July 22, 2019

Colorado Court of Appeals: ALJ Cannot Determine MMI Where No Physician Has Placed Claimant at MMI

The Colorado Court of Appeals issued its opinion in Burren v. Industrial Claim Appeals Office on Thursday, March 7, 2019.

Workers’ Compensation—Maximum Medical Improvement.

Burren sustained admitted work-related injuries to her arm and shoulder in 2014. Several physicians treated her for her injuries into 2017, but Burren complained that her pain continued to worsen and that none of the treatment improved her condition. None of her physicians placed her at maximum medical improvement (MMI).

In 2015 employer retained Dr. Fall to perform a medical examination of Burren. She did not find Burren at MMI, but in 2016 she found Burren had reached MMI. Employer then requested Dr. Henke to perform a 24-month division-sponsored independent medical examination (DIME) because no treating physician had placed Burren at MMI. Dr. Henke determined that Burren was not at MMI.

Employer then applied for a hearing to dispute Dr. Henke’s DIME opinion. The ALJ ruled that employer had clearly and convincingly overcome the DIME and found MMI was reached in 2016. An Industrial Claim Appeals Office panel (the Panel) upheld the ALJ’s order.

On appeal, Burren argued that the Panel and the ALJ misinterpreted C.R.S. § 8-42-107(8)(b) because an ALJ cannot determine a claimant’s MMI as a matter of fact without an authorized treating physician (ATP) placing her at MMI. She contended that if a DIME performed under the statute finds a claimant is not at MMI, treatment should proceed until an MMI determination is made. The court of appeals analyzed the statute and the Panel’s historical practices and concluded that when the DIME and the ATP agree that a claimant is not at MMI, treatment should continue until either the DIME or the ATP places the claimant at MMI. Thus, the ALJ and the Panel misinterpreted C.R.S. § 8-42-107(8)(b)(II). While the court’s conclusion effectively precludes an employer from challenging a 24-month DIME when the DIME agrees with the ATP that a claimant is not at MMI, it does not prohibit an employer from re-invoking the 24-month DIME process at an appropriate future time.

The order was set aside and the case was remanded to the Panel with directions to return it to the ALJ to enter an order consistent with the opinion.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: ALJ Should Apply De Novo Review to State Personnel Board Evidentiary Hearing

The Colorado Court of Appeals issued its opinion in Stiles v. Department of Corrections on Thursday, January 24, 2019.

State Personnel Board—Disciplinary Proceedings—Standard of Review.

Stiles was selected for a random drug screening while serving as a full-time correctional officer for the Department of Corrections (DOC). The day after the test, Stiles submitted a confidential incident report to DOC admitting to marijuana use and explaining the extenuating circumstances that led to it, including a bout of insomnia and personal problems. The test results came back positive for THC, the main psychoactive chemical in marijuana. The warden issued a notice of disciplinary action terminating Stiles.

Stiles appealed his termination to the Colorado State Personnel Board (Board). An administrative law judge (ALJ) conducted a hearing and issued an initial decision finding that the warden’s decision was arbitrary, capricious, and contrary to rule or law. Specifically, the ALJ found that the warden had (1) failed to candidly and honestly consider all of the evidence he procured, particularly Stiles’s lack of prior disciplinary history and his extenuating mitigating circumstances; and (2) imposed discipline that was not within the range of reasonable alternatives by failing to consider the disciplinary alternatives set forth in the DOC regulation directed at marijuana use. The ALJ rescinded Stiles’s termination and modified his discipline. On review, the Board adopted the ALJ’s initial decision.

On appeal, the DOC contended that the ALJ employed an incorrect standard of review and improperly reweighed the evidence when he reviewed the disciplinary action. A C.R.S. § 24-50-125(4) hearing is a de novo hearing at which the ALJ makes credibility, factual, and legal findings without deference to the appointing authority. Therefore, the ALJ applied the correct standard of review.

The DOC next contended that the ALJ misapplied the arbitrary and capricious standard in modifying the warden’s decision. Here, the ALJ’s decision and the Board’s order adopting it were supported by the record, including the warden’s failure to properly weigh the mitigating evidence and the absence of any prior discipline and the imposition of the most severe form of discipline for Stiles’s misconduct.

