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California: Nunes II

September 06, 2023 (13 min read)

By Hon. Robert G. Rassp

Disclaimer: The material and any opinions contained in this treatise are solely those of the authors and are not the opinions of the Department of Industrial Relations, Division of Workers’ Compensation, or the WCAB, or any other entity or individual. The materials are intended to be a reference tool only and are not meant to be relied upon as legal advice.

After Nunes I, the applicant associated in a new applicant’s attorney, who filed a Petition for Reconsideration of the Appeals Board’s June 22, 2023 en banc decision. On August 29, 2023, the Appeals Board issued its second en banc decision upholding its earlier decision [Nunes v. State of California, Dept. of Motor Vehicles (2023) 88 Cal. Comp. Cases – (Appeals Board en banc opinion) (“Nunes II”)]. The applicant has until October 13, 2023, to file a Petition for Writ of Review with the Court of Appeal. This is an ironic date because the author of this treatise is scheduled to teach apportionment for the statewide judge’s training set for 10:00 a.m. on October 13, 2023!

In Nunes II, the Appeals Board reiterated its findings and conclusions:

  1. Labor Code section 4663 requires a reporting physician to make an apportionment determination and prescribes the standard for apportionment, and that the Labor Code makes no statutory provision for “vocational apportionment”;
  2. Vocational evidence may be used to address issues relevant to the determination of permanent disability; and
  3. Vocational evidence must address apportionment, and may not substitute impermissible “vocational apportionment” in place of otherwise valid medical apportionment.

Applicant contended in her petition for reconsideration that “the apportionment analysis described by the QME is speculative and not substantial, and that applicant is entitled to an un-apportioned award. Applicant further contends that vocational evidence may be used to characterize and quantify permanent disability, and that the vocational opinions expressed by vocational experts may differ from the medical evidence. Applicant asserts that the prohibition against using vocational apportionment in place of otherwise valid medical apportionment will result in ‘pass-through’ apportionment that is not substantial evidence; that defendant failed to meet its burden of proof under section 4664; and that our June 22, 2023 Opinion may result in protracted discovery and litigation.” Applicant relied on and cited the writ denied decision in Pacific Compensation Insurance Co. v. Workers’ Comp. Appeals Bd. (Nilsen) [(2013) 78 Cal. Comp. Cases 722 (writ den.)].

The Appeals Board first describes the procedural posture of this case and indicates on its current decision that it is adopting and incorporating its original decision in Nunes I, without any changes or modifications. The case in chief had not been fully developed at the time the trial judge issued the findings and award dated February 21, 2023, and the Appeals Board remanded the case back to the trial level for development of the record to “adequately address permanent disability and apportionment for each injury claimed by the Applicant.”

Then the Appeals Board reiterated its earlier holding that “vocational evidence must address apportionment and may not substitute impermissible ‘vocational apportionment’ in place of otherwise valid medical apportionment.” Both the medical opinions of evaluating physicians and the vocational opinions of vocational experts must “detail the history and evidence in support of their respective conclusions, including ‘how and why’ a condition of factor is causing permanent disability,” citing Escobedo v. Marshalls (2005) 70 Cal. Comp. Cases 604 (WCAB en banc decision).” The Appeals Board discusses the exclusive role of the medical-legal evaluator or treating physician who determines medical apportionment. The Appeals Board in Nunes II then quotes the often most quoted part of Escobedo, which is worthwhile to fully quote here:

[T]o be substantial evidence on the issue of the approximate percentages of permanent disability due to the direct results of the injury and the approximate percentage of permanent disability due to other factors, a medical opinion must be framed in terms of reasonable medical probability, it must not be speculative, it must be based on pertinent facts and on an adequate examination and history, and it must set forth reasoning in support of its conclusion.

