THE COMMONWEALTH COURT ISSUES ITS
SECOND DECISION POST-PROTZ
By Lisa A. Miller, Esquire
On June 6, 2018, the Commonwealth Court circulated a Decision in Whitfield v. WCAB (Tenet Health System Hahnemann LLC), Pa. Cmwlth., June 6, 2018.
The Commonwealth Court has published its second Decision addressing the Supreme Court’s holding in Protz regarding the retroactivity of the Impairment Rating Evaluations.
The facts of the case were not in dispute. On March 25, 2002, the Claimant suffered a work-injury that required her to undergo lower back surgery. From March 25, 2002, until September 28, 2002, the Claimant received partial disability benefits for the time period in which she performed alternative work.
The Claimant’s temporary total disability benefits began on September 29, 2002, the day before her lower back surgery.
On June 13, 2006, Dr. Brody performed an IRE under the Fifth Edition of the AMA Guides to permanent impairment. Dr. Brody concluded that the Claimant had an impairment rating of forty-four percent (44%).
Based upon the IRE, the WCJ modified Claimant’s disability status from total to partial disability as of the date of the IRE.
The Appeal Board affirmed the modification of the Claimant’s benefits by Order on June 1, 2009.
The parties stipulated that the Claimant did not raise the constitutionality of the IRE before the original WCJ, or the Board.
Although the Claimant’s disability status was modified from total to partial, because she was not able to return to work following her surgery, the Claimant received workers’ compensation benefits at the temporary total disability rate from September 29, 2002, until mid-July 2015. She testified that she continued to receive medical benefits.
On November 13, 2015, about one month after the Commonwealth Court’s Decision in Protz I, the Claimant filed a Petition for Reinstatement to total disability based upon the Commonwealth Court’s Decision in Protz I, holding that the Fifth and Sixth Editions were unconstitutional.
At the Hearings on the Reinstatement Petition, the Claimant testified that she did not feel as though she had fully recovered from her injuries, and that she had been unable to work from the time of her surgery through July 15, 2015. There was some contradictory evidence that the Claimant was involved in a motor vehicle accident in May 2012, in which she injured her head, neck, and upper back, but not her lower back.
The Judge issued an Order denying the Claimant’s Reinstatement Petition. The Judge found that Claimant was not entitled to a reinstatement of her benefits based upon Protz I for a number of reasons:
(a) In Protz (I), the Commonwealth Court did not expressly void all prior [IREs] or state that its Decision applied retroactively;
(b) In Pennsylvania, generally only those matters that are pending in any phase of litigation, including Appeal or future matters, are entitled to a benefit in the change of the law, and the litigation in the instant matter ended on June 1, 2009; [and]
(c) The constitutionality of Section 306(a)(2) was not raised or preserved in the underlying litigation.
The WCJ cited Winchilla v. WCAB (Nextar Broadcasting), 126 A.3d (Pa. Cmwlth. 2016), for the proposition that the Claimant waived the constitutionality argument by not raising it previously. Because of the Judge’s Decision, the WCJ did not make a finding regarding the Claimant’s credibility.
The Claimant filed an Appeal of the WCJ Decision, and the Board affirmed in a 4 to 3 Decision.
The majority of the Board found that Claimant waived the right to challenge the constitutionality of the IRE citing Riley v. WCAB (Commonwealth of Pennsylvania), 154 A.3d 396 (Pa. Cmwlth. 2016). The Board found that the Claimant did not challenge the constitutionality of the IRE before the WCJ or the Board when her change in status Petition was first being litigated.
Additionally, the Board noted that the Claimant did not Appeal the Board’s June 1, 2009 Order, in which the Board affirmed the original WCJ Decision modifying her status to partial disability.
The Board also noted that a Claimant may appeal a change in status at any time during the 500-week period of partial disability, so long as the Claimant presents evidence of a revised impairment rating of at least fifty percent (50%). However, the Board held that Claimant was not entitled to a Modification of her disability status, because she failed to present such evidence.
The Board’s dissent disagreed with the Board’s majority that Claimant’s change in disability status was final. The dissent distinguished Riley, noting that in Riley, the Claimant attempted to challenge the IRE more than 500 weeks after the change in disability status, whereas Claimant here filed her Petition with the 500-week period following her change in disability status.
