State News : South Dakota

In another case, the Department again accepted the opinion of a claimant’s treating doctor over the opinion of Employer’s and Insurer’s expert to find that a work injury was a major contributing cause of Claimant Daniel Jensen’s shoulder arthritis — despite evidence that Jensen’s shoulder arthritis pre-existed the work injury. Jensen injured his right shoulder on April 15, 2022, while throwing heavy straps during his employment with NexGen. Upon throwing the straps, Jensen reported a popping in his right shoulder followed by pain. Jensen was diagnosed with a rotator cuff tear in his right shoulder and underwent rotator cuff repair surgery in June 2022. Employer and Insurer paid for that surgery. However, during the rotator cuff repair surgery, it was determined that Jensen had chondromalacia and arthritis in his right shoulder that pre-existed the work injury.

Jensen initially felt relief from his symptoms for several months after the rotator cuff repair surgery. However, by early 2023, he began to experience significant pain, stiffness, and loss of right shoulder function which persisted over time.

Jensen submitted the opinion of his treating orthopedic surgeon, Dr. Jason Hurd, who concluded that the work injury caused a permanent aggravation of Jensen’s pre‑existing shoulder arthritis and therefore Jensen’s arthritic shoulder was compensable. Employer and Insurer submitted the opinion of its IME doctor, Dr. Edward Kelly, another orthopedic surgeon, who agreed with much of Dr. Hurd’s testimony. However, Dr. Kelly ultimately believed the work injury only caused a temporary aggravation of Jensen’s underlying degenerative shoulder disease. Dr. Kelly opined that because Jensen had experienced temporary relief after his rotator cuff repair surgery, Jensen’s right shoulder issues were likely caused by his underlying degenerative arthritis rather than the work injury.

The Department, however, accepted the testimony of Jensen’s treating provider that the work injury was a major contributing cause of Jensen’s shoulder degeneration despite evidence that Jensen’s arthritis predated the work injury. In siding with Jensen, the Department gave special weight to the finding that Jensen’s degenerative shoulder disease was asymptomatic until sometime after the work injury. Employer and Insurer should be aware that a work injury may still be considered a major contributing cause of a claimant’s pre‑existing condition if there is expert testimony that the work injury caused a permanent aggravation of that pre‑existing condition.

The South Dakota Department of Labor recently issued another decision accepting the causation testimony of a Claimant’s treating provider over the testimony of an Employer’s and Insurer’s experts. In Wager v. Buck’s Electric, Inc. (HF No. 96, 2023/24), Claimant, apprentice electrician Zachary Wager, developed a hernia shortly after engaging in heavy lifting activities at work on June 15, 2021. Employer and Insurer initially accepted the hernia as compensable and paid for Claimant’s care related to the hernia. Claimant later developed nerve pain related to his treatment for the hernia. Claimant underwent an IME, in which the IME doctor opined that Claimant’s hernia had, in fact, been caused by a congenital condition rather than the work injury.  However, Claimant later obtained an opinion from his treating provider that the work injury was a major contributing cause of the hernia.

The Department accepted the opinion of Claimant’s treating doctor over the opinion of Employer’s and Insurer’s IME doctor and held Claimant had met his burden to show that the work injury was a major contributing cause of his hernia and nerve pain. This case again shows the Department siding with a treating physician on causality over an IME doctor or other retained expert. In ruling in Claimant’s favor, the Department emphasized that a work injury need only be “a major contributing cause,” not the sole cause of a claimant’s current condition. Therefore, evidence of the Claimant’s preexisting congenital issues did not preclude a finding that the work injury was a major contributing cause of the Claimant’s current condition. 

 In Pham v. Smithfield Foods, 2025 S.D. 41, the South Dakota Supreme Court affirmed that an Insurer may accept an injury as compensable without waiving the right to later deny benefits.  In this case, the claimant, Jody Pham, was injured while working for Smithfield Foods. Smithfield voluntarily paid Pham workers’ compensation benefits for over two years.  Then Smithfield ceased payments upon belief and evidence that Pham’s work injury was no longer a major contributing cause of her condition.  

