California: Labor Code Section 4662: Conclusive or Rebuttable Presumption?

Everyone in the workers’ compensation community has heard of the paradigm changing package of laws brought about by SB899 in 2004 and SB863 in 2013, but sometimes a new law slips under the radar radically tweaking a particular aspect of the rules.

I. Outdated Labor Code § 4662

Prior to 1/1/2015, there was a resurgence of cases dealing with the Labor Code § 4662’s provision that permanent total disability (PTD) “…shall be determined in accordance with the fact”.  At the time, the Labor Code § 4662 read as follows:

Any of the following permanent disabilities shall be conclusively presumed to be total in character:

(a) Loss of both eyes or the sight thereof.

(b) Loss of both hands or the use thereof.

(c) An injury resulting in a practically total paralysis.

(d) An injury to the brain resulting in incurable mental incapacity or insanity.

In all other cases, permanent total disability shall be determined in accordance with the fact.

It was patently obvious that for conditions listed in Labor Code § 4662(a)-(d), there was a conclusive presumption that permanent disability (PD) was total and deemed100% total disability. The conclusive presumption meant that defendants were not entitled to present evidence to reduce the 100% PD award in the form of apportionment to non-industrial factors. Or did it?

There was much litigation over whether the Labor Code § 4663 apportionment provisions to non-industrial factors could be applied to 100% PD cases pursuant to Labor Code § 4662. Also, if Labor Code § 4663 did apply, did it only apply to the last category “PTD shall be determined in accordance with the fact?” Or did it apply to all five categories?

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Courts were all over the map on this issue. Case law tended to sway in favor of only the last category being subject to Labor Code § 4663 apportionment, and not the first, four categories, since they were designated as “conclusive presumptions.” See Corbitt v. Media Quest, 2012 Cal. Wrk. Comp. P.D. LEXIS 458. But there was also litigation and arguments as to why apportionment should apply in all Labor Code § 4662 cases, EVEN in cases when the presumption is clearly conclusive (i.e. in Labor Code § 4662(a) through (d).)  

The community had hoped for some guidance from on high regarding this issue. Were the conclusive presumption categories subject to Labor Code § 4663 apportionment? Was the last category, 100% PD “shall be determined in accordance with the fact” a conclusive presumption or a rebuttable presumption? And if it was a rebuttable presumption, was it subject to Labor Code § 4663 apportionment?

II. Labor Code § 4662: amended by AB 1847 effective 1/1/2015:

While the community waited for word from the District Court of Appeal (DCA) on this issue, the legislature slipped in a sleeper statute AB 1847 effective 1/1/2015 which amended Labor Code § 4662 as follows:

(a) Any of these shall be conclusively presumed to be total in character:

(1) Loss of both eyes or the sight thereof.

(2) Loss of both hands or the use thereof.

(3) An injury resulting in a practically total paralysis.

(4) An injury to the brain resulting in incurable mental incapacity or insanity.

(b) In all other cases, permanent total disability shall be determined in accordance with the fact.

There are still practitioners and judges who are not aware of this change in the law. In the case of Aguilera v. Collins Chiropractic Group, 2016 Cal. Wrk. Comp. P.D. LEXIS 336, the defendant was successful in their Petition for Reconsideration, even though they argued that applicant’s burden of proof under the outdated Labor Code § 4662 section had not been met. The WCAB in its footnote #2 correctly noted, “Defendant’s reference to 4662(c) is mistaken. The correct reference is 4662(a)(3).” Although use of the outdated code section did not seem to hamper defendant’s argument in this case, it is definitely not the best practice to provide outdated laws in support of an argument.

The stated legislative intent is not much help in this regard either. The Labor Code § 4662 amendment was tucked into AB 1847 along with a batch of “technical changes” in an assortment of legislative code sections to clarify language in statutes dealing with “Mental Health Disorders.” The synopsis for AB 1847 reads:

SYNOPSIS: An act to amend Sections 52.5 and 1587 of the Civil Code, to amend Sections 328, 352, 372, 373, and 1447 of the Code of Civil Procedure, to amend Section 56850 of the Education Code, to amend Sections 2310, 2312, 2313, 2332, and 7901 of the Family Code, to amend Sections 854.2, 1001, 6276.30, 6276.34, 6276.38, 7579.1, 12428, 26640, 26643, and 26749 of, and to repeal Section 203 of, the Government Code, to amend Sections 1250, 1250.2, 1267.8, 1275.5, 1276.5, 1276.9, 1505.5, 1566.3, 1568.0831, 1569.5, 1569.85, 11812.6, 11834.23, 13113, 36130, 50680, 50684, 50685.5, 50688, and 50689 of the Health and Safety Code, to amend Section 10235.8 of the Insurance Code, to amend Section 4662 of the Labor Code, to amend Sections 2672 and 11151 of the Penal Code, to amend Sections 9201 and 19201 of the Probate Code, to amend Section 734 of the Public Utilities Code, to amend Sections 5301, 18014, 18395, and 35466 of the Streets and Highways Code, to amend Section 26306 of the Water Code, and to amend Sections 1752.6, 1756, 4011, 4016, 4021, 4022, 4042, 4080, 4109.5, 4119, 4120, 4121, 4132, 4136, 4200, 4202.5, 4240, 4241, 4243, 4244, 4304, 4308, 4320, 4410, 4417, 4440, 4681.1, 5002, 5004, 5004.5, 5115, 5116, 5250, 5301, 5304, 5326.5, 5340, 5350, 5400, 5500, 5511, 5585.10, 5600, 5653, 5696, 5699, 5714, 5802, 6000, 6002, 6002.10, 6250, 6254, 6551, 6825, 7100, 7200, 7201, 7226, 7227, 7275, 7276, 7277, 7278, 7280, 7283, 7284, 7294, 7300, 7329, 7352, 7354, 7357, 7362, 7500, and 7501.5 of, and to repeal Section 5366 of, the Welfare and Institutions Code, relating to mental health disorders. (Emphasis added indicating the mention of the amendment to Labor Code § 4662.)

