NCCI’s Countrywide 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 November 2022 edition contains updated information on cases previously introduced and presents new cases and decisions.
To view previously reported decisions, click 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
ncci.com.
COVID-19 Court Cases
Stakeholders remain interested in COVID-19-related cases that could impact the WC system. For example, in
California the state’s supreme court, in
Kuciemba v. Victory Woodworks, is expected to decide whether an employer is liable in tort for injuries sustained by the spouse of an employee who allegedly contracted COVID-19 at work and spread it to the spouse at home.
For more information on other COVID-19-related state and federal cases with potential implications for WC insurance, visit COVID-19 Court Cases on
ncci.com.
Exclusive Remedy Cases
Courts have been considering cases addressing WC exclusive remedy, which provides immunity to employers from injured employee tort suits. Some of the most recent cases include:
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Idaho, Statutory Exception to Exclusive Remedy—The Supreme Court of Idaho, in
Fulfer v. Sorrento Lactalis, Inc., on November 1, 2022, concluded that an injured employee—who sued his statutory employer in tort for work-related injuries—was not required to plead in the initial complaint that the exception to WC exclusive remedy contained in Idaho statute 72-209(3) applied. The statute provides that exclusive remedy does not apply when the employee’s injury is caused by the willful or unprovoked physical aggression of the employer. In addition, and as a matter of first impression, the court found that the exception in 72-209(3) applied to both direct as well as statutory employers. As to the application to statutory employers, the court reasoned that the state’s WC laws equate direct employers with statutory employers and the statutory scheme makes no distinction between the two when it created the exception to exclusivity. With this decision, the court reversed a lower court ruling that dismissed the employee’s tort claim and remanded the case for further proceedings.
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Indiana, Course and Scope of Employment—On October 17, 2022, the federal District Court for the Southern District of Indiana, in
Johal v. FedEx Corp., dismissed a lawsuit brought against an employer by the estates of employees who were killed in a shooting event at work. The court reasoned that the employees’ fatal injuries were deaths by accident for purposes of the Indiana Worker’s Compensation Act, were sustained within the period of employment, within minutes of starting or stopping work, and in the workplace parking lot. This, the court determined, indicated that the injuries were in the course and scope of employment. Therefore, the court concluded that the lawsuit should be dismissed because WC is the exclusive remedy available to the employees’ estates.
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Nebraska, Dismissal of Wrongful Termination Claim—Dutcher v. Nebraska Department of Correctional Services (Supreme Court of Nebraska)
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South Dakota, Intentional Tort Exception—Althoff v. Pro-Tec Roofing, Inc. (Supreme Court of South Dakota)
Developments in Marijuana
The legal status of marijuana and its implications for WC and the workplace remains dynamic. As states continue to adopt laws decriminalizing marijuana use, courts continue to consider cases involving the impact of these state marijuana laws on workers compensation and the workplace.
At the state level, in 2022 at least 10 states considered legislation to legalize medical and/or recreational marijuana. Rhode Island legalized
recreational marijuana (S 2430/H 7593),
Maryland passed legislation (HB 1) allowing voters to decide on a constitutional amendment that would allow
recreational use, and the
Mississippi legislature enacted a bill (SB 2095) that legalizes
medical marijuana. Other states, including Arkansas, Maryland, Missouri, North Dakota, and South Dakota introduced ballot measures that seek to legalize recreational marijuana. So far, at least 20 jurisdictions have legalized recreational marijuana and 38 allow for medical use.
Marijuana and Workers Compensation:
On October 11, 2022, the Court of Appeals of
New Mexico, in
Barrozo v. Albertson’s, Inc., ruled that an employer was not required to reimburse an injured employee the full amount the employee spent on medical marijuana that was used as a WC treatment, but was only required to reimburse up to the maximum allowable payment provided in the fee schedule.
In
Mississippi, on October 11, 2022, the Court of Appeals, in Meek v. Cheyenne Steel, Inc., found that an injured employee was not entitled to WC benefits because a drug test performed after the workplace accident was positive for marijuana. The court relied on Mississippi statute 71-3-212, which provides that if a drug test shows the presence, at the time of injury, of any illegal drug used, it should be presumed that the proximate cause of the injury was the use of the illegal drug. The court reasoned that marijuana remained illegal as a Schedule 1 Controlled Substance and that at the time of the accident there was no mechanism by which the employee could have legally ingested it. With this decision, the court affirmed a ruling by the Workers’ Compensation Commission which found that the employee’s marijuana intoxication was the proximate cause of the injury.
