IN THE SUPREME COURT OF CALIFORNIA
CHRISTINE BAKER, as Administrator,
etc.,
Petitioner,
S179194
v.
Ct.App. 6 H034040
WORKERS‟ COMPENSATION
APPEALS BOARD and X.S.,
WCAB Case No.
ADJ1510738/SJO 0251902
Respondents.
In this case we construe Labor Code1 section 4659, subdivision (c)
(section 4659(c), or subdivision (c)), which provides for the annual indexing of
two categories of workers‟ compensation benefits—total permanent disability and
life pension payments—to yearly increases in the state‟s average weekly wage
(SAWW), so that lifetime disability payments made to the most seriously injured
workers will keep pace with inflation. The indexing procedure is sometimes
referred to as an “escalator,” or one providing for “cost of living adjustments”
(COLA‟s).
Permanent disability and life pension benefits are intended to compensate
the injured worker for the long-term, residual effects of an industrial injury once
the worker has attained maximum medical recovery. (Department of
1
All further statutory references are to the Labor Code unless otherwise
specified.
1
Rehabilitation v. Workers’ Compensation Appeals Board (2003) 30 Cal.4th 1281,
1291 (Department of Rehabilitation).) Total permanent disability benefits are
weekly payments made for life to injured workers who are 100 percent disabled.
(§ 4659, subd. (b).) They commence on the date the injured worker reaches a
medically stable condition (permanent and stationary) because, at that point, the
full nature and extent of the worker‟s permanent disability, if any, can be
determined. (Department of Rehabilitation, supra, 30 Cal.4th at p. 1292.) Life
pensions are a form of supplemental partial permanent disability benefit,
consisting of payments to a subclass of seriously injured workers, i.e., those whose
“permanent disability is at least 70 percent, but less than 100 percent.” (§ 4659,
subd. (a).) Life pension payments commence once the worker‟s partial permanent
disability payments have been exhausted, and thereafter continue weekly for life.
(Ibid.)
Section 4659(c) provides, in full, “For injuries occurring on or after January
1, 2003, an employee who becomes entitled to receive a life pension or total
permanent disability indemnity as set forth in subdivisions (a) and (b) shall have
that payment increased annually commencing on January 1, 2004, and each
January 1 thereafter, by an amount equal to the percentage increase in the „state
average weekly wage‟ as compared to the prior year. For purposes of this
subdivision, „state average weekly wage‟ means the average weekly wage paid by
employers to employees covered by unemployment insurance as reported by the
United States Department of Labor for California for the 12 months ending March
31 of the calendar year preceding the year in which the injury occurred.”
(§ 4659(c).)
We must determine whether the operative language of subdivision (c)
requires the annual COLA‟s for total permanent disability and life pension
payments to be calculated (1) prospectively from the January 1 following the year
2
in which the worker first becomes “entitled to receive a life pension or total
permanent disability indemnity” (§ 4659(c)), i.e., when the payments actually
commence; (2) retroactively to January 1 following the year in which the worker
sustains the industrial injury, the construction urged by real party in interest, or (3)
retroactively to January 1, 2004, in every case involving a qualifying industrial
injury, regardless of the date of injury or the date the first benefit payment
becomes due, the interpretation given the statutory language by the Court of
Appeal below.
Applying the “fundamental rule of statutory construction . . . that a court
should ascertain the intent of the Legislature so as to effectuate the purpose of the
law [citations]” (DuBois v. Workers’ Comp. Appeals Bd. (1993) 5 Cal.4th 382,
387 (DuBois)), we conclude that, through the operative language of
subdivision (c), the Legislature intended that COLA‟s be calculated and applied
prospectively commencing on the January 1 following the date on which the
injured worker first becomes entitled to receive, and actually begins receiving,
such benefit payments, i.e., the permanent and stationary date in the case of total
permanent disability benefits, and the date on which partial permanent disability
benefits become exhausted in the case of life pension payments.
FACTS AND PROCEDURAL BACKGROUND
The injured worker in this matter, X.S.2 (applicant), sustained an industrial
injury on January 20, 2004, while employed as an accountant/controller. He
received temporary disability payments of $728 per week from the date of injury
through October 19, 2006. On June 19, 2007, he and his employer settled his
2
X.S. is a shortened version of a fictitious name assigned by the presiding
workers compensation administrative law judge to protect applicant‟s medical
privacy.
3
claim, stipulating that he had become permanent and stationary on October 20,
2006, and that he suffered a 69.5 percent partial permanent disability,
compensation for which was payable at the rate of $200 per week based on his
earnings and date of injury (§ 4453, subd. (b)(6)(B)), for 422 weeks, commencing
on the permanent and stationary date.
Approximately one month after settling his claim with his employer,
applicant, who had a preexisting disability caused by hepatitis B and his HIV-
positive status, filed an application for benefits from the Subsequent Injury Benefit
Trust Fund (SIBTF) pursuant to section 4751.3 Petitioner in this matter, Christine
Baker, is the Director of Industrial Relations serving as administrator of the
SIBTF. SIBTF is funded and administered by the state for the purpose of
compensating workers with prior disabilities who suffer subsequent industrial
injuries.
On March 25, 2008, SIBTF and applicant stipulated that his January 20,
2004 injury resulted in a 69.5 percent permanent disability; that he became
permanent and stationary on October 20, 2006; that payments for permanent
disability commenced on that date; and that his previous permanent disability
combined with his industrial disability resulted in a combined total permanent
3
Section 4751 provides, in relevant part: “If an employee who is
permanently partially disabled receives a subsequent compensable injury resulting
in additional permanent partial disability so that the degree of disability caused by
the combination of both disabilities is greater than that which would have resulted
from the subsequent injury alone, and the combined effect of the last injury and
the previous disability or impairment is a permanent disability equal to 70 percent
or more of total, he shall be paid in addition to the compensation due under this
code for the permanent partial disability caused by the last injury compensation for
the remainder of the combined permanent disability existing after the last injury
. . . .” (§ 4751.) The payment for the combined disability is made by the SIBTF.
(Subsequent Injuries Fund v. Workmen’s Comp. App. Bd. (1970) 2 Cal.3d 56, 59.)