Pham petitioned the Department of Labor for benefits, and the Department denied her claim.  On appeal, the circuit court reversed.  The Circuit Court stated that, under SDCL 62-7-33, once Smithfield accepted compensability of Pham’s claim, Smithfield was bound to continue to pay Pham workers’ compensation benefits unless Smithfield showed that Pham had a change in condition allowing for termination of benefits under SDCL 62-7-33.

The South Dakota Supreme Court reversed the Circuit Court and affirmed the Department.  The Supreme Court held that SDCL 62-7-33 applies only after the Department issues an order determining that an injury is compensable, either through a voluntary settlement or after a contested hearing.  Importantly, the Supreme Court further affirmed that, as a matter of public policy, an Insurer should not be penalized for voluntarily accepting a claim as compensable then later denying that claim.  

Put differently, an Insurer’s voluntary acceptance of a claim does not shift the burden of proof onto an Insurer to show that a claim is no longer compensable before the Insurer can deny benefits.  Instead, under South Dakota law, the burden to establish a compensable injury remains with the claimant at all times until a final order declaring that an injury is compensable is issued by the Department.  Only after the Department issues an order establishing that an injury is compensable does the burden shift to an Insurer to show a change in condition under SDCL 62-7-33. A settlement agreement adopted by the Department also constitutes a final order that shifts the burden to an Insurer to show a change in condition under SDCL 62-7-33.

The Pham decision is a significant victory for Insurers and workers in this state.  The Pham decision rightfully recognizes that South Dakota law does not penalize an Insurer for voluntarily paying benefits. This decision allows Insurers and Employers to effectively and quickly administer claims and provide injured workers the care they need without first requiring claimants to fully litigate their claims.

The Pham decision also overruled a South Dakota federal district court decision, Hollow Horn v. Firstcomp Ins. Co., No. CIV. 17-5016-JLV, 2021 WL 1909707 (D.S.D. May 12, 2021).  In Hollow Horn, a claimant raised a similar argument to the Circuit Court in Pham.  The claimant argued that because his insurer initially accepted his work injury as compensable, then his insurer had a continuing obligation to continue to provide workers’ compensation benefits.  The federal district court accepted this argument, which effectively penalized the insurer for voluntarily providing workers’ compensation benefits.  Now, however, the Pham decision shows that Hollow Horn was erroneous. In South Dakota, an insurer suffers no penalty for voluntarily accepting a workers’ compensation claim as compensable.

In Arneson v. GR Mgmt., LLC, 2024 S.D. 61, 13 N.W.3d 206, the claimant, Mr. Michael Arneson (“Arneson”), worked as a maintenance manager at a hotel and casino in Deadwood, South Dakota. On July 18, 2018, Arneson was working on a commercial exhaust fan for his employer (Employer”) when the fan shorted and sent 440 volts of electricity through Arneson’s hand, which exited through his foot (“the Work Injury”).

Arneson went to the emergency room for treatment. Within the next few days, he began suffering from mild heart palpitations. Almost two weeks later, Arneson went to the hospital for his heart palpitations and was diagnosed with hyperthyroidism and Atrial Fibrillation (“AFib”).

Arneson then brought a petition for workers’ compensation benefits arguing that the Work Injury caused his AFib and that he was permanently and totally disabled.

Arneson’s treating doctor, Dr. Holloway, provided an expert opinion that Arneson’s AFib was likely caused by his hyperthyroidism and the Work Injury. Dr. Holloway acknowledged that Arneson’s hyperthyroidism could cause AFib itself. However, he also opined that electrical shocks like the Work Injury can cause heart arrythmias, such as AFib. Dr. Holloway did not provide an opinion on how commonly hyperthyroidism causes AFib or how commonly electrical injuries, like the Work Injury, cause AFib. He simply stated he believed both hyperthyroidism and the Work Injury causally contributed to Arneson’s AFib.

