WCAB Issues Significant Panel Decision That It Will Continue to Follow Shipley

March 28th, 2024
Sure Log
Attorney of Counsel, Michael Sullivan & Associates, LLP

As discussed in an earlier Special Report,^[1] for more than 30 years, the Workers’ Compensation Appeals Board (WCAB) relied on Shipley v. WCAB (1992) 7 Cal. App. 4th 1104 to decide petitions for reconsideration, even if it did not act timely on a petition pursuant to Labor Code § 5909. That statute states, “A petition for reconsideration is deemed to have been denied by the appeals board unless it is acted upon within 60 days from the date of filing.” Based on Shipley, the WCAB generally held that if a petition was not considered within the time limit of LC 5909 due to the WCAB’s own inadvertent error, it still may decide the merits of the petition, even if the 60-day time period has elapsed.

On Dec. 18, 2023, the 2nd District Court of Appeal issued its decision in Zurich American Insurance Co. v. WCAB (2023) 97 Cal. App. 5th 1213, holding that this practice was improper. Zurich stated that “the language and purpose of section 5909 show a clear legislative intent to terminate the Board’s jurisdiction to consider a petition for reconsideration after the 60 days have passed, and thus, decisions on the petition made after that date are void as in excess of the agency’s jurisdiction.” Zurich interpreted Shipley as creating a limited exception to the deadline in LC 5909 only when (1) the petitioner acted diligently to protect his or her rights; and (2) the WCAB misled the petitioner in a manner that deprived the petitioner of a right to review by the WCAB or the appellate courts.

Zurich no doubt created a significant problem for the WCAB not only moving forward, but also in dealing with prior decisions in which the WCAB had granted reconsideration to further study a case beyond the 60-day limit in LC 5909. On March 27, 2024, the WCAB issued a significant panel decision, Ja’Chim Scheuing v. Lawrence Livermore National Laboratory,^[2] explaining how it would move forward. Essentially, the WCAB has chosen to ignore Zurich and will rely on Shipley to continue its practice of deciding petitions for reconsideration after the 60-day time period in LC 5909 has elapsed.

FACTS OF THE CASE

In Ja’Chim Scheuing, the WCJ issued a findings and award on Dec. 1, 2023. The applicant timely filed a petition for reconsideration on Dec. 18, 2023. The WCAB explained that when a petition is filed, a task is sent to the WCJ through EAMS to notify the judge that a report and recommendation is required. Such notice is not provided to the WCAB. Later, the district office electronically submits the case to the WCAB through EAMS.

In that case, the district office transmitted the case to the WCAB on Feb. 21, 2024, which was the board’s first notice of the petition. The WCJ did not issue a report until Feb. 27, 2024. Due to the lack of notice by the district office, the WCAB did not act on the petition within 60 days.

THE WCAB’S DECISION

The WCAB concluded that because the failure to act on the petition was the result of an administrative error, its time to act was tolled until 60 days after Feb. 21, 2024, when the district office transmitted the case to the WCAB. It explained that although LC 5909 states that a petition is denied by operation of law if the WCAB does not act on it within 60 days after it is filed, unlike the Court of Appeal, which has the right to summarily deny petitions for writ of review and mandate, the WCAB does not deny petitions for reconsideration by operation of law pursuant to LC 5909 based on Supreme Court holdings that summary denials of reconsideration are not sufficient after the enactment of LC 5908.5.

The WCAB explained that petitions for reconsideration filed and received by it are acted on within 60 days from the date of filing pursuant to LC 5909. But pursuant to Shipley, the WCAB makes exceptions when it does not receive a petition within 60 days due to irregularities outside the petitioner’s control. The WCAB believed that Shipley allowed tolling of the 60-day period in LC 5909, and that it could act on petitions for reconsideration within 60 days of receipt. It stated, “If a timely filed petition is never acted upon and considered by the Appeals Board because it is ‘deemed denied’ due to an administrative irregularity and not through the fault of the parties, the petitioning party is deprived of their right to a decision on the merits of the petition.” The WCAB noted that it had relied on Shipley for 30 years, and stated, “In keeping with the WCAB’s constitutional and statutory mandate, all litigants before the WCAB must be able to rely on precedential authority, and all litigants must have the expectation that they will be treated equitably on issues of procedure and be accorded same or similar access to the WCAB.”

The WCAB then provided instructions for parties. It explained that when the 60-day period has expired and there has been no response by the appeals board, the parties should contact the district office to confirm that the case has been transmitted to the WCAB and that notice was provided to it. Once they have received such confirmation from the district office, they may follow up by email with the appeals board’s Control Unit at ControlUnit@dir.ca.gov. On the merits of the case, the WCAB returned the matter to further develop the record.

Notably, the WCAB did not discuss Zurich in the main text of its decision. Zurich is cited only in footnote 6 of the decision, in which the WCAB stated that “Zurich appears to reflect a split of authority on the application of Shipley because it disagreed ‘with the conclusion in Shipley that a petitioner has a due process right to review by the Board of a petition for reconsideration even after 60 days has passed …'”

ANALYSIS OF THE DECISION

The WCAB’s decision in Ja’Chim Scheuing is not at all surprising. In Zurich, the WCAB informed the 2nd District Court of Appeal that it did not have the resources to meet the 60-day time limit under LC 5909 because the number of claims filed has increased exponentially since the latter part of the 20th century. So it was unlikely that the WCAB could comply with the Zurich decision, even if it wanted to.

Moreover, Zurich held that the WCAB’s orders granting reconsideration beyond the 60-day limit in that case were void. That holding would impact all cases prior to Zurich in which the WCAB granted reconsideration after the 60-day period, many of which were pending and many of which the WCAB rescinded, altered or amended the original decision beyond the 60-day period. It was unclear how Zurich would apply to past cases, and the WCAB was either unwilling or unable to resolve the issue.

Ultimately, in Ja’Chim Scheuing, the WCAB has given notice that it will ignore the Zurich decision. Normally, published opinions of the Court of Appeal are binding on the WCAB and its judges, but the WCAB is treating the issue as split in authority between the 4th District Court of Appeal, which decided Shipley, and the 2nd District Court of Appeal, which decided Zurich.

Essentially, the WCAB is inviting a party to ask the Supreme Court to resolve the issue. Before doing so, parties must decide whether Zurich is really the result they want. It’s very costly to file appeals with the appellate courts, and parties should consider whether they want to file petitions for writ of review every time the WCAB fails to timely act within the 60-day period, just so they could be heard on the merits. Unless and until the Supreme Court decides otherwise, the WCAB has signaled that it will maintain its practice deciding petitions for reconsideration after the 60-day period in LC 5909 when, due to its own inadvertent error, a petition does not come to its attention until after that period. 

The decision is available from the DIR website: https://www.dir.ca.gov/wcab/SignificantPanelDecisions2024/JACHIM-SCHEUING-Sandra.pdf.