The order was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: Oil and Gas Commission Properly Declined to Adopt Proposed Rule

The Colorado Supreme Court issued its opinion in Colorado Oil and Gas Conservation Commission v. Martinez on Monday, January 14, 2019.

Administrative Law and Procedure—Mines and Minerals.

This case required the court to decide whether, in accordance with the Colorado Oil and Gas Conservation Act (the Act), C.R.S. § 34-60-102(1)(a)(I), the Colorado Oil and Gas Conservation Commission (the Commission) properly declined to engage in rulemaking to consider a rule proposed by respondents.

Respondents proposed a rule that, among other things, would have precluded the Commission from issuing any permits for the drilling of an oil and gas well “unless the best available science demonstrates, and an independent, third-party organization confirms, that drilling can occur in a manner that does not cumulatively, with other actions, impair Colorado’s atmosphere, water, wildlife, and land resources, does not adversely impact human health, and does not contribute to climate change.”

After soliciting and receiving public comment and allowing interested parties to be heard, the Commission declined to engage in rulemaking to consider this proposed rule because, among other things, (1) the rule would have required the Commission to readjust the balance purportedly crafted by the General Assembly under the Act and conditioned new oil and gas drilling on a finding of no cumulative adverse impacts, both of which the Commission believed to be beyond its statutory authority, and (2) the Commission was already working with the Colorado Department of Public Health and Environment (CDPHE) to address the concerns to which the rule was directed and other Commission priorities took precedence over the proposed rulemaking at this time. The Denver District Court upheld the Commission’s decision, but in a split, published decision, a division of the court of appeals reversed the district court’s order in Martinez v. Colorado Oil and Gas Conservation Commission, 2017 COA 37, __ P.3d __.

The supreme court reversed the division’s judgment and concluded that the Commission properly declined to engage in rulemaking to consider respondents’ proposed rule. The court reached this conclusion for three primary reasons. First, a court’s review of an administrative agency’s decision as to whether to engage in rulemaking is limited and highly deferential. Second, the Commission correctly determined that, under the applicable language of the Act, it could not properly adopt the rule proposed by respondents. Specifically, as the Commission recognized, the pertinent provisions do not allow it to condition all new oil and gas development on a finding of no cumulative adverse impacts to public health and the environment. Rather, the provisions make clear that the Commission is required (1) to foster the development of oil and gas resources, protecting and enforcing the rights of owners and producers, and (2) in doing so, to prevent and mitigate significant adverse environmental impacts to the extent necessary to protect public health, safety, and welfare, but only after taking into consideration cost-effectiveness and technical feasibility. Finally, in declining to engage in rulemaking, the Commission reasonably relied on the facts that it was already working with the CDPHE to address the concerns underlying respondents’ proposed rule and that other Commission priorities took precedence at this time.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: No Violation of Open Meetings Law in Establishing Process to Refer Physicians for Disciplinary Investigations Related to MMJ Prescriptions

The Colorado Court of Appeals issued its opinion in John Doe No. 1-9 v. Colorado Department of Public Health and Environment on Thursday, July 26, 2018.

Open Meetings LawState Public BodyAdministrative Procedure Act—Colorado Open Records Act—Attorney Fees and CostsMedical MarijuanaC.R.S. § 24-4-106(8)—Final Agency Action.

The Colorado Constitution authorizes physicians to recommend the medical use of marijuana for patients with debilitating medical conditions. The Colorado Department of Public Health and Environment (CDPHE) is designated as “the state health agency” to administer Colorado’s medical marijuana program and is required to promulgate rules to administer the program. CDPHE created the medical marijuana registry to meet its requirement to establish a confidential registry of patients who are entitled to receive medical marijuana cards.

CDPHE has discretion to refer physicians to the Colorado Medical Board (the Board) for violations of medical marijuana laws. The Board, which is entirely separate from CDPHE and is housed under the Department of Regulatory Agencies, determines whether such violations exist.

