State News : California

By: Bill Davis (Associate Attorney - Santa Rosa)

On May 27, 2020, the Sixth Appellate District issued its long-awaited decision in County of Santa Clara v. WCAB (“Justice”). This decision dramatically curtails the application of the Hikida case, which is regularly cited by the Applicant’s bar to severely limit or even eliminate apportionment. 

It is important to notes that the Justice Court did not disagree with the Hikida decision. Instead, it held that the Hikida decision was being applied in an overbroad and inappropriate manner. 

The Justice Court agreed that Defendant was responsible for a new injury that was the consequence of medical treatment. It further agreed that “[A]n employee is entitled to compensation for a new or aggravated injury which results from the medical or surgical treatment of an industrial injury.” The Court noted that, while these statements are correct, they are not the end of the discussion. “However, it does not follow that an employer is responsible for the consequences of medical treatment without apportionment, when that consequence is permanent disability”. This is key for the defense community because applicant attorneys have been using Hikida to argue that there is no apportionment when permanent disability results from medical treatment. 

The Justice Court relies upon Labor Code sections 4663 and 4664 and the numerous cases which applied these sections, particularly the Lindh decision (City of Petaluma v. WCAB (Lindh)). The Justice Court notes, “There is no case or statute that stands for the principle that permanent disability that follows medical treatment is not subject to the requirement of determining causation and thus apportionment, and in fact such a principle is flatly contradicted by sections 4663 and 4664”. In other words, the Justice Court seems to indicate that where there is permanent disability from any industrial source, Defendant should have the ability to assert apportionment. 

The Court specifically held that that the Hikida decision finding no apportionment “makes sense only because the medical treatment in Hikida resulted in a new compensable injury, namely CRPS, which was entirely the result of the industrial medical treatment”. The emphasis is in the original opinion. The Justice Court was clearly stating that apportionment is required unless the medical treatment resulted in a new condition which was entirely the result of that treatment. Otherwise, per Lindh, “the salient question is whether the disability resulted from both nonindustrial and industrial causes, and if so, apportionment is required”. Citing 4333(a), Lindh, and Acme Steel, the Court held “Where there is unrebutted substantial medical evidence that non-industrial factors played a causal role in producing the permanent disability, the Labor Code demands that the permanent disability “shall” be apportioned”. Defendants still must meet their burden of proof to substantiate apportionment. If medical treatment has caused a “new injury” the evidentiary efforts to prove up apportionment start anew with regard to that new injury. Additionally, per Benson, distinct disabilities must each be taken on their own and cannot be merged. 

There is another aspect of this decision that will be of great benefit to the defense community. The treatment in the Justice case was bilateral knee replacements. There has been substantial litigation since SB 899 on the issue of whether a defendant can obtain apportionment where a joint, and thus the underlying degenerative condition, has been replaced. Most of the more recent cases found that it is permissible, but these have been lower level or writ denied cases. We now have a published Court of Appeal case in which apportionment was allowed where there has been a joint replacement. Still, nothing can be taken for granted and defendants must ensure they have substantial evidence to support apportionment in each particular case. 

This case is a blow to the overbroad application of Hikida that we have seen since the decision issued. Now, a defendant has the ability to apportion liability of permanent disability partly caused by medical treatment. Hikida is now limited to those rare situations where medical treatment results in an entirely new condition, and that condition is not subject to apportionment for non-industrial factors. As an added bonus, defendants have a much stronger argument for apportionment in a joint replacement case. In all, this is a great decision that further strengthens the concept that an employer is only liable for the permanent disability caused by their injury. 

If you have questions about how this decision specifically impacts your case, contact the author, Bill Davis at wdavis@hannabrophy.com.