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California: Permanent and Total Disability Cases after Fitzpatrick

July 07, 2019 (3 min read)

Since the Third Appellate District’s case in Department of Corrections and Rehabilitation v. Workers’ Comp. Appeals Bd., 27 Cal. App. 5th 607, 83 Cal. Comp. Cases 1680, was decided in September of 2018, there has been an open question as to how the Workers’ Compensation Appeals Board (WCAB) would apply Fitzpatrick to permanent and total disability cases, and more specifically to those cases that may have previously be determined “in accordance with the fact” per Labor Code Section 4662(b).

Indeed, prior to Fitzpatrick, it was assumed that an employee had two very distinct paths for establishing a permanent and total disability. There was Labor Code Section 4660, which prescribed a very specific methodology for determining permanent disability. For purposes of addressing injuries before January 1, 2013, Labor Code Section 4660 mandated that the percentage of PD shall be based on the nature of the physical injury or disfigurement, the employee’s occupation, the employee’s age, and the employee’s diminished future earning capacity. This section further explicitly adopted the impairments as described by the AMA Guides for purposes of determining the extent of the “nature of the physical injury or disfigurement”. Finally, this section mandated that the administrative director develop and regularly amend a “rating schedule” that was to incorporate these factors for purposes of arriving at a percentage of permanent disability.

The second path was thought to exist under Labor Code Section 4662(b). Indeed, it was thought that under Labor Code Section 4662(b), the Workers’ Compensation Administrative Law Judge (WCALJ) could use his or her discretion where the employee had clearly lost all of his earnings capacity. The assumption was that the WCALJ could simply conclude that the employee was permanently and totally disabled in these cases “in accordance with the fact”. As we know, the Appellate Court in Fitzpatrick specifically disapproved of this second path.

Hence, the question that exists after Fitzpatrick is how will the WCAB approach permanent and total cases, particularly those permanent and total disability cases that do not fit nicely within the parameters of the 2005 “ratings schedule” and Labor Code Section 4660? This question is answered, at least in part, by a recent WCAB panel case reported on Lexis Advance at 2019 Cal. Wrk. Comp. P.D. LEXIS 143.

In this recent noteworthy panel decision, as expected, the WCAB panel found that, in light of Fitzpatrick, Labor Code Section 4662(b) does not provide an independent basis to find permanent and total disability. The panel next looked at whether Labor Code Section 4660 produced a permanent and total disability or a 100% rating and it did not.

The panel framed the issue of whether the vocational evidence “rebutted” the scheduled rating applicable to the case. After first observing the vocational evidence can only be relied upon for purposes of finding that an employee cannot participate in vocational rehabilitation or is incapable of working in the open labor market based on medically established limitations, the panel found that the vocational expert had exceeded his role by relying on pain and limitations beyond those described by the evaluating physicians.

This case illustrates the increased importance when attempting to rebut the scheduled rating of a well-reasoned and thoughtful vocational rehabilitation expert’s opinion. Although it could be argued that, consistent with the California Supreme Court’s analysis in LeBoeuf v. Workers’ Comp. Appeals Bd. (1983) 34 Cal. 3d 234, 48 Cal. Comp. Cases 587, this has always been the case, this has become even more important since Fitzpatrick.

Additionally, the panel seemed to emphasize the gap between the scheduled ratings and the finding of 100%. Here, the scheduled ratings were between 61% and 84%. It was concluded that the VR opinion was just not sufficient to bridge that gap. This should encourage practitioners when attempting to rebut the scheduled rating, to try and increase the scheduled rating by as much as possible prior to invoking vocational evidence. For examples of how the scheduled rating might be increased, see Milpitas Unified School District v. WCAB (Guzman) (2010) 187 Cal. App. 4th 808, 75 Cal. Comp. Cases 837 and EBMUD; Athens Administrators v. Kite (2013) 78 Cal. Comp. Cases 213 (writ den.).

In conclusion, the important take away from this recent panel decision may be that all legally permissibly methods for increasing the Labor Code Section 4660 permanent disability rating should first be considered. Then, once the Labor Code Section 4660 rating is established, if that rating is going to be rebutted, vocational expert evidence should be obtained that is well-reasoned and consistent with the pain and limitations described by the medical experts in the case.

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