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One of the hottest topics to hit the workers’ compensation radar during the last six months has been the issue of apportionment. Specifically, parties are struggling with cases in which injured workers have had sustained unsuccessful or failed industrial surgeries. As a result thereof, they qualify for potentially higher levels of permanent disability (PD) because of the suboptimal medical treatment. It has been decided that apportionment does not apply to industrial medical treatment costs per Granado v. Workers’ Comp. Appeals Bd. (1968) 69 Cal. 2d 399 [33 Cal. Comp. Cases 647]. Does that mean apportionment does not apply to PD in failed industrial surgery cases? The 1st District Court of Appeal (DCA) case in Hikida v. Workers’ Comp. Appeals Bd. (2017) 12 Cal. App. 5th 1249 [82 Cal. Comp. Cases 679] (Hikida) seemed to answer in the affirmative. However, the 6th DCA case in County of Santa Clara v. Workers’ Comp. Appeals Bd. (2020) 49 Cal. App. 5th 605 [84 Cal. Comp. Cases 467] (Justice) seemed to indicate maybe, or maybe not. What is a workers’ compensation attorney to do?
I. Reconciling Hikida and Justice Cases
The applicant’s bar was delighted in 2017, when the 1st DCA issued their decision in Hikida v. Workers’ Comp. Appeals Bd. (2017) 12 Cal. App. 5th 1249 [82 Cal. Comp. Cases 679] (Hikida). In Hikida, the court held that the injured worker’s failed industrial Carpal Tunnel Syndrome (CTS) surgery resulted in a “new” industrial injury for Ms. Hikida in the form of Complex Regional Pain Syndrome (CRPS). This post-surgical diagnosis rendered her 100% permanently and totally disabled (PTD). The court determined that although the need for the CTS surgery was based on industrial factors, as well as non-industrial factors, she was entitled to a 100% PTD award without apportionment. The court rationalized that the 100% PTD was solely caused by the failed industrial medical treatment. Since medical treatment is not subject to apportionment (per the Granado case, supra), the resulting 100% PTD resulting from the failed industrial medical treatment is also not subject to apportionment.
A few years later, the 6th DCA interpreted this issue perhaps a bit more narrowly in the case of County of Santa Clara v. Workers’ Comp. Appeals Bd. (2020) 49 Cal. App. 5th 605 [84 Cal. Comp. Cases 467] (Justice). In Justice, the court held that apportionment to non-industrial causes must be applied since the increase in disability after Ms. Justice’s failed industrial knee replacement surgery was based on both industrial and non-industrial causes. Ms. Justice would only have been eligible for a non-apportioned award if her failed industrial medical treatment was the sole cause, and not just a contributing cause of the ultimate permanent disability.
Many in the legal community found these two cases contradictory. However, the Justice court explained how the two findings were consistent as follows:
“Understood in context, the Hikida court's conclusion that there should be no apportionment makes sense only because the medical treatment in Hikida resulted in a new compensable consequential injury, namely CRPS, which was entirely the result of the industrial medical treatment. It was this new compensable consequential injury that, in turn, led entirely to the injured worker's permanent disability. The agreed medical examiner's findings underlined this point, as he determined that the injured worker's ‘permanent total disability was due entirely to the effects of the CRPS that she developed as a result of the failed carpal tunnel surgery.’ (Hikida, supra, 12 Cal.App.5th at p. 1253, italics added.) Although parts of the Hikida opinion can be read to announce a broader rule that there should be no apportionment when medical treatment increases or precedes permanent disability, it is clear that the rule is actually much narrow. Put differently, Hikida precludes apportionment only when the industrial medical treatment is the sole cause of the permanent disability.
In contrast to Hikida, the permanent disability in this [Justice] case was not caused entirely by the industrial medical treatment. The medical treatment did not result in a new, unexpected compensable consequential injury. Rather, the surgery was “quite successful,” and it “significantly increase[d]” Justice’s “ability to walk and engage in weight-bearing activities.” Based on a careful review of Justice’s medical history, Dr. Anderson found that the permanent disability was caused 50 percent by industrial factors and 50 percent by nonindustrial factors. Sections 4663 and 4664 plainly require that the permanent disability be apportioned among industrial and nonindustrial factors if unrebutted substantial medical evidence supports an apportionment finding. Here, Dr. Anderson's findings constitute unrebutted substantial medical evidence. It was error for the workers' compensation judge and the Board to ignore unrebutted substantial medical evidence that nonindustrial factors, in part, caused Justice’s permanent disability.”
In summary, if the sole cause of the ultimate PD is due to the failed industrial medical treatment, then the injured worker is entitled to a non-apportioned award per Hikida. On the other hand, if the cause of the ultimate PD is due to both failed industrial medical treatment, as well as non-industrial causes, the non-industrial causes must be apportioned out of the award per Justice.
II. Don’t Put the Cart Before the Horse
The focus on the Hikida versus Justice holdings has led parties to prematurely jump to trial on apportionment, before first properly developing the record on the PD rating. This had led to many cases being taken off calendar at the trial level with instructions from the judge to develop the record.
Several noteworthy panel decisions have issued recently involving this issue. One such case was Fuller v. Monterey Bay Aquarium, 2020 Cal. Wrk. Comp. P.D. LEXIS 190. In that case, the injured worker, Mr. Fuller, a security manager for the aquarium, sustained nine failed industrial surgeries to his right knee rendering him 100% PTD. The case went to trial on the Hikida/Justice factors without fully developing the record on the underlying issues. The Judge then issued an initial Findings and Award, after which the WCAB returned the matter to the trial level to further develop the record.
Ultimately, it was determined that the facts in this case were closely aligned with those in the Justice case. At his deposition, when asked if Mr. Fuller’s failed industrial knee surgeries “directly caused his current 30 percent whole person impairment” the AME, Dr. Gravina, answered as follows:
“No, no, that's why you apportion it. Because if you are looking at how this fellow was when I saw him, he has a whole person impairment of 30 percent. But [as to] apportionment causation… the bottom line is the [industrial] injury caused most of it. I give 80 percent of the current problems [are] due to the [industrial] injury.”
Dr. Gravina then explained how and why he attributed 20% causation to non-industrial factors because diagnostic tests established that the applicant had serious chronic problems with his right knee prior to the specific industrial injury of October 21, 2010. Since the AME’s apportionment discussion was deemed substantial medical evidence, it was therefore compliant with the standard set forth in Escobedo v. Marshalls (2007) 70 Cal. Comp. Cases 604 (Appeals Board en banc). Thus, the WCAB held that applicant was entitled to a 100% PTD award less apportionment to non-industrial factors, for an end result of 91% PD.
III. Questions to Answer When Developing the Record on PD Determination
It is imperative to follow the correct sequential analysis when working a case up for trial on PD and apportionment. The following questions provide a checklist for practitioners in this regard. Counsel should ensure that they have accurate evidence to support each of their positions on each question, before moving on to the next. Please note that apportionment of disability (both medical and vocational) is at the very end of this list. That is because a foundation must be laid as to the proper level of PD, prior to addressing this very last and very complicated issue.
Although difficult issues such as Hikida & Justice apportionment often get front and center stage as parties struggle through the dense body of recent case law to determine which facts mirror their own situation, it is imperative to develop the record on the underlying issues first. That way, when you go to court, a proper and persuasive foundation will have been laid to support your position on each successive issue. Hopefully, this will result in a positive outcome for your client and the troublesome avoidance of unnecessary delays.
Noteworthy panel decisions are not binding precedent.
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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