Marijuana and the Workplace:
In
Nevada, the state’s supreme court found, on August 11, 2022, in
Ceballos v. NP Palace, LLC, that an employee who was fired after a positive marijuana drug test could not sue the employer under Nevada statute 613.333, which makes it illegal for employers to discharge employees for engaging in the
lawful use of any product outside the work premises during nonworking hours. In this case, the employee was not intoxicated at work and the recreational marijuana use occurred outside of work. However, the court concluded that because federal law criminalizes the possession of marijuana, its use is not
lawful in the state and therefore does not support a private right of action against the employer. In addition, the court also found that an employee could not maintain a tortious discharge claim against the employer—which arises when employees are terminated for reasons that violate public policy. The court reasoned that the state legislature had specifically authorized employers to prohibit or restrict marijuana use by employees and therefore, it would go against legislative intent to allow the employee’s tortious discharge claim to proceed.
Other Federal and State Developments (by Geographic Zone)
Across the states courts have addressed issues related to compensability, constitutional challenges to WC statutes, and benefit calculations, to mention a few.
Northeast
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Maryland, Statutory Offset of Benefits—On August 15, 2022, in
Spevak v. Montgomery County, the Court of Appeals of Maryland held that the offset provided for in Maryland statute LE 9-610 applies when an employee receives service-connected total disability retirement benefits based on an injury and is then awarded WC benefits that are based on a second and separate injury. Maryland statute LE 9-610 generally provides that “if a statute … provides a benefit to a covered employee of a governmental unit or a quasi-public corporation … payment of the benefit by the employer satisfies, to the extent of the payment, the liability of the employer and the Subsequent Injury Fund for payment of similar benefits under this title.” With this decision, the court affirmed an earlier ruling from the Court of Special Appeals, which found that a claimant’s service-connected total disability retirement benefits arising from a back injury and the claimant’s permanent partial disability WC benefits arising from occupational hearing loss were “similar benefits” and therefore, subject to the statutory offset.
A summary of the Court of Special Appeals’ ruling in
Spevak v. Montgomery County can be found
here.
Southeast
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Florida, Prospective Application of Firefighter Benefits Statute—The Fifth District Court of Appeal of Florida, on October 21, 2022, in
Weaver v. Volusia County, ruled that Florida statute 112.1816—which provides previously unavailable benefits to firefighters who meet certain criteria and are diagnosed with certain cancers—applies only prospectively. The court reasoned that even though the statute was intended to serve a remedial purpose, the fact that it did so by creating new rights for a limited class of firefighters and new obligations for employers, required the court to treat it as a substantive law, which is presumed to apply only prospectively unless the text of the law provides for retroactive application and such application is constitutionally permissible. The court found that the statute is silent on the issue of retroactivity and silence alone cannot support retroactive application. With this decision, the court affirmed a lower court’s ruling that a firefighter diagnosed with cancer two years prior to the enactment of the statute was not entitled to the benefits it provided because the statute does not apply retroactively.
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Florida, Statutory Immunity—The Third District Court of Appeal of Florida, on October 19, 2022, in
Bal Harbour Tower Condominium Association, Inc. v. Bellorin, determined that an employee of a valet service could not maintain a negligence lawsuit against a condominium association for injuries sustained while working on the condominium premises. The court, relying on Florida statute 440.10(1)(b)—which provides statutory employer status to contractors with respect to employees of subcontractors hired to perform the contracted work—found that the association was a contractor to the valet service under the statute. Because the association was contractually obligated to provide valet services to the condominium residents and subcontracted that obligation to the valet’s employer, the court concluded the association was the valet’s statutory employer and entitled to immunity.
