Tuesday, March 28, 2017

Lessons in Discretion, Credibility and Facebook

The Delaware Superior Court issued an interesting decision about a year ago in MacFayden v. Total Care Physicians, Case No. N15A-05-001 ALR. 

The employee in this case worked for the employer for about ten years. She was injured at work in 2011 and was entitled to workers' compensation. She was originally diagnosed with "carpal tunnel syndrome (“CTS”) and soon thereafter," with "cubital tunnel syndrome, and de Quervains tenosynovitis." She underwent injections and four surgical procedures. She enjoyed some relief and briefly returned to work for the employer, but was later excused from work again, secondary to pain.

In 2014, she filed petitions seeking additional benefits including compensability of "complex regional pain syndrome (“CRPS”) of the upper left extremity," payment of temporary indemnity benefits, and assignment of a "twenty-four percent (24%) permanent impairment (PPI) to the upper left extremity." 

The case proceeded to trial before the Delaware Industrial Accident Board (“Board”) in March 2015. The Board ruled in the employee's favor regarding the compensability of CRPS and temporary indemnity claims, but denied her claim for recognition of the 24% PPI. The Board instead "awarded Claimant a four percent (4%) PPI. The employee appealed the PPI award. 

A critical part of the appeal was the recovering worker's objection to the employer's evidentiary use of "photographs taken from Claimant’s public Facebook profile as impeachment evidence without prior notice to Claimant." But, the case also relies heavily on determinations of credibility. Credibility is a subject that is often worthy of discussion. 

In reaching its conclusions regarding PPI, the Board considered the opinions of two physicians, one certified in physical medicine and rehabilitation and one certified in orthopedic surgery. The Court explained that its review in such cases was a competent substantial evidence analysis, similar to Florida's: "if substantial evidence in support of the Board’s decision exists, then the Board’s decision stands, even if the Court would reach a contrary conclusion." The Delaware Court declines to "reweigh" the evidence. 

The Court also explained that it deferred to discretionary decisions by the Board's "specialized competence and experience." Therefore decisions of the Board are not "disturbed on appeal unless it is based on 'clearly unreasonable or capricious grounds.'” This is deferral to expertise that is not seen in all jurisdictions. The Court explained that it affirmed the 4% PPI award because the Board was presented with "competing experts," and adopted "one medical opinion over another," and that "constitutes substantial evidence for purposes of appellate review." 

The Board had explained that it was persuaded by the credibility of the evidence. Often the discussion of credibility is applied to the person rendering the testimony, that is whether the witness is credible. However, analysis can be about the evidence itself. The analysis described here concluded that the 24% "rating was too high in relation to Claimant’s actual functional limitations." The Board concluded that the assigning doctor's process in determining the PPI "seemed to focus more on the complexity of" surgical procedures she had undergone instead of on the "actual loss of use" of her extremity. 

The Board also took issue with the physician's conclusion that the recovering worker had a "Class II category" impairment. It concluded that the physician "failed to adequately explain how he came to such conclusions." Credibility may be an issue that is more about explaining how conclusions were reached than about those conclusions themselves. This was discussed in Experts and Credibility and Interesting Science and the Litigation Process

It is notable that the Board said the other physician's examination revealed "no objective findings" beyond surgical scars. That physician found "normal range of motion" and "full flexibility," with no signs of discomfort. The recovering worker told that physician "she was not having any difficulty performing her daily activities." It is interesting that the Board noted it did not find the second physician's opinion “all that convincing either,” because "he provided little explanation for his rating."

Therefore, perhaps the critical point in the Board analysis was not which doctor provided more explanation, but which provided better explanation. And, a critical lesson is that trial judges are often presented evidence that is less than ideal. It is not the role of the trial judge to wish for or pursue better evidence. The trial judge is burdened with making the best decision possible based on the evidence that the parties to a case have presented at trial. Even if evidence is not "all that convincing," it may nonetheless be more convincing than the other evidence presented. 

The Delaware Court next reviewed the Board's decision to permit the employer "to use Claimant’s public Facebook photographs of Claimant holding her grandson with her injured arm and hand as impeachment evidence." There was no question here that the employer "failed to comply with the notice requirement" of the procedural rules. The recovering worker complained that she was thus impeached with evidence that was a surprise at trial, and she asked the Court to reverse on those grounds. 

Florida practitioners have been reminded again recently that compliance with the rules is often not a simple analysis of "did you" or "didn't you" follow the rules. In Boyle v. J.A. Cummings, Case No. 1D16-3076 (February 16, 2017), the Florida First District Court of Appeal reversed a trial judge's decision to exclude evidence under "Florida Administrative Code Rule 60Q-6.113(8), which prohibits discovery within ten calendar days of the final hearing." In Boyle, a party took a deposition within that time, without "prior approval . . . for good cause shown." The trial judge enforced the rule and excluded the evidence. 

The First District Court In Boyle relied on Burgess v. Buckhead Beef, 15 So. 3d 25, 27 (Fla. 1st DCA 2009), and said that "this court decidedly does not condone violations of deadlines contained in pretrial orders." But, it reminded that the appropriate analysis goes beyond whether there was a violation, and includes "a case-specific determination as to whether admission of the evdence would result in actual procedural prejudice to the objecting party." More succinctly stated, unless there is actual prejudice, then deadline violations actually are systematically condoned. 

