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California: Permanent Disability Rebuttal Post-Fitzpatrick

November 06, 2019 (13 min read)

I. Labor Code  § 4660 Is the Sole Method for Determining 100% PTD

The 3rd District Court of Appeal (DCA) threw the whole workers’ compensation community for a loop recently when it issued their decision in Department of Corrections and Rehabilitation v. WCAB (Fitzpatrick) (2018) 27 Cal. App. 5th 607 [238 Cal. Rptr. 3d 224, 83 Cal. Comp. Cases 1680]. Essentially, the 3rd DCA held that the Labor Code § 4662 “in accordance with the fact” method of determining 100% permanent total disability (PTD) was not a permissible method for determining 100% PTD separate and apart from that prescribed in Labor Code § 4660.

Practitioners were faced with the following query, “Without the use of Labor Code § 4662 ‘in accordance with the fact’ method, is it still possible for an injured worker to obtain a 100% PTD award?” The noteworthy panel decisions (NPDs) subsequent to Fitzpatrick, supra, indicate the answer to that question is a resounding, “Yes!”

In Fitzpatrick, the injured worker, a prison guard, sustained an industrial heart injury with a strict permanent disability (PD) rating of 97% and an industrial psychiatric PD rating with a strict rating of 71%. When these two ratings were combined using the Combined Values Chart (CVC), the total result was 99% PD.

The Workers’ Compensation Judge (WCJ) in Fitzpatrick, supra, thoroughly reviewed the facts and the case law. Using the “in accordance with the fact” method of Labor Code § 4662, the WCJ determined the prison guard to be 100% PTD, instead of 99% PD. The difference between the two is a substantial monetary difference for the injured worker. The WCAB affirmed the decision by the WCJ, but this decision was overturned by the 3rd DCA. The Appeals Court held that, for dates of injury before 1/1/2013, the sole method to be used for rating PD is that which is found in Labor Code § 4660.

Nevertheless, case law since Fitzpatrick has been clear that there are several pathways to obtaining a 100% PTD determination, using the primary path of Labor Code § 4660 for dates of injury before 1/1/2013, and using the primary path of Labor Code § 4660.1 for dates of injury after 1/1/2013, as set forth below.

II. PTD Means the Injured Worker Can No Longer Work

In the recent NPD of Bagobri v. AC Transit, 2019 Cal. Wrk. Comp. P.D. LEXIS 384, the WCJ reviewed the historical legal analysis for determining when and how an injured worker would be determined 100% PTD. He came to the following conclusion:

Since the enactment of workers’ compensation over 100 years ago, permanent total disability (PTD) has essentially meant the same thing; the injured worker can no longer work. (See Postal Tel Cable Co., v. IAC (1931) 213 Cal 544, 547, [Wherein the Supreme Court clearly defines permanent and total disability as follows: “The statute is plain, and recovery is allowed for total disability because the employee is unfitted by his injury to follow any occupation.”])

The 2005 PDRS… was created by the Administrative Director pursuant to Labor Code § 4660(e) and expressly defines the term “permanent total disability” as follows:

… Permanent total disability represents a level of disability at which an employee has sustained a total loss of earning capacity…

By definition within the PDRS and as the concept has always been used throughout the history of workers’ compensation, permanent total disability means that applicant is not able to go back to work.

Additional California Supreme Court decisions cited by the WCJ in the Bagobri case support this definition of 100% PTD as “not being able to return to work” or its equivalent “total loss of future earning capacity.” They are as follows:

III. Ogilvie and Guzman Remain Viable Rebuttal Methods Post-Fitzpatrick

The concept defining 100% PTD as a total loss of applicant’s future earning capacity dovetails nicely with the PD rebuttal method introduced by the 1st DCA in the case of Ogilvie v. WCAB (2011) 197 Cal. App. 4th 1262, 76 Cal. Comp. Cases 624. Case law has refined the definition of the Ogilvie rebuttal method to require applicant to prove two facts:

  • Applicant is not amenable to vocational rehabilitation (VR) because of his/her industrial injury.
  • Applicant's non-amenability to VR has caused applicant to suffer a greater loss of future earnings capacity (DFEC) than reflected in the 2005 PDRS. (See Hernandez v. SF Day School, 2018 Cal. Wrk. Comp. P.D. LEXIS 151.)