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Kentucky, Reopening a WC Claim—The Supreme Court of Kentucky, on September 22, 2022, in
Lakshmi Narayan Hospitality Group Louisville v. Jimenez, held that a claimant can reopen a prior WC claim in which no permanent partial disability or future medical benefits were awarded. The court analyzed Kentucky statute 342.125(1)(d),which allows reopening and reviewing any award based on several grounds, including a change of disability. In this case, an administrative law judge awarded temporary benefits to a claimant for a work-related injury but determined that the claimant did not sustain a permanent injury and was not entitled to future medical benefits. A few years later, the claimant filed a motion to reopen the claim due to a change in disability after being diagnosed with conditions related to the accident. The Workers’ Compensation Board determined that the claim was not subject to reopening because only temporary disability benefits for a specific period were previously awarded. On review, the state’s supreme court found that the Workers’ Compensation Board had misconstrued the statute, concluding that nothing in the plain language of 342.125(1)(d) precludes reopening an award of temporary disability benefits. The court further ruled that a determination that a claimant has a permanent injury, or an award of future medical benefits, are not prerequisites to reopening.
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Louisiana, Compensability of Fall Injuries—On August 10, 2022, the Court of Appeal of Louisiana, Second Circuit, in
Woodard v. Brookshire Grocery Co., ruled that a pharmacist was entitled to WC benefits for shoulder injuries sustained from a fall caused by a seizure suffered at work. The court noted that in Louisiana, employees are entitled to WC benefits for personal injuries by accident arising out of and in the course of employment, even if the injuries are preceded or possibly caused by an idiopathic seizure. The court found that at the time of the accident, the pharmacist was on the employer’s premises, on the clock, and standing at an assigned work location having just finished some work assignments. Therefore, the court concluded, the fact that the fall was not directly caused by a work-related activity, but a seizure, did not negate that the accident occurred in the course of and arising out of the employment.
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Mississippi, Exhaustion of Administrative Remedies—On August 25, 2022, the Supreme Court of Mississippi, in
Thornhill v. Walker-Hill Environmental, found that a WC claimant could sue his employer for bad faith because the claimant exhausted his administrative remedies by entering into a final settlement with the employer that was approved by the Workers’ Compensation Commission. In this case, the claimant and the employer settled a WC claim before the Commission made a finding of compensability. The employer argued that the claimant’s subsequent bad faith lawsuit should be dismissed because the Commission never made a finding on whether the injuries were compensable. The court disagreed and affirmed an earlier appellate ruling that allowed a bad faith lawsuit to proceed, reasoning that once the settlement was approved and included in the final order, there was nothing left for the Commission to decide. Therefore, the court held, under these circumstances, the claimant had exhausted his administrative remedies and the bad faith lawsuit may proceed.
Midwest
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Oklahoma, Constitutionality of Subrogation Statute—On July 29, 2022, the Oklahoma Court of Civil Appeals, in
Jones v. Cabler, considered a constitutional challenge to the Oklahoma WC subrogation statute, 85A Okl.St.Ann. § 43, which generally allows an employer or WC insurer to obtain a lien on the proceeds recovered in a lawsuit against a third party liable for an employee’s work-related injuries. In this case, a WC claimant asserted that the subrogation statute violated federal and state constitutional due process protections and was an unconstitutional special law. The court rejected the challenge, reasoning that the statute does not violate due process protections as it only precludes claimants from receiving a double recovery of benefits for the same injury. The court also concluded that the statute does not single out or provide different treatment to a specific group of WC claimants, and thus did not violate Oklahoma’s constitutional prohibition on special laws.
West
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Alaska, Attorney Fees—Rusch v. Southeast Alaska Regional Health Consortium (Supreme Court of Alaska)
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Wyoming, Entitlement to Permanent Partial Disability (PPD) Benefits—The Supreme Court of Wyoming, on August 19, 2022, in
McBride v. State of Wyoming, ruled that an injured employee who failed to seek suitable employment was not entitled to a PPD award. In its analysis, the court relied on Wyoming statute 27-14-405, which provides that an injured employee with PPD may apply for a PPD award if, in part, the employee has actively sought suitable work considering the employee’s health, education, training, and experience. The employee argued that there was no suitable work available considering her health conditions. The court disagreed and reasoned that testimony presented in the case indicated that, although the employee could not go back to her pre-injury employment, there were other jobs that could be performed despite her limitations. Moreover, the court noted, the employee never testified that she could not work and even conceded that she was not looking for a job. Thus, the court concluded, the employee failed to establish by a preponderance of the evidence that there was no suitable work given her health and denied the PPD award.
For more information on these and other cases, visit
INSIGHTS.
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