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California: How Does Labor Code Section 4662(b) “Based on the Fact” Apply in Post 1/1/13 Injuries?

September 05, 2019 (5 min read)

By Hon. Robert G. Rassp

The opinions expressed in this article are those of the individual author and are not those of the Calif. Department of Industrial Relations, Division of Workers' Compensation or of the WCAB. 

In September 2018, the District Court of Appeal, Third Appellate District issued its published decision in Department of Corrections and Rehabilitation v. Workers’ Compensation Appeals Board (Fitzpatrick) (2018) 27 Cal. App. 5th 607 [238 Cal. Rptr.3d 224, 83 Cal. Comp. Cases 1680]. The Applicant was a correctional officer who developed a cumulative trauma injury to his heart and psyche. The parties utilized medical evaluators in internal medicine and psychiatry. The internal medicine physician concluded that the Applicant has a cardiac whole person impairment of 75% WPI which after adjustment for age and occupation rated 97% permanent disability. The psychiatrist concluded that the Applicant has a psychiatric impairment rating of 40% WPI which rates out to a 71% permanent disability. The Combined Values Chart combined the 97% and 71% to a 99% permanent partial disability rating. The WCJ issued Findings and Award that the Applicant is 100% permanently and totally disabled “based on the fact” pursuant to Labor Code Section 4662(b). The WCJ did not discuss the rating under the 2005 PDRS and simply jumped to the conclusion that the Applicant is 100% permanently and totally disabled based on the fact.

The employer filed a Petition for Reconsideration and the WCAB panel upheld the judge’s decision. The District Court of Appeal in its published opinion reversed. The Court held that Labor Code Section 4662(b) does not tell us how to find permanent total disability “based on the fact.” The Court held that the proper method of doing so is to first apply Labor Code Section 4660 and apply the WPI ratings based on the medical evidence presented by the physicians. For injuries before 1/1/13, Labor Code Section 4660 expressly applies to the determination of “the percentages of permanent disability” and Section 4660 governs how the finding and award of permanent total disability shall be made “in accordance with the fact” as stated in Section 4662(b).

The Court pointed out, as this author does in The Lawyers’ Guide to the AMA Guides and California Workers’ Compensation (LexisNexis), that the 2005 permanent disability rating schedule recognizes that a permanent disability rating can range from 0% to 100% permanent disability: “Zero percent signifies no reduction of earning capacity, while 100% represents permanent total disability” citing the 2005 PDRS, page 1-2. The Court points out that in examining the 2005 PDRS, there are many combinations of ratings that can reach 100% permanent and total disability, citing pages 1-9 and 6-5 of the PDRS. The Court stated: “Accordingly, by proceeding under Section 4660, Fitzpatrick would have had the opportunity to rebut the 99% scheduled disability rating to show the appropriate rating is permanent total disability.” The Court noted that there was a vocational expert’s report in the record that was not relied upon by the trial judge or the WCAB panel.

In short, the Court held that Section 4662(b) total disability based on the fact is not a second independent path to permanent total disability findings separate from Section 4660. The analysis of every case is mandatory using Section 4660. The Court rejected the WCAB’s new argument in its brief to the Court by suggesting the WPI ratings for the heart and psyche be added pursuant to the Kite case. The Court is basically saying this is not the job of the WCAB—the parties had an opportunity to develop the record.

The takeaway of the Fitzpatrick case is for counsel to be mindful when the WPI ratings are high and could reach 100% permanent and total disability “based on the fact” under Section 4662(b) that it is incumbent of Applicant’s counsel to develop the record before trial and rebut the rating that was generated in accordance with Labor Code Section 4660. In cases like Fitzpatrick, counsel should have each physician review the other’s reporting and comment on them. Counsel can request an opinion about whether adding the impairments would constitute substantial evidence of a more accurate rating of permanent disability in a case and why. Fitzpatrick was on a heart transplant list and was suffering a significant psychiatric disability. The development of the record prior to trial in this case would have resulted in a clean rebuttal of the strict permanent disability rating of 99%.

We are seeing post-Fitzpatrick cases where the Applicant who bears the burden of proving permanent disability has been able to rebut the strict ratings under Labor Code Section 4660 by having the physicians indicate the Combined Values Chart does not apply, the WPI ratings are additive and why, and the injured worker is permanently totally disabled on an industrial basis after or despite apportionment. Added to that layer of rebuttal is the appropriate vocational expert conclusions that the Applicant in a given case is not amenable to vocational rehabilitation and why; and that he or she is precluded from any kind of work taking into account the medical evidence and considerations of apportionment as concluded by evaluating or treating physicians.

Remember, the Fitzpatrick case involved a date of injury prior to 1/1/13. What about under the current 1.4 adjustment factor for post-1/1/13 dates of injury? While no case law is on point yet, we can assume the analysis set forth by the Court of Appeal applies regardless of the date of injury—when the Applicant is trying to prove permanent total disability “based on the fact” pursuant to Section 4662(b). The Applicant will have to establish the rating for permanent disability pursuant to Labor Code Section 4660.1 by utilizing the descriptions and measurements of the AMA Guides 5th Edition as usual, and then provide a rebuttal to the permanent disability rating via vocational expert opinion, or deposition of evaluating or treating physicians to determine if WPI ratings should be added or combined.

There are two WCAB panel decisions that support the possibility that the post 1/1/13 date of injury 1.4 adjustment factor can be rebutted just like the DFEC adjustment could be for pre-1/1/13 injuries. Just because the eight DFEC adjustment factors for pre-1/1/13 dates of injury was replaced by the 1.4 uniform adjustment factor does not preclude the adjustment factor, regardless of what it is in a given case, from being rebutted in order to prove 100% permanent total disability pursuant to Labor Code Section 4662(b) “based on the fact.” Therefore, Fitzpatrick probably applies in all dates of injury post-SB 899 and post-863. See Hennessey v. Compass Group 2019 Cal. Wrk. Comp. P.D. LEXIS 121; Sandoval v. The Conco Companies 2019 Cal. Wrk. Comp. P.D. LEXIS – (see pdf at end of this article).

© Copyright 2019 LexisNexis. All rights reserved. This article is excerpted from the upcoming 2019 Edition of The Lawyer’s Guide to the AMA Guides and California Workers’ Compensation, by Robert G. Rassp.