4
disability of 100 percent. The parties agreed that applicant would receive weekly
payments of $528 from the SIBTF ($728 less $200 paid by the employer‟s
workers‟ compensation insurance carrier), which payments would continue for
422 weeks, and thereafter $728 weekly for life.
Subsequently, a dispute arose when applicant claimed the initial $728
weekly rate that started on October 20, 2006, had to be increased to reflect annual
increases in the SAWW, through the calculation of retroactive COLA‟s for the
period from January 1 following the date on which he had sustained his industrial
injury (Jan. 20, 2004), to the date on which his total permanent disability payments
commenced (the permanent and stationary date of Oct. 20, 2006). Petitioner, on
behalf of the SIBTF, maintained that the weekly payment of $728 to applicant,
commencing on the permanent and stationary date, properly reflected the total
permanent disability rate calculated under sections 4659, subdivision (b) and 4453
(a related section under which total permanent disability rate payments are
calculated, referenced in § 4659, subd. (b)), and that the annual indexing of that
payment with COLA‟s should not commence, per the language of section 4659(c),
until January 1, 2007, which was the January 1 following the date applicant
became permanent and stationary and actually began receiving his payments.4
On July 14, 2008, the worker‟s compensation administrative law judge
(WCJ) issued a “Findings and Award” against the SIBTF, concluding that by
failing to retroactively calculate and apply the annual COLA‟s for January 1, 2005
(the first “January 1” following the date of injury) and January 1, 2006, COLA
4
There was no dispute among the parties that payments made on and
subsequent to January 1, 2007, going forward, should be indexed annually, on that
and each successive January 1, based on the percentage increase of the SAWW as
compared to the “prior” year. (§ 4659(c), 1st sentence.)
5
increases had been improperly withheld from applicant in the amount of
$3,585.56.
The SIBTF appealed to the Workers‟ Compensation Appeals Board
(WCAB), which, on February 13, 2009, issued its “Opinion and Decision After
Reconsideration,” construing section 4659(c) as “provid[ing] that for injuries on or
after January 1, 2003, where an employee becomes entitled to total permanent
disability indemnity or a life pension, that payment shall be increased annually
commencing on January 1, 2004. We construe this to mean that each payment of
total permanent disability indemnity or life pension that is received on or after
January 1 following the date of injury shall be increased, no matter when the first
such payment is received. This ensures that severely injured workers are protected
from inflation, no matter when they receive their first payment. In some cases
there may be years of litigation before there is a determination that an employee is
entitled to receive a life pension or total permanent disability indemnity award. In
the case of a life pension, the first payment will ordinarily be made years after the
date of injury. Nonetheless, the injured worker will have been protected against
any inflation that may have ensued between the date of injury and the date of first
payment of the life pension or total permanent disability indemnity.” (Italics
added.)
On March 30, 2009, following the WCAB‟s final decision, the SIBTF
petitioned the Court of Appeal for a writ of review (§ 5950), urging that the
WCAB had misinterpreted section 4659(c) by finding that the statute‟s COLA
increases begin accruing (and compounding) prior to the January 1 after the
permanent and stationary date, the date on which the first benefit payment actually
becomes due and payable, and asserting that “by holding that the payment increase
is tied to the date of injury, the [WCAB] decided that the increase applies before
an employee is entitled to receive a benefit payment, contrary to the plain
6
language of the statute which stated that the increase applies to „an employee who
becomes entitled to receive‟ a life pension or total permanent disability
indemnity.” (Italics in original.)
The Court of Appeal granted the writ of review and received full briefing,
as well as amicus curiae briefs from the California Applicants‟ Attorneys
Association (CAAA) in support of applicant, and the County of Los Angeles on
behalf of the SIBTF. In its amicus brief, the CAAA noted that, under applicant‟s
reading of the statute, the COLA‟s began accruing on January 1 following the date
of injury, whereas under the SIBTF‟s interpretation, the COLA‟s began accruing
only with the first payment of indemnity after the injured worker becomes
permanent and stationary, “which could be many years after the date of injury.”
The CAAA asserted that both were wrong, as the “plain language of the statute
mandates that the COLA in fact begins to accrue January 1, 2004, without regard
to date of injury.” (Italics added.)
Agreeing with the position taken by the CAAA, the Court of Appeal
concluded that “the [COLA‟s] pursuant to [§ 4659(c)], for life pensions and total
permanent disability indemnity, are added to those payments, per the words of the
statute, starting January 1, 2004, and every January 1 thereafter,” and annulled the
decision of the WCAB. The court reasoned that “as to the worker whose injury
leads to total permanent disability that does not become permanent and stable for a
number of years, setting the COLA‟s from the permanent and stationary date
causes that worker to see his or her payment exposed to the ravages of inflation
over time, eroding the real value of the benefits.”
We granted the SIBTF‟s petition for review. We thereafter granted the
requests of the State Compensation Insurance Fund and the California Chamber of
Commerce to file amicus curiae briefs in support of petitioner, and the CAAA and
7
the California Correctional Peace Officers Association to file amicus curiae briefs
in support of applicant.
DISCUSSION
“As in any case involving statutory interpretation, our fundamental task is
to determine the Legislature‟s intent so as to effectuate the law‟s purpose. (People
v. Lewis (2008) 43 Cal.4th 415, 491.) „We begin with the text of the statute as the
best indicator of legislative intent‟ (Tonya M. v. Superior Court (2007) 42 Cal.4th
836, 844), but we may reject a literal construction that is contrary to the legislative
intent apparent in the statute or that would lead to absurd results (Ornelas v.
Randolph (1993) 4 Cal.4th 1095, 1105).” (Simpson Strong-Tie Co., Inc. v. Gore
(2010) 49 Cal.4th 12, 27; DuBois, supra, 5 Cal.4th at p. 387.) “[O]ur first task is
to look to the language of the statute itself. [Citation.] When the language is clear
and there is no uncertainty as to the legislative intent, we look no further and
simply enforce the statute according to its terms. [Citations.]” (Dubois, at
pp. 387-388.)