Wolk, the CDPHE executive director, and Riggins, the state registrar and director of the Medical Marijuana Registry, (collectively, the Department) referred John Does 1 through 9 (collectively, the Doctors) to the Board for investigation of unprofessional conduct involving the Doctors’ certification of patients for the use of medical marijuana. The Department based its referrals on its medical marijuana policy (the Policy).

The Doctors then submitted Colorado Open Records Act (CORA) requests to the Department and the Board, seeking public records about, among other things, the Policy. The Department responded to the request, but withheld certain documents. The Doctors then brought this action against the Department and the Board, alleging violations of Colorado’s Open Meetings Law (OML) and the State Administrative Procedure Act (APA) and seeking injunctive and declaratory relief. The district court dismissed the claims against the Board and granted summary judgment on the Doctors’ OML and APA claims against the Department and, as a result, declared the Policy void.

On appeal, the Department argued for reversal of the summary judgment, contending that the entire agency cannot constitute a “state public body” under the OML, so the OML doesn’t apply. Under the OML’s plain language, the Department is not a state public body. Thus, the district court erred in granting summary judgment on the Doctors’ OML claim against the Board.

The Doctors challenged the dismissal of their OML claim against the Board. However, they did not allege that the Board had authority to enact or implement the Policy, or that it had enacted the Policy. Thus, even accepting as true the Doctors’ allegations that Board employees attended meetings to discuss and develop the Policy, the complaint failed to allege facts showing a link between the meetings and the Board’s policy-making powers. Thus, the Board is not subject to the OML.

The Doctors also challenged the denial of their request for attorney fees and costs under the OML. Given the case disposition, the court of appeals rejected the request.

The Department also argued that the district court erred in finding that the APA applied to the Department referrals because they are not a “final agency action” under the APA. Subject to an exception under C.R.S. § 24-4-106(8), only final agency action is subject to review. The referrals were not final; they didn’t determine anything, and it is uncertain whether an investigation will result in a finding of a violation or any other action. The Doctors sought to enjoin the referrals under the C.R.S. § 24-4-106(8) exception, which allows interlocutory review of agency actions in which a party will suffer irreparable harm. But to fit under the exception, the referrals must be a “proceeding” under the APA, which they are not. The district court erred in granting summary judgment on the Doctors’ APA claims against the Department based on the referrals.

The Doctors further argued that the Policy itself was a final agency action that did not comply with the APA’s rulemaking requirements. Here, the Policy was not binding and did not confer any power the Department did not already have, so it fell within the APA’s exception to the notice and hearing rulemaking requirements.

The Doctors also objected to the dismissal of the APA claims against the Board. However, they developed no argument in their opening brief about how the APA applies to the Board, and their discussion of the APA in their reply brief was too late.

The Doctors next argued that the district court erred in denying an award for attorney fees and costs associated with their request to obtain access to public documents under CORA. A party requesting an order to show cause for the disclosure of public records is not entitled to attorney fees and costs if the requesting party has filed a lawsuit against a state public body and the records relate to the pending litigation and are otherwise discoverable under the rules of civil procedure, which was the case here. The district court did not err in denying attorney fees and costs under CORA.

The judgment was affirmed in part and reversed in part, and the case was remanded with directions.

Summary provided courtesy of Colorado Lawyer.

Bills to Keep Dextromethorphan Away from Kids and Extend Rule Review Signed

On Friday, May 11, 2018, Governor Hickenlooper signed two bills into law. To date, he has signed 225 bills into law and sent two to the Secretary of State without a signature. The bills signed Friday were HB 18-1253, “Concerning Implementation of Recommendations of the Committee on Legal Services in Connection with Legislative Review of Rules of State Agencies,” by Reps. Pete Lee & Leslie Herod and Sen. Bob Gardner, and HB 18-1307, “Concerning Restricting the Availability to Children of Products that Contain Dextromethorphan,” by Reps. Jonathan Singer & Pete Lee and Sens. Bob Gardner & John Cooke.

