California Highway Patrol v. Workers' Compensation Appeals Board

          Order Filed Date 7/14/16

         ORIGINAL PROCEEDINGS in certiorari. Petition granted; decision of the Workers’ Compensation Appeals Board annulled; No. ADJ9397913, matter remanded for further proceedings.

          Lisa A. Liebson, Deputy Chief Counsel, Mary R. Huckabaa, Assistant Chief Counsel and William L. Anderson, Appellate Counsel for Petitioner.

          Finnegan, Marks, Theofel & Desmond, Ellen Sims Langille and Randall G. Poppy for California Chamber of Commerce as Amicus Curiae on behalf of Petitioner.

          Law Offices of Allweiss & McMurtry and Michael A. Marks for California Workers’ Compensation Institute as Amicus Curiae on behalf of Petitioner.

          John F. Shields for Respondent, Workers’ Compensation Appeals Board.

          Law Offices of Jill Suzanne Breslau and Jill Suzanne Breslau for Respondent, Dorothy Margaris.

          Law Office of Mark Gearheart and Justin C. Sonnicksen for California Applicants’ Attorneys Association as Amicus Curiae on behalf of Respondent, Dorothy Margaris.

         ORDER MODIFYING OPINION

         THE COURT:

         Respondent Dorothy Margaris’s petition for rehearing filed on July 7, 2016, is denied.

         It is ordered that the opinion filed herein on June 22, 2016, be modified as follows:

         On page 24, after the partial paragraph at the top of the page which ends, “We therefore hold that to the extent the director fails to render an IMR determination within the time frame provided by section 4610.6, subdivision (d)-e.g., fails to ensure the IMR organization complies with the applicable statutes and regulations-a writ of mandamus under Code of Civil Procedure section 1085 will lie, in appropriate circumstances, to compel the director to issue an IMR determination, ” the following new paragraphs are added:

         Further, we note that a petition for writ of administrative mandamus seeking to compel the director to act in accordance with a legislative mandate is not subject to the exclusive jurisdiction of the appeals board. (§ 5300.) The Legislature created the division of workers’ compensation, including the appeals board, as part of its constitutional mandate “to create and enforce a liability on the part of any or all persons to compensate any or all of their workers for injury or disability.” (Cal. Const., art. XIV, § 4.) Our courts have repeatedly observed that the workers’ compensation system has as its “fundamental object... the provision of a means for the prompt settlement of the employee’s claim against his employer or the responsible insurance carrier.” (State Comp. Ins. Fund v. Ind. Acc. Com. (1942) 20 Cal.2d 264, 272 (State Comp.); Torres v. Xomox Corp. (1996) 49 Cal.App.4th 1, 32 [citing State Comp.].) It is well established that the jurisdiction of the appeals board includes only those powers expressly delegated to it by the Legislature. (See, e.g. Victor Valley Transit Authority v. Workers’ Comp. Appeals Bd. (2000) 83 Cal.App.4th 1068, 1072 (Victor Valley) [“As a creature of the Legislature, the Board has no powers beyond those conferred on it, ” citing State Comp.].) Under section 5300, the appeals board has exclusive jurisdiction over proceedings concerning a worker’s “recovery of compensation, or concerning any right or liability arising out of or incidental thereto, ” and other issues related to the distribution of an injured workers’ benefits. (§ 5300.)

         However, a petition for writ of mandamus which seeks to compel the director to fulfill a statutory obligation does not implicate the substantive issue of the injured worker’s entitlement to compensation from the employer. Instead, it seeks to compel the director to perform an act which is a necessary procedural step along the road to the resolution of the substantive claim. Moreover, and as already noted, a petition for writ of mandamus cannot seek to compel a particular decision on the part of the director; accordingly, the writ proceeding does not implicate the merits of the dispute between the employer and the injured worker. In other words, the petition for writ of mandate seeks to move the injured worker’s claim toward resolution, but does not affect the resolution of the claim on the merits. Other courts have observed that disputes related to a workers’ compensation claim are outside the jurisdiction of the appeals board to the extent they do not directly concern the merits of an injured workers’ claim for compensation. (See, e.g., State Comp., supra, 20 Cal.2d at pp. 267-268 [holding dispute between insurance carriers over liability for award to injured worker was not within the Commission’s exclusive jurisdiction]; Victor Valley, supra, 83 Cal.App.4th at p. 1076 [holding appeals board had no jurisdiction over dispute over liability as between members of joint government agency that employed injured worker because “the dispute had nothing to do with [the worker’s] receipt of benefits”].) The same is true here and for that reason, we conclude that a petition under Code of Civil Procedure section 1085 does not impinge on the board’s exclusive jurisdiction in the area of workers’ compensation.