Section 4659(c) comprises two sentences, the first of which contains the
indexing scheme‟s operative language, and the second of which defines the
SAWW for purposes of the subdivision. The first sentence provides: “For injuries
occurring on or after January 1, 2003, an employee who becomes entitled to
receive a life pension or total permanent disability indemnity as set forth in
subdivisions (a) and (b) shall have that payment increased annually commencing
on January 1, 2004, and each January 1 thereafter, by an amount equal to the
percentage increase in the „state average weekly wage‟ as compared to the prior
year.” (§ 4659(c), italics added.)
Petitioner SIBTF argued below that under a straightforward reading of the
first sentence of subdivision (c), there is no retroactive calculation of COLA‟s or
additional sums to be added into the first total permanent disability or life pension
8
payment for periods prior to the date on which the worker first becomes eligible to
receive, and actually begins receiving, such payment. Instead, the first COLA
would be computed and applied to the payment on the January 1 following the
year in which the worker becomes permanent and stationary or, in the case of life
pensions, on the January 1 following the year in which the worker‟s partial
permanent disability benefits have become exhausted.
The express language of the operative first sentence of subdivision (c)
plainly supports this construction. To receive the benefit of a COLA on any given
January 1, a worker who has sustained an industrial injury must meet two
conditions. First, he or she must have been injured “on or after January 1, 2003
. . .” (§ 4659(c).) Second, he or she must “become[] entitled to receive a life
pension or total permanent disability indemnity . . . .” (Ibid., italics added.) This
court‟s past decisions explain that the entitlement to total permanent disability
indemnity payments arises when the injured worker‟s condition becomes
permanent and stationary or, to put it in other terms, when the statutory obligation
to pay temporary disability indemnity has ceased. (LeBoeuf v. Workers’ Comp.
Appeals Bd. (1983) 34 Cal.3d 234, 238, fn. 2; Department of Rehabilitation,
supra, 30 Cal.4th at p. 1292.) In the case of life pension benefits, the entitlement
to receive such payments arises, by statute, when the worker‟s partial permanent
disability benefits have been exhausted. (§ 4659, subd. (a).) Hence, under
subdivision (c)‟s express language, it is not until the injured employee “becomes
entitled to receive a life pension or total permanent disability indemnity”
(§ 4659(c), italics added), and actually begins receiving such payments, that he or
she “shall have that payment increased annually . . . by an amount equal to the
percentage increase in the „state average weekly wage‟ as compared to the prior
year.” (Ibid., italics added.)
9
The reference to the fixed date of January 1, 2004, in the first sentence of
section 4659(c) (“commencing on January 1, 2004, and each January 1
thereafter”) is not inconsistent with this construction of its operative provisions.
Since the subdivision applies only to injuries occurring “on or after January 1,
2003” (§4659(c)), the date of January 1, 2004, is the first “January 1” on which a
COLA may be calculated and applied under the subdivision‟s statutory scheme,
i.e., for those workers who were injured on or after January 1, 2003, and who,
during that calendar year, became permanent and stationary and thus became
“entitled” (ibid.) to receive total permanent disability payments as of January 1,
2004.5 The phrase “shall have that payment increased annually commencing on
January 1, 2004, and each January 1 thereafter” (§ 4659(c), italics added) is thus
most reasonably understood as a reference to the overall period to which the new
statutory scheme will apply, or put another way, the indexing provision‟s effective
date, with January 1, 2004, being the first “January 1” on which a COLA could be
calculated and applied for qualifying injuries sustained after January 1, 2003.
This straightforward and sensible reading of the operative language of
subdivision (c) then applies uniformly to all successive years postdating the
statute‟s effective date. Each January 1, “commencing on January 1, 2004, and
each January 1 thereafter” (§ 4659(c)), an employee who has sustained a
qualifying industrial injury “on or after January 1, 2003” and who has “become
entitled to receive a life pension or total permanent disability indemnity” “shall
5
It is not likely that a worker who sustains a partial permanent disability
from an injury occurring on or after January 1, 2003, would have his or her partial
permanent disability benefits awarded and exhausted within the ensuing year, thus
entitling him or her to receive life pension benefits by January 1, 2004. But a
close reading of the syntax of the first sentence reflects that this circumstance does
not undermine our construction of the provision.
10
have that payment increased annually . . . by an amount equal to the percentage
increase in the „state average weekly wage‟ as compared to the prior year.” (Ibid.)
The Court of Appeal, in contrast, construed the phrase “shall have that
payment increased annually commencing on January 1, 2004, and each January 1
thereafter . . .” (§ 4659(c)), as meaning that every worker who sustains an
industrial injury on or after January 1, 2003, regardless of the date he or she is
injured, and who thereafter becomes eligible to receive total permanent disability
or lifetime pension payments, even if that be decades into the future, must receive
annual COLA‟s calculated and applied to any such future payments retroactive to
January 1, 2004. The court believed it was thereby giving effect to the literal
language of the statute (“shall have that payment increased annually commencing
on January 1, 2004 . . .” (§ 4659(c)). The court reasoned that “as to the worker
whose injury leads to total permanent disability that does not become permanent
and stable for a number of years, setting the COLA‟s from the permanent and
stationary date causes that worker to see his or her payment exposed to the ravages
of inflation over time, eroding the real value of the benefits.” It concluded the
Legislature must have intended to remedy such inequity by authorizing COLA‟s
retroactive to January 1, 2004, in every case qualifying for indexing treatment
under the statutory scheme.
“[W]e may reject a literal construction that is contrary to the legislative
intent apparent in the statute or that would lead to absurd results (Ornelas v.
Randolph [, supra,] 4 Cal.4th 1095, 1105).” (Simpson Strong-Tie Co., Inc. v.
Gore, supra, 49 Cal.4th at p. 27; Younger v. Superior Court (1978) 21 Cal.3d 102,
113.) We find that the Court of Appeal‟s purported literal construction of the
reference to the date “January 1, 2004” in section 4659(c) is implausible for
several reasons.
