In Applied Materials v. Workers Compensation Appeals Board and D.C. and Specialty Insurance Co. v. Workers’ Compensation Appeals Board and D.C., the Sixth Circuit of California’s Courts of Appeal annulled the WCAB award of permanent total disability to a claimant who was sexually exploited and abused by her treating physician. The 70 page opinion analyzed the several issues raised in the case and provides guidance for resolution.
D.C. (identified by her initials to protect her privacy as a victim of sexual abuse) worked as an administrative assistant at Applied Materials from 1996 until 2008. Arrowood Indemnity Company (Arrowood) and XL Specialty Insurance Company (XL Specialty) provided workers’ compensation insurance to Applied Materials during this time. D.C. sustained a specific injury to her neck and right upper extremity in 2001 during Arrowood’s coverage. This case was settled by Stipulations and Award at 33% permanent disability (PD) in 2005. The award granted D.C. access to future medical care. D.C. later alleged that she sustained an injury to her neck and upper extremities in 2005, and a cumulative trauma (CT) to her neck, upper extremities and psyche through the last day of her employment at Applied Materials in 2008.
Dr. John Massey, a pain specialist, became D.C.’s primary treating physician in 2007 and provided treatment for several years. Beginning in 2012, Dr. Massey began making sexually suggestive comments to D.C. and inappropriately hugging and touching her in examination rooms at the facility where he treated her. On five occasions, Dr. Massey had sexual intercourse with D.C. at her home. Although D.C. stated that she did not want to have sex with Dr. Massey, she did not overtly resist his advances. Dr. Massey came to D.C.’s home on six subsequent occasions to ask for sex, but she refused. Dr. Massey also continued his sexual exploitation and abuse in the exam room.
At trial before the workers’ compensation judge (WCJ), D.C. testified that the behavior by Dr. Massey was unwelcome, but he told her on multiple occasions “that if anyone found out the affair,” he would no longer be able to be her doctor and complete her disability forms. D.C. reported the relationship to a wellness instructor at the treatment facility in June 2013, who reported Dr. Massey to management. After an investigation, Dr. Massey’s medical license was revoked in 2018.
In May of 2014, D.C. was diagnosed with severe major depression and severe PTSD with panic attacks by her treating psychologist. The psychiatric QME for XL Specialty, Dr. Sidle, opined that the injuries arose out of Dr. Massey’s inappropriate sexual conduct and were a compensable consequence of her accepted physical injuries. Dr. Sidle diagnosed D.C. with PTSD and stated this condition was “100% industrial” since Dr. Massey “had been assigned by Worker’s [sic] Comp to treat her Worker’s [sic] Comp injury,” and signed her disability forms. Dr. Sidle assigned a Global Assessment of Functioning (GAF) score of 45, based in part on his conclusion “that she cannot hold a job” and would be “considered totally disabled.” The QME also based his finding of 100% total disability on D.C.’s psychiatric condition alone, which he believed rendered her unable to work.
The WCJ found that the illegal conduct of Dr. Massey was a compensable consequence of the industrial orthopedic injuries. Even though the illegal acts occurred in D.C.’s home, the WCJ opined that they would not have occurred “without the incidents of improper remarks and intimate touching that took place in the examining room.” Therefore, the judge determined that D.C. sustained compensable specific injuries in 2001 and 2005, as well as a CT to the neck, arms, and psych. He awarded two years of retroactive temporary disability and 100% permanent disability for the psych injury alone, and agreed with Dr. Sidle’s opinion that the three injuries were inextricably intertwined, primarily because “the psychiatric PD was largely caused by treatment events due to all three injuries.”
All three parties filed Petitions for Reconsideration of the award with the Workers’ Compensation Appeals Board (WCAB), who ultimately affirmed the award. The parties then sought review by the Courts of Appeal.
The Courts of Appeal agreed with the WCJ that the abuse by Dr. Massey was a compensable consequence of the underlying industrial injury. The Court noted, “it has long been the rule that the aggravation of an industrial injury or the infliction of a new injury resulting from its treatment or examination are compensable under the [Workers’ Compensation Act] and, therefore, within the exclusive cognizance of the [WCAB].” The court further stated that whether the doctor was selected by the employer, insurance carrier, or the employee is irrelevant to this analysis as the treatment and exploitation by Dr. Massey would not have occurred in the absence of the industrial injury.
The Court declined to disturb the WCAB finding of joint and several liability, reasoning that the events which caused the underlying orthopedic injuries occurred during insurance coverage by both Arrowood and XL Specialty. The court rejected XL Specialty’s contention that the date of injury for the CT occurred in 2002, during coverage by Arrowood, because evidence showed that D.C. continued to be exposed to injury-causing events after 2002, and this injurious exposure continued until the end of her employment.
The defendant appealed the WCAB award of 100% permanent disability without apportionment to the several dates of specific injury or to prior non-industrial emotional issues. Here the Court agreed that the WCAB improperly applied Labor Code sections 4660 and 4662 and that the Board improperly followed the psychiatric QME’s analysis of the injured worker’s ability to compete in the open labor market.
The Court determined that to find the Applicant permanently totally disabled despite the QME’s conclusion that Applicant fit within the GAF scale at 45, the Board must have misinterpreted Labor Code Section 4662. The Court discussed that there are two code sections that are used to determine permanent disability awards, §4660 creates a presumption that the Permanent Disability Rating Schedule, which incorporates the GAF for rating psychiatric disability, is the proper means for assessing permanent disability. But, that section permits the presumption to be rebutted where the facts require. Section 4662(b) has been cited in some decisions as creating a second path for assessing total permanent disability where the disability is statutorily identified, as with total blindness, or where the injured worker proves an inability to compete in the open labor market due to loss of capacity to benefit from rehabilitation, such as the California Supreme Court set out in the LeBouef decision.
Citing the Court of Appeal decision in Fitzpatrick, which coincidentally issued during the WCAB consideration in Applied Materials, the court determined that rather than creating two paths for rating disability, the sections must be harmonized. Section 4660 establishes the presumably correct method for rating all disabilities, including permanent total disability, using the Permanent Disability Rating Schedule, and 4662(b) describes the methods for rebutting the schedule. One of those methods is to prove through reliable evidence that the injured worker is incapable of benefitting from rehabilitation and therefore incapable of returning to the open labor market. Sufficient evidence of inability to benefit from rehabilitation must come from an expert in rehabilitation. A QME is an expert in medicine, but unless the QME is an established expert in rehabilitation as well, making such a determination is outside the doctor’s expertise. In awarding 100% disability to D.C., the WCAB improperly accepted Dr. Sidle’s conclusion that a GAF of 45 meant that D.C. could not return to work. In the absence of expert evidence of this conclusion, the Applicant did not meet her burden of disproving the presumption. Therefore, the Court remanded the issue of permanent disability and apportionment to the WCAB for further consideration in light of this analysis.
The Court of Appeal decision in Applied Materials is an unusually extensive analysis of the evolution of the Labor Code and the decisions that apply it to multiple issues, some of which are beyond the scope of this note. While some of the decision will be decried as dicta, the application of Fitzpatrick in this case provides an important roadmap for litigating cases of alleged permanent total disability.
