Between a Rock and a Hard Place: Permanent Total Disability Under California Labor Code Section 4662

Between a Rock and a Hard Place: Permanent Total Disability Under California Labor Code Section 4662

 By Robert G. Rassp, Esq.

Once in a while, the powers that be allow us to be “applicant oriented” in our articles and this is one of them. We try to be neutral in most of our articles and books but sometimes the intoxicating effect of writing gets the most of us.

Warning to applicant’s attorneys: Defense attorneys can use the checklist in this article against you if you pick the wrong case and you contend it falls under the Labor Code section 4662 presumption of permanent total disability. The title of this article is appropriate here because if you ever represented someone who actually has an 85% to 100% permanent disability, in real life your client is between a rock and a hard place because real disabilities like these truly affect a person’s quality of life and not just their ability to work.

That being said, let’s get down to business and state what Labor Code section 4662 actually says:

“Any of the following permanent disabilities shall be  conclusively presumed to be total in character:

(a) Loss of both eyes or the sight thereof.

(b) Loss of both hands or the use thereof.

(c) An injury resulting in a practically total paralysis.

(d) An injury to the brain resulting in incurable mental incapacity or insanity.

In all other cases, permanent total disability shall be determined in accordance with the fact.”

Notwithstanding its poor grammar, the last sentence of section 4662 has recently been interpreted by the WCAB in a number of cases where the date of injury is on or after 1/1/05 or the case otherwise falls under the 2005 PDRS and WPI ratings under the AMA Guides. Section 4662 creates a conclusive presumption of permanent total disability. More on apportionment later, defense attorneys.

Up until recently there have been very few WCAB cases that fall under section 4662 and virtually no published appellate court decisions that apply the last sentence.  However, the current WCAB has tackled the issue of how and when the last sentence in section 4662 can apply in a number of post SB-899 panel decisions, including a very detailed one called Boatright vs. Argonaut Construction. [Editor’s Note: Subscribers to the FREE LexisNexis enewsletter on Calif. workers’ comp were given access to the Boatright panel decision in the Dec. 6, 2010 issue. To subscribe to the free eNewsletter with access to the 2010 archives, please email Robin.E.Kobayashi@lexisnexis.com.]

In Boatright, the WCAB panel on October 18, 2010 reversed a WCJ decision that found the Applicant had a 92% permanent disability and concluded instead that the Applicant was 100% permanently and totally disabled without apportionment based on the facts pursuant to section 4662. The WCAB panel relied on the report and deposition of an orthopedic surgeon AME and a vocational expert’s report and live testimony.

The Applicant was a 54-year-old construction laborer who had admitted neck, back and bilateral upper extremities injuries that included two failed cervical spinal fusion surgeries resulting in spinal cord damage. Usually, when there is spinal cord damage in the cervical spine, the patient sustains gait derangement as well as sensory deficits in the lower extremities in addition to problems with the upper extremities. In this case, the Applicant’s right leg was affected by the cervical cord damage, and he needed to use assistive devices to ambulate.

Before we get to a discussion of this case, we digress to explain the current thinking of the WCAB panels on section 4662 cases. First of all, let’s answer a few questions:

1.  Does the Labor Code say anything else about permanent total disability?

Labor Code section 4660(b)(2) says that an injured employee’s diminished future earning capacity is one of the core elements of a permanent disability rating utilizing the descriptions and measurements of the AMA Guides 5th Edition. However, this article is not a discussion about alternative WPI ratings pursuant to Almaraz-Guzman II or “Guzman III.” Nor is it a discussion about rebutting a scheduled DFEC adjustment under Ogilvie II. If you try to prove permanent total disability under section 4662, you have to start with a WPI rating. Hint: There are no 100% WPI ratings in the AMA Guides 5th Edition, unless a person is dead or comatose.

2. Does the 2005 PDRS say anything about permanent total disability?

How many of you have actually read the instructions in the 2005 PDRS? On pages 1-2 to 1-3, the PDRS defines permanent total disability as “a level of disability at which an employee has sustained a total loss of earning capacity.”