The Delaware employee objected to evidence because the employer did not follow the rules. She argued "the admission of Claimant’s Facebook images was prejudicial," and urged reversal. The Court explained that the images were not "admitted into evidence," but were "utilized for impeachment purposes." The Board allowed impeachment "because Claimant testified that she cannot hold her grandchildren or even a teacup with her injured arm." The "photographic evidence was to the contrary." 

As impeachment, the Board gave "the photographs lesser weight than if they were introduced as substantive evidence." Delaware law requires the Board to follow the "rules of evidence applicable to the Superior Court of the State," but "the Board may, in its discretion, disregard any customary rules of evidence and legal procedures so long as such a disregard does not amount to an abuse of its discretion." The Delaware Board has significant discretion (flexibility) in application of evidentiary rules, particularly where “fairness so requires.” 

The Delaware Court acknowledged that there are published cases in which the Board rule requiring pretrial disclosure of photographs was strictly enforced, and which enforcement was affirmed on appeal. But, the Court explained, the strict enforcement of rules in one case does not mean that strict enforcement would be appropriate in all cases. This is because the Board has discretion. 

Within that discretion, the Court concluded, it was not “clearly unreasonable or capricious” of the Board to consider the photographs despite the admitted violation of the Board's evidence disclosure rule. The Court held that the "Board was well within its authority to permit Employer to use Claimant’s Facebook photos as impeachment evidence in this context." It said this did not exceed "the bounds of reason in view of the circumstances,” and it did not "produce injustice." The Court concluded that "fairness so required that the Employer could impeach Claimant, including with photographs of Claimant holding her grandchildren with her injured arm."

These are pertinent reminders of the effects of rules. Enforcement may hinge more on actual prejudice resulting than on the rule language itself. Violation of a rule might result in excluding evidence completely, or might merely limit the use of evidence, impeachment rather than admission as substantive evidence. The persuasiveness of evidence may be effected by how well conclusions are described and explained. And, published photographs or documents may prove damaging as impeachment evidence.

Sunday, March 26, 2017

That's Not My Employee

The 2004 Shrek 2 brought a great many comedic moments to the screen. One that sticks with me involves Puss-in-Boots being arrested and searched. A package of catnip is uncovered, and Boots is quick to assure the gendarmes "that's not mine." Denial is a staple of the practice of criminal law. A friend of mine that worked in criminal defense once told me he had never had a guilty client; each one assured him that his/her arrest was on false pretenses or mistaken identity. 

I thought of this recently when reading the court's opinon in Ayerplace Enterprises LLC v. Workers' Compensation Appeal Board (Royal), Commonwealth Court of Pennsylvania, case number 452 C.D. 2016, (September 23, 2016). The employer/carrier's defense in this case was similar to Boots', essentially saying of the injured worker "that's not mine." But in this case, the defense held, and another entity was found instead to be the appropriate employer. The case was tried at least twice, reviewed by Pennsylvania's appellate Board twice, and appealed to the Commonwealth Court twice.

Back in 2007, a worker was injured and there was dispute as to the identity of the employer. In 2009 a Pennsylvania workers' compensation judge concluded that two entities were both employers, and "found Ayerplace and American Road Lines (ARL) jointly and severally liable." Joint and several liability is a legal construct under which the injured worker could recover 100% of the resulting damages from either of these two. Being found jointly and severally liable meant that each was fully "on the hook" for any and all damages. 

One of the employers, Ayerplace, appealed and during the appeal provided no benefits to the injured worker. The worker later filed asking for penalties from Ayerplace based on the failure to pay benefits. 

Before the issue of those penalties was heard by the workers' compensation judge, the Workers' Compensation Appeals Board reversed the trial judge's initial decision, concluding that "ARL was the sole employer, and the evidence did not support an employment relationship with Ayerplace." Essentially, the Board agreed with the "that's not mine" defense because Ayerplace had no workers' compensation insurance, and therefore ARL was the "statutory employer." 

The worker's claim for penalties based no non-payment then came to trial before the workers' compensation judge. Although the appellate Board had concluded Ayerplace was not liable for benefits, the trial judge "granted Claimant’s penalty petition against Ayerplace." The judge concluded that "Ayerplace violated the Act because it did not comply with" the original trial order that awarded benefits. So, the trial judge "assessed a 25% penalty against Ayerplace," and interest. The trial judge also awarded the worker $1,500 in fees (split between Ayerplace and ARL) because they "engaged in an unreasonable contest."

Ayerplace took issue with this decision as well. It sought appellate Board review of the penalty award, claiming again that it was not the workers' employer. It alleged that the Board had concluded it was "not an employer" and therefore not liable for benefits. Thus, it argued, if it was not liable for benefits, it should not be liable for penalties from not paying those benefits. 

Deciding this second appeal, the Board reiterated its earlier conclusions that ARL was the worker's "sole employer" and was "solely liable for Decedent’s injuries.” The Board noted that no party appealed the Board's conclusions regarding ARL's responsibility and reiterated that Ayerplace had no liability for benefits. 

Despite that, the Board reasoned that Ayerplace's subsequent “success in appellate forums did not relieve it of its obligations under the Act.” However, the Board found fault with the trial judge's penalty order, and "concluded the WCJ did not issue a reasoned decision, and it vacated the award of penalties against Ayerplace." The penalty claim was thus "remanded" to the trial judge for further action. 

