Recent Kansas AMA Guides Decision: Would the Court Prefer a Fault-Based System?

Jettisoning the Bath Water—Does the Baby Remain?

As someone who has, for the past 32 years, earned the bulk of his living reading—I’ll admit, often only skimming—some 2,500 appellate decisions each year in our field of workers’ compensation law, and commenting (in some form and fashion) upon, say 700 of them, I appreciate it when a judge or justice takes the time to write an imaginative opinion. One such opinion was penned recently by Judge Patrick McAnany, of the Kansas Court of Appeals, in Johnson v. U.S. Food Serv., No. 117,725, 2018 Kan. App. LEXIS 44 (Aug. 3, 2018). McAnany’s carefully crafted opinion employs rich metaphor—“death by a thousand paper cuts” [Opinion ¶ 22]. It also references comedic cinema—Monty Python’s famous “Black Knight” scene. Judge McAnany’s nod to powerful stage drama—Arthur Miller’s Death of a Salesman, has me wondering, however, if the judge might prefer that we jettison the entire workers’ compensation scheme and just move back to the days in which standard tort law governed the world of work-related injuries. If we throw out the proverbial bath water, what happens to the baby? Let me explain.

The Core Dispute in Johnson

The facts before the Kansas Court of Appeals were not in serious dispute. On October 16, 2015, Johnson, a delivery driver, suffered a work-related injury to his neck when he tried to dislodge a partially frozen trailer door at work. His injuries required surgery. Had his permanent impairment been computed utilizing the AMA Guides, 4th Edition—as would have been the case if the injury had occurred before January 1, 2015—two medical experts would have assigned him a 25 percent permanent impairment. Under the 6th Edition’s regime, however, Johnson was rated at only six percent. That difference in impairment rating amounted to some $47,000 in benefits.

Johnson’s Padgett-Like “Erosion of Benefits” Argument

Johnson contended that the Kansas move to the 6th Edition was the straw that broke the camel’s back (my own attempt at metaphor). Utilizing an argument that has become more and more common within the workers’ compensation context, Johnson took up the gauntlet made popular in Florida’s 2014-2015 Padgett litigation [see my posts here and here].

In a nutshell, the Padgett argument goes something like this:

1. With the passage of a state’s Workers’ Compensation Act, a bargain was struck between three core constituencies (the last of which is often forgotten or ignored): employers, injured workers, and society at large [see Larson’s Workers’ Compensation Law, § 1.02, et seq.]. An injured worker loses his or her right to recover at common law for the negligence of the employer, but receives medical care and a flow of income to replace the income lost due to the injury. The employer gives up common law defenses–contributory negligence, assumption of the risk—but avoids the potentially large jury verdict that might “fully” compensate the injured worker for his or her injuries. Society gets a method of internalizing the cost of injuries to the goods and services offered up by the employer to the consumer. This important, and often ignored, third point acknowledges that if there is no compensation available to the injured employee, society will be forced to support the worker and his or her family. It is better that the cost of the good or service be reflected in the true, total cost of its delivery.
2. That “grand bargain” or compromise, first offered by the respective state’s Workers’ Compensation Act, has slowly (or not so slowly) eroded over the years such that the balance is no longer maintained. Under the Padgett argument, what the worker received for giving up his or her tort remedy is no longer of sufficient value to warrant the sacrifice.

The “Tipping Point” in Kansas

Speaking for the panel of the Kansas Court, Judge McAnany provided a splendid history of workers’ compensation law within the state, noted the erosion of grand bargain from the worker’s viewpoint, and concluded that the “tipping point” had been reached with the adoption of the AMA Guides, 6th Edition. No longer could it be said that recovery under the state’s workers’ compensation laws was worth what had been given up—the potential for tort recovery.

Johnson is First Truly Successful “Padgett-Like” Argument

As far as I’m concerned, the Johnson decision from Kansas is the first successful (from the injured worker’s standpoint) Padgett-like case. I recognize that the Padgett argument was utilized by the successful claimant in Pennsylvania’s Protz decision [see my general discussion here], which struck down the use of the 6th Edition AMA Guides within the Keystone State. The Pennsylvania Supreme Court’s decision was, however, made on other, “non-Padgett,” constitutional grounds.

The Padgett argument was used in Oklahoma recently, to no avail. There, in Hill v. American Medical Response, 2018 OK 57 (June 26, 2018), the state’s high court refused to follow Protz. It ok’d use of the 6th Edition; the Padgett argument did not prevail. Readers will likely recall that the Padgett argument was utilized in Oklahoma in the heated litigation over that state’s controversial “oft out” legislation. While the claimant was successful in having the “opt out” law nullified, the decision was not made on Paggett-like grounds [see my post here].