The Appeals Board discusses the division of labor between a physician and a vocational expert: The physicians determine medical apportionment, and the issue of apportionment is essentially “hands off” by vocational experts. In other words, vocational experts must consider only medical apportionment conclusions by physicians and cannot substitute their own “vocational apportionment.”

The Appeals Board provides the following guidance that it did not provide in Nunes I:

  1. It is axiomatic that in those instances where the WCJ determines that no evaluating physician has identified valid legal apportionment, Applicant is entitled to an unapportioned award.
  2. A corollary of this principle is that if no evaluating physician has identified medical apportionment, a vocational expert is not authorized to interpose an independent apportionment analysis. This is because Labor Code section 4663 does not authorize an expert witness to offer a superseding “vocational apportionment” scheme independent of that identified by the evaluating physicians.
  3. Similarly, if an evaluating physician identifies apportionment, but the WCJ determines that the apportionment analysis does not constitute substantial evidence and that development of the record is not otherwise warranted, Applicant is entitled to an unapportioned award. [Citing: Escobedo, supra, and Boone v. State of California - Dept. of Transp. (July 23, 2018, ADJ7974582) [2018 Cal. Wrk. Comp. P.D. LEXIS 348]; Maverick v. Marriott Int’l (January 30, 2015, ADJ2034254) [2015 Cal. Wrk. Comp. P.D. LEXIS 50v].]
  4. It is also well established that a physician had made the apportionment determination required under Labor Code Section 4663(c) where the evaluating physician has carefully considered factors of apportionment, but has nonetheless determined that it is not possible to approximate the percentages of each factor contributing to the employee’s overall permanent disability to a reasonable medical probability. Under those circumstances, assuming that the WCJ or the WCAB determines that development of the record is not warranted, applicant would then be entitled to an unapportioned award. [Citing: Opinion, at p. 8; Benson v. Workers’ Comp. Appeals Bd. (2009) 170 Cal.App.4th 1535 [74 Cal. Comp. Cases 113, 133]; see also James v. Pacific Bell Tel. Co. (May 10, 2010, ADJ1357786) [2010 Cal. Wrk. Comp. P.D. LEXIS 188].]
  5. The Appeals Board rejected Applicant’s argument that a vocational expert is permitted to include a different approach to causation of permanent disability. A vocational expert cannot offer a competing or an alternative apportionment analysis because that is inconsistent with Labor Code Section 4663. Apportionment of permanent disability under Labor Code Section 4663 “authorizes and requires that apportionment determinations be made by evaluating physicians” [italics by the Appeals Board].
  6. Alternate apportionment schemes espoused by vocational or other expert witnesses are not statutorily authorized and may not be used to circumvent the apportionment mandated by the legislature in the exercise of their plenary power to create and enforce a complete system of workers’ compensation. [Citing: Cal. Const., art. XIV, § 4; Contra Costa County v. Workers’ Comp. Appeals Bd. (Dahl) (2015) 240 Cal.App.4th 746, 758 [80 Cal. Comp. Cases 1119] (Dahl).]
  7. In Footnote 7 of Nunes II, the Appeals Board references the Fitzpatrick case:We also note that in Estrada, the WCJ’s finding that applicant had sustained permanent and total disability was made ‘in accordance with the fact,’ pursuant to section 4662(b). The Court of Appeal has subsequently held in Department of Corrections & Rehabilitation v. Workers’ Comp. Appeals Bd. (Fitzpatrick) (2018) 27 Cal.App.5th 607, 610 [83 Cal. Comp. Cases 1680) that section 4662(b) does not provide a separate path to a finding of permanent and total disability. Rather, Fitzpatrick clarified that it is section 4660 which governs how a finding and award of permanent total disability may be made ‘in accordance with the fact.’” [Citing: Ibid. Note: Citation to Estrada is omitted since the Appeals Board indicates it is not applicable in light of Fitzpatrick.]

