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Ogilvie III Tips
by Michael C. Grimes, Esq.
Michael C. Grimes is an applicant’s attorney
in the San Francisco Bay Area. In this article he offers tips for dealing with
Ogilvie in its latest incarnation.
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On July 29, 2011 the California Court
of Appeal (1st Dist. Div. 3) reversed the case of Ogilvie
v. WCAB,
remanding it back to the WCAB. (2011) 197 Cal.App.4th 1262, 76 CCC
624. The opinion completely overturns the DFEC rebuttal formula devised
in the WCAB en banc decisions in Ogilvie I (2/3/09) 74 CCC
248 and the re-recon in Ogilvie II (9/3/09) 74 CCC 1127
but also opens the door to other methods for challenging the FEC
factor in the 2005 rating schedule and/or the final rating.
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| “Ogilvie III” opens
the door to other methods for challenging the FEC factor in the 2005
rating schedule and/or the final rating. |
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Ogilvie
En Banc Overview
The Ogilvie cases represent the WCAB’s and the compensation
community’s ongoing struggle to soften the harsh effects of
SB 899 and the 2005 rating schedule which dropped PD ratings and
value by a documented 50-70%. In Ogilvie I and II, the WCAB
provided a step-by-step method of rebutting the diminished future
earning capacity (“FEC”) adjustment factor in the 2005
rating schedule and replacing it with an “individualized rating
to loss ratio” based on the methodology used in the RAND study.
The method ordinarily resulted in significantly higher PD, sometimes
as much as 50%, for those with a complete or steep loss of post injury
wages.
The formula began as nearly straight
wage loss math with the WCAB even advising that expert testimony
would generally not be necessary. The formula focused on actual wage
loss post-injury rather than on the more nebulous loss of “wage
earning capacity” concept. It ultimately became more complicated
with the 2010 panel decisions in Shini v. Pacific
Coast Auto Body & Truck,
38 CWCR 38, and Garcia v. Hinrichsen, 2010 Cal. Wkr. Comp.
PD Lexis 58. The new decisions focused more on wage earning capacity,
required greater use of vocational experts and greater application
of the so called Montana factors enunciated by the California Supreme
Court in Argonaut Ins. Co. v. Industrial Acc. Com. (Montana) (1962)
57 C.2d 589, 27 CCC 130.
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| Applicants’ attorneys have
struggled to soften the harsh effects of SB 899 and the 2005 rating
schedule |
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Ogilvie III
What the Appellate Court Opinion does:
- Invalidates the WCAB crafted
formula for rebutting the FEC factor in the 2005 schedule (“FEC
factor”)
on grounds the board exceeded its authority.
- Reaffirms that
the FEC factor and the scheduled rating are rebuttable and
that experts may be used to do so.
- Warns that the FEC
factor may not be rebutted by “impermissible factors” such
as general economic conditions, illiteracy, inability to speak
English or a lack of education.
- Reaffirms
that the FEC factor may be rebutted by factual error or discrepancy
in any part of the calculation or underlying data including the
type or use of data in the RAND study.
- Reaffirms that the
FEC factor may be rebutted by a LeBoeuf
v. WCAB (1983) 34 C.3d
234,48 CCC 587 type vocational evaluation and argument showing
that a limited or complete inability to be vocationally rehabilitated
results in a higher wage loss than reflected by the scheduled
FEC factor.
- Stated
that the FEC factor or scheduled rating can be rebutted by showing
the severity or complexity of a worker’s injury is not reflected in the
sampling of disabled workers used to compute the adjustment factor.
- Stated
that since the RAND study was based on the 1997 rating system
injury categories but applied to injuries rated using the AMA
Guides and no cross-walk has been done, the assumptions underlying
the data may be incorrect and if so, therefore rebuttable.
- Stated
that there is no meaningful difference between the term “diminished
future earning capacity” found in the new Labor Code § 4660(a)
and (b)(2) and the prior wording “ability to compete in
an open labor market.” This
conclusion incidentally allowed the court to call upon a long,
bountiful history of prior precedent referencing the “inability
to compete in an open labor market.”
