California: The Shipley Doctrine: What Is the Current Hoopla About?

The Shipley doctrine remains viable, and the Appeals Board will apply it broadly to ensure that petitioners are not deprived of due process.

By Hon. Susan V. Hamilton, Former Assistant Secretary and Deputy Commissioner, California Workers’ Compensation Appeals Board

Thirty-one years ago, the Court of Appeal issued its decision in Shipley v. Workers’ Comp. Appeals Bd. (Shipley) (1992) 7 Cal. App. 4th 1104 [57 Cal. Comp. Cases 493]. Most practitioners are familiar with the decision, and no doubt many of you have had the Shipley holding applied to a case you are litigating. Briefly, Marshall Shipley sought review of an Appeals Board panel decision that reversed a WCJ’s award of compensation and denied Marshall Shipley’s petition for reconsideration by operation of law because the decision did not issue within the statutory time-period for acting on petitions for reconsideration as set forth in Labor Code section 5909. Although Marshall Shipley timely filed the petition for reconsideration, the case file was misplaced by the appeals board. The court of appeal declined to read the statutory time periods in Labor Code section 5909 as mandatory and jurisdictional since through no fault of Marshall Shipley, his file was not available for review by the appeals board. To hold otherwise, the court of appeal reasoned, would deprive Marshall Shipley of due process of the law.

Most recently in the early period of the COVID-19 pandemic, many decisions issued by the appeals board invoked Shipley. Given the COVID-19 emergency statewide shutdown and stay-at-home orders, generous use of Shipley to enable full consideration of petitions for reconsideration came as no surprise. Business as usual was entirely upended by the pandemic. So, you might wonder, what is all the current Shipley hoopla about? A recent appeals board panel opinion makes clear that even absent the extraordinary, unique and challenging impacts of an event such as the COVID-19 pandemic, the Shipley holding is alive and well and will be broadly applied by appeals board panels to prevent petitioners from being deprived of a ruling on the merits of their petitions when the delay in the issuance of a decision is caused by irregularities outside of petitioners’ control. That decision is Percy Tucker v. City of Pasadena (ADJ11951678, June 16, 2023).

The Facts

Percy Tucker (applicant) filed an application for adjudication of claim in which he alleged that while employed as a police officer by defendant during the period from September 20, 1982, to April 15, 2012, he sustained a cumulative industrial injury to his cervical spine, lumbar spine, both hips, both knees and both ankles. Defendant disputed the claim of injury and asserted that the claim was barred by the statute of limitations.

A trial was held on September 29, 2020. Several medical reports and the deposition testimony of panel qualified medical examiner (PQME), Dr. Clive Segil, were admitted into evidence. Applicant testified that the first time he became aware that his orthopedic complaints were work-related was when he was evaluated by Dr. Segil.

Shortly after the trial, the WCJ issued an order vacating submission and directing further development of the record in the form of a supplemental report from Dr. Segil addressing whether there was a synergistic effect regarding applicant’s spine and hip that might be determinative of whether applicant’s impairments should be combined or added. In response, Dr. Segil opined that there were synergistic effects as regards the lumbar spine and right hip, the right ankle and right hip, and the left hip and left ankle so that the impairments should be added. As regards the cervical spine, Dr. Segil recommended use of the combined values chart to calculate applicant’s impairment.

The WCJ requested a formal recommended rating based on Dr. Segil’s opinions, and a recommended rating of 89% permanent disability issued without objection. On January 5, 2021, the WCJ issued a decision in which he found that applicant’s claim of cumulative trauma injury was not barred by the statute of limitations and that the injury caused permanent disability of 89%.

On January 27, 2021, defendant filed a petition for reconsideration of the decision. On March 29, 2021, an appeals board panel granted reconsideration, rescinded the January 5, 2021, decision, and substituted a new decision finding that the date of injury for statute of limitations purposes is February 14, 2019, that the injuries caused permanent disability of 85%, and that applicant needs further medical treatment to cure or relieve the effects of his injuries. It ordered the matter returned to the WCJ for further proceedings and decision regarding the statute of limitations defense.

Defendant filed a petition for writ of review of the appeals board panel’s March 29, 2021, decision. In the interim, on March 30, 2021, the WCJ issued a decision in which he found that applicant’s claim of cumulative industrial injury is not barred by the statute of limitations.

Defendant then filed a timely petition for reconsideration of the WCJ’s March 30, 2021, decision, but that petition did not come to the attention of the appeals board until after the 60-day time period for acting on the petition (Lab. Code § 5909) had expired. Neither party was at fault in the matter.

