Court Case Update, Countrywide - November 2020
InsightsLegal
By NCCI Insights November 17, 2020


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 November 2020 edition contains updated information on cases previously introduced and presents new cases and decisions.

For more information on cases monitored by NCCI’s Legal Team, visit previous Court Case Updates in the Legal section, COVID-19 Court Cases, and Court Case Insights on ncci.com.

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COVID-19 Court Cases

Courts have begun to consider and decide COVID-19-related cases that could impact WC. Some examples include:

  • Illinois—On April 24, 2020, in Illinois Manufacturers’ Association v. Illinois Workers’ Compensation Commission, the Circuit Court of Sangamon County entered a temporary restraining order enjoining the Workers’ Compensation Commission from implementing an emergency amendment to the Illinois Workers’ Compensation Act. The amendment created a rebuttable presumption that a first responder’s or front-line worker’s exposure to COVID-19 arises in and out of the course of employment and is causally connected to the hazards of the employment.

  • California—On September 4, 2020, the federal District Court for the Southern District of California ruled, in Brooks v. Corecivic of Tennessee, LLC, that WC exclusive remedy barred claims by a former employee against the former employer for negligent supervision and intentional infliction of emotional distress in connection with an alleged failure to maintain a safe and healthy work environment during the COVID-19 pandemic. The court found that the claims were barred by exclusive remedy because, the court reasoned, maintaining a safe and healthy workplace is inextricably part of the “compensation bargain” of the WC system.

  • New York—On October 21, 2020, the New York Workers’ Compensation Board (the Board) found, in Employer: New York Black Car Operators, that a positive COVID-19 test is sufficient prima facie medical evidence (PFME) for a COVID-19 WC claim. In this case, a WC claimant who allegedly contracted COVID-19 as a result of his work activities as an Uber driver, provided a positive COVID-19 test result to show PFME of injury. The New York Black Car Fund, which provides WC insurance to “for-hire” rideshare drivers of certain companies, denied the claim and asserted that the positive test did not establish PFME because it did not show that the claimant contracted COVID-19 while working. The Board reasoned that a positive COVID-19 test constitutes PFME because it documents the claimant’s COVID-19 illness and there is no requirement that PFME, in itself, shows a causal link between the injury and employment.

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.

Workers Compensation 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 that were previously reported by NCCI.

Challenges to State Adoption of Third-Party Guides

Since the 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 and other third-party guides in WC have continued to surface in courts across the states.

In Utah, on July 31, 2020, the state’s highest court, in Ramos v. Cobblestone Centre, rejected a challenge that the adoption of the 2006 Impairment Rating Guide and the 5th Edition of the AMA Guidelines violated the Open Courts Clause of the state constitution reasoning that the claimant failed to explain or present evidence for how these methods are arbitrary and provide inadequate compensation for injured workers.

The following cases are expected to be decided:

Developments in Marijuana

Legalization of marijuana has been active at state and federal levels. In the 2020 election, voters approved ballot measures to legalize recreational marijuana in Arizona (Proposition 207), New Jersey (Question 1), and Montana (Initiative 190), medical and recreational marijuana in South Dakota (Measure 26 and Amendment A) and only medical marijuana in Mississippi (Initiative 65).

State legislatures have also introduced bills on marijuana-related issues. For example, Florida introduced, but failed to pass, a proposal (SB962) that would have prohibited an employer from taking adverse employment action against an employee or applicant who is a qualified medical marijuana patient. New Jersey is considering a bill (A1708) that requires employers and WC insurers to provide coverage for medical marijuana in certain circumstances. And Iowa enacted a bill (HF 2589) providing that WC insurers are not required to provide reimbursement for medical marijuana. At the federal level, pending legislation seeks to address several marijuana-related issues such as decriminalization (HR 3884/S2227) and state regulation without federal interference (HR2093).

State courts also remain engaged in reviewing marijuana-related issues in WC. On October 27, 2020, the Massachusetts Supreme Judicial Court ruled, in Wright’s Case, that a WC insurer cannot be required to reimburse a claimant for medical marijuana expenses as a necessary and reasonable medical treatment. Other cases that are expected to decide whether marijuana is reimbursable under WC include:

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 preempts state WC laws and fee schedules, the Texas Supreme Court this year, 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.

On the legislative front, Florida HB747, which requires health insurers to provide “reasonable reimbursement” to air ambulance companies for certain covered services, became effective September 2020.

Other Federal and State Developments


Federal

  • Remuneration to Seamen Employees Not Part of Premium Owed by Insured Employer. On July 20, 2020, the federal Court of Appeals for the Eight Circuit ruled, in LM Insurance Corp. v. Dubuque Barge and Fleeting Service Co., that remuneration paid or payable by an employer to seamen employees could not be included as part of the premium owed to an insurer under three successive WC policies. The court noted that, pursuant to the policies’ language, WC premium is calculated by multiplying the applicable rate by the payroll and all other remuneration paid or payable to the individuals described in sections C.1. and C.2. of the policies. The court reasoned that, when read together, section C.1. includes employees engaged in covered work and section C.2. includes nonemployees, such as independent contractors. The court concluded that the seamen were not part of either of those two sections because they were not engaged in covered work and because they were not independent contractors. The court further explained that remuneration to the seamen was not part of the premium calculation just because the seamen could be reclassified at some point. The court clarified that, in such event, an audit at the conclusion of the policy period would appropriately account for the reclassification.

