MISSOURI OPENS THE DOOR TO PART II SUITS

The workers' compensation and employer liability policy (Parts I and II) is the name of the insurance contract sold to employers. Part I provides all the benefits required by the law of the state that has jurisdiction over the on the job injury. Part II of the policy covers liability lawsuits filed against the employer by the employee for an injury or disease the occurs in the course and scope of the employment but is not covered by part I of the policy and for which the esclusive remedy does not protect the employer from tort suits. Part I has no dollar limit on the benefits. Part II is sold with coverage limits.
In 1990 the Florida Supeme Court in Scanlan v. Martinez signaled the end of the exclusive remedy that is workers' compensation by opening the door a crack to tort suits against employers for on the job injuries. It seems that Florida's 1990amendments to the workers' compensation act making certain types of injuries 'non-compensable' were 'constitutional'. The court rejected a constitutional challenge by stating that if prior to the ammendments an accident or injury was compensable and by reason of the amendments was no longer so, there still remained the common law tort remedy.
More recently, in Smothers v. Gresham Transfer the Oregon Supreme Court held Oregon's 'Major Contributing Cause' defense to be constitutional but when raised by the Empoyer/Carrier, left the injured worker with the right to take his case to a court of general jurisdiction instead of through the workers' compensation morass. Later legislative changes in Oregon have diminished but not eliminated this election of remedy.
Now Missouri has joined the club. This week the Missouri Supreme Court ruled on a constitutional challenge brought by scores of labor unions against amendments to the workers' compensation act. The ruling, like that in Florida and Oregon, left the workers' compensation law in tact (although Missouri sidestepped the issue by holding the suit was premature, there being no injured worker victim in the group of plaintiffs). But the court was very clear to point out in the resolution of one count of the complaint, that injured workers whose accidents are no longer 'covered' by the act by reason of the amendments in 2005 may enforce their rights via the tort remedy. Welcome to the fold Missouri. The dissent is worth reading for examples of the types of claims that will now shift to the common law remedy and avoid the exclusive remedy of workers' compensation.Missouri's new "definition of accident" is a real trip. Kudos to the humble justices of the Missouri Supreme Court for the very public published apology for failing to rule in a timely fashion. To my knowledge, such an apology is not only unprecedented, but serves to overcome the perception that the Justices operate out of an ivory tower and are aloof to the real world need for justice to be not only fair but prompt.
I suspect that National Council of Compensation Insurers (NCCI of Boca Raton, Florida) will be keeping it's actuaries up late burning the midnight oil to come up with a statistical reason for insurers in Missouri to raise rates on Part II premiums (employer liability) while reducing Part I premiums to a lesser extent to leave a net increase instead of decrease. NCCI will likely blame the adverse affect on premiums than what was expected or predicted by the 2005 Missouri reforms on activist justices, unions and claimant's lawyers. They should realize what a bargain even high workers' compensation premiums are compared to liability insurance costs to cover what are usually unsafe workplaces.
Most state constitutions guarantee that there will be no right without a remedy. If workers' compensation as a substitute for tort remedy becomes no remedy at all, or an unreasonable substitute, employers can expect to be back before juries who can award large verdicts and punitive damages. Part II premiums will skyrocket. Employers will learn in the coming years that you can't have your immunity and pay nothing in workers compensation too.

I HOPE THE LEGISLATURE DOESN'T READ THIS

In January a three judge panel of the First District Court of Appeal (1DCA) made an historic first (no pun intended) appearance in Miami-Dade County to hear oral arguments in a number of workers' compensation cases. All appeals of workers' compensation orders of Judges of Compensation Claims (JCC's) go to the 1 DCA based in Tallahassee, Florida, according to the appeal provisions of the compensation statute (the Act). This process was adopted to reduce the possibility that there would be any conflict between decisions of the various DCA's. No conflict, rare review by the Supreme Court. Since the 1 DCA often uses a process called "PCA Affirmed" to render it's decisions, those too are not reviewable by the Supreme Court. Workers' Compensation litigants are second class citizens (claimant's, employer's and carrier's alike) when it comes to available Art. V court review.
The January oral arguments did produce a full written opinion that is sure to spur legislative concern and activity to prevent any possible recurrance of this liberal interpretation of the Act.
Pamela Mullins had a dispute with her employer, 7-Eleven. Ms. Mullins, without question had an injury at work arising out of her employment and in the course and scope of her employment with 7-Eleven. The compensation servicing agent Sedgwick CMS, refused to pay for a plastic surgeon to replace Mullins' ruptured cosmetic right breast implant. Under the present statute the JCC had to make two findings based upon the evidence. 1- Was the accident the major contributing cause (MCC) of the partial rupture of a 'prosthetic device'? and 2. Should the medical benefits be apportioned so that Mullins would only get Employer payment for part of the treatment needed to repair or replace the damaged implant?
The JCC awarded Mullins payment for only 25% of the expenses associated with the treatment needed. Mullins appealed. The medical evidence showed that the aged implant had lost 75% of its usefullness before the accident took place. The JCC's award ordered 7-Eleven to pay ony 25% of the cost of treatment. Who would have paid the balance, if Mullins did not have the resources to do so was not considered. If she had no money, she would not have had the medical care she needed.
The appellate opinion did not focus on the problems that will be caused by the medical apportionment language in s. 440.15(b) since 2003. The decision of the 1 DCA reversed the award of the JCC and held that Mullins was entitled to 100% of the cost of medical care for the damaged implant. The court reasoned that the apportionment language applied only to injury to a claimant who has a preexisting condition, not to a prosthetic device that has depreciated. Good for Mullins. Bad for Employers and Carriers.
I fully expect a 'Mullins' fix to be proposed this session when the legislature takes up workers' compensation. The legislature is expected to try to fix the percieved problem caused by the Supreme Court's decision in the Emma Murray case. The lawmakers will likely remove the word 'reasonable' from the attorney fee provision and add the word 'prosthetic' to the apportionment language.
The result will be a lopsided Mullins who will not be able to get an attorney to represent her interests in the future.