On remand (a reconsideration by the trial judge following appellate reversal), the trial judge specifically rejected Ayerplace’s argument that it was not an employer under the Act," and again granted the penalty petition. This was based on the trial judge's conclusion that "Ayerplace violated the Act by not paying benefits ordered." The judge imposed a 25% penalty, plus 10% interest, and "$4,297.50 in unreasonable contest fees." The logic is simple, essentially the judge concluded that she/he had no authority ("jurisdiction"), that the entity ("Ayerplace") was not subject to the law, but that it had failed to obey the judge's erroneous decision and so was liable for penalties. 

Ayerplace again appealed to the Board, which this time affirmed the penalties but reversed the attorney fee award. The Board concluded that "success on the merits did not excuse a violation of the Act." An interesting quote, attributed to many, is "don't confuse me with the facts, my mind is made up." Reading the Board's conclusion, this quote came to mind. 

Ayerplace next appealed to the Commonwealth Court (which had earlier concluded Ayerplace was not an employer). The Court found that the issue presented was "novel," to wit: "whether a litigant adjudicated to be neither an employer nor an insurer under the Act, is nevertheless susceptible to penalties for noncompliance with the Act." Or, more succinctly, "may penalties be assessed against a litigant without a showing that the Act applies to the litigant." 

The injured worker reasoned that at the time benefits were due, that Ayerplace was an employer, because the trial judge had decided (erroneously) it was. And that when Ayerplace thereafter refused to pay the (erroneously) ordered benefits, it was an employer not complying with the order. This was the logic the Board found persuasive in affirming the trial judge's penalty order. 

The Court distinguished precedent in which entities had acknowledged or accepted their status as "employer," and concluded that Ayerplace was essentially arguing jurisdiction (authority) of the trial judge, the Board, and the workers' compensation law. The Court held that "where there is a dispute as to whether a litigant is an employer subject to the Act in the first instance, the Board and the WCJ err in presuming a litigant is an 'employer.'” 

The authority to impose penalties, or award benefits, is derived from the statute. Therefore, the Court explained, the first analysis has to be "whether the entity against which penalties are assessed is within the purview of the Act," because "it is axiomatic that penalties for noncompliance with the Act may only be imposed on litigants that are subject to the Act." The Court aptly noted that to conclude "otherwise would lead to an absurd result, like that here."

Because Ayerplace was not an employer, it was not subject to the law, and therefore not subject to the penalties. Awarding penalties against Ayerplace was "absurd." Holding that the trial judge's remand decision "misapplied the law" and was an "abuse of discretion warranting reversal," the Commonwealth Court reversed. Regarding the imposition of fees, the Court noted that "because Ayerplace was not an employer, it was not unreasonable for Ayerplace to challenge the penalties," and thus not liable for attorney fees either. It is interesting that the Court did not merely conclude that fees likewise flow from the same statute, the one that did not apply regarding penalties and thus did not apply regarding fees. 

So, it turns out that "its not mine" is a valid workers' compensation defense in at least some circumstances, in Pennsylvania. And, more importantly, that defense is absolute if proven. If not the employer, then the provisions of the law do not apply, and benefits, penalties, and attorney fees are not due. 

Remember the part where ARL was found to be the employer, and the joint and several liability? The good news for the injured worker is that ARL was also "on the hook" for all of the awarded benefits, any penalties for nonpayment, etc. So, the injured worker had a viable employer to pursue. Why this pursuit of penalties continued against Ayerplace is curious and interesting. 


Thursday, March 23, 2017

PDMP and Opioids in Ohio

A recent article in the Journal of the American Pharmaceutical Association caught my eye, Strategies and policies to address the opioid epidemic: A case study of Ohio. The issue is seen having some urgency because it notes "Ohio has the fifth highest rate of drug overdose deaths (24.6 deaths per 100,000) in the United States." However, Statista.com reflects the top are West Virginia (41.5 deaths per 100,000 people), New Hampshire (34.3), Ohio and Kentucky (29.9) and Rhode Island (28.2) as the top 5. The rest of the top ten are Pennsylvania (26.3), Massachusetts (25.7), New Mexico (25.3), Utah (23.4), and Tennessee (22.1). This difference likely reflects the fact that overdose death rates are rising in many jurisdictions. 

As an aside, the Statista.com figures for 2015 reflect that Florida is right in the middle of the list, in 26th place, with a rate of 16.2 deaths per 100,000. Perhaps every state should be looking to the bottom ten, in hopes of discovering the secret to their success. They are Oregon (12), Kansas (11.8), California (11.3), Hawaii (11.3), Minnesota (10.6), Iowa (10.3), Texas (9.4), North Dakota (8.6), South Dakota (8.4), and Nebraska (6.9). That is an intriguing list, with large and small states, coastal, inland, north, central, and south. If there is a geographic or size equivalence it eludes me. 

The authors of the case study note that "unintentional drug overdose has become the leading cause of injury-related death in Ohio." The state has noted a significant volume (3,050 in 2015) of deaths from overdose and in 2015 over 12,000 "overdose events" in which lives were saved by medical responders administering medication to reverse the effects of opioid overdose. 