Then the Appeals Board discusses the context of what kind of case would allow a finding of permanent total disability despite medical apportionment to a pre-existing condition where the current diagnosis is causing the total disability:

Applicant’s Petition refers us to the writ-denied decision in Pacific Compensation Insurance Co. v. Workers’ Comp. Appeals Bd. (Nilsen) (2013) 78 Cal.Comp.Cases 722 [2013 Cal. Wrk. Comp. LEXIS 90] (Nilsen)for the proposition that industrial injuries can result in a total loss of earning capacity, notwithstanding factors of apportionment including a prior award and preexisting psychiatric treatment. (Petition, at p. 7:9.) In Nilsen, applicant’s industrial injuries resulted in the development of a new and distinct medical condition in the form of a chronic pain syndrome. (Nilsen, supra, at p. 723.)6 Multiple evaluating physicians opined that the chronic pain syndrome standing alone resulted in permanent and total disability without apportionment. (Nilsen, supra, at pp. 723-724.) While the record reflected other valid factors of apportionment, the WCJ concluded that the medical and vocational evidence supported a finding of permanent and total disability based on the opinions of the evaluating physicians who determined that applicant’s inability to compete for wages was caused solely by his chronic pain syndrome, a condition for which there was no valid apportionment. (Ibid.) In sum, nothing in the analysis in our Opinion is inconsistent with the outcome in Nilsen.

A second scenario arises “when an evaluating physician identifies a valid basis for apportionment (a prior injury, subsequent injury, prior pathology, non-industrial disease process, or non-industrial condition causing permanent disability) which must be considered as part of any determination of permanent disability, including a vocational expert’s evaluation of an injured worker’s feasibility for vocational retraining.” The Appeals Board in Nunes II states:

[A] finding of permanent and total disability notwithstanding the presence of valid nonindustrial apportionment is permissible, so long as the medical and vocational evidence establishes that the permanent and total disability arises solely out of industrial conditions or factors, that is, exclusive of nonindustrial or prior industrial conditions or factors. (Acme Steel v. Workers’ Comp. Appeals Bd. (Borman) (2013) 218 Cal.App.4th 1137, 1142-1143 [78 Cal.Comp.Cases 751] (Borman); City of Petaluma v. Workers’ Comp. Appeals. Bd. (Lindh) (2018) 29 Cal.App.5th 1175 [83 Cal.Comp.Cases 1869] (Lindh).) It is not permissible, however, to circumvent valid medical apportionment by attempting to introduce a competing theory of apportionment such as “vocational apportionment.

The Appeals Board reiterated the problem with the original trial decision in Nunes—that both vocational experts attempted to describe an apportionment analysis that is inconsistent with the apportionment described by the evaluating QMEs. Both the applicant and defendant vocational experts sought to impermissibly interpose vocational apportionment in place of medical apportionment.

The Appeals Board also discusses Labor Code Sections 3202.5 and 5705, which indicate that each party has a respective burden of proof by a preponderance of the evidence and that the burden of proof rests upon the party holding the affirmative of the issue. The applicant has the burden of proving injury AOE/COE, temporary total disability, permanent disability, and need for medical treatment, while the defendant has the burden of proof of apportionment of permanent disability.

The Appeals Board offers the parties a roadmap to successful development of the record in this case: to ask the QMEs to prepare supplemental reports on the issue of “whether the factors giving rise to the Applicant’s non-feasibility for vocational retraining is identified by the vocational experts are themselves subject to medical apportionment, or whether Applicant’s inability to participate in vocational retraining is attributable solely to current industrially related conditions or factors.” The Appeals Board mandates that all vocational reports should be reviewed by all medical-legal evaluators and vice versa, and specifically: “It is uncontroverted that many evaluating physicians routinely describe and consider a significant array of vocational evidence in the preparation of their reporting,” citing 8 Cal. Code Reg. § 10682(b)(8), which includes consideration of a history of the alleged industrial injury, the patient’s complaints, and an opinion as to the nature, extent, and duration of disability and work limitations, if any.