11
First and foremost, the Court of Appeal‟s construction is patently at odds
with the operative language of section 4659(c), as described above. Calculating
and applying COLA‟s retroactively to the arbitrary fixed date of January 1, 2004
in every case reads right out of the statute the requirement that the disabled worker
must first “become[] entitled to receive a life pension or total permanent disability
indemnity” (§ 4659(c)) before COLA‟s may be applied to such payments.
Similarly, before an injured worker becomes entitled to receive disability
payments, there simply is no “payment” (“shall have that payment increased
annually . . .”) (§ 4659(c), italics added) to be increased.
Next, to ascribe such a literal meaning to the drafters‟ inclusion of the fixed
date of January 1, 2004, in the statutory language would expand the scope of the
statute‟s indexing provisions in a manner the Legislature could not within reason
have intended. Under the Court of Appeal‟s interpretation of section 4659(c), a
worker who did not sustain his or her industrial injury until the year 2008, or 2011,
and indeed workers who will not suffer such injuries qualifying them for total
permanent disability or life pension benefits until well into the future, would still
receive annual COLA‟s for every calendar year commencing on the arbitrary date
of January 1, 2004, through to the date on which they become entitled to and
actually begin receiving their benefit payments, which COLA‟s would further then
be compounded from January 1, 2004, going forward. Even persons who have not
yet joined the work force, and for whom workers‟ compensation insurance
premiums have yet to be paid, but who, in years to come, may become employed,
sustain industrial injuries, and qualify for the two categories of disability benefits
covered under subdivision (c), would likewise have their future benefit payments
enhanced by compounded annual COLA‟s retroactive to the arbitrary fixed date of
January 1, 2004, under the Court of Appeal‟s construction of the statute. The
12
Legislature could not possibly have envisioned or intended such an expansive
application of the statute‟s anti-inflationary protections.
Furthermore, as petitioner observed below, under the Court of Appeal‟s
construction of the statute, many workers with industrial injuries qualifying them
for total permanent disability benefits could actually receive a windfall “double
escalator” as a result of applying retroactive COLA‟s for the period from January
1, 2004, until the date they sustain their injury. This is so because of the
provisions of section 4453, subdivision (a)(10), which operate in conjunction with
section 4659, subdivision (b), to set the total permanent disability payment rates
based on the worker‟s earnings on the date of injury. Briefly, section 4453,
subdivision (a)(10), sets forth brackets (floors and ceilings) for determining
temporary disability payments based on the injured worker‟s earnings on such
date. For injuries occurring after January 1, 2007, the upper brackets are
themselves indexed to the SAWW (i.e., increased) to account for the effects of
inflation over time.6 Section 4659, subdivision (b), in turn, extends those
increases in the ceiling brackets for temporary disability payments to the
calculation of total permanent disability payment rates. As a result of the interplay
of these two statutes, under the Court of Appeal‟s interpretation of section
4659(c)‟s indexing provision, a maximum earnings worker sustaining an industrial
injury in 2011 that leads to total permanent disability would receive the benefit of
both section 4453, subdivision (a)(10)‟s increase in the ceiling brackets used to
calculate temporary disability payment rates (i.e., adjusted for inflation), which are
then utilized to calculate the total permanent disability payment rate by virtue of
6
Applicant here sustained his industrial injury on January 20, 2004.
Accordingly, the SAWW indexing provision found in section 4453,
subdivision (10), has no direct application to his case.
13
section 4659, subdivision (b), and the benefit of the annual (and compounded)
COLA‟s calculated and applied retroactive to January 1, 2004, for the period from
that date until the date of injury in 2011 — the “double escalator” complained of
by petitioner below.
“The words of the statute must be construed in context, keeping in mind the
statutory purpose, and statutes or statutory sections relating to the same subject
must be harmonized, both internally and with each other, to the extent possible.
[Citations.]” (Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43
Cal.3d 1379, 1387.) It is unreasonable to infer that the Legislature intended two
distinct anti-inflation measures to overlap and apply to the calculation of the same
total permanent disability payment rate. Moreover, workers who sustain industrial
injuries qualifying them for total permanent disability payments receive temporary
disability payments for the period between the date of injury and the date they
become permanent and stationary and begin receiving their permanent payments.
Depending on the date of injury, the Legislature has provided that those temporary
disability payments may themselves be indexed to the SAWW, thereby protecting
the payments received by the worker during that waiting period from the effects of
inflation. (See §§ 4453, subd. (a)(10), 4653, 4661.5.)
Next, to the extent the phrase “shall have that payment increased annually
commencing on January 1, 2004, and each January 1 thereafter . . .” (§ 4659(c),
italics added) can be viewed as creating some ambiguity in the operative language,
we may “look to a variety of extrinsic aids, including the ostensible objects to be
achieved, the evils to be remedied, the legislative history, public policy,
contemporaneous administrative construction, and the statutory scheme of which
the statute is a part. [Citations.]” (People v. Woodhead (1987) 43 Cal.3d 1002,
1008.) We find an examination of the legislative history of section 4659(c),
enacted by Assembly Bill No. 749 (2001-2002 Reg. Sess.) (Stats. 2002, ch. 6,
14
§ 67), lends no support to the argument that the Legislature intended to expand the
inflation protection of subdivision (c), through the language utilized in its
operative sentence, by authorizing COLA‟s to be calculated retroactive to either
the fixed date of January 1, 2004, in every case, or to the January 1 following the
date on which the worker sustains his or her qualifying industrial injury.
First, the Workers‟ Compensation Insurance Rating Bureau of California
(WCIRB) prepared a cost analysis report for the Legislature, which is part of the
official legislative history of Assembly Bill No. 749 (2001-2002 Reg. Sess.), in
which the indexing of disability benefits proposed in the new legislation was
summarized and analyzed. (WCIRB, Preliminary Evaluation of Assembly Bill
No. 749 as Amended January 31, 2002 (Feb. 1, 2001) pp. 1-2.) In that report, the
WCIRB stated, “AB 749 provides that weekly permanent total benefits [sic] paid
during each calendar year be increased annually by the change in the state average
weekly wage. We have assumed these annual increases would commence the year
following the year in which permanent total benefit payments began.” (Id.,
appen., Summary of Benefits Proposed, § 2, fn. 1, italics added.) At the very least,
this legislative history reflects that when enacting section 4659(c), the Legislature
had before it for consideration the solicited opinion of a workers‟ compensation
insurance rating service, which analyzed the legislation‟s provisions and fiscal
impact, and concluded the annual COLA‟s authorized thereunder would, per the
bill‟s language, be applied prospectively once the injured worker‟s total permanent
disability payments commenced.