Employer countered by providing testimony from two non-treating experts. First, Employer presented the testimony of a cardiologist, Dr. Brody. Dr. Brody stated that he has rarely treated electrical injuries and that electric shock-induced AFib is extremely rare, occurring in less than 1% of cases based on his review of medical literature. In contrast, Dr. Brody testified that “the association” between hyperthyroidism and AFib “is a lot stronger” and more well accepted in the medical community. Dr. Brody then opined that the Work Injury was unlikely to have caused Arneson’s AFib, and the more likely cause was Arneson’s hyperthyroidism. Employer also provided the testimony of Dr. Elkins. Dr. Elkins, like Dr. Brody, stated that it was statistically far more likely that hyperthyroidism caused Arneson’s AFib than an electrical shock like the Work Injury.

The Department of Labor (“Department”) found that the Work Injury was a major contributing cause of Arneson’s AFib and that he was permanently and totally disabled. Employer appealed arguing it was error for the Department to accept Dr. Holloway’s testimony that the Work Injury caused Arneson’s AFib when Employer presented unrebutted evidence that the Work Injury was statistically highly unlikely to have caused Arneson’s AFib.

The South Dakota Supreme Court (“Court”) rejected Employer’s argument and relied on a Minnesota case in support, stating “[a]n opinion based solely on statistical improbability ignores the fact that, by definition, improbable events do occur.” Arneson v. GR Mgmt., LLC, 2024 S.D. 61, ¶ 35, 13 N.W.3d 206, 217 (citing Ingram v. Syverson, 674 N.W.2d 233, 237 (Minn. Ct. App.2004) (noting “medicine is an imperfect science and a plaintiff's symptoms may not always be proven by tests and statistics.”). The Court then found Dr. Holloway’s opinion was sufficient to show the Work Injury was a major contributing cause of Arneson’s AFib and affirmed the Department.

While the Court has still not defined “major contributing cause.” The Arneson opinion provides additional information on what “major contributing cause” is not. In this case, the Court was offered an opportunity to define major contributing cause in terms of probability and soundly rejected it. Employers should be aware of cases like this that continue to define the causal standard for compensable injuries.

Brewer v. Tectum Holdings, Inc., 2025 S.D. 23, 20 N.W.3d 433, concerned an appeal of denied medical and disability benefits. The South Dakota Supreme Court affirmed the Department’s finding that a claimant was not permanently and totally disabled but overturned the Department’s findings on causation. This case demonstrates the Court’s willingness to thoroughly review medical records, and assign its own weight to those medical records, in determining causation.

In September 2015, Joshua Brewer (“Brewer”) suffered a back injury while working for Truxedo, a bed manufacturer (“Work Injury”). He did not immediately feel pain but stated his pain intensified in the months thereafter. In December 2015, Brewer quit working for Truxedo claiming he could no longer work due to his pain.

Employer and Insurer paid for Brewer’s medical care related to the Work Injury until May 2016, when Dr. Douglas Martin performed an IME of Brewer and concluded the Work Injury was not a major contributing cause of Brewer’s back pain. Dr. Martin stated the Work Injury was “probably best described as a strain episode” but that it did not explain Brewer’s symptoms. Brewer then brought a Petition for Hearing seeking medical benefits for his Work Injury and claiming he was permanently and totally disabled.

At the hearing on his Petition, Brewer offered his medical records and the deposition testimony of his treating provider, Dr. Corey Rothrock. Dr. Rothrock opined that Brewer’s back pain originated from his sacroiliac (“SI”) joint and that the Work Injury was a major contributing cause of that pain. In opposition to the Petition, Employer and Insurer relied on the IME of Dr. Martin and a second IME of Dr. Wade Jensen. Like Dr. Martin, Dr. Jensen opined that the Work Injury likely caused a muscle strain, but that muscle strain had resolved and was no longer major contributing cause of Brewer’s symptoms.