III. Apportionment Applies to Labor Code § 4662(b), but not to Labor Code § 4662(a)?

In any event, the post 1/1/2015 case law seems to indicate that in the future, based on this amendment, Labor Code § 4663 apportionment will not apply to the first, four categories which are conclusive presumptions of 100% PD. However, Labor Code § 4663 apportionment may apply in cases where PTD is determined “in accordance with the fact,” which has been held to be a rebuttable presumption of 100% PD.

In the Noteworthy Panel Decision (NPD) of Rodriguez v. Crystal Stairs, 2016 Cal. Wrk. Comp. P.D. LEXIS 247, the injured worker was determined to be 100% PTD. The Judge analyzed his finding using the Labor Code § 4662(b) “in accordance with the fact” standard. But also notes, “In a strict sense, I did not rely on a determination of total disability ‘in accordance with the fact’ under section 4662 but rather on the DEU's rating of the disability and apportionment factors found by the AMEs which I understand to be prima facie evidence of the correct disability rating…” to arrive at 100% PTD. However, he did feel it was appropriate to reduce the award using apportionment to non-industrial factors. He discusses a variety of case law interpreting Labor Code § 4662 and concludes his discussion of whether apportionment applies in Labor Code § 4662(b) case with the following:

I would also add that it simply does not seem fair or logical to me that a totally disabled individual is exempted in every case from factors of apportionment that apply to all other injured workers. That means for example, that an individual who suffers a disabling heart attack who had abundant nonindustrial causal factors…  could collect a 100% award even if his or her disability was found to be only 5% industrially caused. I do not believe the Legislature intended to create such a loophole in its otherwise rigorous standards of uniformity and apportionment. (See Labor Code §§ 4660(d), 4663.)

See also the NPD of Winninghan v. State of California Department of Corrections, 2016 Cal. Wrk. Comp. P.D. LEXIS 251, wherein Manny Winningham, a correctional officer, sustained industrial injury to his brain and other body parts. Applicant argued that his industrial injury fell within the category of Labor Code § 4662(a)(4), which provides a 100% “conclusive presumption” of permanent total disability for any “…injury to the brain resulting in incurable mental incapacity or insanity.” The WCJ and WCAB disagreed with the applicant and instead held as follows:

Although… a combination of disabilities has rendered the applicant permanently totally disabled "in accordance with the fact" (Lab. Code, § 4662, subd. (b)), the conclusive presumption of section 4662(a)(4) only arises when an injury to the brain causes severe cognitive impairment. Applicant did sustain serious psychological symptoms as a result of his injury, including a score of 45 on the Global Assessment of Functioning Scale, corresponding to “Serious symptoms (e.g., suicidal ideation, severe obsessional rituals, frequent shoplifting) OR any serious impairment in social, occupational, or school functioning (e.g., no friends, unable to keep a job).” (2005 Schedule for Rating Permanent Disabilities at p. 1–14.) Partially because of these serious psychiatric impairments, the WCJ found that applicant sustained overall permanent total disability. However, given the legislative history of section 4662(a)(4), when viewed alone, the partial cognitive impairments sustained as a result of the injury were not sufficient to raise the 4662(a)(4) presumption. (See Schroeder v. Workers' Comp. Appeals Board (2013) 78 Cal. Comp. Cases 506 [writ den.].)

IV. Conclusion

Despite the fact that no legislative history of the amendment to Labor Code § 4662 exists to confirm that apportionment to non-industrial factors applies to industrial injuries covered under Labor Code § 4662(b), that seems to be the most logical explanation for the change in the law. In addition, case law has fully supported that interpretation since then.

Parties should remember the following when a potential 100% permanent and total disability case goes to trial:

> Cite the correct and current Labor Code Section on the Mandatory Settlement Conference statement and to the Judge when the “issues” are read into the record.

> Remember that there are alternate ways to arrive at a 100% permanent and total disability standard. One way is by Labor Code § 4662 discussed in this article. Another way is to rebut the 2005 Permanent Disability Rating Schedule, governed by Labor Code § 4660 and the case of Milpitas Unified v. WCAB (Guzman), (2010) 187 Cal. App. 4th 808, 75 Cal. Comp. Cases 837, or Guzman standard.

> Make sure you have substantial medical evidence to support your burden of proof. If you are dealing with a presumption such as that under Labor Code § 4662, and clarify for the trier of fact whether the presumption is conclusive or rebuttal and how your burden has been met under that standard.

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