In a footnote, the Board noted that the Claimant filed her Petition within 500 weeks of the change in status on June 13, 2006, the dissent went onto cite Section 306(a.2)(4), which provides, in relevant part, that “An employee may Appeal the change to partial disability at any time during the 500 week period of partial disability.”
The footnote goes on to state that Claimant received twenty (20) weeks and six (6) days of partial disability benefits in 2002, leaving her with 479 weeks, one day before her 500 weeks of partial disability benefits were exhausted. Although she did not actually receive payment of four (4) weeks of partial disability until April 2016, those benefits were for the period of July 13, 2015 through August 19, 2015. Therefore, the Claimant exhausted her benefits in the summer of 2015, but did not file her Petition until November 2015. Thus, Claimant did not file her Petition “during the 500 week period of partial disability”.
The dissent further found that Protz I should be applied retroactively, because it satisfied the criteria for retroactive application in Blackwell v. State Ethics Commission, 589 A.2d 1094 (Pa. 1991).
The first criterion is the purpose to be served by the new rule. The dissent concluded that “applying Protz I retroactively to the instant case serves the important purpose of mandating conformity with the Constitution.
Otherwise “allowing Claimants to have their disability status, and ultimately have their benefits completely cut off, based upon an IRE that was based upon an unconstitutional section of the Act, greatly prejudices those Claimants and blocks the main purpose of the Protz I Decision.
With regard to the second criterion, the extent of the reliance on the old rule, the dissent noted that “The IRE process is inherently not a final process, and remains an open case for 500 weeks past the time that a Claimant’s disability status has changed.” Because the Guides could change, and Claimants retain a right to challenge their status during this 500 week period, the dissent found “Employers have never had full reliance that a change in Claimant’s disability status to partial would be final as that change only becomes final once the 500-week period has expired.”
The dissent believed “There would be a more adverse effect on the administration of justice if Protz I was not retroactively applied to [cases in which the 500-week period had not expired], as those are not final cases.”
If Protz I was not given retroactive effect, the dissent stated “It would lead to the absurdity that Claimants would have the right to Appeal IREs, but have no actual remedy to carry through on that Appeal, as the right to Appeal would be based upon a now unconstitutional section of the Act.”
On Appeal to the Commonwealth Court, the Claimant argued that the Protz Decisions apply, and that she is entitled to have her disability status restored from partial to total disability, because the IRE upon which the change was based was unconstitutional and invalid. The Claimant contends that the case is “strikingly similar” to the Commonwealth Court’s Decision in Thompson v. WCAB (Exelon Corporation), 168 A.3d 408 (Pa. Cmwlth. 2017), in which the Commonwealth Court reversed the Board’s affirmance of a WCJ’s Decision modifying a Claimant’s disability status from total to partial.
Claimant also argues that Reinstatement Petitions made be filed within three years of the date of last payment, which is satisfied here.
In addition, the Claimant also argues that public policy and justice require the retroactive application of Protz II. Because Protz II struck the entirety of the IRE provision from the Act, the Claimant asserted that injured employees no longer have a statutory remedy to seek a change in status, and “by eliminating the statutory process for an employee to challenge his or her IRE – based partial disability status, the Supreme Court could not have intended to bind forever Claimants to a partial disability status that was unconstitutionally inacted. In addition, the Claimant emphasizes that the remedial nature of the Act stresses that it should be liberally construed in favor of injured workers.
Employer argued that the reinstatement was not warranted, because at the time that Protz II was decided, the Claimant had “already conclusively litigated the change in her benefit status, collected 104 weeks of temporary total disability benefits, and collected the entirety of her 500 weeks of temporary partial disability benefits.”
Employer also notes that Employers have relied on the now-invalid IREs, which largely went unchallenged until the Protz Decisions. Employer explained:
“While the statutory scheme set forth in Section 306(a.2) of the Act allowed a Claimant to prove an entitlement to temporary total disability benefits at some point within the future of that 500 week period, presuming he/she was able to demonstrate a total person impairment of fifty [%] or greater, the statute did not provide a Claimant with 500 weeks within which to look back and invalidate a past IRE, and the corresponding change in benefit status.”
The Employer argued that Claimant fully litigated her change in benefit status a decade ago, but never challenged the constitutionality of the IRE provisions during that litigation. The Employer argued that if the Court were to give retroactive effect to Protz II, the parties expectation of finality would be upset.