On de novo review, the Court held that the Work Injury was a major contributing cause of Brewer’s back pain. In doing so, it relied heavily on Dr. Rothrock’s deposition testimony and Dr. Rothrock’s status as a treating provider, stating “the opinions of a treating physician may, in some cases, be more persuasive than those of a non-treating physician because of the knowledge gained through the claimant's treatment and more generally through treatment of the specific ailment that the claimant suffers.” Brewer, 2025 S.D. 23, ¶ 60, 20 N.W.3d at 447–48. The Court also found Dr. Jensen’s opinion less persuasive than Dr. Rothrock’s opinion because, in the Court’s view, Dr. Jensen gave inordinate weight to Brewer’s pre-Work Injury medical records.

Notably, in this case, the Court did not solely rely on Dr. Rothrock’s opinion to reverse the lower courts’ findings on causation. The Court also relied on its own opinion of the significance of a claimant’s medical records in determining that the testimony of Dr. Jensen, Employer’s and Insurer’s expert, was lacking. Employers should be aware that the South Dakota Supreme Court may take a liberal view of its role in evaluating medical records, as it did in this case.

In Linda Muellenberg v. Redfield Ace Hardware d/b/a Investment Enterprises and First Dakota Indemnity Company HF No. 33, 2022/2023, Linda Muellenberg (“Claimant”) worked for Redfield Ace Hardware (“Employer”) as a cashier, but she would also stock products on shelves. On December 3, 2020, Claimant sustained a work injury to her left eye when she was struck by the metal end of a bungee cord after it detached from a shelf (the “Injury”).

Following the Injury, Claimant required surgery on her left eye. After surgery, she was released to full-duty work by her treating doctor, Dustin Dierks. Following her release to full-duty work, no permanent work restrictions were imposed by any of her medical providers. Later, Claimant treated with her new doctor, Alex Ringeisen, who found Claimant to have a visual acuity of 20/40 in her injured eye with glasses or contact correction.

Claimant alleged she was permanently and totally disabled under SDCL § 62-4-53 and primarily relied on the alleged fact that she could not safely drive the approximate 10 miles from her home in Zell, South Dakota, to nearby Redfield, South Dakota for employment opportunities. Further, Claimant admitted she had previously driven herself from her home in Zell, South Dakota, to her mother-in-law’s home approximately five miles away but did not feel comfortable driving to Redfield, South Dakota, 10 miles away.

However, Claimant’s treating doctor testified there was no medical reason why Claimant could not drive, but he ultimately left the choice of whether to drive up to the discretion of the patient. Employer had an Independent Medical Examination completed by Dr. Douglas Martin, who opined there was no medical reason why someone with partial vision in one eye cannot drive and noted patients with partial vision drive personal and commercial vehicles.

Claimant provided a vocational assessment from their expert, Tom Audet, who concluded that Claimant was unemployable due to her inability to drive to work. He testified that his opinions were based on what Claimant felt she was able to do. Employer provided a vocational assessment from their expert, Chad Kollars, who concluded that Claimant was capable of driving to and performing work in Redfield. Chad based his assessment on the medical opinions of Claimant’s treating physicians, which indicated Claimant could drive and had no formal work restrictions.

Employer’s main argument, and biggest concern, in this file, was that workers’ compensation claimants should not be allowed to determine their restrictions based on their subjective beliefs or limitations when no formal medical restrictions have been imposed.

The South Dakota Department of Labor (the “Department”) relied on Billman v. Clarke Mach., Inc., 2021 S.D. 18, 956 N.W.2d 812, in which the Court held “[t]he Department must take a holistic approach to a claimant's condition, as each factor affects the severity of the others. The statute explicitly requires the Department to examine the ‘employee's physical condition, in combination with the employee's age, training, and experience[.]’” Id. at ¶ 37.

The Department ultimately held that while Claimant had symptoms that made her uneasy about driving, her feelings, without formal restrictions related to her condition, failed to prove she was “obviously unemployable.” Further, the Department found Chad Kollars’ assessment more persuasive because it did not rely on Claimant’s subjective views of her condition. Therefore, the Department concluded Claimant was not entitled to Permanent Total Disability (PTD) benefits.