3. Can you “LeBoeuf” a case under the last sentence of Labor Code section 4662?

No! LeBoeuf is dead in the water under the 2005 PDRS! The WCAB has recently said: “Leboeuf vs. WCAB (1983) 34 Cal. 3d 234; 48 Cal. Comp. Cases 587 does not directly apply to injuries that are subject to the 2005 PDRS. At the time of LeBoeuf, the chief component of a permanent disability rating was the injured employee’s diminished ability to compete in the open labor market [under former Labor Code section 4660(a)].” Baldrige vs. Swinerton, Inc. 2010 Cal. Wrk., Comp. P.D. LEXIS 271 (July 2010). [Editor’s Note: Lexis.com subscribers can access the Baldridge panel decision. To subscribe to lexis.com, contact Robin.E.Kobayashi@lexisnexis.com.]

Under Leboeuf, we used to bring in vocational experts to testify that an injured worker was non-feasible for retraining due to his or her industrial injury and therefore the person has lost 100% of the ability to compete in the open labor market. This is not the same criteria that now exist under Labor Code section 4660 – that a person’s diminished future earning capacity is affected by an industrial injury. The WCAB panel in Baldrige goes on to say:

“Nevertheless, under current law, the injured employee’s diminished future earning capacity is one of the core elements of a permanent disability rating (citing Labor Code section 4660(b)(2) and Leboeuf indirectly supports the principle that an employee’s permanent disability rating may be affected where the industrial injury causes a total loss of earning capacity. That is, a complete loss of future earning capacity is analogous to a complete inability to compete in the open labor market. Moreover, as the WCJ’s report points out, the 2005 PDRS at pages 1-2 to 1-3 expressly declares that ‘permanent total disability represents a level of disability at which an employee has sustained a total loss of future earning capacity.’ See also Labor Code section 4662 providing that certain disabilities shall be conclusively presumed to be total and that in all other cases, permanent total disability shall be determined in accordance with the fact.”

So you can see the framework has been set up by the WCAB to utilize section 4662 under the 2005 PDRS and the AMA Guides. But you cannot directly use the same approach under Leboeuf.

4. Should a vocational expert be used to apply the last sentence in section 4662 cases?

Absolutely! In August 2010, a WCAB panel reversed a WCJ and returned the matter to the trial level ordering the judge to consider the testimony and report of an agreed vocational expert on the question of whether the injured worker has a total loss of future earning capacity. The WCJ erroneously held that the vocational expert’s testimony was “outside the four corners of the Guides” and could not be considered in rebutting a strict WPI rating that resulted in an 85% permanent disability. The WCAB panel specifically said that a vocational expert’s testimony is allowed to show permanent total disability under the AMA Guides or Labor Code section 4662. See Gross vs. Slater Brothers (August 2010) 2010 Cal. Wrk. Comp. P.D. LEXIS 360. In fact, use of a vocational expert is absolutely essential in a section 4662 “last sentence” case. [Editor’s Note: Lexis.com subscribers can access the case above. Subscribers to the FREE LexisNexis enewsletter on Calif. workers’ comp were given access to the Gross panel decision in the Aug. 23, 2010 issue. To subscribe to the free eNewsletter with access to the 2010 archives, please email Robin.E.Kobayashi@lexisnexis.com.]

5. One last question, we promise. Is a case that falls under any part of section 4662 resulting in a presumption of permanent total disability subject to apportionment under Labor Code sections 4663 and 4664?

Probably, but there is no direct case law yet on this very important issue. Remember, Labor Code section 4662 creates a conclusive presumption of permanent total disability. Does this mean that apportionment is not relevant? A hint to defense attorneys: Always raise apportionment as an issue – the worst thing that can happen is that you lose.

The focus should be on medical evidence on this issue on what is the direct cause of the permanent total disability. Hint: There is no published case law that actually defines the term “direct causation” of permanent disability. There is nothing in the Escobedo or Gatten appellate decisions on the definition of “direct” cause of permanent disability.  We might go out on a limb and suggest that the courts focus on the term “proximate cause” using the “but for” test to get there, but that is a separate idea for another article (e.g., how do you apportion permanent disability for a diabetic construction worker who steps on a rusty nail at work resulting in a below knee amputation? Hint: The amputation is a 28% WPI per Table 17-32. The WCAB has not yet tackled this very difficult issue). But we digressed.