To address the state's concerns regarding opioid overdose, Ohio formed "the Governor's Cabinet Opiate Action Team," (GCOAT). This team resulted in implementation of study and regulation of opioids. Over a four year period, 2011 to 2015, prescriptions for opioids in Ohio decreased by 81 million, and far fewer overdose deaths were related to prescription overdose in 2015. While that is a significant figure, 700 million doses of opioids were still dispensed in 2015. And, it must be remembered that although prescription overdose is demonstrably decreasing, overdose in general is not. 

The study credits a multidisciplinary approach to the problem of narcotic overdose. But two components of the approach received significant attention in this study: the use of "prescription drug monitoring programs" and the empowerment of pharmacists to "engage in potentially difficult conversations with patients." 

A series of GCOAT guidelines were formulated and released. They addressed prescribing in Emergency rooms (acute care), in treatment of chronic pain, and in the treatment of acute pain. Each urged "prescribers to consider nonopioid therapies first and to encourage prescribers to check Ohio's prescription drug monitoring program (PDMP) before prescribing opioids."

The Ohio legislature also engaged regarding opioid prescriptions. By law, "Ohio prescribers" must now receive a Prescription Drug Monitoring Program (PDMP) report "before prescribing or personally furnishing an opioid." I have written about these PDMPs, see The PDMP is Showing Progress, Maine Makes Opioid Changes, and If it is Worth Having, Is it Worth Checking? In this last, I suggest that there may be value in mandatory PDMP checking. The Ohio law requires it upon initial prescription and periodically thereafter. 

A major issue in the opioid crisis has been "pill mills." Ohio has legislated changes in medical clinics to avoid their operation as "pill mills." It has barred "clinics that prescribe or dispense opioids without any legitimate purposes," and "prevents convicted felons from owning or operating pain clinics," and mandated "a drug take-back program." The state has also focused on decreasing access with "a closed prescription drug formulary," and increasing access to the opioid antagonist naloxone.

The case study acknowledges both progress/successes, and remaining challenges. Progress is documented in decreased opioid death rates and less "doctor shopping." There is discussion of integrating the PDMP database to facilitate easier access and convenience, further efforts to afford naxalone access, and efforts to more broadly address "opioid use disorder." Unfortunately, the progress and plans will be harder to adapt to the problem of illicit drug overdose and death, the growth area of overdose. A leading culprit in this challenge has been "illicit fentanyl," which has been involved in "nearly 40% of unintentional drug overdose deaths."

Essentially, while strides are being made to address prescription drug death and addiction, the illicit drug problem seems to be growing. According to NBC News, the Stark County, Ohio coroner's office recently made the news for its purchase of a "20-foot-long air conditioned trailer with room for 18 bodies." The equipment was needed "because the morgue was overflowing with bodies, nearly half of them victims of drug overdoses." In short, overdose is not decreasing, despite gains in the prescription drug segment. 

The case study concludes that addressing the overdose crisis "is a complex problem requiring a comprehensive and multifaceted approach." There appears to be room in the fight for a variety of professions and perspectives. The question I have asked before and will note again is simple: how many people have to die before we take this situation as seriously as it deserves? Why is there not more leadership on this subject? 

Tuesday, March 21, 2017

I Never Knew Oxford had a Comma

For 175 years my ancestors have resided in a small corner of Lafayette (luh fay et) County, Mississippi. It is a part of the world enamored with Pine Trees, Oxford, and the University of Mississippi. It is known for its ties to John Grisham, William Faulkner, and Archie Manning. But it is not known for its otherwise famous comma. In fact, in all the time I have spent in Oxford, I have yet to even see the Oxford Comma (the location is said to be a closely guarded secret). Local residents will provide you a quite peculiar look sometimes if you inquire of the whereabouts of the Oxford Comma. 

Yet there it is, likely just around the corner from where James Meredith drew support and criticism, eventually attended law school, and made history. Oxford has a long and storied history. It is proud of its dam, its food, and its football. The Sardis dam is said to be the second longest land dam in the world. Oxford is a place of history, solitude, and serenity. The town center is said to rest on land originally donated by John Chisholm, John D. Martin, and John L.Craig. More recently, Ole Miss garnered attention in the 21st century with its debate to replace its Colonel Reb mascot. Contenders included Admiral Ackbar, Rebel Bruiser, and the eventually victorious Black Bear. 

Oxford Comma inquiries outside the confines of Mississippi will produce self-assured responses that the Oxford Comma has nothing to do with The Grove, The Square, or the self-effacing and rarely uttered "Hotty Toddy." Outside of Mississippi, there is an insistence that the "Oxford" of the Oxford Comma references instead some humble, obscure, and distant institution of higher learning far away in Europe somewhere (which, rumor has it, does not even play in the SEC). But, I digress. The real point is not where the Oxford Comma is, what it looks like (throughout this post it is red and bold), or where it came from. The real point is that in the world of legalese, phrase-parsing, and interpreting words, the famed Oxford Comma has gotten some recent attention. 


The "Oxford" comma, in reality, has nothing to do with this little corner of Mississippi, so steeped in history, hospitality, and geniality. This "Oxford" is a shorthand reference to the use of a comma before a conjunction (and, but, or; remember School House Rock?) in any series. 

