NCCI’s Court Case Update provides a look at some of the cases and decisions monitored by NCCI’s Legal Team that may impact workers compensation (WC) across the states. This April 2021 edition contains updated information on cases previously introduced and presents new cases and decisions.
To view previously reported decisions, click on the case links. For more information on cases monitored by NCCI’s Legal Team, visit previous Court Case Updates, COVID-19 Court Cases, and
Court Case Insights on
COVID-19 Court Cases
Courts have begun to consider and decide COVID-19-related cases that could impact WC. Some examples include:
New York—The New York Workers’ Compensation Board found, in
NYS Department of Corrections, that a claimant failed to establish that his contraction of COVID-19 was an accident that arose out of his employment.
Kuciemba v. Victory Woodworks, an employee’s wife sued the employer in tort, alleging that the employer’s failure to maintain the workplace in a safe condition and to implement social distancing and COVID-19 screening procedures caused the employee to contract COVID-19 and spread it to his wife. The employer filed a motion to dismiss based on WC exclusive remedy. On February 22, 2021, the federal District Court for the Southern District of California granted the employer’s motion to dismiss without a written opinion but allowed the employee and his wife to amend and refile the complaint.
For more information on other COVID-19-related state and federal cases with potential implications for WC insurance, visit COVID-19 Court Cases on
WC Exclusive Remedy
Stakeholders remain interested in cases addressing challenges to the constitutionality and scope of exclusive remedy. Below are some of the latest exclusive remedy related cases.
Wisconsin, Denial of WC Benefits—Graef v. Continental Indemnity Co. (Wisconsin Supreme Court)—Pending
Colorado—The Colorado Supreme Court, on February 16, 2021, in
Ryser v. Shelter Mutual Insurance Co., concluded that WC exclusive remedy and co-employee’s immunity principles barred an injured employee’s recovery under the Uninsured Motorist/Underinsured Motorist policy of a co-employee for damages resulting from a work-related accident. In this case, the employee suffered compensable work-related injuries while traveling in the personal vehicle of the co-employee. The court noted that the expansive wording of the exclusive remedy provision abolishes “all causes of action, actions … for and on account of … personal injury to (an) employee” against an employer, its insurance carrier, and has also been applied to co-employees. Therefore, the court concluded, the immunity necessarily extends to co-employees’ insurance carriers. The court reasoned that holding otherwise would allow an end-run around exclusive remedy and co-employee immunity principles.
Missouri—On April 6, 2021, the Supreme Court of Missouri, in
State ex rel. Beutler, Inc. v. Midkiff, ruled that exclusive remedy barred a negligence lawsuit brought by an injured employee of a motor carrier subcontractor against an excavation subcontractor working on the same job. The court held that the excavation subcontractor was immune from the lawsuit, pursuant to Missouri statute 287.040.1, which extends WC civil immunity protections to statutory employers. The court found that there was an unbroken chain of contractor-subcontractor relationships that would make the excavation subcontractor the injured worker’s statutory employer. The court added that the contractor-subcontractor’s chain was not broken by the application of Missouri statute 287.040.4, which exempts relationships between certain for-hire motor carriers and owners and operators of a motor vehicle from the statutory employer immunities. The court reasoned that 287.040.4 applies when the statutory relationship specifically involves the claimant, and not the other parties/subcontractors that are upstream from the injured worker.
Challenges to State Adoption of Third-Party Guides
Pennsylvania Supreme Court’s 2017 decision striking the “most recent edition” of the
American Medical Association (AMA) Guides in
Protz v. Workers Compensation Appeals Board, challenges to use of the
AMA Guides in WC have continued to surface in courts across the states. Some examples include:
Kansas—Johnson v. US Food Service (Supreme Court of Kansas)
Kansas Court of Appeals will also consider, in
Morris v. Schilling Construction Co., whether the Workers Compensation Appeals Board erred in calculating a claimant’s impairment rating solely based on the
AMA Guides, 6th Edition, when the state’s highest court in
Johnson ruled that the 6th Edition is a starting point for the analysis and the ultimate decision should be based on competent medical evidence.
Colorado—The Court of Appeals held, in
Fisher v. ICAO, that subsections (3)(a)(I) and (3.7) of Colorado statute 8-42-101 do not preclude physicians from using evaluative processes that are not described in the
AMA Guides, 3rd Edition, to determine a claimant’s impairment rating. Subsections 3(a)(I) and (3.7) state that, in WC cases, physical impairment ratings “shall be based on” the revised 3rd Edition of the
AMA Guides. The court reasoned that the use of the phrase “based on” means that the revised 3rd Edition is the starting point, and not the exclusive impairment rating methodology.
