Dana Holding Corp. v. Workers' Comp. Appeal Bd.

• Decision Date: 11 October 2018
• Docket Number: No. 1869 C.D. 2017,1869 C.D. 2017
• Citation: 195 A.3d 635
• Parties: DANA HOLDING CORPORATION, Petitioner v. WORKERS' COMPENSATION APPEAL BOARD (SMUCK), Respondent
• Court: Pennsylvania Commonwealth Court

195 A.3d 635

DANA HOLDING CORPORATION, Petitioner

v.WORKERS' COMPENSATION APPEAL BOARD (SMUCK), Respondent

No. 1869 C.D. 2017

Commonwealth Court of Pennsylvania.

Argued September 13, 2018

Decided October 11, 2018

Carol A. Crisci, Eagleville, for petitioner.

Olivia U. Bort, Enola, for respondent.

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE MICHAEL H. WOJCIK, Judge, HONORABLE CHRISTINE FIZZANO CANNON, Judge, HONORABLE ELLEN CEISLER, Judge

OPINION BY JUDGE COHN JUBELIRER

Dana Holding Corporation (Employer) petitions for review of an Order of the Workers' Compensation Appeal Board (Board), which reversed a decision by a Workers' Compensation Judge (WCJ) and reinstated David Smuck (Claimant) to total disability status as of June 20, 2014, the date of his impairment rating evaluation (IRE). The WCJ had granted Employer's Modification Petition, modifying Claimant's disability status from total to partial disability based upon an IRE performed using the Fourth Edition of the American Medical Association's (AMA) Guides to the Evaluation of Permanent Impairment (Guides ), which was, at the time of the WCJ's decision, still a valid means of modifying a claimant's status under this Court's decision in Protz v. Workers' Compensation Appeal Board (Derry Area School District) , 124 A.3d 406, 417 (Pa. Cmwlth. 2015) ( Protz I ). However, the Pennsylvania Supreme Court subsequently declared the entirety of Section 306(a.2) of the Workers' Compensation Act¹ (WC Act), which governed IREs, unconstitutional.

Protz v. Workers' Comp. Appeal Bd. (Derry Area Sch. Dist.) , 639 Pa. 645, 161 A.3d 827, 840-41 (2017) ( Protz II ). At issue in this appeal is whether Claimant is entitled to the benefit of Protz II . Because Claimant's appeal was pending before the Board at the time of that decision, we conclude the Board properly applied the law in effect at the time of its appellate review and, accordingly, affirm.

The pertinent facts are not in dispute. Claimant suffered a work injury described as an "upper back, disc protrusion @ T11-12" on April 6, 2000. (WCJ Decision, Finding of Fact (FOF) ¶ 1.) Employer issued a Notice of Temporary Compensation Payable, acknowledging the injury, which subsequently converted into a Notice of Compensation Payable.

On June 20, 2014, Claimant underwent an IRE that was performed by Lucian P. Bednarz, M.D., who was appointed by the Bureau of Workers' Compensation at Employer's request. Dr. Bednarz opined that Claimant had a whole body impairment rating² of 11 percent under the Sixth Edition of the Guides.³ Based upon this IRE, Employer filed its Modification Petition seeking to modify Claimant's disability status from total to partial as of the date of the IRE. Claimant challenged the modification, alleging he had not reached maximum medical improvement, a prerequisite to an IRE.

Various hearings were held before the WCJ. After the record closed, but before the WCJ issued his decision, this Court issued its decision in Protz I , wherein we declared that certain IRE provisions found in Section 306(a.2) of the WC Act were unconstitutional. Protz I , 124 A.3d at 417. Specifically, we declared the portions of Section 306(a.2) that provided that a claimant's impairment rating should be determined "pursuant to the most recent edition of the [AMA Guides ]" were an unconstitutional delegation of legislative authority violative of Article II, Section 1 of the Pennsylvania Constitution.⁴ We reasoned that "the General Assembly ... failed to prescribe any intelligible standards to guide the AMA's determination regarding the methodology used in granting impairments." Id. at 415. We further explained that "Section 306(a.2) of the [WC] Act is wholly devoid of any articulations of public policy governing the AMA in this regard and of adequate standards to guide and restrain the AMA's exercise of this delegated determination by which physicians and WCJs are bound" and is devoid of any "mechanism requiring governmental review of the Guides by the promulgation of regulations." Id. Having concluded that Section 306(a.2) was an unconstitutional delegation of legislative power because "it proactively approved versions of the AMA Guides beyond the Fourth Edition without review," we vacated the Board's decision and remanded the matter to the Board with instruction to remand to the WCJ for an IRE determination applying the Fourth Edition of the Guides , which was in effect at the time Section 306(a.2) was enacted. Id. at 416.