The Court goes on to summarize the holdings in Protz I and II, and the subsequent Commonwealth Court holdings in between Protz I and II, namely Winchilla, Riley and Thompson.
In Thompson, the Claimant’s disability status was changed on August 30, 2005 from total to partial disability following an IRE performed utilizing the Fifth Edition of the AMA Guides.
The parties were in the midst of litigating the merits of the earlier change in status, based upon the Claimant’s 2011 Petition for Review, challenging the 2005 IRE when Protz I was decided. Although the Claimant had not challenged the constitutionality of the IRE before the WCJ or the Board, the Claimant in her Petition for Review to the Commonwealth Court raised the constitutionality issue.
The Employer argued that the Claimant failed to timely raise the issue, and should be barred from doing so on Appeal.
The Commonwealth Court rejected the Employer’s argument noting that “This matter began before Protz I and Protz II were decided. It implicated the validity of the statute, and the [Claimant] raised this issue at the first opportunity to do so.” Thompson.
The Commonwealth Court noted that post-Protz II, the statutory time requirements were no longer valid, and the Commonwealth Court allowed a Claimant to raise the constitutionality of the IRE for the first time outside of those time periods, but while the litigation involving the change in status was still pending. Thompson.
With regard to the case at bar, the Claimant argued that she was entitled to a reinstatement of her disability status from partial to total, because she filed her Reinstatement Petition within three years after the date of her most recent payment of compensation, and the IRE upon which the modification of her disability status was based is invalid. She argues that her case is most analogous to Thompson, because she filed her Reinstatement Petition at the first available opportunity, just one month after the Decision in Protz I.
The Claimant also argues that Protz should be applied retroactively.
Employer argues against retroactive application, stressing that Claimant did not raise the constitutionality of the IRE at any time during the underlying litigation related to the IRE itself, and she cannot do so now, because it would upset Employer’s reasonable expectation of finality.
It is undisputed that the Claimant filed her Reinstatement Petition within three years after the date of the most recent payment of compensation. Her last payment was received in mid-July 2015, just four months before she filed her Petition. Therefore, under Section 413(a), the Court examined the disability of [Claimant] has increased, decreased, recurred, or has temporarily or finally ceased. 77 P.S. §772.
The Court notes that “disability” is synonymous with a loss of earning power resulting from a work-related injury. “Disability” may also refer to a status, which is linked to the rate or amount of compensation to which a Claimant is entitled. Traditionally, this status was linked to Claimant’s earning power under the traditional vocational efforts and earning power assessments.
Section 306(a.2) to the Act provided another method of changing Claimant’s disability status from total to partial disability, but without regard to any change in Claimant’s earning power. The practical effect of the change in status for an impairment rating under fifty percent (50%) was to change the Claimant’s status from total to partial disability, and to limit a Claimant to 500 weeks of partial disability. See Diehl v. WCAB (I.A. Construction), 972 A.2d 100, (Pa. Cmwlth. 2009).
Diehl discussed the distinction between a change in disability status based upon an IRE, and a change in earning power based upon a vocational evaluation.
In Diehl, the Court explained that “IRE remedies are separate from remedies involving actual ability to work.” The Diehl Court explained that “requiring proof of a Claimant’s level of impairment, and a Claimant’s earning power, would render the IRE provisions meaningless” and that “there would be no reason for the Employer to ever obtain an IRE.”
The Court noted that until the IRE provisions were struck down as unconstitutional, a Claimant’s disability status could be modified from total to partial disability in one of two ways: (1) evidence of earning power under Section 306(b)(2), or (2) based upon a Claimant’s impairment rating without regard to his or her earning power under Section 306(a)(2).
Because earning power did not play any role in Claimant’s change from total to partial disability in this case, we discern no reason why the term “disability” in Section 413(a) governing reinstatement from partial to total disability status in this case should be restricted to its traditional definition of earning power.
The Court next considered whether Claimant’s disability status “increased, decreased, recurred, or has temporarily or finally ceased”. 77 P.S. §772.
Under the facts of this case, Claimant may establish entitlement to reinstatement of her disability status “recurred”. The Court defined “recur” as “to return to a place or status”, or “to happen, take, place, or appear again.” Webster’s Third New International Dictionary.
