Applied Materials v. WCAB: Sixth Appellate District Court of Appeal Holds Physician Misconduct is Compensable but also Upholds Fitzpatrick
On June 1, 2021, the 6th Appellate District Court of Appeal certified for publication its decision in Applied Materials et al. v. WCAB.
In that case, the 6th District Court of Appeal issued a lengthy 73-page decision addressing multiple issues raised by the parties. However, the decision is most significant for two issues:
- Whether a worker’s post-traumatic stress disorder (PTSD) arising from a treating physician’s sexual misconduct is compensable under workers’ compensation. It was.
- Whether the Fitzpatrick case was wrongly decided. Fitzpatrick was important as it had held that the WCJ may not use LC 4662 on its own to make a finding of total permanent disability. This case and its finding were affirmed.
FACTS OF THE CASE
The case involved a worker who claimed three industrial injuries while working for an employer from 1996 until 2008: a specific injury in 2001, a specific injury in 2005, and a cumulative trauma injury through her last day of work in 2008. The 2001 injury was insured by Arrowood Indemnity Company (Arrowood) and the two later injuries were insured by XL Specialty Insurance Company (XL Specialty).
In late 2007, Dr. John Massey began serving as the primary treating physician. In Jan. 2011, Arrowood entered into a stipulation wherein it agreed to continue authorizing medical care with Dr. Massey. Moreover, although Arrowood implemented a medical provider network (MPN) in 2012, Dr. Massey was part of the MPN, and the worker was permitted to continue seeing him.
Starting in 2012, Dr. Massey began hugging the worker in suggestive ways and engaged in sexual banter with her in the exam rooms. Then on five occasions between May 22 and June 25, 2013, Dr. Massey went to the worker’s home where they had sexual intercourse. Dr. Massey went to the worker’s home six more times between July 14 to Oct. 10, 2013 and asked for sex, but she refused him. She testified that Dr. Massey controlled her treatment and disability benefits and told her multiple times that if anyone found out about the affair, he would have to stop being her doctor and would no longer complete her disability forms. The worker continued treating with Dr. Massey until Dec. 2013.
In May 2014, the worker contacted the Medical Board of California, and her claims were investigated. In Sept. 2016, the Medical Board filed a formal accusation against Dr. Massey and charged him with multiple causes of action for discipline. Following a formal hearing, the Medical Board revoked Dr. Massey’s license.
In the meantime, the worker was evaluated by a psychiatric QME, Dr. Sidle, and in Jan. 2016, after she disclosed additional details about her sexual contacts with Dr. Massey, Dr. Sidle diagnosed her with post-traumatic stress disorder (PTSD). Dr. Sidle reported the worker had a Global Assessment of Function (GAF) score of 45 but also opined that she was 100 percent permanently disabled based on her psychiatric condition alone and unable to work. Dr. Sidle later testified that the worker’s disability was entirely due to her PTSD, which was due entirely to her sexual relationship with Dr. Massey.
Following a trial, the WCJ found the worker was 100 percent permanent disabled for the injury to her psyche alone based on Dr. Sidle’s report. The WCAB granted reconsideration and amended the amount of the weekly temporary disability and permanent disability rates but otherwise affirmed the award.
THE COURT’S DECISION
The 6th District Court of Appeal’s decision addressed multiple issues, most of which related to the liability of Arrowood and XL Specialty. Ultimately, it rejected most the arguments raised by both defendants and held they were jointly and severally liable for the worker’s injury.
On the primary issue for appeal, the Court held that the worker’s psychiatric disability that arose out of her sexual exploitation by Dr. Massey was compensable. It rejected the argument that the worker broke the chain of industrial causation when she entered into a personal relationship with Dr. Massey outside of the medical setting, and that her PTSD did not arise out of the employment because the sexual activity between Dr. Massey and Worker occurred in her home, did not involve medical treatment, and was consensual. The Court explained that a worker is entitled to compensation for a new or aggravated injury that results from medical treatment of an industrial injury.
The Court concluded the worker met her burden of demonstrating that her PTSD was a new injury that resulted from the treatment for her industrial injuries and that her employment was one of the contributing causes without which the sexual exploitation by Dr. Massey and her PTSD would not have occurred. It found that Dr. Massey prescribed five or six drugs at the time of their sexual contact which affected the worker’s ability to function. It found Dr. Massey treated the worker for six years by the time the sexual exploitation occurred, and Arrowood stipulated that Dr. Massey would continue to treat her industrial injuries. The Court found these facts supported that the conclusion that the medications and treatment provided for the workers’ industrial injuries were a contributing cause of the worker’s PTSD and disability.
The Court also found the worker was assaulted by a physician who was treating her industrial injuries; who was a member of the employer’s MPN; and whose treatment was authorized and paid for by Arrowood and should have been authorized by XL Specialty. Based on this, it concluded the disability due to Dr. Massey’s sexual exploitation was a compensable consequence of the medical treatment provided by the employer.
The Court, however, also concluded that the WCAB erred in awarding 100 percent PD. The Court noted that in Fitzpatrick, the Court of Appeal declined to endorse the WCAB’s interpretation that Labor Code sections 4660 and 4662(b) provided alternative paths to establishing 100 percent PD.