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The
DCA Ogilvie opinion invalidated the WCAB crafted formula for rebutting
the FEC factor in the 2005 schedule and seemingly brought back
LeBoeuf
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What it doesn’t do:
- While the decision describes
specific ways to rebut the schedule, it provides little guidance
on what to do when rebuttal is successful, instead punting back
to the WCAB: “We
leave it to the WCAB in the first instance to prescribe the exact
method for such recalculation that factors the employee’s
anticipated diminished earning capacity into the data used by
the RAND Institute.” Ogilvie, supra, 197 Cal.App.4th at
1276.
- The
decision does not limit the ways in which the FEC factor may
be rebutted to those discussed in the opinion.
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Ogilvie
III provides little guidance
on what to do when rebuttal is successful, and instead punts back
to the WCAB.
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Current Status
of Ogilvie III
On October 26, 2011, the California Supreme Court issued an order
denying defendant City and County of San Francisco’s Petition
for Review. Ogilvie v. WCAB (2011) 197 Cal.App.4th 1262, 76 CCC 624
is thus binding precedent.
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This continues to be a very unsettled
area of the law, as we now await further development of the issue
at the WCAB level, consistent with the DCA’s opinion in Ogilvie
III.
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What to Do?
Consider these steps:
Step One. Make sure that the medical record
contains comprehensive Residual Functional Capacity (or lack thereof)
(“RFC”) information.
The attorney needs to consider this
step early because getting this information takes some time and can
slow down resolution of your case. The value of RFC information cannot
be emphasized enough and is absolutely essential to any authoritative
vocational evaluation. Vocational Evaluators do not evaluate loss
of wage earning capacity on the basis of the WPI. They do it on the
basis of an inability to perform the specific mental or physical
requirements of a range of jobs otherwise available to the applicant.
Occasionally, a good Qualified Medical evaluator or Primary Treating
Physician will describe an applicant’s work preclusions. Rarely
is this sufficient because it is intended mainly for work status
but not for a vocational evaluation to determine loss of earnings
capacity—very different things. When in doubt, check with a
vocational evaluator or assume it is insufficient.
The best way to
get RFC information is by asking the PTP, or less preferably the
QME/AME, to complete a standardized “check the box” RFC
form. The PTP is preferred because they’ve seen the applicant
more frequently during the healing process and are in a better position
to know applicant’s tolerable limits. The PTP is usually more
credible. The best place the undersigned has found to get these RFC
forms is on Jeff Malmuth’s website http://www.jmalmuth.com/index.html .
The site has a dozen or more specialized forms for many different
types of injuries such as psych, pulmonary, upper extremity, etc.
Another place to get such forms is from Social Security at https://secure.ssa.gov/poms.nsf/lnx/0424510066 for
physical and https://secure.ssa.gov/poms.nsf/lnx/0424510090 for
mental. There may be other places to get such forms.
Often, a PTP or QME will not want to complete an RFC form. If that
happens, consider a deposition of either or both asking the same
questions as are on the forms or consider getting a professional
Functional Capacity Evaluation. All these costs, if reasonable and
necessary, are reimbursable under Labor Code § 5811 or as med-legal
evaluations.
Have complete RFC information at the ready for your
vocational evaluator.
Step Two. Decide whether this is a case with
a significant drop in earnings post-injury. If so,
Step Three. Identify the range of strategies
available to you to increase the size of the award.
Quite often a
doctor deposition on a Guzman III type issue will achieve a reasonable
increase in the award without venturing into the unsettled waters
of Ogilvie and the FEC factor in the 2005 schedule.
Step Four. Get
a preliminary report from a Vocational Evaluator to use in settlement
discussions.
At this time, Jeff Malmuth & Co. has an online service
rendering “preliminary” DFEC analysis for $129.95 at
http://www.jmalmuth.com/index.html . Since this issue is new, I would
expect Med-Legal and PDRater, among others, to provide similar services
soon. This type of report can be used in settlement negotiations
or to decide if further vocational workup would be worthwhile.
Step Five. Get a full Vocational Analysis.
Regardless of the method
used, the Vocational Evaluator will rely heavily on the RFC information
you give them. It is worth noting here that one method of performing
a DFEC analysis appears consistent with the Appellate Court’s
Ogilvie III opinion and is well within the capacity of Vocational
Evaluators to do. This is the method I believe Jeff Malmuth uses.
