California: SB 863: New Panel Decision on Psychiatric Disability for Violent Act

Rumors of the death of psychiatric permanent disability in post-1/1/2013 date of injury cases have been greatly exaggerated

In Madson v. Michael J. Cavaletto Ranches, 2017 Cal. Wrk. Comp. P.D. LEXIS --, the WCAB rescinded the WCJ’s award of 39 percent permanent disability and instead awarded the applicant 60 percent permanent disability for orthopedic and psychiatric injuries incurred in a serious truck accident on 5/17/2013, when the WCJ’s permanent disability award did not include permanent disability resulting from the applicant’s psychiatric injury, presumably based on the WCJ’s finding that the applicant’s psychiatric injury did not result from a “violent act” in accordance with Labor Code § 4660.1.

The WCAB concluded, based on the qualified medical evaluator’s opinion, that the applicant’s psychiatric injury in the form of post-traumatic stress disorder was a separate industrial injury rather than a compensable consequence of the applicant’s orthopedic injuries. Therefore, Labor Code § 4660.1 did not preclude the applicant from receiving an increased permanent disability rating for the psychiatric injury.

The WCAB reasoned that, even if the applicant’s psychiatric permanent disability were construed as arising from his physical injuries, the psychiatric injury would be separately compensable under the “violent act” exception in Labor Code § 4660.1(c). “Violent acts” within the definition of Labor Code § 3208.3(b) are not limited to criminal or quasi-criminal conduct perpetrated by human beings as determined by the WCJ, but also include acts that are characterized by a strong physical force and are considerably threatening as was the applicant’s truck accident in this case, which left the applicant with a broken neck and pinned under his overturned tractor trailer until he was rescued by the “jaws of life.”

Commentary:

Senate Bill 863 introduced significant benefit increases to injured employees for injuries occurring on or after January 1, 2013. Unfortunately, in exchange for those benefit increases, SB863 included several “take-aways” to the injured worker as well.  One of the most significant “take-aways” to the injured employee from SB863 is at issue in the Madson panel decision.

Although it has now been more than four years since SB863 became law, how Labor Code Section 4660.1 works has been a very unsettled aspect of the new legislation. Many practitioners will tell you that you can no longer obtain psychiatric permanent disability for an injury occurring after January 1, 2013, period. However, as can be seen from Madson, this is a gross over-statement of Labor Code Section 4660.1.

This panel decision highlights two very important considerations that come into play when addressing psychiatric permanent disability for a post- January 1, 2013 date of injury. The first question that must be asked is whether the claimed psychiatric impairment is “arising out of a compensable physical injury”? Where there has been a traumatic specific physical injury (for example, the motor vehicle accident in Madson), the accident may have also been the direct cause of a psychiatric injury. In other words, a psychiatric injury may have occurred independent from the physical injury. It will be particularly important in these cases to look at the psychiatric diagnosis. If Post-Traumatic Stress Disorder (PTSD) is one of them, there may be a serious issue as to whether Labor Code Section 4660.1 has any effect on the claimed psychiatric impairment.

The second inquiry into these cases should be, where the claimed psychiatric impairment arises from a “compensable physical injury”, does the impairment fall under either of the exceptions reflected in Labor Code Section 4660.1(c)(2)? Although Madson dealt with Labor Code Section 4660.1(c)(2)(A), the “violent act” exception, there is also  Labor Code Section 4660.1(c)(2)(B), which creates an exception where the psychiatric injury resulted from a “catastrophic  injury”. The fact that the panel of commissioners in Madson found that the serious motor vehicle accident involved in that case qualified as a “violent act” may indicate that the commissioners are willing to broadly construe these exceptions.

In conclusion, in the para-phrased words of Mark Twain, the rumors of the death of psychiatric permanent disability in post-January 1, 2013 date of injury cases have been greatly exaggerated. There are many, many post-January 1, 2013 dates of injury cases where psychiatric impairment, and for that matter, sleep dysfunction and sexual dysfunction should be pursued. Hopefully, with more cases like Madson, practitioners will gain a better understanding of the full scope of Labor Code Section 4660.1, and more of these issues will be contested before the WCAB.

Read the Madson case.

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