It appears that the 3rd DCA in Fitzpatrick meant to prohibit use of Labor Code § 4662(b)’s “in accordance with the fact” language to calculate 100% PTD for dates of injury before 1/1/2013. That court mandated that only Labor Code § 4660 be utilized for that purpose. However, there’s nothing in the language of the Fitzpatrick case that would eliminate use of the Ogilvie rebuttal rating method to reach 100% PTD for dates of injury before 1/1/2013, as long as Labor Code § 4660 was used to calculate the initial strict rating before any attempt at rebuttal.

In fact, the 3rd DCA in Fitzpatrick stated the following:

The scheduled rating (or component parts of the rating) may be rebutted based on the specific circumstances of a case. (See Ogilvie v. Workers' Comp. Appeals Bd., supra, 197 Cal.App.4th at pp. 1266–1276; … Milpitas Unified School Dist. v. Workers' Comp. Appeals Bd. [Guzman], supra, 187 Cal.App.4th at pp. 827-829.)

The case law following the issuance of the Fitzpatrick decision confirms that the Ogilvie rebuttal rating method is a perfectly viable rebuttal method for rating PD for dates of injury before 1/1/2013.

In the NPD of Delgado v. Southern California Gas Co., 2019 Cal. Wrk. Comp. P.D. LEXIS 192, a residential energy electrician with an admitted industrial cumulative trauma injury ending 12/17/2011 (i.e., before 1/1/2013) was deemed to be 100% PTD, using the Ogilvie method. The WCAB explained:

…[t]he reporting of applicant's vocational expert, Mr. Vega, which was consistent with applicant's unrebutted testimony, constitutes substantial evidence to support the determination of applicant's vocational feasibility and lack of future earning capacity, thus rebutting the permanent disability rating schedule consistent with Labor Code section 4660 and Department of Corrections & Rehabilitation v. Workers' Comp. Appeals Bd. (Fitzpatrick) 27 Cal.App.5th 607 [83 Cal.Comp.Cases 1680].

See also the writ denied case of Qualcomm v. WCAB (Brown) (2019) 84 Cal. Comp. Cases 531 (writ den.), which dealt with a similar fact pattern and a finding of 100% PTD, using the Ogilvie method to rebut the Labor Code § 4660 strict rating of PD. Thus, for dates of injury before 1/1/2013, even after the holding in Fitzpatrick, the Labor Code § 4660 strict rating of the AMA Guides may be rebutted using the Ogilvie.

As indicated in the above “pull quote” from Fitzpatrick, the Guzman rebuttal method would also be appropriate to use when rebutting a Labor Code § 4660 strict rating for dates of injury before 1/1/2013. See also the “post-Fitzpatrick” NPD of Campos v. Petcare Veterinary Hospital, 2019 Cal. Wrk. Comp. P.D. LEXIS 379. In that case, the WCAB affirmed the WCJ’s Guzman rebuttal to determine that a veterinary technician was 100% permanently and totally disabled after the employee’s 2/9/2009 date of industrial injury.

Even though Labor Code § 4662 “in accordance with the fact” appears to be barred for findings of 100% PTD, the Ogilvie and Guzman rebuttal methods continue to be viable for rebutting Labor Code § 4660 strict PD ratings for dates of injury before 1/1/2013.

IV. Does Fitzpatrick Apply to DOIs Post 1/1/2013 Per Labor Code § 4660.1?

It should be noted that the injured worker’s injury in the Fitzpatrick case was a cumulative trauma ending 12/7/2011 and was thus a pre-1/1/2013 date of injury. The 3rd DCA’s holding was thus limited to interpreting how Labor Code § 4660 should be applied for pre-1/1/2013 dates of injury. The law changed significantly for dates of injury on or after 1/1/2013, when Labor Code § 4660.1 replaced Labor Code § 4660 as to instructions on how to calculate strict PD ratings.