Second, in the Assembly debates over the proposed workers‟ compensation
reform measures in the 2001-2002 legislative session, the question arose whether
COLA‟s for total permanent disability and life pension payments should be
retroactively extended to workers who had sustained their industrial injuries prior
to January 1, 2003, and who were receiving lifetime disability payments without
15
any adjustments for inflation. Then Governor Davis vetoed two earlier attempts at
reform (Sen. Bill No. 71 (2001-2002 Reg. Sess.) and Assem. Bill No. 1176 (2001-
2002 Reg. Sess.)) because, inter alia, he viewed the total costs of those packages,
which included COLA‟s for pre-2003 injured workers, as exorbitant. (See Assem.
Com. on Insurance, Analysis of Assem. Bill No. 749 (2001-2002 Reg. Sess.) as
amended Jan. 31, 2002, pp. 17-18; Sen. Rules Com., Off. of Sen. Floor Analyses,
3d reading analysis of Assem. Bill No. 749 (2001-2002 Reg. Sess.) as amended
Jan. 31, 2002, p. 2.) It would be unreasonable to conclude that the Legislature,
having agreed in the final enacted version of subdivision (c) to forego retroactive
COLA‟s for workers with pre-2003 injuries as a cost-saving compromise, would
then extend COLA‟s to all current workers who will sustain qualifying industrial
injuries in future years, and to those persons who will sustain such future injuries
but have yet to even enter the workforce, retroactive to the fixed arbitrary date of
January 1, 2004, as a component of the compromise legislation.
The COLA‟s provided for in subdivision (c) apply to only two categories of
disability benefits: total permanent disability and life pension payments, and only
then for injuries sustained after January 1, 2003. It can further be observed that
partial permanent disability payments for industrial injuries rated at less than 70
per cent, and temporary disability payments for workers in all such categories
whose injuries predate 2007, are not indexed to the SAWW to protect such
payments against inflation. Indeed, adjustment for inflation seems to be more the
exception than the rule. (See § 4453, subd. (d) [“Except as provided in section
4661.5 [for the calculation of temporary disability payments more than two years
after the date of injury], disability indemnity benefits shall be calculated according
to the limits in this section in effect on the date of injury and shall remain in effect
for the duration of any disability resulting from the injury.”].) In short, we find no
compelling reason to conclude the Legislature intended the COLA‟s authorized
16
under section 4659(c) to broadly redress all the potentially erosive effects of
inflation—past, present and future—for every case falling within the two
categories of disability benefits covered under subdivision (c).
Last, applicant‟s argument that section 4659(c) calls for the calculation of
COLA‟s retroactive to the January 1 following the date of injury must be rejected
for the same reasons we have found the Court of Appeal‟s construction of the
statutory language untenable. Applicant‟s construction would likewise conflict
with the straightforward operative language of the subdivision‟s first sentence,
because workers who suffer total permanent disability, or partial permanent
disability sufficiently serious to give rise to the right to life pensions, do not
“become[] eligible” (§ 4659(c)) to receive such benefit payments as of the date of
injury or the January 1 immediately following that date. (Indeed, life pension
payments usually commence many years if not decades after the date of injury.)
Hence there is no “payment” (§ 4659(c)) to which COLA‟s can be applied as of
the date of injury under the statute‟s operative language. Moreover, for the same
policy and legislative history reasons given for rejecting the Court of Appeal‟s
expansive reading of the statute, we find no basis to conclude that the Legislature,
through the language utilized in subdivision (c), actually intended to extend the
COLA‟s authorized thereunder retroactive to the January 1 following the date of
injury.
The WCAB below agreed with the interpretation of the statutory language
urged by applicant, suggesting that, “[t]his holding is also consistent with the
second sentence of section 4659(c). The state average weekly wage which is the
basis of the increased payments is determined initially by data in the „calendar
year preceding the year in which the injury occurred,‟ not the year in which the
first payment is made. This is further evidence of legislative intent that the
17
increased payments be calculated from the January 1 following the date of injury,
not from the date of first payment.”
The second sentence of section 4659(c) reads, “For purposes of this
subdivision, „state average weekly wage‟ means the average weekly wage paid by
employers to employees covered by unemployment insurance as reported by the
United States Department of Labor for California for the 12 months ending March
31 of the calendar year preceding the year in which the injury occurred.”
(§4659(c).)
The WCAB‟s Opinion and Decision After Reconsideration offered no
further guidance as to how the language in the second sentence, which specifically
references SAWW data for “the calendar year preceding the year in which the
injury occurred” (§ 4659(c)), might be read consistently with the operative
language of the first sentence to support applicant‟s position that the COLA‟s must
be calculated and applied from the January 1 following the date of injury. We
make the following brief observations regarding the matter.
First, the question directly before us in this case is when the COLA‟s
authorized under subdivision (c) must be applied under the operative language,
i.e., prospectively, from the January 1 following the date on which the worker first
becomes eligible to receive the benefit payments and actually begins receiving
them, as was argued by petitioner below, or retroactively, i.e., from either the
fixed date of January 1, 2004 (the Court of Appeal‟s construction of the
subdivision), or from the January 1 following the date of injury (applicant‟s
position). Consideration of the language of the second sentence of subdivision (c)
sheds little light on that inquiry, and, as noted, the WCAB‟s decision neither
analyzed the relevant statutory language nor explained how the special definition
of the SAWW found in the second sentence could be squared with the operative
18
language of the first sentence and thereby support its conclusory determination
that the date of injury controls.