HB 18-1253 extends all state agency rules that were adopted or amended on or after November 1, 2016, and before November 1, 2017, with the exception of the rules specifically listed in the bill. HB 18-1307 criminalizes the selling of products containing dextromethorphan to people under 18 years of age, and requires proof of age unless the vendor reasonably believes the purchaser is over 25 years of age.

For a complete list of Governor Hickenlooper’s 2018 legislative actions, click here.

Colorado Court of Appeals: Subpoena Issued for Lawfully Authorized Purpose Despite Having Arisen from Different Agency

The Colorado Court of Appeals issued its opinion in Colorado Medical Board v. Boland on Thursday, March 22, 2018.

Physician—Subpoena—State Administrative Procedure Act—Medical Practice Act—Colorado Department of Public Health and Environment—Open Meetings Law—Disciplinary Procedures.

Dr. Boland, a licensed Colorado physician, received a subpoena duces tecum from the Colorado Medical Board (Board) to produce certain medical records. A letter accompanying the subpoena explained that the Board had received information regarding Dr. Boland’s conduct as a physician and a possible violation of the Medical Practice Act. The letter also noted that the Board had received a complaint from the Colorado Department of Public Health and Environment (CDPHE) related to Dr. Boland’s medical marijuana recommendations. In response, Dr. Boland sent a written objection to the Board, arguing that CDPHE’s referral policy was invalidly adopted, and on that basis he refused to produce the records. The Board filed an application for an order enforcing the subpoena, which was granted by the district court. The district court concluded that even if the referral policy was invalid, only CDPHE could be enjoined from enforcing it.

On appeal, Dr. Boland argued that the trial court erred in enforcing an unlawful subpoena. He alleged that because CDPHE based its referral on a policy that was unlawfully adopted, the subpoena caused by the referral had no lawful purpose. Even assuming the policy was adopted in violation of the Open Meetings Law, CDPHE’s conduct does not determine whether the Board acted lawfully in issuing the subpoena. The Board has a statutory duty to investigate whether a licensed physician engages in unprofessional conduct and is vested with authority to conduct investigations and issue administrative subpoenas. Thus, the subpoena in this case was issued for a lawful purpose.

The judgment enforcing the subpoena was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Board Had No Basis for Investigating Physician Based on Reasons Outside Subpoena

The Colorado Court of Appeals issued its opinion in Colorado Medical Board v. McLaughlin on Thursday, March 22, 2018.

Physician—Subpoena—State Administrative Procedure Act—Colorado Department of Public Health and Environment—Open Meetings Law—Disciplinary Procedures.

Dr. McLaughlin, a licensed Colorado physician, received a subpoena duces tecum from the Colorado Medical Board (Board) to produce certain medical records. The Board issued the subpoena after it had received a complaint from the Colorado Department of Public Health and Environment (CDPHE) related to Dr. McLaughlin’s medical marijuana recommendations. Dr. McLaughlin objected to the Board’s subpoena, arguing that CDPHE’s referral policy was invalidly adopted. On that basis, he refused to produce the subpoenaed records. The Board filed an application for an order enforcing the subpoena. The district court concluded that although the physician referral policy was invalid, the subsequent investigation and subpoena were for a lawfully valid purpose, and the court granted the Board’s application.

On appeal, Dr. McLaughlin contended that the subpoena was not issued for a lawful purpose because the policy prompting the Board’s investigation was adopted in violation of Colorado’s Open Meetings Law. Here, the subpoena was issued solely as a result of a physician referral policy promulgated in violation of the Open Meetings Law and the State Administrative Procedure Act. Because the Board had no basis for investigating the physician apart from the invalid physician referral policy, the subpoena had no lawful purpose and the district court erred in enforcing the subpoena.

The judgment was reversed. However, the dissent agreed with the majority in Colorado Medical Board v. Boland, 2018 COA 39, and would affirm the district court’s judgment.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Adverse Inference from Refusal to Testify Properly Applied at Administrative Hearing

The Colorado Court of Appeals issued its opinion in Romero v. Colorado Department of Human Services on Thursday, January 11, 2018.