  • Presumption of Compensability for Federal Contractor IllnessesUnited States of America v. State of Washington (Federal Court of Appeals for the Ninth Circuit)

State Cases (By Geographic Zone)

Northeast

Southeast

  • North Carolina, Subrogation of Underinsured Motorist Benefits—The North Carolina Supreme Court ruled, in Walker v. K &W Cafeterias, on August 14, 2020, that a WC insurer could not satisfy its subrogation lien by collecting from uninsured/underinsured motorist (UIM) proceeds received by the widow of a North Carolina employee who died in a work-related vehicle collision in South Carolina. After receiving WC benefits in North Carolina, the widow settled a lawsuit against a third-party tortfeasor, which included proceeds from a UIM policy governed by South Carolina law. The court, relying on South Carolina law, reasoned that South Carolina Statute § 38-77-160 bars an insurer from seeking reimbursement from UIM proceeds for benefits it has previously paid.

  • Florida, Personal Leave and WC Benefits—On July 15, 2020, the Florida First District Court of Appeal, in Medina v. Miami Dade County and Risk Management of Dade County, found that a claimant was entitled to temporary disability benefits for a period during which he received full pay under the employer’s personal sick leave policy because the employer did not pay WC benefits as required by Florida Statute § 440.09(1) or pay wages in lieu of those benefits.

    Florida Statute § 440.09(1) requires the employer to pay compensation or furnish WC benefits if an employee suffers a compensable injury. In this case, an employer failed to reinstate the sick leave time used by the claimant while recovering from a workplace injury. The court reasoned that the employer failed to provide compensation or furnish benefits because the claimant was paying himself through personal sick leave.

  • Florida, Change of PhysicianCity of Bartow v. Flores (Florida First District Court of Appeal)

  • Kentucky, Constitutionality of Statutory Limitation on BenefitsDonathan v. Town and Country Food Mart has been certified to the state’s highest court. In this case, the appellate court upheld the constitutionality of Kentucky Statute § 342.730—which requires termination of all income benefits when the employee reaches the age of 70 or four years after the injury or last exposure, whichever is last—against a challenge alleging that the statute unconstitutionally discriminates between older and younger injured workers.—Pending

  • Georgia, Compensability for Injuries Occurring During a Scheduled BreakFrett v. State Farm Employee Workers’ Compensation (Supreme Court of Georgia)

Midwest

West

  • Hawaii, Statutory Presumption of Compensability—On June 30, 2020, in Cadiz v. QSI, Inc., the Supreme Court of Hawaii found that an employer’s independent medical examination (IME) reports failed to meet the burden to provide evidence that, if true, would overcome the statutory presumption that an employee’s injury is work related. In this case, a claimant filed a WC claim stemming from exposure to mold in the workplace. The Hawaii Supreme Court relied on WC statute 386-85, which provides that in a proceeding for a claim of compensation, it is presumed, in the absence of substantial evidence to the contrary, that a claim is for a covered work injury. The court reasoned that, because the claimant presented laboratory evidence of elevated levels of mycotoxins in his body, and the evidence was never rebutted in the employer’s IME reports, the employer had failed to meet its burden of production and thus did not overcome the presumption of compensability.

  • Texas, Waiver of Subrogation—The Court of Appeals of Texas, on October 2, 2020, in Texas Mutual Insurance Co. v. Stevenson, held that a WC claimant failed to prove that a WC insurer waived its rights of subrogation. The claimant, who suffered compensable injuries and sued an allegedly negligent third party, argued that the applicable WC policy contained a blanket waiver of subrogation, which precluded the WC insurer from recovering proceeds of the third-party lawsuit. The court noted that the policy waiver applied only to parties for whom the employer has contractually agreed to provide the waiver. Therefore, the court concluded, because the record did not contain such a contract, there was no evidence to show that the WC insurer waived its subrogation rights.

  • Oregon, Compensability for Impairment Related to Preexisting Conditions—On October 7, 2020, the Oregon Court of Appeals ruled, in Robinette v. SAIF Corp., that, unless an employer issues a preclosure denial asserting that a portion of a claimant’s impairment is not work-related, a claimant is entitled to compensation for an impairment caused entirely by a pre-existing condition that has not previously been claimed or combined with a compensable injury, as long as the impairment as a whole is caused in material part by a work-related injury. The court’s holding was guided by the Oregon Supreme Court decision in Caren v. Providence Health System Oregon, which reasoned that claimants are entitled to some notice if the employer contends that a portion of the worker’s impairment is not compensable.

  • Nevada, WC for Preexisting ConditionsCity of Henderson v. Spangler (Court of Appeals of Nevada)

  • Colorado, Determination of Maximum Medical ImprovementDestination Maternity v. Burren (Supreme Court of Colorado)

For more information on these and other cases, visit INSIGHTS.

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.







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