Second, the parties below agreed, as apparently did the WCAB and the
Court of Appeal, that, looking forward from the January 1 following the date on
which the worker‟s benefit payments in question first become due and payable, the
COLA‟s must then be calculated and applied “each January 1 thereafter”
(§ 4659(c)), to reflect each successive year‟s percentage change in the SAWW “as
compared to the prior year” (id., italics added) for the duration of the worker‟s
lifetime payments. As petitioner states in the opening brief, “No one disputes that
once payments begin, the raise in payments each year is based on the increase in
the state average weekly wage from the prior calendar year.” (Italics added.)
Neither the parties nor the Court of Appeal focused on the special definition
of the SAWW contained in the second sentence of section 4659(c). Nor did they
seek to explain how the phrase “average weekly wage paid by employers to
employees covered by unemployment insurance as reported by the United States
Department of Labor for California for the 12 months ending March 31 of the
calendar year preceding the year in which the injury occurred,” utilized in that
definition, could be given effect together with the operative language of the first
sentence, “shall have that payment increased annually . . . by an amount equal to
the percentage increase in the „state average weekly wage‟ as compared to the
prior year.” (§ 4659(c), italics added.) Accordingly, we have no clear occasion in
this case to construe the language or import of the special definition of the SAWW
contained in section 4659(c). That having been said, we briefly observe that the
special definition, which purports to tie any year-to-year change in the SAWW to
the figures for the year preceding the date of injury, appears in conflict with the
otherwise clear language of the first sentence, which defines the COLA‟s in the
19
traditional sense, as “an amount equal to the percentage increase in the „state
average weekly wage‟ as compared to the prior year.” (Ibid., italics added.)
Although the parties have not briefed or argued the point, our research
reveals that the Legislature‟s two earlier attempts at drafting the inflation-
offsetting measures of subdivision (c), Senate Bill No. 71 (2001-2002 Reg. Sess.)
and Assembly Bill No. 1176 (2001-2002 Reg. Sess.), both of which were vetoed
by then Governor Davis, contained the following language as the proposed
subdivision‟s second sentence: “For the purpose of this subdivision, „state average
weekly wage‟ means the average weekly wage paid by employers to employees
covered by unemployment insurance, as reported to the Employment Development
Department for the four calendar quarters ending June 30 of the calendar year
preceding the year in which the adjustment is made.” (Italics added.)
The current text of section 4659(c)‟s second sentence is no model of clarity.
Perhaps the Legislature may wish to revisit the suitability of the current language
of the second sentence of subdivision (c) in light of the operative language of the
first sentence.
20
CONCLUSION
The judgment of the Court of Appeal is reversed and the matter remanded
to that court for further proceedings consistent with the views expressed herein.
BAXTER, J.
WE CONCUR:
CANTIL-SAKAUYE, C. J.
KENNARD, J.
WERDEGAR, J.
CHIN, J.
CORRIGAN, J.
LAMBDEN, J.P.T.*
_______________________
* Associate Justice, Court of Appeal, First Appellate District, Division Two,
assigned by the Chief Justice pursuant to article VI, section 6 of the California
Constitution.
21
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. Name of Opinion Baker v. Workers‟ Compensation Appeals Board and X.S.
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 179 Cal.App.4th 1009
Rehearing Granted
__________________________________________________________________________________
Opinion No.
S179194Date Filed: August 11, 2011
__________________________________________________________________________________
Court:
County:
Judge:
__________________________________________________________________________________
Counsel:
Vanessa L. Holton, Steven A. McGinty, Carol Belcher, Anthony Mischel and Jesse N. Rosen for Petitioner.Robert E. Kalunian, Acting County Counsel (Los Angeles), Leah D. Davis, Assistant County Counsel,
Jeffrey L. Scott and Jason E. Waller, Deputy County Counsel, for County of Los Angeles as Amicus Curiae
on behalf of Petitioner.
Suzanne Ah-Tye, Patricia A. Brown and David M. Goi for State Compensation Insurance Fund as Amicus
Curiae on behalf of Petitioner.
Law Offices of Saul Allweiss and Michael A. Marks for California Workers‟ Compensation Institute as
Amicus Curiae on behalf of Petitioner.
Finnegan, Marks, Theofel & Desmond and Ellen Sims Langille for the California Chamber of Commerce
as Amicus Curiae on behalf of Petitioner.
No appearance for Respondent Workers Compensation Appeals Board.
Butts & Johnson, Arthur L. Johnson and Heather A. Harper for Respondent X.S.
Marcus & Regalado, Marc G. Marcus and Jason M. Marcus for California Applicants‟ Attorneys
Association as Amicus Curiae on behalf of Respondent X.S.
Frank Rankin for California Correctional Peace Officers Association as Amicus Curiae on behalf of
Respondent X.S.
22
Counsel who argued in Supreme Court (not intended for publication with opinion):
Anthony MischelDepartment of Industrial Relations
Office of the Director-Legal Unit
320 W. 4th Street, Suite 600
Los Angeles, CA 90013
(213) 576-7725
Ellen Sims Langille
Finnegan, Marks, Theofel & Desmond
1990 Lombard Street, Suite 300
San Francisco, Ca 94123
(415) 931-9284
Arthur L. Johnson
Butts & Johnson
481 N. First St.
San Jose, CA 95112
(408) 293-4818
Marc G. Marcus
Marcus & Regalado
3031 F Street, Suite 100
Sacramento, CA 95816
(916) 441-1611
23
Petition for review after the Court of Appeal annulled a decision of the Board. This case presents the following issue: When do cost-of-living adjustments under Labor Code section 4659, subdivision (c), for payments for total permanent disability and life pensions begin?
