PLENARY

Chalk one up for the “plenary power” of the legislature.

California’s courts are seemingly reluctant to challenge the legislature’s prerogative in workers’ comp.

The drafters of SB 863 and the California Legislature scored a big win last week as the California Court of Appeal 1st District nixed a constitutional challenge to the IMR provisions of the 2012 California workers’ comp reforms.

Parts of the Stevens opinion (see link to it below) read almost like a press release from the architects of the reform.

We may not have heard the last on the constitutional issues, however. The case, Frances Stevens v. WCAB (Outspoken Enterprises), will be appealed to the California Supreme Court, though the court may well decline to hear the case. In Sacramento’s California Court of Appeal, 3rd District another case with similar issues is pending, Daniel Ramirez v. WCAB.

Indeed ,a review of various amicus briefs and the Answer to Petition for Writ of Review filed by SCIF attorneys in Ramirez reveals that many of the same arguments and cases cited in Ramirez are cases cited in Stevens by the 1st District.

So another set of judicial eyes will look at the constitutional arguments.

In Ramirez, the procedural facts are somewhat complicated, but the attorneys for the Mr. Ramirez argue that the workers’ comp judge refused to proceed to trial on their appeal of IMR challenging IMR on substantive grounds. In the Petition for Writ the attorneys for Ramirez allege that an IMR reviewer found that the treating physician documented functional improvement following acupuncture. However they point out that the IMR reviewer rejected the UR appeal by opining that the primary treater’s continued reporting of functional improvement from acupuncture was not credible.

Ramirez is somewhat complicated because it has multiple layers. Ramirez asserts that SCIF failed to comply with UR because it did not follow the MTUS. As a result, Ramirez challenges Dubon II, the WCAB en banc where the board trimmed back its oversight of UR to timeliness issues. Under Dubon I the WCAB had asserted jurisdiction to decide medical issues where there were material procedural defects that undermined the integrity of the UR process.

But Ramirez also challenges the constitutionality of IMR itself. Indeed, SCIF argues that attorneys for Ramirez waived all other issues except the IMR constitutionality issue.

The court in Stevens appeared to have a somewhat expansive view of Labor Code 4610.6(h)(1) & (5), which they reference as follows “The Board’s authority to review an IMR determination includes the authority to determine whether it was adopted without authority or based on a plainly erroneous fact that is not a matter of expert opinion.” Stevens notes that the Board has the power under that section to review whether MTUS was wrongly interpreted and thus if “it were to find there are no other reasons supporting the denial” the board would “have the power to conclude that the determination was adopted without authority”. As a result, the Stevens court remanded to the Board for a determination as to whether the DWC acted in excess of authority in deciding that personal care by home health aides was not medically necessary.

If so, then perhaps the matter would be submitted to a second IMR organization under Labor Code 4610.6(i). However, the Stevens decision did not deal with that part of the process.

Under the Stevens type of analysis, Mr. Ramirez, who was seeking further acupuncture treatments, should have have been entitled to a determination on his challenge to the IMR determination on acupuncture.

But how the Ramirez court will approach this is unknown. Oral argument has not yet been set.

Meanwhile, the Stevens court hands a victory to the architects of SB 863 on the constitutional argument. The short version for those who haven’t read the Stevens decision:

1. The California legislature’s plenary powers under Section 4 of the California Constitution aren’t limited by the state Constitution’s separation of powers or due process clauses

2. Even if Section 4 of the California Constitution did impose separate limits on legislative plenary powers, the IMR process of SB 863 does not violate those

3. The IMR process does not violate the Federal constitution’s due process clause or Section 4 of the California Constitution

Another interesting sidebar to this legal thicket is that the Stevens v. WCAB court appears to have weighed in on the dispute as to whether the time frame for the DWC and Maximus to render IMR decisions is “directory” or “mandatory”. The WCAB has been split on the issue. In Arredondo v. Tri-Modal, a majority comprised of Commissioners Zalewski and Lowe ruled that the time frame was directory. In Saunders v. Loma Linda, a majority of Caplane and Sweeney held that the time frame is mandatory. Sweeney and Caplane joined in a similar opinion in Southard V. Hallmark. Reg. 9792.10.6(g)(1) specifies a 30 day time frame for issuing an IMR decision.

Southard is now pending at the 3rd DCA in Sacramento, which recently granted the defendant’s writ petition.

The “directory” vs. “mandatory” issue of IMR decision timeframes was not specifically at issue in Stevens. Yet, in dicta the Stevens court appeared to advance the view that the time limit is “directory”. In Saunders the IMR decision took over 5 months and in Arredondo and Southard around 4 months, so this is an issue of importance to workers.

Here is a link to the Court of Appeal decision in Stevens:

http://www.courts.ca.gov/opinions/documents/A143043.PDF

Stay tuned.

Julius Young