Judge McAnany’s Ideal World: “Wrongdoing Must be Uncovered”

In Judge McAnany’s argument that the grand bargain has become so eroded that injured worker’s no longer have an adequate remedy for what they gave up under common law, he offers a final nail that seems sure to secure the lid of the casket containing the 6th Edition of the Guides. Acknowledging that earlier discussion of the workers’ erosion of benefits had appropriately been couched in economic terms, the judge offers “a final point on this issue” [Opinion, ¶ 31]:

The economic outcome of the administrative process is certainly the key element in measuring the value of the administrative side of the bargain. But in measuring the value of the other side of the bargain, those who have participated in trials of tort actions, either as lawyers or as judges, know that justice involves more than the ca-ching of a cash register.

In a public trial, plaintiffs seek the recognition of their peers of the propriety of their conduct and a recognition of the misconduct of their adversaries. They want their community to know the consequences of that misconduct on their lives and their fortunes. They want a public answer to the common question from friends and neighbors when they learn of the accident: “So what happened, and who’s at fault?” In short, they want to be heard. [Opinion, ¶ 31].

Referencing the famous soliloquy of Linda Loman in Act I of Miller’s Death of a Salesman, Judge McAnany allows that public disclosure of what happened is crucial to the balancing of rights. Indeed, the judge continues:

Answers must not only be uncovered but publicly expressed. For an injured plaintiff the value of a public trial of a common-law tort action encompasses all these things. Wrongdoing must be uncovered and its consequences laid bare. Attention must be paid [Opinion, ¶ 31].

Where’s the “Wrongdoing” in Johnson?

Since Judge McAnany argues that it is crucial to uncover the “wrongdoing,” let us try to do so. In Johnson, what had the employer done wrong? Recall the circumstances of the injury. Johnson hurt his neck as “he tried to dislodge a partially frozen trailer door at work” Opinion, ¶ 4]. Willy Loman aside, there was no contention that the employer, U.S. Food Service, had been responsible for the frozen door; one suspects it was just really cold that morning. The employer did not controvert the injury. Medicals had been paid. Surgery had been performed. The argument was over the level of impairment/disability. I repeat, “What had the employer done wrong?” What “consequences” need to be laid bare and why isn’t the workers’ compensation arena sufficient to do so?

For all the apparent benefits of the tort system, as envisioned by Judge McAnany, how would a tort trial have worked to Johnson’s benefit? There still would have been the disagreement over the extent of disability. The employer or carrier still would have argued that under the most recent AMA Guides edition, Johnson’s permanent impairment was only six percent. He would still have argued that the 4th Edition was more fair than the 6th. The difference is that under the tort rules, Johnson would have had to show negligence on the part of the employer—a position that, under these circumstances, would have been quite difficult to show. Absent such a showing, Johnson would have received nothing!

Judges Seem to be Drawn Toward “Fault-Finding”

All too often, judges (and others) appear to be drawn to “fault-finding,” at laying fault at the feet of the wrongdoer. Sometimes the attraction is subtle. For example, in a recent decision from the Supreme Court of Minnesota [Roller-Dick v. CentraCare Health Sys., 2018 Minn. LEXIS 442 (Aug. 8, 2010], the dissenting justice argued that a worker’s injuries in a fall down the stairs at her employer did not arise out of the employment, but rather arose from the fact that employee “chose not to use the handrail” [Opinion and Dissent, p. 16]. If that’s the standard to be applied in Minnesota, how many more claims should be denied?

Ten years ago, in a decision from my home state, Hassell v. Onslow County Bd. of Educ., 362 N.C. 299, 661 S.E.2d 709 (2008), compensation for a mental injury/occupational disease claim was denied where the Commission—and the appellate courts—found that her stress disorder was occasioned by her own inability to control her class. In other words, it was her own fault. The Supreme Court of North Carolina protested that its decision was not grounded in fault-finding. A careful reading of the decision leaves the question open, in my less than humble opinion.

Moving back to Mr. Johnson, the claimant in the Kansas case, how is he helped by a fault analysis? With regard to the countless work-related injuries that occur each week without fault on the part of any party, what good would be served by a trial before one’s peers? How many more judges and courtrooms would we need to right all these wrongs?

Does Judge McAnany Echo a Rising Sense of Cynicism About the Workers’ Compensation Arena?

I’m left wondering if Judge McAnany shares a somewhat commonly-held view that the workers’ compensation system has fallen, “and it can’t get up.” How efficiently can our tort system deal with every Willy Loman dispute, where the perceived need is to be heard, rather than compensated? Does the judge view the current workers’ compensation arena as incapable of adjudging fault in the minority of cases in which fault is really an issue (e.g., intentional tort)? What does the judge (and others) say when the vast majority of workers’ compensation disputes are resolved each year without litigation at all? If we throw the bath water out the back door, will we still have the baby?