The question then becomes, does the Fitzpatrick holding apply to post-1/1/2013 dates of injury when the applicable PD calculation method is no longer found in Labor Code § 4660 but in a totally different code section, Labor Code § 4660.1?

When the legislature created Labor Code § 4660.1, it clarified that the Guzman rebuttal method was viable to use for rating disability for dates of injury on or after 1/1/2013.

Labor Code § 4660.1(h) provides:

In enacting the act adding this section, it is not the intent of the Legislature to overrule the holding in Milpitas Unified School District v. WCAB (Guzman) (2010) 187 Cal.App.4th 808.

Of course, that is what the legislature said about Labor Code § 4662, and then the Fitzpatrick case came along and kind of upset that apple cart. Remember, Labor Code § 4660.1(g) provides:

Nothing in this section shall preclude a finding of permanent total disability in accordance with Section §4662.

At the time of this writing, there appears to be no case law post-Fitzpatrick that cites Labor Code § 4662(b) “in accordance with the fact” as a viable method to reach 100% PTD for post 1/1/2013 dates of injury. In fact, case holdings dealing with post-1/1/2013 dates of injury and use of Labor Code § 4660.1 to rate disability have, so far, adhered to the holding in Fitzpatrick, and have avoided using Labor Code § 4662(b) to determine 100% PTD.

V. PD Rebuttal Methods for DOIs Post 1/1/2013 Per Labor Code § 4660.1?

If injured workers are no longer able to use the Labor Code § 4662(b) “in accordance with the fact” method to obtain a 100% PTD rating, do they have any other tools available to use for this purpose for dates of injury on or after 1/1/2013?

The answer is once again a resounding, “Yes!” As discussed above, there were several PD rebuttal methods left in place by Fitzpatrick to contest a strict rating that was allegedly not an accurate reflection of applicant’s PD.

1. Kite  Rebuttal – Use of Simple Additive Method v. the CVC

In addition to the Guzman and Ogilvie rebuttal methods discussed above, injured workers may also consider using what has been commonly been termed as the Kite method to rebut the strict PD determined by Labor Code § 4660.1, for dates of injury on or after 1/1/2013.

In the 1st DCA writ denied case of Athens Administrators v. WCAB (Kite) (2013) 78 Cal. Comp. Cases 213 (writ den.), the WCAB affirmed the QME’s findings that “the impairment resulting from applicant’s left and right hip injuries is most accurately combined using simple addition than be use of the combined-values formula.” And thus, the rebuttal method of “Additive Method versus the Combined Values Chart (CVC)” was born.

In Fitzpatrick, applicant’s two PD values were 97% for the heart and 71% for the psych. If these two values had been simply added together, following the Kite rebuttal method, the total value would have been 168%, well over 100% PTD threshold. However, the 3rd DCA refused to consider this argument as it was not raised until the case had reached the appellate level, and even then, it was not raised by applicant, but by the WCAB.

PRACTICE NOTE: One huge takeaway from the Fitzpatrick case is to make sure you have developed the record thoroughly PRIOR to the Mandatory Settlement Conference, AND that you have raised all pertinent issues at that time, AND that you have listed all evidence (especially medical evidence) necessary to meet your burden of proof.

Nevertheless, the Fitzpatrick case did not change anything with regard to use of the Kite rebuttal method for dates of injury either before or after 1/1/2013.

2. DFEC Rebuttal – For DOIs on or After 1/1/2013

Remember, the PD rebuttal question that has arisen most often for workers’ compensation attorneys when dealing with dates of injury post 1/1/2013, has nothing to do with the Fitzpatrick case. It deals with the Diminished Future Earning Capacity (DFEC) factor of the PD rating string. Clearly, for dates of injury before 1/1/2013, Labor Code § 4660 applies.