The 21-page Boatright WCAB panel decision has a detailed description of the evidence and the panel explains why it concluded that the Applicant was 100% permanently and totally disabled under the “in accordance with the fact” sentence in section 4662, thereby reversing the WCJ’s conclusion of a 92% permanent disability finding. The WCAB panel decision is noteworthy for how it evaluates the evidence from an AME and one vocational rehabilitation counselor who wrote a report and testified at trial.

HOW THE PHYSICIAN APPROACHED THE CASE

The WCAB panel focused on the AME physician’s report and deposition testimony about the seriousness of the Applicant’s cervical spine impairment. The physician covered all of the following elements:

·         Medical history resulting in final diagnosis at MMI with permanent objective findings

o   Two cervical surgeries C4-C7 fusions resulting in “signs of cervical cord dysfunction consisting of weakness, sensory loss and spastic gait coupled with a remarkably abnormal MRI scan…permanent severe spinal cord compression, bilateral hand weakness, inability to ambulate without assistive device.”

·         Effect of objective medical findings on ADL functioning (use Table 1-2 of the AMA Guides.

o   “Permanent neurologic findings were objective (i.e. without patient participation), reproducible and not likely to be amenable to a pain management program but will require chronic analgesics. Neurologic impairment would be unchanged absent the pain medication. It is not possible to improve his gait by merely diminishing analgesic intake.”

o   Persistent cervical pain, bilateral hand weakness, bilateral leg weakness, falling, loss of sexual function, inability to ambulate without a walker or scooter. Needs to lie down for significant portions of the day due to pain levels.

·         Medications and their applicable side effects in this case.

o   “Throughout the day, he takes eight Gabapentin (Neurontin), five to six oxycodone, six to nine ibuprofen, 30 milligrams of Mirtazapine (a tranquilizer), Amyltriptyline (for depression), Diazapam for heavy spasms in his legs – he used to take 310 Percocet per month.

·         Permanent work restrictions

o   “Needs assistive devices to ambulate – a walker, a scooter. Needs home health assistance four hours a day. A 50% decrease in grip on the right, maybe a 30% on the left. He is precluded from forceful strength activities and repetitive manipulation, contemplating loss of 50% of pre-injury capacity of lifting, pushing, pulling, grasping, pinching, holding, torquing, performing other activities of comparable physical effort and activities requiring finger dexterity. . I don’t know what he could do in the workplace.”

HOW THE VOCATIONAL EXPERT APPROACHED THE CASE

What is immediately apparent when you read the WCAB panel’s summary of the vocational expert’s report and testimony is the fact that this vocational expert did not cut his teeth from within the workers’ compensation community. Instead, his report and testimony reads directly out of a standard vocational rehabilitation expert’s testimony in a social security disability case. In a recent case that resulted in a 100% permanent and total disability award with the contention “in accordance with the fact” from Labor Code section 4662, an agreed vocational expert was specifically hired because her participation before SB 899 was enacted was 80% in social security disability cases and 20% in workers’ compensation cases.

Why is this important? Simply stated, a vocational expert’s testimony about a person’s residual functional capacity alone is not enough to prove permanent total disability under section 4662’s “in accordance with the fact” analysis. Most workers’ compensation oriented vocational experts are not qualified to testify in a Labor Code section 4662 “in accordance with the fact” cases because most lack the expertise and experience in understanding a person’s complete loss of future earning capacity in the context of permanent impairments under the AMA Guides. These workers’ compensation experts are experienced and knowledgeable about how an industrial injury affects a person’s ability to compete in the open labor market and based on the 1997 PDRS.

The AMA Guides have been the framework from which eligibility for social security disability benefits are established. See Subpart P of the federal regulations under the Social Security Act 20 C.F.R. sections 404.1501 through 404.1599. The WPI ratings, the 2005 PDRS coupled with the Labor Code section 4660 mandate of determining loss of future earning capacity requires a deeper expertise from a vocational expert than from one who only has had experience dealing with pre-AMA Guides cases.