US Department of Labor’s Benefits Review Board—On December 7, 2020, the US Department of Labor’s Benefits Review Board (the Board), in
Pierce v. Electric Boat Corp., upheld the constitutionality of 33 U.S.C. § 902(10), a provision of the Longshore and Harbor Workers’ Compensation Act, that mandates the use of the
AMA Guides as “modified from time to time” to determine impairment for individuals whose occupational disease manifests after retirement. The court also upheld a federal regulation 702.601(b), which states that the impairment is to be measured using the “most currently revised” version of the Guides. The Board concluded that the mandate to use the
AMA Guides does not delegate power to the AMA, instead, it merely prescribes a method by which doctors may calculate a retiree’s impairment and only adopts the industry standard’s periodic updates to ensure uniform application of the newest developments in medical approaches to impairment ratings.
Montana—On December 16, 2020, the state’s supreme court, in Hensley v. Montana State Fund, upheld the constitutionality of Montana statute 39-71-703(2), which denies compensation to permanently impaired injured workers with no wage loss and a Class 1 impairment rating, whereas workers with a Class 2 or higher impairment rating and no wage loss are compensated in full for their permanent impairment rating—as determined by the
AMA Guides, 6th Edition.
Developments in Marijuana
Legalization of marijuana has been active at state and federal levels. So far in 2021,
New Mexico, and
New York have legalized recreational marijuana. The
New York law (S.854) expressly provides that employees who are medical marijuana patients shall be afforded the same protections available to injured workers under the state workers compensation law.
Nebraska (LB474) introduced a bill to legalize medical marijuana and to provide that medical marijuana reimbursement is not required in WC. In
New Jersey (S3406), the legislature is considering a bill that would require WC reimbursement for medical marijuana. At the
federal level, Congress introduced S.862 and H.R. 1996, which create safe harbors and protections for insurers and banking institutions, respectively, providing services to cannabis-related legitimate businesses.
State courts also remain engaged in reviewing marijuana-related issues in WC.
Pennsylvania—On December 16, 2020, the Workers’ Compensation Appeals Board, in
Bunty v. Demuth Steel Products, Inc., held that based on the plain language of the state’s Medical Marijuana Act, an insurer or employer cannot be compelled to pay for a claimant’s medical marijuana expenses.
New Jersey—On April 13, 2021, the Supreme Court of New Jersey, in
Hager v. M&K Construction, affirmed an earlier decision by the Appellate Division that an employer can be ordered by a WC court to reimburse a claimant for reasonable costs related to prescribed medical marijuana as a WC treatment.
New York, Marijuana Reimbursement in WC—Matter of Quigley v. Village of E. Aurora (New York Supreme Court Appellate Division)
New Hampshire, Federal Preemption of Marijuana Reimbursement Order—Appeal of Andrew Panaggio (New Hampshire Supreme Court)
Florida, Prohibition on WC Marijuana Reimbursement—Jones v. Grace Health Center (First District Court of Appeal)—Pending
Air Ambulance Reimbursement: State vs. Federal Law
While in the past couple of years state and federal courts have largely found that the federal Airline Deregulation Act (ADA) preempts state WC laws and fee schedules, the
Texas Supreme Court, in
Texas Mutual Insurance Co. v. PHI Air Medical, LLC, ruled that the ADA does not preempt the state’s “fair and reasonable” WC reimbursement standard.
Meanwhile, the following cases are yet to be decided:
Other State Developments (by Geographic Zone)
Pennsylvania, Suspension of Benefits During Incarceration—On January 27, 2021, the Supreme Court of Pennsylvania, in
Sadler v. WCAB, ruled that an employer was not entitled to reimbursement for the benefits it paid to a claimant during the claimant’s preconviction incarceration while awaiting trial. Relying on 77 P.S. § 511.1, which provides that payment of compensation is not required for any period during which the employee is incarcerated after conviction, the court reasoned that there was no statutory basis for a termination of benefits when the claimant was not incarcerated during any period of time after his conviction.
Pennsylvania, Compensation for Traveling Employees—Peters v. WCAB (Pennsylvania Supreme Court)—Pending
Maine, Compensation for Injury Manifesting Outside the Workplace—On March 16, 2021, the Workers’ Compensation Board, Appellate Division, held, in
Thomas v. United Ambulance Service, that a claimant’s injury that manifested off the employer’s premises arose out of and in the course of employment. The Appellate Division concluded that the final test is not whether the ultimate injury happened at
work, but whether the injurious activities that caused the injury were undertaken in the course of employment.