It involves identifying a group of “similarly situated workers” who
do a job closest in duties and location to your client through sources
at the EDD and Dept. of Labor. The Vocational Evaluator then overlays
functional limitations and capacities resulting solely from your
client’s injury, and not the “impermissible” non-industrial
factors, onto the “similarly situated workers.” The Vocational
Evaluator identifies transferrable skills and jobs that someone with
your client’s injuries could do. The earnings of this group
are then compared with the earnings of the “similarly situated
workers” and the resulting figure is the DFEC for your client.
This approach has the advantage of avoiding the “impermissible
factors” identified in Ogilvie III of illiteracy, general economic
conditions, English proficiency and lack of education.
The other type of vocational DFEC analysis is the standard LeBoeuf type
analysis for the individualized worker, comparing pre-injury actual
earnings with labor market job availability for workers with your
client’s residual disabilities, skills and abilities and
the resulting income, if any, therefrom.
How is this percentage of reduction in future earning capacity figure
used? Many argue that this percentage figure becomes the PD rating
citing Chevron USA v. WCAB (Arnold) (2000) 65 CCC 922 (a
pre-SB899 panel writ denied case where a DEU evaluator said if he
could not use the scheduled rating, he would adopt the vocational
evaluator’s
DFEC percent as the PD percent on special facts. The opinion was
not cited again.) This is also the approach of Commissioner Ronnie
Caplane in her dissents in both Ogilvie WCAB En banc decisions.
This is also the result in some other forums such as the USDOL applying
the Longshore and Harborworkers’ Act for non-scheduled injuries
(using a slightly different process). The undersigned did not see
in the Ogilvie III opinion, an endorsement of this or any
other approach. Another approach would be to use the percentage figure
to increase the DFEC factor using a formula based on the percentage.
This issue will be the subject of litigation.
Another consideration in determining the final PD rating may be whether
RAND study data was appropriately applied as required by Labor Code §4660(b)(2).
It bears repeating that the Ogilvie DCA opinion states: “We
leave it to the WCAB in the first instance to prescribe the exact
method for such recalculation that factors the employee’s anticipated
diminished earnings capacity into the data used by the RAND Institute.” Ogilvie,
supra, 197 Cal.App.4th at 1276.
Step Six. Serve defendants with either a Request
for Rating or Request for Rating Instruction to DEU with your Ogilvie vocational
report, calculations and briefed legal points well before the MSC.
I continue to recommend
this step. Early disclosure has many advantages. If the other side
wants a deposition on Ogilvie issues, early disclosure mitigates
against an Order Taking Off Calendar at the Mandatory Settlement
Conference (“MSC”) for further discovery. It strengthens
your settlement posture. It has the inherent strength of the high
road. The data is not going to change because it is disclosed.
A Request for Rating (by the WCJ) is useful where the judge will
decide how to rate the injury. A Request for Rating Instruction is
useful where the usual practice for that judge or board is to refer
the rating to the DEU. The Request for Rating Instruction has the
added advantage that if the judge does not issue the rating instructions
requested, we can move to strike the rating instruction within 12
(7 + 5) days from service and request a hearing. 8 CCR § 10602.
This provides another opportunity to brief and argue the point to
educate the judge further and it shows seriousness.
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The Ogilvie III decision
created as many questions as it answered. The FEC factor in the 2005
schedule is clearly rebuttable. Using vocational experts is the usual
means. However, the WCAB’s complex formula is gone. This continues
to be a very unsettled area of the law, as we now await further development
of the issue at the WCAB level, consistent with the DCA’s opinion
in Ogilvie III. Future decisions will turn on such issues
as: 1) whether the Vocational Evaluator’s opinion of the percent
of reduced earnings capacity (minus the “impermissible factors”)
becomes the overall PD rate, 2) whether some other standard applies
and if so what, and, 3) whether the new standard affects only the
FEC factor or the overall rating.
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The Ogilvie
III decision created
as many questions as it answered
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Michael Grimes began practicing
law in 1984 after a 10 year career staffing for the National, California
and San Francisco AFL-CIOs including a stint on Hubert Humphrey’s
Presidential Campaign staff in 1972. He has represented injured
workers from the beginning, more or less exclusively since 1996
at the San Francisco, San Jose and occasionally Oakland venues.
He is a member of the Labor Committee of the California Applicants’ Attorneys’ Association.
Law Offices of Michael C. Grimes
795 4th Ave., Suite 207
Redwood City,
CA 94063-3936
(650) 261-1754
Fax 261-1755
mgrimes@sbcglobal.net |
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