A vocational expert does not need to have a working knowledge of the AMA Guides but experience in understanding the criteria of “unable to engage in substantial gainful activities due to medically determinable physical and/or mental impairments” is essential and is the cornerstone of eligibility for social security disability benefits and by analogy to permanent total disability “in accordance with the fact” under section 4662. Only vocational experts who are experienced in testifying in social security disability cases can carry this evidentiary burden.

The vocational expert in the Boatright case covered the following specific issues:

1. He reviewed all of the medical reports in the case including the AME report and deposition transcript. He especially paid attention to the medications the injured worker is prescribed at the time he was declared MMI by the AME, including reported and documented side effects of those medications, if any.

2. He evaluated the Applicant’s “past relevant work” which in social security parlance is the last 15 years of employment activities prior to the onset of disability or in this case prior to the date of injury and last date worked. The injured worker in Boatright was a construction laborer for 32 years prior to the date of injury.

3. He evaluated the Applicant’s past educational history – high school graduate or not, post-high school education including college, higher education or vocational schools; licenses or certificates of completion. Boatright struggled as a student and barely graduated from high school and had no post high school education.

4. The expert described the Applicant’s “vocational profile” in terms of whether his work history was “skilled, semi-skilled, or unskilled,” the specific vocational profile (on a scale of 1 to 13 how long it takes to become proficient in a particular job) and the level of arduousness of each job - very heavy, heavy, medium, light or sedentary. In Boatright, the injured employee’s vocational profile was heavy unskilled work. Note that the term “sedentary” is not the same in this context as the term was used under the 1997 PDRS. Sedentary work in social security disability cases means the person can work sitting 6 hours in an 8-hour day or work standing 6 hours in an 8-hour day, can lift up to 10 pounds frequently, 20 pounds occasionally.

5. The vocational expert described the Applicant’s current personal, social and occupational profiles. This would include his or her living conditions and social life (i.e., married, living alone, able to care for self, grocery shopping, driving, house hold chores such as laundry and cleaning, general ADL functioning as reported by the applicant and observed by the vocational expert).

6. The vocational expert, based on a review of the permanent objective medical findings and permanent impairments, stated that the injured worker cannot perform his past relevant work and described why he cannot.

7. The vocational expert then determines if there are any transferable skills the injured worker has from his past education and relevant work history. Hint: An unskilled heavy type work history does not result in any transferable skills. If there are transferable skills, the expert identifies them specifically.

8. The vocational expert described the injured worker’s residual functional capacity using national standards. In Boatright, the vocational expert concluded that the Applicant can sit for a total of one to two hours in an eight-hour day; cannot stand unassisted and must use a walker or scooter. He could walk with assistance for 30 minutes to one hour a day. He spends most of his day laying down on his couch, he has limited finger manipulations in that he can write for five to ten minutes at a time for a total of 45 minutes over a day.

9. The vocational expert administered standard pencil and paper vocational testing to determine the Applicant’s vocational aptitude. This helps determine if the Applicant is feasible for re-education and retraining. People who have no transferable skills who cannot perform his or her past relevant work must have some sort of retraining in order to re-enter the work force. In Boatright, the vocational expert concluded that the injured worker, due to his physical limitations would not be able to attend classes for training on a regular basis and he would have to explore work at the unskilled sedentary/light work level.

10. The vocational expert then determined whether the injured worker, based on the physical limitations in the medical records, his vocational testing, his educational background and his ADL functioning whether he has a total loss of future earning capacity.

In Boatright, the vocational expert concluded the Applicant would be limited to light unskilled jobs offering a sit/stand option such as small product assembler, hand packer and inspector. “However, the ability to do those jobs would be limited due to the limitations noted in the Applicant’s hand and arm, use of narcotics, need to lie down for part if not all of the day; and the negative affect his pain and medications have on his ability to maintain a consistent pace and concentration level needed for employment of this type.”