| Date: | Citation: | Docket Number: | Category: | Status: |
| Thu, 08/11/2011 | 52 Cal. 4th 434, 257 P.3d 738, 129 Cal. Rptr. 3d 133 | S179194 | Review - Civil Appeal | submitted/opinion due |
| 1 | Baker, Christine L. (Petitioner) Represented by Anthony Mischel Department of Industrial Relations Office of the Director-Legal Unit 320 W. Fourth Street, Room 600 Los Angeles, CA |
| 2 | Duncan, John C. (Petitioner) Represented by Anthony Mischel Department of Industrial Relations Office of the Director-Legal Unit 320 W. Fourth Street, Room 600 Los Angeles, CA |
| 3 | Duncan, John C. (Petitioner) Represented by Carol Belcher Department of Industrial Relations Office of the Director-Legal Unit 455 Golden Gate Avenue, Room 9516 San Francisco, CA |
| 4 | Workers' Compensation Appeals Board (Respondent) P.O. Box 429459 San Francisco, CA 94142 Represented by Workers Compensation Appeals Board P.O. Box 429459 (Attn: Writ Unit) P.O. Box 429459 (Attn: Writ Unit) San Francisco, CA |
| 5 | SJO2, XYZZX (Respondent) Represented by Arthur Johnson Butts & Johnson 481 N. First Street San Jose, CA |
| 6 | California Applicant's Attorneys Association (Amicus curiae) Represented by Marc G. Marcus Marcus & Regalado, LLP 3031 "F" Street, Suite 100 Sacramento, CA |
| 7 | California Applicant's Attorneys Association (Amicus curiae) Represented by Jason M. Marcus Marcus & Regalado, LLP 3031 "F" Street, Suite 100 Sacramento, CA |
| 8 | California Chamber of Commerce (Amicus curiae) Represented by Ellen Sims Langille Finnegan Marks Theofel & Desmond 1990 Lombard Street, Suite 300 San Francisco, CA |
| 9 | California Correctional Peace Officers Association (Amicus curiae) Represented by Frank E. Rankin California Correctional Peace Officers Association 775 River Point Drive West Sacramento, CA |
| 10 | California Workers' Compensation Institute for Status (Amicus curiae) Represented by Michael A. Marks Law Offices of Saul Allweiss 18321 Ventura Boulevard, Suite 500 Tarzana, CA |
| 11 | State Compensation Insurance Fund (Amicus curiae) Represented by David M. Goi State Compensation Insurance Fund 1275 Market Street, Room 399 San Francisco, CA |
| Opinion Authors | |
| Opinion | Justice Marvin R. Baxter |
| Dockets | |
| Jan 4 2010 | Petition for review filed Petitioner: Duncan, John C.Attorney: Anthony Mischel |
| Jan 5 2010 | Record requested |
| Jan 8 2010 | Received Court of Appeal record one file folder/briefs |
| Jan 13 2010 | Answer to petition for review filed Respondent: SJO2, XYZZXAttorney: Arthur Johnson |
| Jan 21 2010 | Request for depublication (petition for review pending) Petitioner: Duncan, John C.Attorney: Carol Belcher |
| Jan 25 2010 | Reply to answer to petition filed Petitioner: Duncan, John C.Attorney: Carol Belcher |
| Mar 24 2010 | Petition for review granted Votes: George, C.J., Baxter, Werdegar, Chin, Moreno and Corrigan, JJ. |
| Mar 24 2010 | Letter sent to: Dear Counsel: We are enclosing a copy of this court's order granting review in the above referenced case. Your attention is directed to California Rules of Court, rule 8.520, for briefing requirements. Please insure that briefs submitted for filing reflect the case number, title and party designations appearing on the court's order. Per our Internal Operating Practices and Procedures (? IV, ? L), when review is granted each party must file a "Certification of Interested Entities or Persons" that lists any persons, associations of persons, firms, partnerships, corporations (including parent and subsidiary corporations) or other entities other than the parties themselves known by the party to have either (i) a financial interest in the subject matter of the controversy or in a party to the proceeding; or (ii) any other kind of interest that could be substantially affected by the outcome of the proceeding. For this purpose, we enclose a form for your use. This letter is the sole communication to all counsel for Petitioner. If other associated counsel are better situated to provide the required information, please reroute the enclosure to them. The completed form and eight copies should be returned to us within 15 days. |
| Mar 29 2010 | Certification of interested entities or persons filed by Neil P. Sullivan, counsel for Respondent, Worker's Compensation Appeals Board. |
| Apr 1 2010 | Certification of interested entities or persons filed John C. Duncan, Petitioner Anthony Mischel, Retained counsel |
| Apr 9 2010 | Certification of interested entities or persons filed X. S., Respondent. ArthurJohnson, Retained counsel. |
| Apr 26 2010 | Opening brief on the merits filed Petitioner: Duncan, John C.Attorney: Anthony Mischel (CRC, rule 8.25(b)) |
| Apr 26 2010 | Request for judicial notice filed (Grant or AA case) Petitioner: Duncan, John C.Attorney: Anthony Mischel |
| May 20 2010 | Answer brief on the merits filed Respondent: SJO2, XYZZXAttorney: Arthur Johnson |
| Jun 10 2010 | Reply brief filed (case fully briefed) Petitioner: Duncan, John C.Attorney: Anthony Mischel |
| Jul 9 2010 | Application to file amicus curiae brief filed State Compensation Insurance Fund, Amicus Curiae in support of petitioner David M. Goi, counsel |
| Jul 9 2010 | Application to file amicus curiae brief filed California Chamber of Commerce, Amicus Curiae in support of petitioner Ellen Langille, counsel |
| Jul 9 2010 | Application to file amicus curiae brief filed California Applicant's Attorneys Association, Amicus Curiae in support of respondent XYZZX SJ02 Jason Marcus, counsel |
| Jul 9 2010 | Application to file amicus curiae brief filed California Correctional Peace Officers Association, Amicus Curiae in support of respondent XYZZX SJ02 Frank Rankin, counsel |
| Jul 9 2010 | Application to file amicus curiae brief filed California Workers' Compensation Institute for Status, Amicus Curiae in support of petitioner Michael Marks, counsel |
| Jul 21 2010 | Permission to file amicus curiae brief granted The application of California Workers' Compensation Institute for Status for permission to file an amicus curiae brief in support of petitioner is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief. |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: California Workers' Compensation Institute for StatusAttorney: Michael A. Marks |
| Jul 21 2010 | Permission to file amicus curiae brief granted The application of State Compensation Insurance Fund for permission to file an amicus curiae brief in support of petitioner is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief. |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: State Compensation Insurance FundAttorney: David M. Goi |