Because, in Protz I , we permitted IREs to be performed using the Fourth Edition of the Guides , Employer here sought to reopen the record before the WCJ and introduce a new IRE using that edition. Claimant objected to reopening the record and instead requested the WCJ to dismiss Employer's Modification Petition based upon Protz I because the IRE used the Sixth Edition of the Guides. Instead, the WCJ allowed the new IRE. Based upon his prior examination on June 20, 2014, Dr. Bednarz found Claimant had a whole person impairment of 15 percent using the Fourth Edition of the Guides.

The WCJ found that the IRE performed using the Sixth Edition of the Guides was invalid as a result of this Court's decision in Protz I . (WCJ Decision at 8.) However, based upon the results of the second IRE using the Fourth Edition of the Guides , the WCJ granted Employer's Modification Petition and modified Claimant's disability status from temporary total disability to partial disability, effective June 20, 2014. (WCJ Order.)

Claimant and Employer appealed to the Board. Claimant argued Dr. Bednarz was not qualified to perform an IRE under the Fourth Edition of the Guides and that the WCJ's conclusion that Employer met its burden of proof was in error. Meanwhile, Employer cross-appealed, arguing the WCJ erred in concluding Protz I rendered the first IRE using the Sixth Edition of the Guides invalid.⁵ Employer explained that it filed the cross-appeal because Protz I was appealed to the Pennsylvania Supreme Court and it wanted:

to preserve the issue concerning the validity of the finding that [C]laimant had a whole body impairment of less than 50% under the 6th Edition of the AMA Guides in the event that the Supreme Court reverses Protz and concludes that the evaluation under the "most recent edition" of the Guides at the time of the evaluation is constitutional and the determination under the 4th Edition of the Guides is rendered moot.

(Employer's Appeal, Record (R.) Item 9.) Employer requested the Board stay the matter until the Supreme Court decided the appeal of Protz I , which the Board did.

While the appeal was pending before the Board, the Pennsylvania Supreme Court declared Section 306(a.2) of the WC Act unconstitutional in its entirety. Protz II , 161 A.3d at 840-41. The Supreme Court agreed with this Court's holding in Protz I that Section 306(a.2) of the WC Act was an unconstitutional delegation of legislative authority. Protz II , 161 A.3d at 838. However, the Supreme Court disagreed that the offending language was severable from the rest of Section 306(a.2) and struck Section 306(a.2) in its entirety. Id. at 841. As a result, this Court's holding in Protz I that use of the Fourth Edition of the Guides was permissible was overturned.

After Protz II was decided, the Board considered this appeal, which had been stayed. The Board concluded Protz II required reversal of the WCJ Decision because the WCJ had relied upon the now-unconstitutional provisions of Section 306(a.2), including the use of the Fourth Edition of the Guides. It, therefore, reversed the grant of the Modification Petition and reinstated Claimant to total disability status as of June 20, 2014, the date of the disputed IRE. (Board Opinion at 3.)

Employer now seeks review of the Board's Order.⁶ Employer claims the Board erred in retroactively applying Protz II to the instant action. Employer argues that the Supreme Court gave no directive in Protz II as to its retroactive effect and that the factors to be considered in applying a new rule of law retroactively weigh against retroactivity. Employer particularly stresses the prejudice it claims it will suffer if Protz II is held to invalidate past IREs, which have been relied upon by Employer, as well as all other employers and insurers. As a result, Employer seeks prospective application of Protz II or, in the alternative, application of Protz II only as of the date of that decision and in cases where the issue has been properly raised and preserved. In addition, Employer asserts retroactive application of Protz II violates its constitutional right to the "due course of law" under the Remedies Clause of Article I, Section 11 of the Pennsylvania Constitution. Finally, Employer argues Claimant waived his ability to challenge the constitutionality of the IRE by not raising it before either the WCJ or the Board.

Claimant responds that he did, in fact, raise the applicability of the Protz decisions throughout the litigation. Regardless, Claimant argues that a party can challenge the validity of a statute for the first time on appeal, citing Section 703(a) of the Administrative Agency Law, 2 Pa. C.S. § 703(a).⁷ Claimant asserts he is not seeking full retroactive effect of Protz II ; rather, he is merely asking this Court to apply the general rule that the law in effect at the time of appellate review applies. Claimant claims that Employer would not be prejudiced by such an application. Claimant further argues this case is analogous to Thompson v. Workers' Compensation Appeal Board (Exelon Corporation) , 168 A.3d 408 (Pa. Cmwlth. 2017), in which, based upon Protz II , we reversed the Board's affirmance of a WCJ's decision modifying a claimant's disability status from total to partial based on an IRE, even though it had not been raised before the WCJ or Board.

We begin with the threshold issue in this...