This analysis is broken down as follows:

            -Injured worker cannot perform past relevant work

            -Injured worker has no transferable skills

            -If there are transferable skills, what are they and can injured worker perform them – if not why not?

            -If there are transferable skills and the injured worker can perform them, what accommodations are necessary, if any, for full time work?

            -What kind of entry level (unskilled, sedentary) jobs could injured worker perform, if any?

            -If injured worker cannot perform entry level jobs, why not?

            -Can injured worker perform work in a sheltered work setting?

            -Can injured worker perform any kind of self employment activities?

One of the most telling quotes from the vocational expert’s testimony and report includes commentary on the Applicant’s use of narcotic medications:

“Further impacting his ability to be considered for employment is the use of narcotics that is prescribed for him to help alleviate and deal with his levels of pain. Employers do not look kindly upon people who are on heavy doses of narcotics. The other people he would be competing with for these positions that would be drug free would certainly be considered before Mr. Boatright.”

In addition, the expert offered his opinion that unskilled sedentary or light work jobs mostly are production oriented and the Applicant could not maintain the appropriate pace, persistence and concentration necessary to meet minimal production standards. (See page 365 of the AMA Guides that describes the appropriate mental functional capacities in a work setting). He would not be able to perform work at a home based job because those types of jobs require the ability to market yourself and the injured worker does not have any marketable skills nor does he have the ability to market himself. He would not be able to make any money at a home based job since he would need to pay someone to assist him as he cannot perform work activities on a full-time basis.

HOW AND WHY THE WCAB REVERSED THE WCJ’S FINDING OF 92% AND HELD THE APPLICANT IS 100% PERMANENTLY TOTALLY DISABLED UNDER SECTION 4662

The WCJ expressly rejected the vocational expert’s conclusions as “largely conclusive. It does not appear that he considered all possible employment. He did not, for example, explore any home based employment but rather dismissed it out of hand. All in all, the testimony was not found to be persuasive” and did not constitute substantial evidence.

The WCAB panel responded to the WCJ’s conclusions as follows:

“Based upon the findings and opinion of the AME, regarding applicant’s physical incapacity due to the neurologic effects of his spinal cord injury, as well as his need to use medications, including narcotic medications, combined with the unrebutted opinion of the vocational counselor that applicant has lost the ability to work in the open labor market, we find applicant is entitled to an award of permanent total disability “in accordance with the fact.”

“As for a sheltered workshop, which would allow applicant to work at his own pace, [the vocational counselor] did not believe applicant had the capacity to work a full day and he did not believe such work would provide an adequate income. As for home based employment [the vocational expert] stated that applicant’s limited aptitude and need for light duty would be amenable for production and assembly work, and he was not aware of home-based work of that type. He further stated that operating a home-based business would require applicant to go out and market himself and [the vocational expert] did not believe applicant was capable for such activity.”

WHAT DOES THE WCAB PANEL SAY ABOUT THE 2005 PDRS AND LABOR CODE SECTION 4662 “IN ACCORDANCE WITH THE FACT” ANALYSIS?

What is compelling in the WCAB panel decision is their opinion of how and when a Labor Code section 4662 presumption of permanent total disability applies “in accordance with the fact” in light of the enactment of SB 899 and the use of the AMA Guides to determine permanent disability. The WCAB panel in Boatright sets forth the reasoning and a summary of what is needed to be entitled to the presumption of permanent total disability under section 4662 “in accordance with the fact” analysis:

“The 2005 PDRS defines permanent total disability as “a level of disability at which an employee has sustained a total loss of earning capacity.” (2005 rating schedule, page 1-2 and 1-3). According to [the vocational expert’s] well reasoned and unrebutted opinion, which was based upon his expertise, his direct observation of applicant’s capabilities, and the medical opinion on the AME, applicant has sustained a total loss of earning capacity. Based upon an analogy to the cases referring to the opinions of medical experts, the opinion of [the vocational expert] as a vocational expert – particularly where there is no evidence contradicting or rebutting his conclusions – constitutes substantial evidence in support of the award. (See Place vs. WCAB (1970) 3 Cal. 3d 372, 35 Cal. Comp. Cases 525).