          LAVIN, J.

         INTRODUCTION

         In this original proceeding, State Compensation Insurance Fund (SCIF), as the adjusting agent for California Highway Patrol (CHP) (collectively, Petitioner), seeks review of a decision of the Workers’ Compensation Appeals Board (appeals board) regarding the medical necessity of proposed treatment requested by CHP employee Dorothy Margaris (applicant). The issue presented relates to Labor Code^[1] section 4610.6, which the Legislature adopted in 2012 as part of an ongoing effort to reform California’s workers’ compensation system. Section 4610.6 created a new procedure-independent medical review (IMR)-that an injured worker may use to challenge an employer’s timely denial, delay or modification of a request for authorization of proposed medical treatment. The Administrative Director of the Division of Workers’ Compensation (director) oversees IMR, which is conducted by a private organization that retains licensed physicians to review the pertinent medical records and issue written determinations regarding the medical necessity and appropriateness of proposed medical treatment. The IMR determination becomes the final determination of the director by operation of law and may only be appealed on limited grounds.

         Section 4610.6, subdivision (d), provides that the organization conducting IMR “shall complete its review and make its determination in writing... within 30 days of the receipt of the request for review and supporting documentation, or within less time as prescribed by the administrative director.” (§ 4610.6, subd. (d).) We consider whether, as the appeals board concluded in this case, an IMR determination issued after the 30-day period is invalid and thereby vests jurisdiction in the appeals board to decide whether the proposed treatment is medically necessary and appropriate. Our analysis turns, in large part, on whether the language of the statute is mandatory-such that a failure to comply with the statute’s directive renders the resulting governmental action invalid-or merely directory.

         We disagree with the appeals board and conclude the 30-day time limit in section 4610.6, subdivision (d), is directory and, accordingly, an untimely IMR determination is valid and binding upon the parties as the final determination of the director. Our interpretation of the statute in this manner is consistent with long-standing case law regarding the mandatory-directory dichotomy, and implements the Legislature’s stated policy that decisions regarding the necessity and appropriateness of medical treatment should be made by doctors, not judges. We therefore annul the decision of the appeals board and remand for further proceedings.

         FACTUAL AND PROCEDURAL BACKGROUND^[2]

         Applicant suffered a work-related injury to her left foot and lumbar spine. On October 16, 2014, applicant’s treating physician submitted a request for authorization of medical treatment to SCIF proposing to treat applicant with a lumbar epidural injection. On October 21, 2014, SCIF denied the request.

         Applicant timely requested independent medical review. On November 26, 2014, SCIF sent the necessary medical records to Maximus Federal Services, Inc.^[3] for review. On January 8, 2015, Maximus issued its IMR determination, upholding SCIF’s denial of the proposed medical treatment. The IMR determination became the final determination of the director as a matter of law. (§ 4610.6, subd. (g).)

         Applicant appealed the IMR determination to the appeals board (§ 5300), which directed the matter to an administrative law judge for a hearing (§ 5310). Applicant argued (as is pertinent here) that the IMR determination was invalid because Maximus failed to issue it within the 30-day time period provided by section 4610.6, subdivision (d), and the applicable regulation (Cal. Code Regs., tit. 8, § 9792.10.6, subd. (g)). The judge agreed the IMR determination was issued 13 days late, but nevertheless found the determination was valid and binding on the parties, concluding that an untimely IMR determination “does not confer jurisdiction on the [workers’ compensation judge] to decide any medical treatment issues.”

         Applicant filed a petition seeking reconsideration of the judge’s decision by the appeals board (§ 5900), and again argued that the 30-day time period set forth in section 4610.6, subdivision (d), is a mandatory provision and, accordingly, an untimely IMR determination is invalid. Applicant further asserted that, in the absence of a timely IMR determination, the appeals board had the authority to decide whether the proposed treatment was medically necessary and appropriate. A majority of the three-member panel agreed with applicant and went on to find, contrary to the IMR determination, that the proposed treatment was supported by substantial medical evidence and was consistent with the treatment schedule^[4] promulgated by the director. One member of the panel dissented, and would have found that the IMR determination, though untimely, was valid and binding on the parties.

         Petitioner filed the instant petition seeking review of the appeals board’s decision. We issued a writ of review because this case presents an important issue of first impression regarding the interpretation of section 4610.6, and because it relates ...