2009-EB-9 (2009). Wanda Ogilvie v. City and County of San Francisco, Permissibly Self-Insured.

CourtCalifornia
California Workers Compensation Decisions 2009. 2009-EB-9 (2009). Wanda Ogilvie v. City and County of San Francisco, Permissibly Self-Insured WORKERS' COMPENSATION APPEALS BOARD STATE OF CALIFORNIA WANDA OGILVIE, Applicant,vs. CITY AND COUNTY OF SAN FRANCISCO, Permissibly Self-Insured, Defendant(s).Case No. ADJ1177048 (SFO 0487779) OPINION AND DECISION AFTER RECONSIDERATION (EN BANC) (EN BANC) In this en banc decision, [1] we clarify the holdings reached in our en banc decision of February 3, 2009. In our February 3, 2009 decision, we held that: (1) the diminished future earning capacity (DFEC) portion of the current Schedule for Rating Permanent Disabilities (Schedule or 2005 Schedule) [2] is rebuttable; (2) the DFEC portion of the 2005 Schedule ordinarily is not rebutted by establishing the percentage to which an injured employee's future earning capacity has been diminished; (3) the DFEC portion of the 2005 Schedule is not rebutted by taking two-thirds of the injured employee's estimated diminished future earnings, and then comparing the resulting sum to the permanent disability money chart to approximate a corresponding permanent disability rating; and (4) the DFEC portion of the 2005 Schedule may be rebutted in a manner consistent with Labor Code section 4660 - including section 4660(b)(2) and the RAND data to which section 4660(b)(2) refers.[3] Further, the DFEC rebuttal approach that is consonant with section 4660 and the RAND data to which it refers consists, in essence, of: (1) obtaining two sets of wage data (one for the injured employee and one for similarly situated employees), generally through the Employment Development Department (EDD); (2) doing some simple mathematical calculations with that wage data to determine the injured employee's individualized proportional earnings loss; (3) dividing the employee's whole person impairment by the proportional earnings loss to obtain a ratio; and (4) seeing if the ratio falls within certain ranges of ratios in Table A of the 2005 Schedule. If it does, the determination of the employee's DFEC adjustment factor is simple and relates back to the Schedule. If it does not, then a non-complex formula is used to perform a few additional calculations to determine an individualized DFEC adjustment factor. In this decision, we hold: (1) the language of section 4660(c), which provides that "the schedule . shall be prima facie evidence of the percentage of permanent disability to be attributed to each injury covered by the schedule," unambiguously means that a permanent disability rating established by the Schedule is rebuttable; (2) the burden of rebutting a scheduled permanent disability rating rests with the party disputing that rating; and (3) one method of rebutting a scheduled permanent disability rating is to successfully challenge one of the component elements of that rating, such as the injured employee's DFEC adjustment factor, which may be accomplished by establishing that an individualized adjustment factor most accurately reflects the injured employee's DFEC. However, any individualized DFEC adjustment factor must be consistent with section 4660(b)(2), the RAND data to which section 4660(b)(2) refers, and the numeric formula adopted by the Administrative Director (AD) in the 2005 Schedule. Any evidence presented to support a proposed individualized DFEC adjustment factor must constitute substantial evidence upon which the Workers' Compensation Appeals Board (WCAB) may rely. Moreover, even if this rebuttal evidence is legally substantial, the WCAB as the trier-of-fact may still determine that the evidence does not overcome the DFEC adjustment factor component of the scheduled permanent disability rating. Otherwise, we affirm our prior decision. I. BACKGROUND The factual and procedural history through February 3, 2009 is set forth in our en banc opinion of that date, which we incorporate by reference. On February 19, 2009, applicant filed a petition seeking reconsideration of our February 3, 2009 decision. In that petition, applicant contended in substance: (1) our suggestion that the parties ordinarily should "establish the employee's actual earnings in the three years following his or her injury" is inconsistent with section 4660 and violates the mandate of Article XIV, section 4, of the California Constitution that administration of the workers' compensation system "shall accomplish substantial justice in all cases expeditiously"; (2) it is improper to compare an injured employee's individualized rating to proportional earnings loss ratio to the aggregate average rating to proportional earnings loss ratios in Table A of the 2005 Schedule, because the former ratio uses