The New York Times recently reported that the "Lack of Oxford Comma Could Cost Maine Company Millions in Overtime Dispute." (I suspect they just forgot the article: "a" Maine Company, but I digress). The dispute is between truck drivers and a local dairy in Maine. There is an Maine statute, which was drawn up by some lawyers (who likely did not attend Ole Miss and therefore apparently lack familiarity with the famed "Oxford Comma," much like the Times apparently lacks familiarity with articles). The story is getting a great deal of coverage in places like the Australian Financial Review, The British Broadcasting Company (BBC), The Boston Globe, and The USA Today. One might say it is the "comma heard round the world."

The Times reported that the driver's class-action lawsuit seeks overtime pay for the drivers. It evolved (or devolved) into an expensive debate about the famous Oxford Comma, and apparently divided the community in which the dairy operates. Essentially, the drivers sought overtime and the dispute was controlled by the Maine statute that exempts some efforts and labor from overtime. These are: "The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of" various food products. 

Note that the red, bold, and noticeable Oxford Comma is missing from the list of exceptions ("for shipment(,) or distribution of"). And thus, the debate ensued as to whether this law intends "to exempt packing for the shipping" or simply for the "distribution of them?" Phrased differently, "does the law intend to exempt the distribution of the three categories (various food products) that follow, or does it mean to exempt packing for the shipping or distribution of them?" And that, is the truth of which great (or small) lawsuits are made.

You see, the drivers seeking overtime in Maine distribute, "but they don't pack the boxes." The Times says that if there had been an Oxford Comma after "shipment" then "it might have been clear that the law exempted the distribution of perishable goods." As in baseball sometimes, the tie goes to the base runner. The Court ruled in favor of the drivers seeking overtime. It concluded that "the absence of a comma produced enough uncertainty to rule in their favor."

The Times notes that the Oxford Comma is "perhaps the most polarizing of punctuation marks." There is less than universal agreement as to its necessity, propriety, and effectiveness. A great many seemingly respect it less than a vestigial tail. But why, with the potential for misunderstanding, would one not simply include the Oxford Comma for the sake of safety? (you know, for Justin, Justin Case?). The Times reports that it was omitted from this Maine statute in compliance with the instructions provided to Maine legislators, the Maine Legislative Drafting Manual. The powers-that-be in the Pine Tree State (Not making that up. As an aside, if any state should be the pine tree state, it is Mississippi, just sayin') have specifically instructed legislators not to use the Oxford Comma. 

This all reminded me of Benjamin Franklin (for whom Franklin County, Mississippi is coincidentally named), who is credited with the rhyme:
For the want of a nail the shoe was lost, For the want of a shoe the horse was lost, For the want of a horse the rider was lost, For the want of a rider the battle was lost, For the want of a battle the kingdom was lost, And all for the want of a horseshoe-nail.
And now, for want of appreciation, a comma was lost. A comma was lost for the sake of satisfying the Maine Legislative Drafting Manual. A comma was lost, and perhaps millions of dollars will be lost, or found depending upon perspective, as a result. 

According to the Times, there is significant disagreement surrounding the Oxford Comma. But that is nothing new. It resolved a Canadian telephone pole contract dispute in 2006, a Chrysler bankruptcy dispute in 2010, and a North Carolina contract dispute in 2015. Conversely, I could find no examples in which the inclusion of an Oxford Comma resulted in a dispute, ambiguity, or misunderstanding. 

Perhaps the real lesson of these examples is two-fold. First, always be wary of manuals and books written by so-called English "experts" that did not attend Ole Miss. Second, perhaps, it, is, better, safe, than, sorry, when, deciding, when, where, or, if, to, use, a, comma?

If you make the pilgrimage out to Lafayette County to see the famed Oxford Comma, be sure to try the catfish, greens, and pecan pie (those same English scholars would likely mispronounce pecan also). Other attractions recommended for your historical tour include Yocuna, Delay, and old Dallas. Spring is in the air, country cookin' is on the mind, and you can't wait to see the Oxford Comma in all its glory. Just park on the square and ask any local for directions. If they pretend not to know, just find a bench, sit a spell, and ask the next one that comes by. 

Sunday, March 19, 2017

Defense Fees, Loss Cost, and More

I recently had the opportunity to discuss Worker's Compensation with an attendee at a legislative meeting. The attendee explained to me a perception that Worker's Compensation insurance companies in Florida defend worker's compensation cases too extensively. This attendee perceived that there is a tendency to fight "tooth and nail," and that this behavior is incentivized because insurance carrier's "can just recoup all of their defense attorneys fees through increased insurance rates." This conversation was stimulated by the criticism that has been periodically levelled regarding claimant attorney fees in Florida. 

I found this perception intriguing. Early in my career I was told that insurance companies in Florida cannot include defense fees in their rate-making calculations. Insurance rates in Florida Worker's Compensation include several components. One is the "loss-cost," which is the money spent on care and compensation for the injured worker. These are the actual losses directly resulting from an injury or accident.

In the Florida system, individual insurance companies can file for a Worker's Compensation rate with the office of insurance regulation. They are also allowed to aggregate they're filing, through a trade group or association. As a result, the majority of carriers accept the rate that is calculated and filed for by the National Council on Compensation Insurance (NCCI). One apparent benefit of this to various carriers is avoiding the expense of evaluating the various losses, calculating, and perhaps defending their proposed rate.

There was an Actuarial Peer Review performed in December 2015, which is very informative regarding the "Rate Making Processes" in Florida workers' compensation. 