The Appeals Board then reiterates the same obligations for medical-legal evaluators also apply to the primary treating physician under 8 Cal. Code Reg. § 9785. Both types of physicians are obligated to review each other’s reporting, along with the reporting of all vocational experts. The Appeals Board cites the AMA Guides for the authority that physicians need to consider vocational factors in arriving at impairment ratings:

In addition to the required consideration of vocational evidence in the preparation of a report, an evaluating physician may also utilize vocational evidence in the assessment of both impairment and permanent disability. The AMA Guides to the Evaluation of Permanent Impairment, Fifth Edition (AMA Guides) observes that, “[p]hysicians with the appropriate skills, training and knowledge may address some of the implications of the medical impairment toward work disability and future employment.” (AMA Guides, 5th Ed., § 1.9, at pp. 13-14.) With respect to the broader question of whether a seriously injured worker is able to reenter the labor market, the AMA Guides observe, “[a] decision of this scope usually requires input from medical and nonmedical experts, such as vocational specialists, and the evaluation of both stable and changing factors, such as the person’s education, skills, and motivation, the state of the job market, and local economic consideration.” (Id. at p. 14.) Additionally, where an evaluating physician is tasked with describing impairment pursuant to the AMA Guides, vocational evidence may assist the physician in determining which of the chapters, tables, or methods from within the four corners of the AMA Guides will provide the most accurate assessment of the injured worker’s impairment. (Almaraz v. Environmental Recovery Services/Guzman v. Milpitas Unified School District (2009) 74 Cal. Comp. Cases 1084 (Appeals Board en banc), as affirmed by Milpitas Unified School District v. Workers’ Comp. Appeals Bd. (Guzman) (2010) 187 Cal.App.4th 808 [75 Cal. Comp. Cases 837].)…

In short, as is demonstrated above, treating and evaluating physicians regularly review, assess, and opine on vocational issues, from the gathering of vocational information relevant to the determination of causation, to the final assessment of permanent disability and work restrictions. We therefore find no merit in applicant’s contention that evaluating physicians are ill-equipped and unwilling to assess vocational evidence. To the contrary, we believe that vocational evidence is an important, and often integral, consideration in the preparation of medical-legal reporting, and that is fully within the purview of the evaluating physician to offer an opinion responsive to the vocational evidence either at the request of the parties, or of the physician’s own accord.

The Appeals Board also addresses in Nunes II a vexing problem that trial judges experience all the time—when one evaluating physician adopts another evaluating physician’s conclusions on apportionment of permanent disability, without stating how and why they are adopting the other physician’s conclusions. The Appeals Board states:

While we agree generally that it is impermissible for an evaluating physician to merely reiterate another physician’s apportionment analysis without an accompanying explanation of “how and why” the conditions or factors of apportionment result in permanent disability, these concerns would necessarily be limited to physicians who are statutorily authorized to render an apportionment opinion under section 4663. (See, e.g. Mayorga v. Dexter Axle Chassis Group (June 25, 2015, ADJ364166; ADJ3925942) [2015 Cal. Wrk. Comp. P.D. LEXIS 359].) There can be no “pass-through” apportionment from a physician to a vocational expert when that expert is not authorized to render an apportionment determination in the first instance.

The Nunes cases serve as a guideline for counsel to develop the record on cases involving the potential of a 100% permanent and total disability award with or without apportionment of permanent disability to non-industrial factors. The many takeaway factors in this case will be used to teach attorneys, physicians, and vocational experts the standards of proof and the substantive information that needs to be adduced and produced by these experts so that a trial judge, the Appeals Board, and appellate courts can rely on their conclusions as substantial medical and vocational evidence to support an award.

© Copyright 2023 LexisNexis. All rights reserved. This article is excerpted from the upcoming 2024 Edition of The Lawyer’s Guide to the AMA Guides and California Workers’ Compensation (LexisNexis).