Colorado State Administrative Procedure Act—Sexual Abuse—Evidentiary Facts—Adverse Inference—Fifth Amendment.

In this administrative law case, the Larimer County Department of Human Services (DHS) made a finding confirming that Romero sexually abused his grandchildren and exposed one grandchild to an injurious environment, which required Romero to be listed in the statewide child abuse registry. Romero appealed DHS’s confirmations pursuant to Colorado’s State Administrative Procedure Act (APA). An administrative law judge (ALJ) concluded in an initial decision that the preponderance of the evidence did not support DHS’s confirmation decisions. DHS appealed, and the Colorado Department of Human Services (Department) reversed the ALJ’s initial decision, concluding that the evidentiary facts, including an adverse inference based on Romero’s invocation of his Fifth Amendment right to remain silent, supported a finding that Romero sexually abused his grandchildren. Romero appealed to the district court, which reversed the Department’s final decision.

On appeal, the Department argued that the district court erred by overruling the Department’s final decision and by restricting the application of the adverse inference to situations where the Department provides an “adequate explanation” of why it has applied the inference. An agency’s determination in a final agency action to apply an adverse inference to a defendant’s invocation of his right to remain silent is an ultimate conclusion of fact under the APA. Consequently, the agency is required, as a matter of law, to make its own determination regarding the adverse inference and can substitute its own judgment for that of the administrative law judge regarding the inference and the weight to give the inference in light of the other evidence presented. To apply the adverse inference for invocation of the right against self-incrimination, a party in a civil case must have been asked questions the answers to which would have been potentially incriminating in a future criminal action, and the party must have invoked his Fifth Amendment rights. There must also have been probative evidence offered against the person claiming the privilege.

It is undisputed that during discovery for the ALJ hearing, DHS deposed Romero and asked him incriminating questions, including whether he touched his grandchildren for his own sexual gratification. It is also undisputed that Romero invoked his Fifth Amendment rights for the entire deposition except for the first few questions. Further, the record is clear that had Romero been called to testify at the ALJ hearing, he would have invoked his Fifth Amendment rights because of the ongoing criminal investigation into the allegations. Here, the Department’s application of the adverse inference was not arbitrary or capricious because it was supported by the record; it considered Romero’s constitutional rights; and it was not contrary to the law on Fifth Amendment adverse inference. Further, there is no authority that supports the district court’s imposition of a duty on the Department to provide an explanation for why it was applying the inference. Accordingly, the district court erred by effectively precluding the Department from making its own determination on the adverse inference.

Romero argued that the district court’s judgment should be upheld because the facts relied on by DHS to support findings of sexual abuse are speculative and do not support the ultimate findings. The Department’s view of the evidence was not speculative or contrary to the weight of the evidence presented to the ALJ.

The district court’s judgment overturning the Department’s final decision was reversed.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Appeals Council Required Only to “Consider” New Evidence of Disability

The Tenth Circuit Court of Appeals issued its opinion in Vallejo v. Berryhill on February 28, 2017.

Vallejo applied for supplemental security income benefits alleging that she had been disabled for several months. The US Social Security Administration denied her claim. She received a hearing with an administrative law judge (ALJ), who issued a decision adverse to Vallejo. The next day, Vallejo’s treating physician, Dr. Ratner, completed his opinion, which stated that Vallejo was bipolar with an extreme level of impairment. Vallejo requested the Appeals Council to review the ALJ’s decision and submitted Ratner’s opinion with her request. The Appeals Council denied review, stating that it considered Ratner’s opinion and additional evidence but found the evidence did not provide a basis for changing the ALJ’s decision. This rendered the ALJ’s decision the Commissioner’s final decision.

Vallejo sought judicial review of the Commission’s final decision. The district court found that the Appeals Council erred in not properly articulating its assessment of Ratner’s opinion in denying Vallejo’s request for review. The court reasoned that the Appeals Council was required to either assign Ratner’s opinion controlling weight or articulate reasons for assigning it a lesser weight. Because neither the ALJ nor the Appeals Council expressly evaluated Ratner’s opinion, the district court reversed the Commissioner’s decision and remanded to the Appeals Council to either determine what weight to give Ratner’s opinion or to remand to an ALJ with directions to make such a determination.