The Court noted that the legal effect of Protz I and subsequently Protz II was to render Claimant once again eligible for total disability benefits. The impediment that rendered her partially disabled under the Act, the Impairment Rating Evaluation, is no longer a valid means of challenging a Claimant’s status. There was no longer a legal basis for Claimant’s disability status to remain partial, because the IRE upon which the change in status was predicated was found, as a matter of law, unconstitutional and invalid. This change in the law was a basis upon which Claimant could seek reinstatement.
This scenario is more akin to a Claimant seeking reinstatement of benefits currently under a suspension than one seeking a reinstatement of benefits following termination, because there is no allegation that Claimant’s disability had ceased.
The Supreme Court explained that suspension status “actually acknowledges” a continuing medical injury.” Latta v. WCAB (Latrobe Die Casting Co.), 642 A.2d 1083, 1085 (Pa. 1994).
In situations where Claimant’s benefits are suspended, the Claimant is only required to demonstrate that the reasons for the suspension no longer exist. Pieper v. Ametek-Thermox Instruments Division, 584 A.2d 301, 304 (Pa. 1990).
A Claimant is not required to demonstrate with medical evidence that the work-related injury giving rise to benefits continues; a Claimant’s testimony to that effect satisfies the Claimant’s burden of proof. Latta.
The Supreme Court held that “once a Claimant testifies that his prior work-related injury continues, the burden shifts to his Employer to prove the contrary. Where an Employer fails to present evidence to the contrary, the Claimant’s testimony, if believed by the Judge, is sufficient to support to reinstatement.”
The Supreme Court explained that because the Claimant already established a work-related injury, it would be improper to require a Claimant to establish it again. “In such suspension stituations, the causal connection between the original work-related injury and the disability which gave rise to the compensation is presumed.” Pieper.
The Court goes on to distinguish Stanek v. WCAB (Greenwich Collieries), 756 A.2d 661, 668 (Pa. 2000).
The Court distinguishes Stanek because the Claimant there did not have his status changed based upon an impairment rating, rather he received partial disability benefits based upon a change in earning power. In Stanek, the Claimant exhausted 500 weeks of partial disability, and sought a reinstatement on the basis that his physical condition had worsened, rendering him totally disabled. The Commonwealth Court noted that the standard enunciated by the Supreme Court, requiring evidence of a loss of earning power and a worsening of the Claimant’s physical condition, under these circumstances makes sense.
However, in cases where the Claimant’s change in disability status was never based on either a change in earning power, or a change in physical condition, but solely on an impairment rating, it does not make sense for a Claimant seeking reinstatement based upon an unconstitutional IRE to show a change in earning power when the Employer was not required to share the same when it had the Claimant’s disability status modified from total to partial.
Furthermore, in some cases, a Claimant will not be able to show a change in earning power, because he or her earning capacity remains at zero. Moreover, because the change in disability status was not linked to any change in physical condition, but only to an impairment rating, it does not make sense to require Claimants to show their physical condition worsened.
Claimant testified that she was not able to work at all, since her surgery in 2002. Employer did not present any evidence to the contrary. Therefore, if Claimant’s testimony is credited, this satisfies her burden under Latta.
However, the Commonwealth Court remanded the matter to the WCJ, noting that the WCJ did not find it necessary to make any findings as to Claimant’s credibility, because of the Judge’s determination that Protz I was inapplicable.
Therefore, the Commonwealth Court vacated the Board’s Order, and remanded the case to the WCJ to make factual findings related to whether Claimant credibly testified that she is totally disabled. If her testimony is credited, and because Employer presented no evidence to the contrary, the Claimant is entitled to a reinstatement as of the date that she filed her Petition under Latta.
The Court cites the humanitarian purposes of the Act for rendering their decision.
Interestingly, the Court appeared to “punt” on the retroactivity issue. The Court notes “Our Decision today does not impose any new legal consequences upon a past transaction. Simply because Protz II is being applied to a case that arose from a work injury and a change in disability status that pre-dates it does not mean it operates retroactively.” Warren v. Folk, 886 A.2d 305, 308 (Pa. Super. 2005).
It would be retroactive if it related back and gave a prior transaction a legal effect different from which it had under the law in effect at the time. This Decision does not alter Claimant’s past status. Rather, it gives effect to the Claimant’s status as it existed at the time she filed a Reinstatement Petition, which was within the statutory time frame for filing of such Petitions.
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