The report from that review notes that rate-making includes "methodologies, thought processes, judgments, and assumptions." The processes are applied to "over 500 individual . . . employer classifications." This results in a rate determination for a particular employment (occupation), which is then modified for each specific employer based on that business' individual past experience, called an "experience modification." Businesses that have fewer claims, less severe claims, pay less for workers' compensation than businesses in the same occupation that experience significant losses. 

The report says that the process of determining a rate change involves four steps. The first of these is to calculate the rate change for a particular year as follows:
The statewide rate change is the average rate change for all classifications combined. This step relies primarily on Aggregate Financial Call data. Contributing elements to the statewide rate change include, but are not necessarily limited to: 
Loss Experience: Is the actuarial forecast of the final cost of benefits for a group of claims greater than or less than what is expected in current premium rates? 
Trend: Are benefits increasing at a rate greater than or less than wages? 
Benefit Changes: Have there been any changes to workers compensation benefits since the prior rate examination? 
Claim Adjustment Expense (LAE): Is the expected cost of LAE greater than or less than the provision in current premium rates? 
Other Insurance Company Expenses: Is the expected cost of insurance company expenses greater than or less than provisions in current premium rates? 
Taxes and Assessments: Is the expected cost of taxes and assessments greater than or less than the provisions in current premium rates?  
Profit and Contingencies: Is the economic/actuarial forecast of reasonable insurance company profit greater than or less than the provision in current premium rates? 
According to the Actuarial Peer Review, the LAE is a broadly inclusive category of "adjustment expenses" for the "total cost of adjusting claims, including overhead costs of maintaining a claims adjustment staff and claim defense costs." The Review says that "claim defense costs generally include, but are not limited to, legal fees, court fees, and the cost of investigations." 

Seemingly, whether a particular carrier filed its own individual request for approval of workers' compensation rates, or whether it relied on NCCI or some other actuarial cooperative to do so, the process described in the Review would be similar. That may be interesting as system constituents discuss whether Florida should retain its current system of setting workers' compensation rates, called "administered pricing" in a recent WorkCompCentral article, or whether it should move to a "loss cost" system that has gained favor in other states. 

Some contend that the "loss cost" system would not produce significant change. They explain that in such a process it remains probable that either NCCI or some entity similar to it would continue to aggregate data from multiple payers (carriers or self-insured employers) to determine that element of the workers' compensation rate. The aggregated loss cost filing process is said to be at work already in the majority of those states that have adopted "loss cost." 

So, the contention that insurance carrier's "can just recoup all of their defense attorneys fees through increased insurance rates" might be viewed with two perspectives, in light of the Review's illumination and explanation of the process. 

First, the money that an insurance carrier spends on defense attorneys and investigators is included in the analysis of what the insurance rates should be. 

Second, in the current Florida system, individual insurance carriers are not including their individual LAE in the rate calculation. Instead, the carrier industry's overall experience is being calculated and included by NCCI in an overall LAE component of a rate for all carriers that have elected to be included in the NCCI process. 

Returning to the Loss Cost versus Administered Pricing discussion, most states are in the Loss Cost category. Critics of Florida's Administered Pricing contend that its use of averages provides an identical rate to all carriers participating. One attorney quoted in the WorkCompCentral article noted that "Some [insurers] are efficient and non-litigious, and others deny every claim, pay huge costs to defend, have highly salaried staff at the upper levels and generally do a poor job of claims handling." The implication is apparently that aggregating LAE facilitates or allows inefficiency. 

That attorney asserted that "NCCI averages the costs to suggest setting rates that will return a profit to even the worst carriers." On this basis, advocates of Loss Cost argue that calculating the rate individually for each carrier would remove the industry "averaging," and the rate market would become more affected by individual carrier's decisions about management of claims in a broad sense. This is an argument that competition in the rate market would perhaps change how carriers make decisions. 

The implication from the Review, and the discussions of "loss cost" seems to support that averaging would remain for claims expenditures under a "loss cost" system. Perhaps the only elements in which there would be individualization of carrier rates would be in the categories of Claim Adjustment Expense, Other Insurance Company Expenses, Taxes and Assessments, and Profit and Contingencies? 

The decisions about how workers' compensation insurance rates are set will come from the Florida Legislature. It convened March 7 and will adjourn on May 5, 2017. Whatever it has passed will then proceed to the Governor's desk. And, there will be ample issues for the Legislature to discuss; workers' compensation reform is not the sole issue that is attracting attention this session. It will be interesting to watch the process and the outcome. 

Thursday, March 16, 2017

Medical Review and Qualifications

At a conference years ago, I recall Judges and administrators around a large table discussing what they perceived as the challenge of adjudicating medical disputes. Some lamented that they "were not doctors," and described a perceived shortcomings in their skills to determine such disputes. Several state's adjudicators and administrators expressed their desire to determine such claims in novel ways; they sought to have doctors make medical decisions instead of judges. Louisiana took a somewhat unique turn with its workers' compensation system a few years later. 


I learned about Louisiana's medical dispute resolution process at a similar conference. The proponents of various "resolution processes" for medical claims presented and discussed their solutions. There was the recurrent theme of medical disputes being reviewed medically, through programs like "independent medial review" or "IMR," "independent review organizations," or "IRO," and more. Typically, these programs involve the engagement of a panel or list of physicians to resolve medical disputes. The Louisiana program was also discussed in detail, as was the Florida "expert medical advisor" or "EMA" process. 