The Tenth Circuit held that it had jurisdiction to hear this appeal because the district court’s remand was a sentence-four remand. The Tenth Circuit held this because the district court did not retain jurisdiction and the remand was not solely for consideration of new evidence that was not before the Commissioner.

The Tenth Circuit addressed the issue of whether the district court’s determination that the Appeals Council failed to apply the correct legal standard was an error.

The Tenth Circuit held that the Appeals Circuit was not required to expressly analyze the new evidence of Ratner’s opinion. Rather, the statutes or regulations only require the Appeals Council to “consider” the new evidence. The Tenth Circuit acknowledges that an express analysis from the Appeals Council would be helpful to judicial review. But, further states that nothing in the statutes or regulations requires the Appeals Council to provide that analysis.

Therefore, the Tenth Circuit reversed the district court’s order reversing the Commissioner’s final decision and remanding to the Appeals Council. The Tenth Circuit remanded to the district court with directions to address Vallejo’s remaining arguments and determine if the Commissioner applied the correct legal standards and if substantial evidence in the administrative record supported the Commissioner’s final decision.

Colorado Supreme Court: Inquiry into Unemployment Claimant’s Mental Condition Beyond Scope of Simplified Administrative Proceedings

The Colorado Supreme Court issued its opinion in Mesa County Public Library District v. Industrial Claim Appeals Office on Monday, June 26, 2017.

Unemployment Compensation—Fault or Misconduct—Illness or Physical Disability of Employee.

The supreme court held that where the Division of Unemployment Insurance determines a claimant was mentally unable to perform assigned work under C.R.S. § 8-73-108(4)(j) of the Colorado Employment Security Act, C.R.S. §§ 8-70-101 to 8-82-105, neither the text of C.R.S. § 8-73-108(4)(j) nor related case law contemplates further inquiry into the cause of the claimant’s mental condition, and such an inquiry is beyond the scope of the simplified administrative proceedings to determine the claimant’s eligibility for benefits. Here, the court concluded that the Division’s hearing officer erred in determining that claimant committed a volitional act to cause her mental incapacity and thus was at fault for her separation from employment and was disqualified from receiving unemployment benefits. The court of appeals’ judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Mutual Benefit Doctrine Supports Union Member’s Claim for Workers’ Compensation Coverage While at CBA Discussion Meeting

The Colorado Court of Appeals issued its opinion in Pueblo County, Colorado v. Industrial Claim Appeals Office on Thursday, May 18, 2017.

Workers’ Compensation—Injury at a Union Meeting—Mutual Benefit Doctrine.

Claimant was president of the local union. She worked for Pueblo County (employer). Union membership is required for workers in a bargaining unit, and union dues are deducted from workers’ paychecks. Participation in union meetings is voluntary. Claimant stayed after work for a union meeting, which was held immediately after claimant clocked out for the day and took place in a conference room in the building in which she worked. The purpose of the meeting was to review and revise the new collective bargaining agreement.

After the meeting, claimant walked to the adjacent parking lot where she normally parked for work. While getting in her car, she slipped on ice and injured herself. She filed a workers’ compensation claim for her medical expenses. An administrative law judge (ALJ) denied and dismissed the claim, finding the claimant “was not in the course and scope of her employment at the time of her injury.” The Industrial Claim Appeals Office (Panel) disagreed, finding the union activities were “sufficiently incidental” to claimant’s work “as to be properly considered as arising out of and in the course of employment.” It remanded to the ALJ to determine benefits. On remand, the ALJ ordered employer to pay all of claimant’s reasonable, necessary, and related medical expenses. The Panel affirmed.

On appeal, employer argued that the Panel erred in holding that the post-work injury sustained immediately following claimant’s attendance at a union meeting arose out of and in the course of employment. An injury arises out of employment when it originates in an employee’s work-related functions and is sufficiently related to those functions to be considered part of employment. It is not essential that an employee be engaged in an obligatory job function.