It found the facts in Fitzpatrick were very similar to the facts of that case. In Fitzpatrick, an employee claimed injuries to his heart and psyche. The psychiatrist reported the injured worker’s GAF score was 45, but also opined the worker was “on strict psychiatric grounds totally and permanently disabled. The Court noted that Fitzpatrick harmonized sections 4660 and 4662(b) by explaining that while section 4662(b) allows the WCAB to make a determination of permanent total disability on the facts of the case, section 4660 addresses how the determination on the facts shall be made in each case for injuries before Jan. 1, 2013.
The Court rejected the worker’s assertion that Fitzpatrick was wrongly decided and agreed with the statutory analysis in Fitzpatrick. It then found the record supported the conclusion that the worker relied on the alternative path theory to support her claim of permanent total disability. Specifically, in the pretrial conference statement, the worker claimed total PD under section 4662(b). She also cited section 4662(b) and a case which supported the alternative path theory in her answer to the petition for reconsideration.
It found that while the WCJ did not cite section 4662(b) or the worker’s cases, the WCJ clearly agreed with the worker’s view of the case. Thus, it appeared that the WCJ relied on the alternative path theory that was later rejected in Fitzpatrick to award 100 percent PD. It added that while the WCAB’s decision was issued after Fitzpatrick, there was nothing in the WCAB’s decision indicating it considered the scheduled rating, Fitzpatrick, or whether the worker presented substantial evidence to rebut the scheduled rating.
The Court then held the worker did not meet her burden of rebutting the scheduled rating in accordance with LeBoeuf v. WCAB (1983) 34 Cal.3d 234. It found Dr. Sidle did not opine on the workers’ ability to participate in vocational rehabilitation, take advantage of training opportunities, or find work. It added that while Dr. Sidle was able to opine on these matters from a medical or psychiatric standpoint, he was not a vocational expert. Therefore, he was not qualified to opine on these points from a vocational perspective or opine that she was 100 percent “disabled from working in the open labor market.”
The Court also held the worker did not meet her burden of proving to rebut the scheduled rating under Milpitas Unified School Dist. v. WCAB (Guzman) (2010) 187 Cal.App.4th 808. It found that while Dr. Sidle provided a strike rating by assigning a GAF score, which converts to a 40 percent WPI, he erroneously assumed that a GAF of 45 meant she was 100 percent disabled. It found Dr. Sidle did not explain why the 40 percent WPI did not accurately reflect her disability, provide an alternative rating within the GAF scale, or explain why the rating more accurately reflected the level of her disability.
The Court concluded that since Dr. Sidle, the WCJ, and the WCAB all relied on an incorrect legal theory (i.e., the alternative path theory) to find 100 percent PD, the award of 100 percent PD was not supported by substantial evidence. The Court remanded for further proceedings on the PD issue with instructions to consider apportionment.
ANALYSIS OF THE DECISION
Applied Materials is a very complicated decision. Neither the defendants nor the worker was satisfied with the decision. Therefore, the request for publication came from outside organizations, rather than the parties. Nevertheless, the case settles some important legal issues.
There is no question that Applied Materials expands what qualifies as a compensable consequence injury. The Court doesn’t focus on whether the treating physician’s sexual exploitation constituted an actual event of employment under section 3208.3. This statute isn’t even considered during the Court’s discussion of the issue.
Instead, the Court relies on the general rule that an injury is compensable if the employment is a contributing cause. It also relies on the rule that an employee is entitled to compensation for a new or aggravated injury that results from the medical treatment of an industrial injury. Because the treating doctor was part of the employer’s MPN and his care was authorized, the Court found the worker’s PTSD was compensable consequence of the medical treatment her employer.
The case involves a very special set of facts, and hence was an issue of first impression. Therefore, there will be questions as to its general application beyond these facts. However, there is no doubt the case expands what will be considered a compensable consequence of treatment.
The Court’s decision to uphold Fitzpatrick has more general application. It did not believe that section 4662(b) allowed the WCAB to engage in “ad hoc decisionmaking.” Instead, the injured worker may only rebut the scheduled rating under one of the legally established methods: (1) establishing the worker is not amenable to rehabilitation pursuant to LeBoeuf, Ogilvie, and Dahl; or (2) challenging the standard rating within the four corners of the AMA Guides under Guzman. The WCAB may not broadly review the evidence and determine a worker is 100 percent disabled. It must explain how and why the worker was able to rebut the scheduled rating under these two established methods.
Applied Materials also provides guidance on the evidence that may be used to prove a worker is not amenable to rehabilitation. Specifically, the Court adopted the defendant’s argument that Dr. Sidle was not qualified to opine on the worker’s ability to participate in vocational rehabilitation, take advantage of training opportunities, or find work from a vocational perspective because he was not a vocational expert. Thus, under the decision, a doctor’s opinion that a worker is not amenable to rehabilitation alone may be insufficient to support a 100 percent award, unless it can be justified within the four corners of the AMA Guides. Any effort to rebut a scheduled rating under LeBoeuf, Ogilvie, and Dahl would need to be supported by vocational expert.
While the case was remanded for further proceedings on the issue of permanent disability, it remains to be seen how the WCAB will deal with the issue. The Court held the worker did not meet her burden of rebutting the scheduled rating based on the current evidence, but there are no instructions requiring the WCAB to issue a decision based on the current evidence. In Applied Materials, no vocational evidence was admitted, and it is possible the WCAB will order further development of the record with such evidence. Moving forward, workers should obtain vocational evidence if they want to prove they cannot compete in the open labor market and are not amenable to rehabilitation.
- Department of Corrections & Rehabilitation v. WCAB (Fitzpatrick) (2018) 27 Cal.App.5th 607