Friday, February 27, 2015

APPORTIONMENT AND SIBTF (formerly SIF): Acme Steel v. WCAB & Borman

When Labor Codes 4663 and 4664 were changed pursuant to SB 899 it was understood by the legal and medical stakeholders that major changes in applicable case law were in the making and that the issue of apportionment was about to become even more difficult than it already was. The upshot is that medical evidence that may be considered substantial and that was not rebutted may still be considered even in cases where Permanent Disability has been awarded at the 100% level. 

In Acme Steel v. WCAB & Borman, Acme Steel appealed the verdict in favor of Borman wherein Borman was awarded 100 percent permanent disability without apportionment for hearing loss. It was Borman's contention that his hearing loss, associated with injury  to other body parts, was attributable to his job with Acme (DOI 10/16/03). Three different AMEs worked the case, orthopedics, neurology, and otolaryngology for hearing loss. 

The hearing loss was reported as apportioned to both industrial and non-industrial factors, 40% to cochlear degeneration on a non-industrial basis, 60% to "occupational factors," e,g., hearing loss caused by on-the-job noise. The applicant's hearing loss was diagnosed as secondary to cochlea degeneration in turn secondary  to congenital disease of the Organ of Corti.  However, it was also understood that in 1994 the applicant sustained loss of consciousness secondary to an explosion that occurred on-the-job and that catapulted the applicant across the room. A workers comp claim was filed at the time. Applicant Borman was awarded 22% disability; however, his hearing continued to deteriorate.

Applicant Borman's hearing loss was bilateral from the beginning. Hearing aids were advised. Ten years later the AME found that there was "further hearing loss" and that this "further hearing loss ... was the result of both cochlear degeneration ... and persistent noise exposure." 

In 2012 the Workers Comp Admintrative Law Judge (ACALJ) found that Applicant Borman's injury was ratable under the post-2004 Permanent Disability Rating Schedule (PDRS) and that Borman showed 100% loss of earning capacity so that he was entitled to Permanent Total Disability (PTD). The WCALJ also said that LC Sec. 4664 was not pertinent because there was no earning loss before the prior award. In other words, Borman had continued to work while his hearing loss got worse. That's about when ACME appealed by stating that the WCALJ failed to apportion injury pursuant to LC 4663. In other words, there was prior evidence showing 40% hearing loss on a non-industrial basis. 

The WCALJ replied that she was not bound by the findings of the AME because there was "convincing vocational testimony regarding loss of earning capacity." In 2013 WCAB denied ACME's petition for reconsideration. It was at about this time that matters got hot. The case came before the First Appellate District Court. Division One, "Not to be published,"  7/16/13.

The discussion led off with this remark: "When a workers' compensation decision rests on the Board's erroneous interpretation of the law, the reviewing court will annul the decision." The Appellate Court then indicated that the WCALJ's decision asserting that Borman could rebut the rating schedule's DFEC by offering vocational expert testimony showing evidence of 100% loss of earning capacity was proper; however, it then also said that the WCALJ erred "by failing to address the issue of apportionment." 

This assertion was based on changes in LC Sections 4663 and 4664 which were enacted in 2004 as part of SB 899. These changes reflected changing concepts re the issues of apportionment and causation in favor of employer and insurance interests for any portion of a disability that would not have occurred but for the current industrial cause and where injured workers had "wide latitude to disprove apportionment based on prior permanent disability awards by demonstrating that they had substantially rehabilitated the injury." 

The Supreme Court was quoted as saying that "the plain language of new sections 4663 and 4664 demonstrates they were intended to reverse these features." Apportionment was now to be based on causation such that "the new approach to apportionment is to look at the current disability and parcel out its causative sources -- industrial, prior industrial, current industrial -- and decide the amount directly caused by the current industrial source. This approach requires thorough consideration of past injuries, not disregard of them (italics added)." 

The court ruled that it was the "clear intent" of the legislature in enacting SB 899 "to charge employers only with that percentage of permanent disability directly caused by the current industrial injury." It was then asserted that the WCAB had ignored substantial medical evidence from the otolaryngology AME that 100% of Borman's hearing loss could not be attributed to the current cumulative trauma. 

The court said that the WCAB's failure to apportion the hearing loss portion of the cumulative trauma was contrary to law such that the award to Borman was annulled. ACME's petition for review was granted. The order denying consideration was annulled. 

My Comment

It can now be expected that this determination on Apportionment will have an effect on SIBTF (SIF) cases. The crucial happenstance in the ACME v. Borman case is that the applicant's total disability award was actually vacated by being annulled and that apportionment was then determined to be applicable. The meaning of this determination is that what is lost in terms of apportionment may now be applicable and applied to  SIBTF situations where prior injury resulted in work disability or "labor disablement."  Labor disablement is currently a crucial concept in SIBTF cases which requires its own level of documentation and proof. 


ACME Steel v WCAB and Michael Borman, A137915, filed 7/16/13

Opinion on Decision, WCALJ Deborah Lieberman, 10/25/12

California: A Radical/Diametrical Change in the Law of Apportionment, 09/13/13, Raymond F. Correio

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