WCAB Strikes Down Rule 30

Mendoza v. Huntington Hospital (2010) (en banc): In a decision eagerly awaited by defendants throughout the state, the WCAB, en banc, has struck down dreaded California Code of Regulations, title 8, section 30, subdivision (d)(3), better known as “Rule 30(d)(3)” or just "Rule 30."

Rule 30(d)(3) came into effect with almost no notice on February 17, 2009 and quietly became the bane of the defense community. It was probably largely ignored due to the splash made by the first Almaraz/Guzman and Ogilvie en banc decisions which were issued on February 3, 2003.

Rule 30(d)(3) provides that “[w]henever an injury or illness claim of an employee has been denied entirely by the [defendant], only the employee may request a panel of Qualified Medical Evaluators” on the issue of compensability under section 4060. (Emphasis added.)

For many defendants their first notice of the new Regulation and its impact occurred when a request for a QME panel on a denied case was denied with a citation to the Regulation. Defendants were then left without a medical legal report. Injured workers still retained the right, but most opted to go with the reports of self-procured primary treating physicians who they could select. Many judges remained unaware of the Rule. Often trials were bifurcated with the factual issues tried and adjudicated and the medical causation issues left to be determined by a subsequent evaluation. Other times defendants were forced to try a case with no hope of victory, or simply admit liability.

The WCAB in Mendoza was asked to decide whether the administrative regulation was inconsistent with Labor Code sections 4060, subdivision (c), 4062.2 and 5402, subdivision (b) or simply a valid interpretation thereof. Unanimously the WCAB decided that the Regulation went too far. In reaching its holding the WCAB did not need to engage in any legal gymnastics. It simply read the Labor Code to say what it says.

First, the WCAB cited Government Code section 11342.2 which provides that an agency’s interpreting regulation (like Rule 30) must not conflict with a statute (the Labor Code). If the regulation conflicts, it is invalid. The WCAB then cited Labor Code section 5300 which gives it the authority to determine the validity of the regulations adopted by the Administrative Director.

Next, the WCAB pointed out that neither Labor Code section 4060 nor section 4062.2 limit the right to a post-denial QME panel to the employee. In fact, the WCAB noted, section 4060 specifically provides that a compensability exam may be requested “at any time.” It further observed that section 4062.2 provides that “either party” may request an evaluation “pursuant to Section 4060.” Read together the WCAB concluded “either party” may request a compensability exam at “any time.” In a footnote the WCAB preemptively determined that the same logic applies in unrepresented cases under sections 4060(d) and 4062.1.

The WCAB also rejected Rule 30(d)(3) because it was inconsistent with Labor Code section 5402, subdivision (b). The WCAB explained that only after a claim is presumed compensable is a defendant’s right to discovery limited by the 90 day discovery rule. Since Rule 30(d)(3) would expand the 90 day discovery limitation to medical evidence on cases which are timely denied the statute would be contradicted. The Rule therefore loses.

The Commissioners then revealed a depth of familiarity with real world workers’ compensation discovery and litigation when rebutting the DWC’s arguments in favor of the Rule. First, the Commissioners observed that there are many reasons liability may be denied. The WCAB noted claims are properly denied because, among other reasons there is no medical evidence of causation. Contrary to the contention of the bureaucrats in the DWC, the Commissioners noted that it is the employee’s burden to prove industrial causation, not the defendant’s burden to disprove it. As such, they entered the world of real life claims by observing that a claim may be properly denied on such grounds, then later require a medical legal examination to determine compensability.

The WCAB also rejected attempts by the applicant to impose an arbitrary time limit on securing a 4060 evaluation. The WCAB observed the statute provides that the exams may be procured “at any time.” The only time limits are those set forth in section 4062.2 regarding the period in which to agree on an AME and/or strike doctors.

The Commissioners also rejected the claim that Rule 30(d)(3) is necessary to ensure employers timely investigate claims and deny them only in good faith. The Commissioners again revealed an understanding and experience of the real world of workers' compensation that the DWC lacks. They noted there are many methods to ensure timely good faith investigations and decision making. These include the filing of a declaration of readiness to proceed and the AOE/COE Priority Conference calendar. They also include penalties and sanctions.

This case represents a victory for common sense, strict construction and fairness. It avoids the “railroading” that many defendants have experienced in the last year by being forced to trial without the right to a medical legal examination by a doctor not chosen entirely by the applicant’s attorney. Unfortunately, the QME panel process itself still remains in place and can only be repealed by the legislature. It is unclear whether there will be further appellate litigation on Rule 30(d)(3). However, for now, this subsection of the rule is void and has no legal effect.

Opinion filed June 3, 2010.

Heggeness,Sweet, Simington & Patrico, A.P.C

WCAB Strikes Down Rule 30