the standard whole person impairment rating assigned by the AMA Guides [4] while the latter ratios use the standard rating under the 1988 Schedule, which is fundamentally different; (3) it is improper to use the numerical formula adopted by the 2005 Schedulem [5] because that formula is not based on empirical data, as required by section 4660(b)(2), and it has no purpose other than to justify the arbitrary range of 1.1 to 1.4 for the DFEC adjustment factors contained in the Schedule; (4) under section 4660(c), it is the permanent disability rating that is rebuttable, not an individual element of the rating formula, and here applicant's vocational expert was not challenging the DFEC element of the rating formula, but instead was rebutting the scheduled rating by showing that it was not rationally related to applicant's true disability and her empirically established diminished future earning capacity; (5) before section 4660 was amended by Senate Bill 899 (SB 899), [6] case law made it clear that an injured employee's percentage of permanent disability was the same as the percentage of the open labor market from which he or she was precluded; therefore, after SB 899, an injured employee's percentage of permanent disability is the same as his or her percentage of diminished future earning capacity; (6) the Schedule is not the exclusive method of calculating permanent disability; therefore, a scheduled permanent disability rating may be rebutted by vocational expert evidence regarding the injured employee's percentage of diminished future earning capacity, which should be deemed to equate to his or her overall percentage of permanent disability; (7) the purpose of the Schedule is to convert the non-empirical AMA Guides whole person impairment (WPI) rating into an empirically-based measure of diminished future earning capacity, and not to adjust WPI for diminished future earning capacity; (8) the purpose of the Schedule's DFEC adjustment factors is to assure that injured employees with the same diminished future earning capacity will receive the same permanent disability rating regardless of the part of body injured; however, the DFEC rebuttal method adopted by the Appeals Board erroneously results in ratings that vary widely for workers with the same diminished future earning capacity; (9) the language of the Schedule confirms that permanent disability is measured by an injured employee's percentage of diminished future earning capacity; (10) the Appeals Board improperly concluded that an injured employee's percentage of diminished future earning capacity is not tantamount to the employee's percentage of permanent disability; (11) the permanent disability rating calculated by applicant's vocational expert is a more accurate measure of applicant's true disability and, therefore, it rebuts the permanent disability rating assigned by the Schedule; and (12) although the Appeals Board can disallow any DFEC rebuttal evidence that does not comply with the requirements of section 4660, including the specific language of section 4660(b)(2), the Appeals Board cannot require that only a single rebuttal methodology - its own - be used, because such a mandate is illegal under Rea v. Workers' Comp. Appeals Bd. (Milbauer) (2005) 127 Cal.App.4th 625 [70 Cal.Comp.Cases 312] (Milbauer). On March 2, 2009, defendant, the City and County of San Francisco, also filed a petition seeking reconsideration of our February 3, 2009 en banc decision. In that petition, defendant contended in substance: (1) the DFEC component of the 2005 Schedule is defined by statute and that definition cannot be altered by judicial intervention; (2) the Appeals Board usurped the AD's regulatory authority over the 2005 Schedule; (3) the allowance of individualized rebuttal of the Schedule's DFEC adjustment factors conflicts with the requirement of section 4660(d) that "the schedule shall promote consistency, uniformity and objectivity"; (4) the allowance of individualized rebuttal of the Schedule's DFEC adjustment factors conflicts with the intention of section 49 of SB 899 to reduce workers' compensation costs; and (4) the cases upon which the Appeals Board relies do not support the holding that permanent disability ratings under the new Schedule are rebuttable. On April 6, 2009, we granted reconsideration.[7] Concurrently, we invited any interested person or entity to file and serve an amicus curiae brief by May 1. We also gave each party until May 21 to file a single consolidated brief in reply to the amicus briefs. Pursuant to our invitation, we received a number of amicus curiae briefs.[8] Each party also filed replies to the amicus briefs. [9] II. DISCUSSION In part, defendant's petition for reconsideration challenges whether a...

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