This was a case of first impression in Colorado but has been addressed in a number of other states. In general, injuries sustained during “unilateral union activities conferring, if any, only a remote or indirect benefit upon the employing enterprise” are not covered. However, the leading treatise recognizes a trend toward finding a mutual employer-employee benefit in actions of union officers. The court of appeals concluded that union activity cases in Colorado should be analyzed under the mutual benefit doctrine to determine compensability. This doctrine requires courts to examine the circumstances of each case to determine whether a union activity is of mutual benefit to the employer and employee. Here, where a union officer participated in a union meeting that served to facilitate ongoing negotiations between the union and employer concerning a new collective bargaining agreement, there was mutual benefit to employer and employee. Further, once mutual benefit is established, the location of the injury is not determinative. Accordingly, the injuries sustained were compensable.

The order was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: No Constitutional Violation by Using ALJs in Workers’ Compensation Proceedings

The Colorado Court of Appeals issued its opinion in Sanchez v. Industrial Claim Appeals Office on Thursday, May 18, 2017.

Workers’ Compensation Act of Colorado—Constitutionality—Separation of Powers—Equal Protection.

Claimant sustained a back injury at work lifting a hydraulic unit from his truck. Within two months he was back to work and placed at maximum medical improvement. Soon thereafter he complained of excruciating lower back pain, but both his original doctor and a specialist concluded that this new lumbar strain was not work-related but related to normal age-related degenerative changes.

Claimant sought temporary partial disability (TPD) benefits from the date of his injury and temporary total disability (TTD) benefits from when his low back pain flared up. An  administrative law judge (ALJ) rejected the request for benefits, finding that (1) his lower back pain was unrelated to his work injury, and (2) because he had continued working, claimant had not suffered a wage loss and was not entitled to either TPD or TTD benefits. The ALJ dismissed his requests. The Industrial Claim Appeals Office (Panel) affirmed but remanded the case to the ALJ to determine whether claimant was entitled to change his physician.

On appeal, claimant argued the separation of powers doctrine is violated by having workers’ compensation cases heard in the executive branch. In rejecting this argument, the court of appeals followed Dee Enterprises v. Industrial Claim Appeals Office, which held that the statutory scheme for deciding workers’ compensation cases does not violate the separation of powers doctrine.

Claimant then argued his equal protection claims should be analyzed under the strict scrutiny standard. The court held that the rational basis test applies to equal protection challenges in the workers’ compensation context. Under that test, “a statutory classification is presumed constitutional and does not violate equal protection unless it is proven beyond a reasonable doubt that the classification does not bear a rational relationship to a legitimate legislative purpose.”

Claimant argued that his and other workers’ compensation litigants’ rights to equal protection were violated because workers’ compensation cases are not heard by judges. The court concluded that legitimate governmental goals provide a rational basis for employing executive branch ALJs and the Panel to decide workers’ compensation cases. The court rejected claimant’s contention that his right to equal protection was violated because his claim was heard by an ALJ and the Panel.

Claimant then contended that the Panel’s dual role as decision-maker and then-named litigant if a case is appealed “reeks of impropriety.” The requirement that the Panel be added as a party is not arbitrary and serves the purpose of the Workers’ Compensation Act of ensuring thorough and expeditious review and enforcement of ALJ and Panel orders.

Claimant also challenged on equal protection grounds C.R.S. § 8-43-404(5)(a)(II)(A), which exempts governmental entities and health care providers from providing an injured worker with a list of four physicians from whom the worker may seek medical care for his injury. The court concluded that a rational basis exists for excluding employees of those two types of employers from the four-physician referral requirement. Thus, there was no equal protection violation.

The court rejected claimant’s three non-constitutional arguments, which were that: (1) the exemption from the four-physician referral requirement did not apply because claimant’s employer did not meet the requirements of C.R.S. § 8-43-404(5)(a)(II)(A); (2) substantial evidence did not support the ALJ’s factual findings; and (3) the ALJ made numerous evidentiary errors.

The Panel’s order was affirmed.

Summary provided courtesy of The Colorado Lawyer.