Kentucky, Constitutionality of Statutory Limitation on Benefits—Donathan v. Town and Country Food Mart (Supreme Court of Kentucky)—Pending
Kentucky, Interest Rate on Income Benefits—Martin v. Warrior Coal LLC (Supreme Court of Kentucky)
Florida, Time for Filing a Notice of Claim for Post-Traumatic Stress Disorder (PTSD)—On December 14, 2020, the First District Court of Appeal, in
Palm Beach County Fire Rescue v. Wilkes, found that the 52-week filing requirement for first responders’ PTSD benefits in Florida statute 112.1815(5)(d) operates as a statute of repose, and barred a firefighter’s claim for PTSD benefits resulting from a qualifying event that occurred in 2015, though the resulting PTSD did not manifest until 2019. The court reasoned that, under the statute’s plain meaning, the 52-week requirement starts running on the date of the qualifying event, and not on the date of the manifestation of the PTSD symptoms.
Arkansas, Employer’s Requirement to Prove Bona Fide Job Offer—The Supreme Court of Arkansas, in
Calhoun v. Area Agency on Aging of Southeast Arkansas, ruled on March 11, 2021, that an injured employee was entitled to wage loss benefits because the employer failed to show that it offered employment at wages equal to or greater than the employee’s average weekly wage at the time of the accident. In this case, an injured employee claimed to be entitled to permanent partial disability benefits in excess of his percentage of permanent physical impairment (a wage loss award) because the employer failed to extend a bona fide offer of employment. Relying on 11-9-522(b)(2), which provides that a worker is ineligible for wage-loss disability if he has received “a bona fide and reasonably obtainable offer to be employed at wages equal to or greater than his ... average weekly wage at the time of the accident,” the court concluded that the employer presented no evidence of the number of hours that the injured employee would receive, and thus, failed to prove the existence of a bona fide offer of employment.
Louisiana, PPD for Noise Induced Hearing Loss—On March 24, 2021, the Supreme Court of Louisiana, in
Hartman v. St. Bernard Parish Fire Dept., ruled that Louisiana statute 23:1221(4) prevents a claimant from recovering permanent partial disability benefits for hearing loss suffered over years of exposure to loud noises. The court reasoned that the statute’s legislative intent is to provide permanent partial disability benefits to an employee who suffers permanent hearing loss
solely due to a
single traumatic accident and that the evidence presented in the case did not indicate that the claimant’s hearing loss resulted from a single traumatic accident, but instead,
repeated exposure was likely a
Louisiana, Duty of Good Faith and Fair Dealing in WC—On March 31, 2021, the Court of Appeals of Louisiana, Third Circuit, found, in
Cox, Cox, Filo, Camel & Wilson, LLC v. Louisiana Workers Compensation Corp. (LWCC), as a matter of first impression, that Louisiana statute La. R.S. 22:1973(A)—providing that an insurer owes its insured a duty of good faith and fair dealing and has an affirmative duty to adjust claims fairly and promptly—applies to WC policies and provides a cause of action for insureds. In its decision, the court relied on the language of the statute, which specifically exempts claims made under health and accident policies, but not any other kind of insurance. The court noted that while the legislature has exempted WC insurers from other provisions of the insurance code, it did not provide such an exemption under La. R.S. 22:1973. The court also ruled that the trial court had subject-matter jurisdiction because the WC statutes provide no remedy for employers that might be arbitrarily and capriciously denied a defense under their WC policy, and the claim did not arise out of the WC statutes.
Colorado, WC Subrogation—The Colorado Supreme Court, on April 12, 2021, in
Delta Airlines, Inc. v. Scholle, held that a settlement between a WC insurer and a third-party tortfeasor for past medical expenses paid by the insurer for an employee’s on-the-job injury, extinguished the employee’s claim to recover damages for those medical expenses in a separate tort claim against the third-party tortfeasor. The court reasoned that an insurer pursuing a subrogation claim stands in the shoes of the employee, and that when the insurer settles a subrogation claim, it in fact is settling the employee’s claim—to the extent the employee’s claims against the third-party tortfeasor are for the same injuries entitled to WC benefits.
Arizona, WC for Mental Injuries—France v. The Industrial Commission of Arizona (Supreme Court of Arizona)
Idaho, Statute of Limitation for Claims Against the Industrial Special Indemnity Fund—Stanley v. State of Idaho Industrial Special Indemnity Fund (Supreme Court of Idaho)
Montana, Constitutionality of WC Subrogation Statute—Hogan v. Federated Mutual Insurance Co. (Montana Worker’s Compensation Court)
For more information on these and other cases, visit the Legal section of
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