The Muellenberg ruling is still ripe for appeal at this time. In South Dakota, Claimant can appeal to the circuit court who will make a ruling. That decision can then be appealed as a matter of right to the SD Supreme Court.  

In Arneson v. GR Mgmt., LLC, 2024 S.D. 61, 13 N.W.3d 206, the claimant, Mr. Michael Arneson (“Arneson”), worked as a maintenance manager at a hotel and casino in Deadwood, South Dakota. On July 18, 2018, Arneson was working on a commercial exhaust fan for his employer (Employer”) when the fan shorted and sent 440 volts of electricity through Arneson’s hand, which exited through his foot (“the Work Injury”).

Arneson when to the emergency room for treatment. Within the next few days, he began suffering from mild heart palpitations. Almost two weeks later, Arneson went to the hospital for his heart palpitations and was diagnosed with hyperthyroidism and Atrial Fibrillation (“AFib”).

Arneson then brought a petition for workers’ compensation benefits arguing that the Work Injury caused his AFib and that he was permanently and totally disabled.

Arneson’s treating doctor, Dr. Holloway, provided an expert opinion that Arneson’s AFib was likely caused by his hyperthyroidism and the Work Injury.  Dr. Holloway acknowledged that Arneson’s hyperthyroidism could cause AFib itself. However, he also opined that electrical shocks like the Work Injury can cause heart arrythmias, such as AFib. Dr. Holloway did not provide an opinion on how commonly hyperthyroidism causes AFib or how commonly electrical injuries, like the Work Injury, cause AFib. He simply stated he believed both hyperthyroidism and the Work Injury causally contributed to Arneson’s AFib.

Employer countered by providing testimony from two non-treating experts. First, Employer presented the testimony of a cardiologist, Dr. Brody. Dr. Brody stated that he has rarely treated electrical injuries and that electric shock-induced AFib is extremely rare, occurring in less than 1% of cases based on his review of medical literature. In contrast, Dr. Brody testified that “the association” between hyperthyroidism and AFib “is a lot stronger” and more well accepted in the medical community. Dr. Brody then opined that the Work Injury was unlikely to have caused Arneson’s AFib, and the more likely cause was Arneson’s hyperthyroidism.  Employer also provided the testimony of Dr. Elkins. Dr. Elkins, like Dr. Brody, stated that it was statistically far more likely that hyperthyroidism caused Arneson’s AFib than an electrical shock like the Work Injury.

The Department of Labor (“Department”) found that the Work Injury was a major contributing cause of Arneson’s AFib and that he was permanently and totally disabled. Employer appealed arguing it was error for the Department to accept Dr. Holloway’s testimony that the Work Injury caused Arneson’s AFib when Employer presented unrebutted evidence that the Work Injury was statistically highly unlikely to have caused Arneson’s AFib.

The South Dakota Supreme Court (“Court”) rejected Employer’s argument and relied on a Minnesota case in support, stating “[a]n opinion based solely on statistical improbability ignores the fact that, by definition, improbable events do occur.” Arneson v. GR Mgmt., LLC, 2024 S.D. 61, ¶ 35, 13 N.W.3d 206, 217 (citing Ingram v. Syverson, 674 N.W.2d 233, 237 (Minn. Ct. App. 2004) (noting “medicine is an imperfect science and a plaintiff's symptoms may not always be proven by tests and statistics.”). The Court then found Dr. Holloway’s opinion was sufficient to show the Work Injury was a major contributing cause of Arneson’s AFib and affirmed the Department.

While the Court has still not defined “major contributing cause.” The Arneson opinion provides additional information on what “major contributing cause” is not. In this case, the Court was offered an opportunity to define major contributing cause in terms of probability and soundly rejected it. Employers should be aware of cases like this that continue to define the casual standard for compensable injuries.