The 2009 Louisiana legislative reaction was to codify a process for a single medical doctor to make decisions regarding medical care disputes. It is not uncommon for states through processes like IRM, IRO, EMA and others, to engage a physician panel for dispute resolution. But the Louisiana system engages no panel of physicians, but "a" physician. The process is reliant upon the medical director employed by the Louisiana Office of Workers' Compensation. I recall my first thought about this plan, the significant workload that would be for one person.

That Louisiana process was declared unconstitutional in June 2015, and a preliminary injunction issued by a civil trial judge foreclosed the process. It remained in effect pending appeal. An appellate court reversed that decision based upon the judge's failures in his order. I noted in Another Statute Unconstitutional that judges should draft their own orders. The Louisiana judge did not and the order prepared by counsel did not stand up to scrutiny. It did not make the requisite findings. 

The recent news in March 2017 from WorkCompCentral was that this constitutional challenge has now run its course and the same trial judge has issued a Permanent Injunction Against Medical Directors Making Treatment Decisions. The injunction forbids "the state workers' compensation agency's medical director from making final decisions on injured workers' treatment." 

I read the decision, and it is not an order, but a "Judgment." It has no findings of fact or analysis of either a constitution or statute(s). It is perhaps the epitome of conclusory. It provides the reader with nothing except the conclusion that the Louisiana medical review process is not constitutionally worthy and that it shall stop. It is unfortunate that the trial judge elected not to provide any details that might allow better comprehension of the why and how. Part of a judge's job is to explain decisions. This benefits the parties and the community at large.

The Judgment says Louisiana shall be "permanently enjoined, restrained, and prohibited" from:

Applying and/or enforcing 40 LAC §2715(L)
and
allowing anyone to attempt to communicate with judges of the Office of Workers' Compensation regarding pending workers' compensation claims
and

enforcing the statutes and regulations which establish the system for the administrative determinations of form 1009 claims for medical benefits for injured workers by a medical director employed by the Office of Workers' Compensation
The enjoined statutes and regulations are
1. La. RS. 23:1203.1(J)(1), (K), (M);
2. La. R.S. 23:1314 (D)-(E)(1) inclusive;
3. 40 LAC 2715(B)(3),(d),(e),(f); and
4. 40 LAC 2715(E)(2),(F),(H),(I),(J),(K) and (L).
The argument voiced by challengers in Louisiana is that it is unconstitutional "for a medical director to be making quasi-judicial decisions." According to press reports, the foundation of arguments against the process, at least in part, centered on the qualifications of the medical director generally, not necessarily the current official serving in that capacity. 


According to WorkCompCentral on March 8, 2017, the challengers raised as illustration that the current director is an internist. In this case, the challengers argue, that physician is "making decisions about whether a neurosurgeon's recommendation is going to be reviewed." In other words, should one specialty be reviewing the conclusions of some other specialty and making decisions about medical care? One might argue that the internist in this example is far better qualified for such a decision than a lawyer who has become a judge. Internists are not neurosurgeons, but neither are lawyers.

I am reminded of a series of television ads a few years back in which people injected themselves into the solving of various urgencies. Asked about their individual qualifications, they would deny education or experience, but assure their expertise by explaining the great night's sleep they had the night before at the advertiser's hotel: "no, I am not a doctor, but I did stay at a _______ hotel last night." It was a catchy ad and garnered significant quotation in pop culture and on the lecture circuit. Are we similarly saying "no, I am not a doctor, but I did go to law school?"

In this regard, there will be those who may perceive parallels with the current Florida statute and the delegation of judicial decisions, in part, to expert medical advisers. See Not with a Bang, but with a Whimper.

In Louisiana the medical decisions are made by a physician employed by the state. An independent physician with no interest in the outcome of the litigation, much like the independent judge. Of course the medical director cannot be a specialist in all fields of medicine, but she/he is a medical doctor with expertise in medicine that a judge lacks. The Louisiana challengers and trial Judge Donald Johnson conclude that lawyers/judges with no medical training have superior qualifications to make medical decisions. It is curious that they fault the qualifications of a particular physician and advocate that determinations should instead come from officials with absolutely no medical training or background.

The Florida EMA process is similar. Though there is no state official "medical director," the legislature has concluded that medical disputes shall be resolved by medical doctors. The law mandates the appointment of an EMA for any dispute. But, in a dispute between two neurosurgeons, a Florida judge could appoint an internist. In a dispute between an internist and orthopedic surgeon, the Florida judge could appoint a neurologist. The Florida judge can appoint any physician that the Judge deems appropriate. And, upon what evidence should such a selection be based? Should the testimony of the two disagreeing experts be considered? What if they disagree on what specialty should break the disagreement, must an EMA be appointed to choose the expertise of the EMA? Herman Melville once said "of all the preposterous assumptions of humanity. . . ."

These recent developments in Louisiana are interesting. The perspectives on the appropriate roles for lawyers, judges and doctors are fascinating. There will be ongoing debate. But, the Louisiana OWC is appealing Judge Johnson's decision. I suspect it will be a year before we learn of the ultimate outcome, and somewhat suspect that the brevity of his "judgment" bodes ill for the challengers. Because the judgment provides little in the way of factual findings and explanation, further analysis of probabilities is futile. Only time will tell.