In its petition for reconsideration, defendant argued that the WCJ lacked authority to issue the March 30, 2021, decision until after the 45-day period to file a petition for writ of review had expired and because it filed a petition for writ of review, the F & A issued prematurely.

The Appeals Board Panel’s Analysis

The panel begins its analysis of the petition by explaining why its decision, albeit issued beyond the statutory period in Labor Code section 5909, is nonetheless timely. While that statute is unambiguous in its directive that a petition for reconsideration is deemed denied unless the appeals board acts on it within 60 days of filing, fundamental due process principles will trump that apparent directive to prevent a party from being deprived of a substantial right without due process. Shipley, and its progeny (Rea v. Workers’ Comp. Appeals Bd. (2005) 127 Cal. App. 4th 625 [70 Cal. Comp. Cases 312]) are at the heart of the panel’s discussion. The opinion explains that Marshall Shipley filed a petition for reconsideration of an adverse appeals board decision. For reasons beyond Marshall Shipley’s control, the appeals board misplaced his file and then failed to act upon his petition for reconsideration within the statutory time. When the petition did come to the attention of the appeals board, it issued an order denying the petition by operation of law. A petition for writ of review of the denial was then filed.

Next, the panel reviews the appellate court’s decision in some detail and quotes portions of the decision. Briefly, it notes that the appellate court granted the writ and issued an order that reversed the appeals board’s holding, based on principles of fundamental due process. Specifically, the court of appeal held that during the time Marshall Shipley’s file was lost or misplaced by the appeals board, the time to act on his petition for reconsideration pursuant to Labor Code section 5909 was tolled. Additionally, the court of appeal emphasized that Shipley was without fault in the misplacement of the case file and had no control over the circumstances that apparently led to his file being misplaced. Finally, the panel decision acknowledges the appellate court’s conclusion that in denying Shipley’s petition for reconsideration by operation of law, the appeals board effectively deprived Marshall Shipley of his statutory right to reconsideration without due process, a result that is offensive to both fundamental due process and common sense. (Shipley, supra, 7 Cal. App. 4th at pp. 1007-1008.)

Applying Shipley and Rea, supra, to the matter at hand, the panel explains that the statutory time in which the Appeals Board is required to act upon a petition for reconsideration under Labor Code section 5909 commences when a petition for reconsideration is filed and received by the Appeals Board. Thus, when a petition for reconsideration is not received by the appeals board due to administrative irregularities beyond the petitioner’s control, the statutory time in Labor Code section 5909 is tolled. No exigent circumstances, like a pandemic, are required; it is enough that the appeals board simply did not receive or somehow misplaced the file. Tucker makes clear that the appeals board will continue to apply Shipley when its failure to timely act on a petition for reconsideration is caused by irregularities that cannot be attributed to and are outside of the control of the petitioner.

Other Issues Presented in Tucker

Although not specifically germane to the discussion of Shipley principles, Tucker presents two additional issues that warrant brief discussion. The first is defendant’s claim that the effect of its pending petition for writ of review was to stay proceedings before the WCAB. The panel points out that Labor Code Section 5956 explicitly states that the “filing of a petition for, or the pendency of, a writ of review shall not of itself stay or suspend the operation of any order, rule, decision or award of the appeals board.” The panel explains that since its March 29, 2021, decision was not stayed by the filing of the petition for writ of review, it was appropriate for the WCJ to issue a decision on the statute of limitations defense.

Second, the panel considers the nature of defendant’s petition for reconsideration of the WCJ’s March 30, 2021, decision. It observes that the petition seeks reconsideration on identical facts and legal arguments as raised in its earlier January 27, 2021, petition for reconsideration and as addressed and decided by the appeals board in its March 29, 2021, decision. Thus, the current petition is a successive petition, which is prohibited (Crowe Glass Co. v. Industrial Acc. Com. (1927) 84 Cal. App. 287) and a basis for dismissal of the petition.

The Takeaway

Tucker illustrates the unequivocal commitment of the appeals board to ensure that parties are not deprived of their statutory right to seek reconsideration of a decision where, through no fault of the petitioning party, the appeals board simply does not receive or somehow misplaces the file of a timely filed petition for reconsideration. The denial of such a petition by operation of law would fundamentally deny the petitioner’s right to due process of law, and the appeals board will not tolerate such a result. The Shipley doctrine will continue to be followed whenever the circumstances of a particular case require its application.

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