Labor Code § 4660(a) sets forth the following four factors in the PD rating string:

  • Nature of the physical injury or disfigurement
  • Diminished Future Earning Capacity (DFEC)
  • Occupation
  • Age

For dates of injury on or after 1/1/2013, the legislature replaced Labor Code § 4660 with Labor Code § 4660.1. Labor Code § 4660.1(a) sets forth the following three factors for the PD rating string:

  • Nature of the physical injury or disfigurement
  • Occupation
  • Age

Then Labor Code § 4660.1(b) states in part “…the ‘nature of the physical injury or disfigurement shall incorporate the descriptions and measurements…as provided in the Guides, multiplied by an adjustment factor of 1.4.”

Thus, by enacting Labor Code § 4660.1, the legislature omitted any mention of the term “diminished future earning capacity” (DFEC) and replaced it with an across the board 40% whole person impairment (WPI) increase regardless of the body part involved.

In order to accommodate this change, the Disability Evaluation Unit (DEU) adjusted the PD rating string by deleting the DFEC valuation, but then replacing it with the number 1.4.

The query then becomes, for dates of injury post-1/1/2013, can parties rebut this 40% increase as not being an accurate reflection of the injured workers’ ability to return to work, just as they had rebutted the DFEC valuation for dates of injury pre 1/1/2013 under Labor Code § 4660?

So far, much to the relief of injured workers and their attorneys, we have at least three cases (both pre- and post-Fitzpatrick) saying “YES” to the above question:

  • Robles v. State of Cal., 2015 Cal. Wrk. Comp. P.D. LEXIS 697. The WCAB stated, “Applicant is also correct that for injuries occurring on or after January 1, 2013, the previously variable Future Earning Capacity (FEC) modifier is replaced with ‘an adjustment factor of 1.4’ Lab. C. §4660.1(b). For injuries on or after January 1, 2013, section 4660.1 set the DFEC multiplier to 1.4 for all injuries.”
  • Hennessey v. Compass Group, 2019 Cal. Wrk. Comp. P.D. LEXIS 121. The WCAB explained “… it appears that defendant's argument fails to account for the provision in section 4660.1 which states that the injured worker's whole person impairment (WPI) is to be ‘multiplied by an adjustment factor of 1.4.’ (Lab. Code, §4660.1(b).) The 2012 amendment of section 4660.1 did not eliminate the adjustment factor, it standardized the factor to a multiple of 1.4. Defendant cites no legal basis or support for its argument.”
  • Sandoval v. Conco Companies, 2019 Cal. Wrk. Comp. P.D. LEXIS 299. The WCAB held, “With respect to defendant’s contention that the legislative changes for injuries on or after January 1, 2013 mean that applicant is not entitled to a vocational expert, I disagree. The main thrust of defendant position is that Labor Code § 4660.1 (applicable for injuries on or after January 1, 2013) does not refer to either ‘diminished ability to compete in the open labor market’ or ‘diminished future earning capacity (DEFC).’ There is, however, a reference to an ‘adjustment factor’ of 1.4 for all body parts in subsection (b) of Labor Code § 4660.1, which, when read in the context of Labor Code § 4660 and the entire permanent disability scheme premised on the AMA Guides, refers to the DFEC.”

VI. Conclusion

Although, at first glance, it looks like the Fitzpatrick case effectively limited, or perhaps even abolished use of the Labor Code § 4662(b) “in accordance with the fact” method for reaching 100% PTD. However, a careful review of the applicable history, case law and relevant statutes demonstrate that there remain several other methods to use in rebuttal of the AMA Guides strict rating. These methods, in turn, may allow the injured worker to obtain a 100% PTD. The key for practitioners wishing to utilize these methods to reach a 100% PTD level for their clients is to ensure that their medical-legal and vocational rehabilitation reports are 100% bullet-proof.

Practitioners should check the subsequent history of any cases before citing to them.

Any information or opinions contained in this commentary are not necessarily endorsed by LexisNexis® or its affiliates.

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