings loss. At the time of trial, three years had not yet elapsed from the applicant's date of injury. Additionally, we note that in this case the applicant was not found to be permanent and stationary until August 5, 2008, more than one and one-half years after the industrial injury, but only about one year before trial. In the further proceedings, the WCJ should more fully analyze the proper time period for an earnings loss calculation and whether applicant's earnings during that time period are more indicative of her earning capacity than the scheduled rating. Additionally, to the extent that the WCJ believes that a proper DFEC adjustment factor cannot yet be determined, the WCJ should consider issuing an award utilizing the scheduled DFEC rating, subject to a later petition to reopen, as discussed in Ogilvie II.”
When an Ogilvie argument is raised in settlement negotiations or otherwise, we recommend defendants make demand for each and every document and item of evidence which the applicant intends to submit in an attempt to support a modification of the scheduled DFEC modifier. We also recommend demanding early disclosure of the identity of any expert witness the applicant intends to call on the subject of loss of earning capacity, coupled with an offer to disclose the same information on behalf of the defendant. If there is significant potential exposure, depositions of experts is recommended to determine where the Ogilvie case is well supported, and where it may be weak. Careful analysis of the potential case for modification of the DFEC in light of the requirements in Ogilvie I and II, as well as Shini and Garcia as discussed above, will allow both sides to make a good determination as to how realistic the probability of success with these complex arguments may be.
© Copyright 2010 by McDermott & Clawson, LLP. This article was reprinted with permission from the firm's Legal Briefs Newsletter June 2010.