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California: Baker Redux

October 20, 2011 (5 min read)
The California Supreme Court has spoken again about COLAs.
Call it Baker Redux.
In response to a Petition for Rehearing filed by San Jose attorney Arthur Johnson, the California Supreme Court issued a modified opinion that can be found here:
Johnson's Petition for Rehearing had noted that the Baker decision, issued in August 2011, used the term "seamless transition" in reference to the transition from temporary disability benefits (which have a COLA under Labor Code 4453) to permanent total disability benefits (which have a COLA in certain circumstances under Labor Code 4659(c).
Johnson noted that after SB 899 there is a 104 week cap on temporary disability. Some claimants may not be permanent and stationary for years once the 104 weeks of TD has been paid out. Under Johnson's argument:
"This situation would then mean that two claimants equally disabled at 100%, but who become permanent and stationary at different dates, would have dramatically different pay-out rates over their lifetimes. If a person for example, fell and was paralyzed from the neck down (such as Christopher Reeve), became permanent and stationary immediately, the temporary disability would end immediately and permanent total disability benefits would begin immediately and a total disability COLA would apply to January first following the date of injury."
Continuing, Johnson noted that:
"However, if a similar injured worker fell and sustained multiple internal injuries with broken bones, and took ten years to heal before becoming permanent and stationary, that injured worker would receive 104 weeks of temporary disability and then temporary disability would stop. Perhaps permanent disability "advances" would be made at a partial disability rate, as we often now see in practice. Perhaps not. If and when the claimant was found to be 100% totally disabled, the total permanent disability payments would revert back to the last payment of temporary disability, two years following the date of injury pursuant to L.C. 4659(b). However, pursuant to the terms of this decision, the COLA would have "flat-lined" for the 10 years it took to become permanent and stationary."
In essence, Johnson argued that the Supreme Court's decision ignored the realities of workers' comp, discriminating against injured workers whose disabilities do not become permanent and stationary for many years.
But now we have Baker Redux.
Apparently tacitly acknowledging some of Johnson's argument, the court added a new footnote to its opinion:
"On page 439, in the paragraph carrying over from page 438, a new footnote 2 is added following the clause “i.e., the permanent and stationary date in the case of total permanent disability benefits, ” stating: “Our discussion of total permanent disability benefits pertains only to those payable for injuries occurring before April 19, 2004. For later injuries, it may be that an injured worker would become entitled to total permanent disability payments, and corresponding COLA’s, before the worker’s medical condition is permanent and stationary. (See §§ 4650, subd. (b) & 4656, subd. (c).) We express no view on that question, which is not presented under the facts of this case.”
This would seem to leave open the issue of COLA calculation start date in a case where the worker is likely 100% even if the worker is not yet deemed P&S.
Advantage Arthur Johnson.
Baker Redux may not prove to be the California Supreme Court's finest hour.
The Court's modified opinion in Baker Redux has now given us this:
"On page 446, the third and fourth sentences in the first full paragraph on the page are replaced by the following: “Moreover, workers who sustain industrial injuries qualifying them for total permanent disability payments receive temporary disability payments which, depending on the date of injury, may themselves be indexed to the SAWW, thereby protecting the worker from the effects of inflation during the period of eligibility for temporary disability benefits. (See §§ 4453, subd. (a)(10), 4653, 4661.5.)”
But as my fellow CompGuys.org commentator Jake Jacobsmeyer has noted, it appears that the Supreme Court is confused. Jacobsmeyer noted in an e-blast tonight that "to some extent the Court's language suggests a lack of understanding of some aspects of workers' compensation".
Specifically (and I think correctly), Jacobsmeyer noted that:
"The minimum and maximums for TTD are indexed under Labor Code § 4453(a)(10) but injured workers only receive the benefit of such indexing to the extent earnings support the increases but TTD itself is not indexed to the COLA. Additionally since Labor Code § 4661.5 does not affect any benefits until 2 years after the date of injury, the Courts observation that IW are protected from inflation based on increases in TD under Labor Code § 4453, subd. (a)(10), 4653 & 4661.5 does not appear accurate. "
Writing to a largely employer based audience, Jacobsmeyer claims that
" We can anticipate the Court’s mischaracterization of the impact of Labor Code § 4661.5 may be used by applicant attorneys to try and cause some mischief in the future. However the language is dicta at best and certainly is not part of the Courts holding in this case. The Court is not interpreting Labor Code § 4653, just making an observation about it."
Whatever.
In any event, it's quite fascinating to see the California Supreme Court make an adjustment in Baker v. WCAB and then in doing so, making another error that will likely trigger a "Baker Three".
Might the Court get cold feet for comp?
Julius Young
www.workerscompzone.com
www.boxerlaw.com
© Copyright 2011 Julius Young. All rights reserved. Reprinted with permission.
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