Labor Code section 4662 allows a determination of 100% permanent and total disability “in accordance with the fact.” Senate Bill 899 which mandated use of the 2005 rating schedule did not alter Labor Code section 4662 regarding determination of 100% permanent total disability based on the facts of each case.

In this case, the well reasoned opinions of [the AME and vocational experts] establish that applicant is unable to return to the workforce and, therefore, based on this record, applicant has sustained a level of permanent disability at which he has experienced a total loss of earning capacity. Applicant’s loss of earning capacity also satisfies the requirement of permanent total disability as defined by the 2005 rating schedule…Accordingly, we shall grant applicant’s petition for reconsideration to find that as a result of his industrial injury, applicant has sustained 100% permanent total disability.”

FURTHER COMMENTARY

What if in Boatright or in any other similar case, there were dueling vocational experts? There are no dueling experts in social security disability cases – there is only one vocational expert who is hired by the social security judge. From what the WCAB panel says in Boatright about the only vocational expert who testified in that case, it appears that the WCAB will accept the most persuasive and credible vocational expert opinion even if there are dueling experts.

You should read Place vs. WCAB cited by the WCAB panel – it is the long-standing case that says that a judge can rely on any one physician to the exclusion of all others if that physician’s conclusions are the most persuasive, credible and constitute substantial evidence. The same now applies to the value of vocational expert testimony under a Labor Code section 4662 “in accordance with the fact” type case. As with medical evidence, the WCAB is indicating that the vocational expert’s conclusions must be based on substantial evidence – he must review the medical evidence before drawing any conclusions and his opinion must be well reasoned with his or her rationale behind his conclusions clearly stated. The vocational expert, like any physician, must state how and why he or she came to specific conclusions concerning a person’s loss of future earning capacity.

Labor Code section 4662 permanent and total disability “in accordance with the fact” cases are an emerging breed of cases that we are now seeing more frequently. This is because of the threshold of permanent total disability is so much lower than the threshold of 100% permanent impairment of ADL function in the AMA Guides. In other words, we are seeing cases like Boatright which under the 1997 PDRS would unquestionably rate 100% based on loss of ability to compete in the open labor market. Now we have to analyze WPI impairment ratings in the context of the effect of those permanent impairments on a person’s total loss of future earning capacity in post 2005 injury cases.

This article is dedicated to four clients whose cases were separately found by a WCJ to be 100% permanent and total disability “in accordance with the fact” under section 4662. The first client has been on a bilateral lung transplant list since the fall of 2009 due to her exposure to diacetyl (popcorn butter) and whose case potentially rated less than 100% under the WPI ratings from the AMA Guides.

The second client had “routine” cervical spine surgery where something went wrong inter-operatively or post-operatively and she has a C-5 spinal cord motor impairment where she has lost complete use of her elbows and shoulders – she can only use her hands and fingers. Believe it or not, this one fell below 100% permanent disability based on WPI ratings under the AMA Guides.

The other two cases involved clients who developed chronic pain syndromes, one as a result of a pain drip that malfunctioned during routine elbow surgery and the other after failed carpal tunnel surgeries. Both required trials because each case resulted in a rating below 100% disability based on WPI ratings from the AMA Guides. It is very clear that all four of these cases involved injured workers whose permanent disability was 100% in accordance with the fact. These cases reflect why the legislature did not repeal Labor Code section 4662 in SB 899 – many cases fall under the last sentence of that section, even in cases rated using the AMA Guides and the 2005 PDRS.

Make sure you pick your battles carefully – stay with permanent objective medical findings and the criteria listed here from the WCAB panel decision. Do not base an attempt to apply section 4662 on claimed “sleep disorders” and “sexual dysfunction” ratings since these are red herrings both in the AMA Guides and in our cases. The credibility of the injured worker and the vocational expert are essential to win cases under the last sentence of section 4662.

© Copyright 2011 LexisNexis. All rights reserved.

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Comments

Teri Louise
  • 04-09-2012

Mike here is the article on the vocation specialist