Whether Florida will face similar challenges to its EMA statute likewise remains to be seen. Doctors know nothing of due process and weighing of evidence. Perhaps lawyers and judges likewise know nothing of medicine. In the end, perhaps there is no perfect solution and we will collectively conclude that our flawed (from whatever perspectives) solutions are somehow the best of uniformly imperfect alternatives? Perhaps constitutionality comes down to something less than perfection?


Tuesday, March 14, 2017

Wondering Whether to Object?

Do parties in litigation have a right to speak their piece? Ohio's Twelfth District Court rendered an interesting opinion in January. It was a workers' compensation case styled Courtney v. Stephen Buehrer Admr., Ohio Bureau of Workers' Compensation, Case number. CA2016-06-040.

The recovering worker in this case was injured at work and diagnosed with "cervical strain, lumbar strain, transverse process fracture L2 left, transverse process fracture L3 left, and subcutaneous contusion of the left buttock." Those conditions were accepted as compensable. The worker later sought compensability of a "substantial aggravation of pre-existing degenerative disk disease," but the Bureau of Workers' Compensation denied that claim (Ohio is a "monopolistic" system in which benefits are paid by the state itself). 

The recovering worker appealed the denial, and a hearing was scheduled. At the outset, the trial judge announced that the court would "have the parties submit written closing arguments in lieu of oral argument." With any process or procedure, there will be preferences held by various parties and attorneys. Some like writing and others prefer speaking. To some extent, this may be influenced by an individual's perception of their personal strength or their perception of what influences a particular judge. 

When there are speaking closing arguments, there is a tradition that the party with the burden of proof (the party prosecuting the particular claim or motion) speaks to the issues first, then the responding party speaks, and ultimately the prosecuting party gets the last word. I have presided over thousands of motion hearings and hundreds of trials over the years. I have had parties that preferred to voice a closing argument and others that asked for time to submit a written one. 

At the end of a workers' compensation trial, summarizing the evidence in a concise closing is not usually time-consuming. One detriment I have heard voiced about this process is that the defending party may feel they have little time to consider the prosecuting party's closing argument, and feels it has to effectively respond quickly. Similarly, the prosecuting party has little time to think and analyze after the response and before the "last word" is delivered. But, when the parties walk out of the hearing room after this process, the matter is over for them and they need only await the judge's ruling. 

This same pattern is often employed when closing arguments are instead delivered in a written form. This method allows the parties more time to think and analyze. The prosecuting party can reflect on the proceedings after the hearing, and perhaps provide a more succinct, deliberative, and persuasive argument in writing. The responding party has the same opportunity in some period of days thereafter, to digest, think and write a response. The written closing argument process might arguably be effective in that it allows time for reflection. 

But in Courtney, the judge ordered the written closing arguments "to be submitted 'in blind.'" This meant that each side was to submit closing arguments on the same due date, each side filing their argument without knowing what their opposing party would say about the evidence and the case. 

The trial judge explained the logic in the hearing. The explanation is not completely clear, but centered upon trial scheduling and the judge's calendar commitments. The pronouncement on written closing arguments was made at the outset of trial, and "neither party objected to this decision." When the presentation of evidence had concluded, "the trial court again noted the request for written argument," and afforded the parties "about 2 to 3 weeks to just submit a brief written closing statement."

It was clear at that time that these arguments would be "submitted in blind." The recovering worker's attorney specifically asked about that process and timing, the Judge confirmed the instruction, and counsel replied "that's fine." Both parties submitted their arguments, and the judge promptly issued an order in which compensability of the "additional conditions" was denied. The recovering worker then appealed the decision arguing that "closing arguments in blind" were legally inappropriate. 

The worker's complaint was essentially that this process resulted in "depriving him of an opportunity to reply to the BWC's written argument." In other words, the process denied the recovering worker, the prosecuting party, of the opportunity to have the last word before the judge ruled. 

The Courtney Court ruled that "a trial court judge possesses inherent power to regulate court proceedings." as such, it explained that rulings about the process of proceedings would be reversed only if the "complaining party demonstrates a prejudicial abuse of discretion." But, it appears the Court was most persuaded by the fact that the recovering worker "did not object to the trial court's decision."  The Court held that by failing to object, the worker "has waived all but plain error."

It explained that "the plain error doctrine" is an error which "seriously affects the basic fairness, integrity, or public reputation of the judicial process." The Court concluded that the process of requiring written closing arguments, even "in blind," was not plain error. The Court acknowledged that this procedure is contrary to the applicable statute, R.C. 2315.01(A)(6), but explained that "statute plainly authorizes a trial court to deviate from the specific procedure outlined." The trial court explained its scheduling and reason, and clearly informed the parties of the "in blind" process. 

The failure to object is a critical point in the outcome of this case. The appellate Court concluded that the "method of closing was agreed to by the parties, or, at a minimum, acquiesced to." It noted that rights can be waived by parties in litigation, and the failure to object was effectively such a waiver. 

But, a second critical point made by the Court is that "the decision to proceed in this manner did not prejudice the parties." The Court concluded that the "disputed factual issues were simple and straightforward," and "this was simply a matter of judicial discretion in the handling of its court proceedings." 

The lessons from Courtney are: (1) when you object to something, say so; and (2) understand that there will likely be times when the process employed may not be the one you personally prefer; become adept at various procedures to enhance your comfort with them and your chances of prevailing with them.