Claimants who were still litigating their impairment rating evaluations at the time the Pennsylvania Supreme Court’s landmark workers’ compensation decision in Protz v. Workers’ Compensation Appeal Board (Derry Area School District) came down are entitled to the benefit of that ruling, the Commonwealth Court en banc has held, once again expanding the universe of cases to which Protz retroactively applies while still stopping short of addressing full retroactivity.
The ruling comes about four months after the Commonwealth Court en banc held in Whitfield v. Workers’ Compensation Appeal Board (Tenet Health System Hahnemann LLC) that, in light of the Protz decision (referred to as “Protz II” because it was decided on its second trip up to the appellate courts), any claimant who had their benefits modified from full to partial based on an unconstitutional IRE now has the right to seek reinstatement to full benefits, provided they file their petition while they’re either still within their 500-week partial disability period or within three years of the date of their last compensation payment.
The Supreme Court’s 2017 ruling in Protz II partially reversed a Commonwealth Court decision by invalidating in its entirety Section 306(a.2) of the Workers’ Compensation Act, which required doctors performing impairment rating evaluations of claimants to rely on “the most recent edition” of the American Medical Association Impairment Rating Guides. The justices found that portion of the statute unconstitutionally delegated the legislature’s lawmaking authority to the AMA. Consequently, IREs performed pursuant to those guidelines were unconstitutional.
The decision was hailed as the most important development in Pennsylvania workers’ compensation law in decades. Shortly after that decision came down, the Pennsylvania Bureau of Workers’ Compensation issued a statement saying that, “effective immediately, [it] will no longer designate physicians to perform impairment rating evaluations.”
In the most recent case addressing Protz II‘s application, Dana Holding Corp. v. Workers’ Compensation Appeal Board (Smuck), a seven-judge panel of the Commonwealth Court unanimously upheld a decision by the Workers’ Compensation Appeal Board to reverse a workers’ compensation judge’s ruling and reinstate claimant David Smuck to total disability status as of June 20, 2014, the date of his IRE.
The Commonwealth Court said Protz II applied to Smuck’s case because both he and his employer were in the midst of appealing a WCJ’s modification of his disability status at the time the Supreme Court rendered its decision.
While the employer argued that retroactively applying Protz II was akin to changing the rules of play in the middle of the game, the court called that argument “unpersuasive” because Smuck’s disability status “was far from final” at the time Protz II came out.
“Because employer’s modification petition was still being actively challenged at the time Protz II was decided, we are hard pressed to find employer had any reasonable expectation in the finality of the modification of claimant’s disability status,” Judge Renee Cohn Jubelirer wrote for the court, noting that, in Whitfield, “An en banc panel of this court recently rejected a similar argument that the employer had an expectation of finality in a case with much stronger facts favoring finality than those present here.”
Jubelirer was joined by President Judge Mary Hannah Leavitt and Judges Robert Simpson, Patricia McCullough, Michael Wojcik, Christine Fizzano Cannon and Ellen Ceisler.
The panel also rejected the employer’s argument that the Protz II decision should only apply from the date it was handed down by the Supreme Court and not the date of the IRE.
“Employer argues that it had a vested right and should, at a minimum, receive a credit for three years of temporary disability from the date of the IRE on June 20, 2014, to the decision in Protz II on June 20, 2017,” Jubelirer explained. ”These weeks, according to employer, should be counted towards claimant’s limit of 500 weeks of partial disability compensation. Section 306(b)(1) of the WC Act, 77 P.S. Section 512(1). Should employer seek to use some other statutory mechanism to change claimant’s status to partial, employer argues it should be entitled to a credit for those weeks between the IRE and Protz II. However, this approach does not take into consideration that the IRE determination was never final. In fact, at oral argument, employer recognized that if the IRE had been overturned on the merits, it would not have been entitled to any credit for the period of partial disability.”
In the Smuck case, Smuck underwent an IRE in June 2014, which was performed pursuant to the Sixth Edition of the AMA Impairment Rating Guides, the most recent edition at the time, according to Jubelirer. That examination yielded an impairment rating of 11 percent, which then prompted Smuck’s employer, Dana Holding Corp., to seek to modify his disability status from full to partial. While the parties were litigating that issue, the Commonwealth Court issued its opinion Protz I, which held that Section 306(a.2) was unconstitutional to the extent that it required IREs to be performed under editions of the AMA Guides published subsequently to the Fourth Edition, which was the most recent version in publication at the time the law was enacted.
In light of the Protz I ruling invalidating IMEs performed using the Sixth Edition, Dana Holding was then allowed to pursue a new IRE of Smuck under the Fourth Edition, which again led to the employer seeking to modify Smuck’s disability status. A WCJ granted the modification of Smuck’s status from temporary total disability to partial disability effective June 20, 2014, according to Jubelirer.
But then, while the parties were arguing over the second IRE on appeal to the board, the Supreme Court issued its Protz II decision. Based on that decision, the board reinstated Smuck to total disability status as of June 20, 2014.
On appeal, Dana Holding argued that retroactive application of Protz II violated its right to due course of law because it relied on the IRE process in Smuck’s case before the Supreme Court invalidated it. Jubelirer also rejected that argument, finding that the employer did not have a vested right in the continued validity of the IRE results in Smuck’s case because those results were still being litigated.
“At best, it had ’a mere expectation based upon an anticipated continuance of existing law,’” Jubelirer said. “In short, employer had no reasonable expectation that the IRE would be upheld as claimant’s disability status was still being litigated.”
Furthermore, Jubelirer said, Dana Holding ”had other avenues available to it to modify claimant’s status but chose to utilize the IRE route because it was less expensive and more efficient.”
“Accordingly, it took a risk to pursue an IRE instead of some other mechanism,” Jubelirer said. ”To the extent it is now foreclosed from pursuing other options, the fault does not lay with claimant. It bears emphasis that the WC Act ‘is remedial in nature and intended to benefit the [injured] worker.’”
But, as in Whitfield, the court was again careful to clarify that its decision should not be read as granting Protz II full retroactivity.
“We reiterate that our holding is limited to cases, such as this, where the underlying IRE was still being actively litigated when Protz II was issued,” Jubelirer said in a footnote. “The extent to which Protz II may be retroactively applied to another factual scenario is not currently before us.”
Counsel for the employer, Carol Crisci of The Chartwell Law Offices in Eagleville, declined to comment because she and her client were still reviewing their options moving forward.
Counsel for Smuck, Karl Januzzi of Shollenberger Januzzi & Wolfe in Enola, could not be reached for comment.