| Jul 21 2010 | Permission to file amicus curiae brief granted The application of California Chamber of Commerce for permission to file an amicus curiae brief in support of petitioner is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief. |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: California Chamber of CommerceAttorney: Ellen Sims Langille |
| Jul 21 2010 | Permission to file amicus curiae brief granted The application of California Applicant's Attorneys Association for permission to file an amicus curiae brief in support of respondent XYZZX SJ02 is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief. |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: California Applicant's Attorneys AssociationAttorney: Jason M. Marcus Attorney: Marc G. Marcus |
| Jul 21 2010 | Permission to file amicus curiae brief granted The application of California Correctional Peace Officers Association for permission to file an amicus curiae brief in support of respondent XYZZX SJ02 is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief. |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: California Correctional Peace Officers AssociationAttorney: Frank E. Rankin |
| Jul 21 2010 | Request for judicial notice filed (Grant or AA case) Amicus curiae: State Compensation Insurance FundAttorney: David M. Goi |
| Aug 10 2010 | Response to amicus curiae brief filed Petitioner: Duncan, John C.Attorney: Anthony Mischel To AC Brief filed by California Applicant's Attorneys Association and California Correctional Peace Officers Association. |
| May 4 2011 | Justice pro tempore assigned Hon. James R. Lambden First Appellate District, Division Two |
| May 3 2011 | Case ordered on calendar to be argued Tuesday, May 24, 2011, at 2:00 p.m., in San Francisco |
| May 12 2011 | Request for judicial notice granted Petitioner's Motion for Judicial Notice, filed April 26, 2010, is granted with respect to exhibits 2, 7, 8, 9, and 11, and denied with respect to exhibits 3, 4, 5, and 6. Petitioner's motion is further denied with respect to exhibits 1 (the Opinion and Decision of the Workers' Compensation Appeals Board below) and 10 (the decision of the Workers' Compensation Administrative Law Judge below) as those exhibits are already made part of the official record on review. |
| May 16 2011 | Received: from counsel for petnr., Letter notification regarding oral argument by Christine Baker, Acting Director of Dept. of Industrial Relations. |
| May 16 2011 | Filed: Letter from Arthur L. Johnson, counsel for respondent X.S., requesting to share 15 minutes of oral argument time with amicus curiae California Applicant's Attorneys Association. |
| May 16 2011 | Filed: Letter from Anthony Mischel, counsel for petitioner, requesting to share 15 minutes of oral argument time with amicus curiae California Chamber of Commerce. |
| May 17 2011 | Order filed: case retitled The above entitled matter is retitled as follows: CHRISTINE L. BAKER, as Acting Director etc., Petitioner, v. WORKERS' COMPENSATION APPEALS BOARD and X.S., Respondents. |
| May 18 2011 | Order filed The request of respondent XYZZX SJ02 to allocate to amicus curiae California Applicant's Attorneys Association 15 minutes of petitioner's 30-minute allotted time for oral argument is granted. |
| May 18 2011 | Order filed The request of petitioner to allocate to amicus curiae California Chamber of Commerce 15 minutes of petitioner's 30-minute allotted time for oral argument is granted. |
| May 24 2011 | Cause argued and submitted |
| Jul 20 2011 | Received: Letter, dated July 18, 2011, from Arthur L. Johnson, counsel for respondent XYZZX SJO2. |
| Aug 10 2011 | Notice of forthcoming opinion posted To be filed Thursday, August 11, 2011 at 10 a.m. |
| Briefs | |
| Apr 26 2010 | Opening brief on the merits filed Petitioner: Duncan, John C.Attorney: Anthony Mischel |
| May 20 2010 | Answer brief on the merits filed Respondent: SJO2, XYZZXAttorney: Arthur Johnson |
| Jun 10 2010 | Reply brief filed (case fully briefed) Petitioner: Duncan, John C.Attorney: Anthony Mischel |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: California Workers' Compensation Institute for StatusAttorney: Michael A. Marks |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: State Compensation Insurance FundAttorney: David M. Goi |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: California Chamber of CommerceAttorney: Ellen Sims Langille |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: California Applicant's Attorneys AssociationAttorney: Jason M. Marcus Attorney: Marc G. Marcus |
| Jul 21 2010 | Amicus curiae brief filed Amicus curiae: California Correctional Peace Officers AssociationAttorney: Frank E. Rankin |
| Aug 10 2010 | Response to amicus curiae brief filed Petitioner: Duncan, John C.Attorney: Anthony Mischel |
| Brief Downloads | |
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| Jun 7, 2012 Annotated by Monica Estrada | FACTS Petitioner is Christine Baker, Director of Industrial Relations and the administrator of the Subsequent Injury Benefit Trust Fund (SIBTF), a fund that compensates workers with prior disabilities who suffer subsequent industrial injuries. PROCEDURAL POSTURE On July 14, 2008, the worker’s compensation administrative law judge (WCJ) issued a “Findings and Award” against the SIBTF, concluding that the COLAs for 2005 and 2006 had been improperly withheld from the applicant. ISSUE Whether the operative language of Section 4659(c) requires the annual COLAs for total permanent disability and life pension payments to be calculated: HOLDING The operative language of §4659(c) shows that Legislature intended that the COLAs be calculated and applied prospectively commencing on the January 1 following the date at which the injured worker first becomes entitled to receive (and thus actually begins receiving) such payments. (Scenario 1 in the Issue above) REASONING When dealing with a case of statutory interpretation, the Court will first look at the language of the statute itself. If the language is clear and a literal construction falls in line with legislative intent, the court will look no further and simply enforce the statute according to its terms. TAGS KEY STATUTES RELATED/CITED CASES DuBois v. Workers’ Comp. Appeals Bd., 5 Cal.4th 382 (1993). People v. Lewis, 43 Cal.4th 415 (2008). Simpson Strong-Tie Co., Inc. v. Gore, 49 Cal.4th 12 (2010). LeBoeuf v. Workers’ Comp. Appeals Bd., 34 Cal.3d 234. Younger v. Superior Court, 21 Cal.3d 102 (1978) Dyna-Med, Inc. v. Fair Employment & Housing Com., 43 Cal.3d 1379 (1987). |
